Stability vs. steady income

aesopAs a child, I read Aesop’s Fables avidly; I like getting my life lessons from animals rather than humans, I suppose. One fable that caught my attention way back then was The Dog and The Wolf, the TL;DR version of which is a well-fed dog offered to help a scrawny wolf get regular food from his master. The wolf listened but noticed a bald spot on the dog’s neck where the collar sat. Goodbye, said the wolf. There is nothing worth so much as liberty.

I often talk with coaching clients who have worked for years — often decades — as employees and who are learning how to look at the world differently. One of the biggest shifts is having to give up the idea of a steady, predictable paycheck in exchange for being self-employed. (And I’ll pause here to note that there are some situations in which a steady paycheck is more important than the liberty of self-employment. In that case, keep your day job!)

Often, new solopreneurs seek out retainer clients who will guarantee them a predictable revenue, usually in exchange for a lower hourly rate. They look for clients who, in essence, need to slot a contractor into their work process — like an employee but without the benefits or job security. They are looking for a client who looks like their last employer. (And look… there’s that bald spot on your neck, caused by the collar.)

I know what that feels like. When I launched my business, I had a retainer client who paid me for 15 hours a week at half my usual hourly rate. After six months, I realized that my nice, steady client was actually holding me back from building a stable, profitable business. I would never be able to expand my client base when so much of my time, mental energy and focus was already committed to work at an hourly rate that wasn’t going to sustain me. I took a deep breath, gave my client several months’ notice that I would need to double my hourly rate, and then helped her find someone else to take my place.

It was one of the scariest things I have done, but my next (full-hourly-rate!) client called me out of the blue the next week… and I have never looked back. I realized that having a regular stream of clients would make my business stronger and more stable than having one big client. I am better off having ten clients who use me periodically and refer me to others than having one client who could end my contract at any time. While I may not know exactly where my income will be coming from in six months, I know that, with consistent marketing and outreach efforts, clients will be calling me for projects. My business is more stable because it is based on the income from multiple sources.

Yes, there are months with thin cash flow, which I cover from the months when I am busier. I put up with the challenges that a variable cash flow present, because I’ve learned that the higher value we provide, the less likely we are to find steady clients who need to slot us into their work flow. We make a trade-off between having a predictable but lower income stream and getting paid significantly more per hour but not knowing exactly which client will be paying that high hourly rate. I don’t know about you, but I sure appreciate the extra hours in the day that I have gained by focusing on higher paying and higher value work rather than predictable but lower value work.

feed-usAnd while my own two dogs appreciate their steady and predictable paycheck of kibble every day, I’m glad that’s not how I earn my dinner.

Handling scope creep

Scope creep, the phrase that strikes fear in the heart of every consultant…

We have all had that experience, where we carefully plan out every aspect of a project, estimating the necessary time and resources and even adding in a safety margin, only to have our client ask for “just a little more” work or “just this little addition” to our deliverable halfway through the project. All of a sudden the expected work load has doubled, for no additional income.

It’s easy to react defensively when this happens — to feel that your client doesn’t respect your time or that he’s trying to get you to work at a significantly reduced fee. And it’s tempting to react angrily, to resent that the client is trying to change the agreement. (I am reminded of the immortal line in Star Wars: The Empire Strikes Back in which Darth Vader snarls, “I am altering the deal; pray I don’t alter it any further.”)

Instead, reiterate your commitment to supporting your client, find something you can say yes to and then explain where you have to say no. If your client asks for analysis or conclusions you are not comfortable making, offer to highlight the perspectives of established experts your client can rely on instead. If your client’s new request means you will spend far more hours than you had anticipated, briefly explain that this would exceed the scope of the project and offer either to do just a portion of the extra work or to write up a supplemental agreement to cover the project expansion.

While these conversations often feel stressful to solopreneurs, we are actually providing a service to our clients—helping them understand how much time, judgment and expertise is involved in what we do. A friend and colleague recently told me about the response she got from a client whose request would have required far more work than she had negotiated. After she explained the situation and offered some alternatives, her client responded with a gratifying email:

I fully understood and that is fair. You have been very generous and we can see that you have already put more time into the work than we had agreed. Anything that you may be able to get back to us that can address any of the issues we discussed would be great. Whatever you can or can’t find will be fine.

Because of my friend’s ability to calmly and politely respond to the possibility of scope creep, she continues to have a client who values her work, her time and her commitment to his concerns. He knows that her budget is honest and realistic, and that additional work involves additional commitment. She turned what could have been an unpleasant discussion into an opportunity to strengthen her relationship with her client.

Resumé or dog whistle?

dog1What’s one of the first things you do when you launch a business? Get a domain name and set up a web site on a platform like WordPress. You pick one of the popular templates, write up descriptions of your services, grab a few stock photos and you’re good to go. No-brainer, right?

The problem with this approach is that you wind up creating an online presence that often just looks like a glorified resumé. Most business web site templates encourage you to create lists of things — what your services are, what your background and credentials are, frequently-asked questions and so on. If you are writing your own marketing content instead of using a branding professional, it’s easy to get sucked into thinking that all you have to do is write up a description of yourself and your services, and the clients will come. This approach forces everyone who comes to your site to figure out for themselves why they should care about what you do. You’re making your prospective clients do all the work.

Instead, create content that speaks directly to your ideal clients. Don’t tell them what you do; talk about what amazing things happen to your clients when you’re done. Focus on outcomes, not activity. For example:

  • A temporary staffing agency could say We make sure you’re always ready when your customers need you.
  • An eldercare consultant could say I help you be there even when you can’t.
  • A graphic designer could say We help you show your clients who you really are.

How do you figure out what those outcomes look like? What is it that your clients value the most about you? Why would they work with you instead of any of the other people who offer similar services? HINT: it’s not your background or extensive experience in the field. It’s because you are focused on what your clients care about. By talking about why your clients use you instead of what you do, you turn your web site from a resumé to a dog whistle that directly calls to your ideal clients.

If you want to find that priceless description of the magic that happens when you work with a client, you have to ask them. And what they tell you will undoubtedly not be what you expect. A hedge-fund consultant who helps investors avoid the next Bernie Madoff found out her clients value her flexibility with changing investment priorities more than they care about the specialized resources she uses or her professional certifications. So on her web site she emphasizes her ability to shift based on changing market priorities rather than her extensive background. She knows what matters more to her specific clients.

One easy approach to learning what your clients really value is to ask them how they would describe you to a colleague. Most clients will respond not with a recitation of the kinds of work you do but with a story of why they need you. I’ve heard answers like “We call Mary Ellen when we don’t know how to reach out to our customers” or “I use Mary Ellen when I’m starting a project and don’t even know what I don’t know.” Priceless!

And what if you don’t have any clients yet, or if you want to expand into a new market where you don’t know your clients’ biggest concerns? It’s time to roll up your sleeves and do a half-dozen reality-check interviews. These conversations are invaluable tools for finding out what your potential clients really care about and what words they use to describe their biggest concerns. When your web site addresses the issues that resonate most with your market, they come to you already sold on your value to them right now. Yes, it takes time to conduct this type of primary research, and the reward is a web presence that speaks to the people you want to hear you.

What I learned at summer camp

group of happy kids roasting marshmallows on campfireI just got back from my annual trip to solopreneur summer camp, otherwise known as the AIIP Annual Conference. I always come away inspired and challenged, ready to try out new ideas and approaches.

This year’s conference focused on pivoting as a strategic approach—something that we solopreneurs do continually as we adjust to our clients’ changing needs and pain points. We were lucky enough to have Jenny Blake, author of Pivot: The Only Move That Matters Is Your Next One, as our keynote speaker and Anne Caputo as the Roger Summit Award speaker. Their talks sparked rich hallway and mealtime conversations about how we can remain nimble and responsive while staying grounded to what our clients value the most. Here are some of the insights I brought home with me.

  • When I recognize that things aren’t working and I need to change strategies, find out what’s working now. It’s easy to focus on all the things I’m doing wrong instead of looking for the solid point upon which I can pivot. What am I doing now that I really enjoy, that requires my expertise and that has space for expansion?
  • Ambiguity and serendipity need to be part of my strategic plan. Change is a constant, so my best approach is to incorporate pivoting into my planning. I can set a long-term (say, one-year) goal and look at the immediate actions I need to get there, without having to plan every step along the way to my goal. When an unexpected opportunity appears, I will be more likely to recognize and embrace it if I have already built an uncertainty factor into my planning.
  • I’m living inside my stretch zone, not outside my comfort zone. I’ve often said that the most important characteristic of successful solopreneurs is the ability to live outside their comfort zone, but that always sounded so negative. I prefer the idea that I’m living beyond stagnation and within the realm of reasonable risk… in my stretch zone.
  • We all have things that scare us. Jenny Blake described them as fear dragons and suggests that, rather than try to banish them, we simply domesticate them and make them our friends. And Cindy Shamel mentioned the children’s book There’s No Such Thing as a Dragon, which reminds us that denying the existence of a dragon only causes it to grow larger. So I am going to become friends with my fear dragons.

I gave a presentation at the conference on time management. I know, the topic sounds boring, but it was a fun session. (I’ll probably do a webinar on it; if you’re interested, email me). I had a number of conversations with people afterward; here are some of the ideas that resonated most with me.

  • Life is short; don’t spend your time killing time. When you work, give each task 100% of your focus. Know what you can do productively to fill those random 15- or 20-minute openings. Likewise, when you’re not working, don’t work. Don’t check email in the evening or when you’re out with friends. Be 100% present with whatever you’re doing.
  • The value of The 12-Week Year is that it puts goal-oriented strategic planning into a set-it-and-forget-it framework. You don’t have to consult your strategic plan every week to make sure you’re on track. Instead, your three-month goals give you short-term guidance with enough flexibility to accommodate serendipity.

If you’re a solopreneur, or even just thinking about it, start right now putting $25 aside every week so that you can attend next year’s solopreneur summer camp AIIP conference (April 19-22, 2018 in Minneapolis).

Being Radically Client-Focused

Be DifferentI like to practice what I preach, and one of the ideas I have been thinking a lot about lately is being radically client-focused. I recently recorded a half-hour talk on the art of the informational interview, which looks at how to learn what you don’t know you don’t know about your clients’ biggest information-related needs.

Marcy Phelps and I are regularly invited speakers at Kim Dority’s class at the University of Denver on alternative careers for librarians. Marcy and I usually plan out what we’ll cover during our two hours and how we will divide up the time and the topic. Sometimes we talk about what impelled us to launch our businesses, sometimes we talk about the lessons learned from entrepreneurship that translate to any employment situation, sometimes we talk about the pros and cons of self-employment. But Kim commented to us that this year’s students are different than recent years, so Marcy and I decided to give her class a true example of entrepreneurship in action.

This time, we are going to introduce ourselves and spend a couple of minutes talking about what we do. Then we are going to just start asking the students questions about what they most want to find out about infopreneurship. Marcy and I will each have a couple of thought-provoking grenades propositions to toss out if needed to get the conversation going, but otherwise, we are going to wing it.

How is this being radically client-focused? We realized that we really don’t know what this class wants to know. Do they want to hear advice about how to get their own businesses started? Do they think that entrepreneurship is for them? Do they want to hear day-in-the-life-of-an-infopreneur stories? First, I thought of doing a flash survey of the class to get a sense of what they would want. But I realized that, because I didn’t know what I didn’t know, a survey wouldn’t really help.

Just as it is important for us to listen to our clients during the reference interview instead of jumping to conclusions as to what they want, Marcy and I decided that we would be of best service by being open to whatever comes up.  We both have enough public speaking experience – one of the best ways to build word-of-mouth referrals – so the idea of speaking without notes or a structure doesn’t faze us.

More importantly, by taking this approach, we are showing the students an essential entrepreneurial skill – the ability to live slightly outside our comfort zone. We are willing to sound less polished, to have to stop for a moment to think something through, to get stumped by a question we hadn’t thought about before. And we leave ourselves open to the possibility of addressing concerns or worries we would not have imagined, of gaining an entirely fresh perspective on what we do, and seeing new ways to describe the value we bring to our clients.

As I describe in my blog post on why my clients are happy to tell me how much they want to spend on me, infopreneurs succeed when we tangibly demonstrate that our focus is on our client’s best interest and not just our own bottom line or comfort level. Marcy and I are putting that into practice in Kim’s class soon.

I’ll update this blog post to let you know how the class goes!

UPDATE: We had a great time! The class had lots of thoughtful questions, and we definitely would not have anticipated half of them. And, even more importantly, our “client” – Kim – was delighted. Win/win/win.

What do your clients REALLY want?

8-ballI don’t know about you, but I never found the Magic 8 Ball that would tell me what my clients value the most. Sure, I can make educated guesses. But what I have learned over time—and from talking with many coaching clients—is that generally we are way off when it comes to what our clients care the most about and are willing to pay us well for.

I wrote an article on what I called Reality-Check Interviews, with tips on how to have conversations with people who represent (what you think is) your market and get back in touch with reality instead of just your own thoughts. Based on the feedback from readers, I decided I needed to go into more detail about what’s involved.

Recently, I recorded a presentation on the Art of the Informational Interview. I go into more detail of what’s involved in an informational interview, and how you can gather the insights you need in 10 minutes or less.

If you’ve ever wondered why your marketing messages aren’t getting through, or why your clients always push back on your budget, it’s probably because you aren’t talking about what they need, value, and will pay you well for. Check out the recording and let me know if you have any questions or would like some help with your informational interviews.

“Busy” is a four-letter word

Today’s Wall Street Journal has a nice column by Elizabeth Bernstein on the use of “I’m busy” as a point of pride. (It’s behind the paywall at wsj.com/articles/youre-not-busy-youre-just-rude-1489354275. Seriously, consider a subscription; it’s a great newspaper. You may not always agree with the editorial page, but the reporting is high quality and neutral. These days, we need to support real journalists.)

According to Bernstein, studies have found that “busier people are perceived as having a high status. ‘We place a high value on hard work and rewarding effort, which is really rewarding activity and not necessarily achievement,’ says Woody Woodward […] Bernstein encourages us to stop using “busy” as a positive description but, instead, to focus on what specifically is eating up our time—and, just as importantly, to own our free time as rightfully ours.

Reflecting on my latest conversation with a colleague, I realized that I was guilty of this. “Yes, work’s really busy right now” I said, when asked how things were. Of course, solopreneurs know that clients keeping us fully employed is critical to success, but “busy” isn’t really the best description of what the optimal state looks like. And sometimes “busy” means I feel overwhelmed, not working on client projects.

So, I’ve developed a new lexicon to replace the word “busy”:

  • “Working on several projects right now; it’s fun to have a variety of things going at once.”
  • “I have a really time-consuming project right now. It’s nice to have the work, and I’ll be glad when it’s done.”
  • “I have a break in my client work right now, so I’m spending more time working on my marketing.”
  • “I feel stretched pretty thin right now. I’ve got some family responsibilities that have me feeling kind of anxious.”

And when I find myself NOT juggling four client projects, a bathroom remodel and house guests, I can embrace that, too. There are days when I feel caught up on my to-do list, I have social media posts in the pipeline, and my clients all have long deadlines. When those days happen, I can step back and decide that today I don’t need to be “busy”. I can use one of the best perks of being self-employed—I can give myself a guilt-free day off.

How to make yourself competition-proof

unique-ccI was chatting with a friend the other day who, among other things, is a professional wallpaper installer. A local hotel had contacted her and asked for a bid to redo all the wall coverings in their halls. She knew that her price would be higher than others in town; in fact, she knew that her client was getting competing bids. But as we talked, she thought through what her client was actually paying for.

  • She has 25 years of local experience with other hotels in town, all of which can confirm that she is professional, prompt and pleasant to work with. They have seen her show up in the middle of a snow storm or work late at night in order to get a job done as promised. They can vouch for her reliability and commitment to her clients.
  • She is friendly, quiet and courteous to hotel guests. She minimizes disruption and treats the hotel’s customers as her own. She has never had a guest complain about noise or inconvenience during her projects.
  • She does not advertise; she gets all of her work through word of mouth, so her business model is built around a commitment to providing high-quality work at a fair price and treating all her clients as she would like to be treated. Her business succeeds when her clients are delighted with her work.

She and I reflected that as we become (ahem) chronologically gifted, our value to our clients increases. We know that our most important asset is our reputation, which we have built over decades. Sure, our clients may be able to find someone who does what we do for a lower price, but they can’t find anyone with our track record and personal investment in delighting every client.

What are you doing to build and strengthen your professional reputation in ways your clients value?

[photo “Unique” by Jiří Zralý is licensed under CC BY 2.0]

How to talk about price

man recoils in horrorOne of the scariest things a solopreneur has to do is start the discussion of how much a project will cost. You might be having a great conversation with your client, in which you learn everything your client needs and you figure out how you can delight your client with your deliverable. Then comes the big moment where one of you has to start talking about cost….

Do you choke?

I used to. I would stutter and ramble and eventually get around to saying “Well, I guess we had better talk about how much this is going to cost.” It would feel awkward, especially when the client would turn around and say “What do you think it should cost?” and I would have no idea what to say next.

Now, I have a better way to handle the discussion of price – I own it. During my conversation with a client, I focus on what her goals are and how she is going to measure success in this project. I listen for opportunities to offer something she didn’t think to ask for that would really enhance the outcome. I focus entirely on what my client is trying to accomplish, not on what specifically I’ll do. (The description of the deliverable will be in my proposal.) After I have a really good sense of my client’s biggest needs in this situation and how I can amaze her with what I provide, then I just ask the next question.

“So, what kind of budget do you have in mind for this?”

Just like that. Then I shut up. Virtually every time, clients share with me what they expect to spend for this project; one recent client told me his entire marketing budget for the year and said he just wanted to have a little left over after my engagement for one other expense.

If a client hesitates, my response is along the lines of “Knowing how much priority this has in your overall budget helps me understand what level and depth of work is appropriate. Rather than my trying to guess a number and then design a deliverable around it, I can know exactly what this is worth to you and I’ll show you how much value I can pack into that budget.”

In my experience, after I have proven that my focus is on my client’s best interest and not just my own bottom line, clients are more than willing to share with me what they plan on spending. Every once in a while, they truly have no idea what a project will cost. In those cases, I am happy to spend the time required to scope out several options. But in most cases, when I write up a proposal, I already know how much my client values the solution to this problem and I can design something that they can’t turn down.

Think like a rock climber

rock climberI’m from Boulder, where there seem to be more professional rock climbers than people like me who like our feet planted firmly on terra firma. Whenever I drive up a canyon, I can see the tiny figures of people halfway up a sheer rock face, appearing to defy both gravity and common sense.

Our local newspaper has a regular column for rock climbers and a recent one caught my eye. Chris Weidner, in “Don’t just get stronger, get smarter“, offers four tips for mental toughness that seemed directed at us solopreneurs as much as it was to those about to scale the side of a mountain.

1) Make learning your goal, not achievement. While it’s important to focus on what you want to accomplish, pay attention to the landscape and signposts along the way. If you are too attached to meeting your goal by using a specific technique or by marketing to a specific market, you won’t see the indications that you need to veer off in a slightly different direction. Stay flexible and always open to taking in new or unexpected information.

2) Free yourself of wishing behavior. For rock climbers, wishful thinking sounds like “if only that foothold was better” or “if only I were a little taller”. For solopreneurs, it might be “if only the business environment were better” or “if only my clients had more budget”. Instead of putting your energy into the things you have no control over, focus on what you can control and affect. Your attention is one of your most strategic resources, and it needs to be focused on what you can accomplish.

3) In the midst of doubt, come back to what you know. It is easy for solopreneurs to feel overwhelmed; we are responsible for every aspect of our business, and its success or failure is on us. Sometimes we listen too much to our doubts instead of our strengths. If you feel like you don’t know what to do next, take a deep breath and think about your focus. What is one thing you can do to understand your situation better? What one step can you take that gets you in the right direction?

4) Get out there and try hard. I have always believed that failure is a sign that I am stretching myself and expanding my possibilities. Some of my business efforts have worked surprisingly well; others have failed miserably. If I defined myself by my failures, I would have closed my business years ago. Instead, I know that I always have to be pushing my comfort zone, and doing something slightly beyond what I see as my capacity.

While you may never be climbing a rock face, consider adopting the mental toughness required of serious rock climbers.