I’ve been self-employed since April 2022. I was 28 at the time. For the remainder of that year, I focused on freelancing for other established freelancers, gaining invaluable experience.
(Mark, if you’re reading this, thanks for letting me tag along and ask a million questions on each job).
I didn’t actively start seeking my own clients until January 2023, so I conveniently consider my official ‘years in business’ to begin at the start of each calendar year.
Despite this being my first foray into working for myself, I wasn’t exactly new to it. While growing up, I had the privilege of watching my father successfully run the family company, instigating my entrepreneurial spirit.
I never thought it was going to be easy. When we went on vacation, Dad’s phone constantly rang. Each call was a customer or employee wanting just five minutes of his time. I remember him needing a break so much on one occasion that he turned his phone off for the whole vacation.
However, I quickly learned that running a company you took over from your father is vastly different than building a business from the ground up. Here are some hard-won lessons from hard-fought battles my first two years in business.
Don’t make hard rules
I tend to see the world from a very black-and-white perspective, but situations you face as an entrepreneur rarely fit neatly into any one box.
Most things I’ve learned along the way are from a Dummy Tax—you don’t know what you don’t know and will pay a price for that.
Just last month, we signed a client that is a government agency. I requested that they pay our typical 50% deposit before we begin the work, and they politely told me that government contracts aren’t paid until the services are completed.
By this point, we’d sent over thirty emails back and forth, had attorneys review the contract and agreed on all the fine print. I’m very firm with payment terms with our clients, but I had to break my rule to keep a client we’re rather excited about.
For any rule you make, you’ll face unexpected challenges, moving goalposts and unpredictable clients. As Levi the Poet put it, “Life tends to beat the binaries out of you.” As hard as it is sometimes, be firm, but be ready to be break your own rules.
Master the “keeping busy” response
I was too transparent with friends and strangers when starting out. I’ve always been an open book and didn’t want folks to think being a small business owner is all sunshine and rainbows.
When you go out, people will ask questions about how business is going. Hence, it’s necessary to master the ‘keeping busy’ response. Here’s how it goes:
Friend: How’s business going? I’ve seen some exciting updates on LinkedIn.
You: You know—just keeping busy! We’ve been really blessed so far. How’s life going for you?
Friend: [Feels like they got some information without being overwhelmed with details]
Some people are genuinely interested in what it’s like working for yourself, but most people ask to be nice. Be brief, utilize strategic ambiguity when answering how business is going, and quickly pivot back to them.
Dale Carnegie was right—most people are more interested in talking about themself anyway.
Imperfect action beats inaction
I’m not a perfectionist, but I am very competitive. That competitive nature is why I don’t play tennis anymore. I don’t get a sense of accomplishment from winning a match, but I can dwell on a loss for days.
(And that’s a terrible trait when you’re an out-of-shape-slightly-above-average-has-been).
Being intensely competitive means that if I do something, I have to do it to the best of my ability. It also means that I can get in my head about stuff.
When you’re building something, I advise releasing it as soon as it’s remotely ready. If you give yourself unlimited time to work on it, you’ll spend endless time tweaking and tinkering but never release it.
You need to trust your gut, accept it’s good enough, and remind yourself that you can build on it later.
Most of the time, being willing to take big swings and risking mistakes can reveal infinitely more than game-planning infinite situations in your head.
It’s okay to be nervous. Those nerves are just a sign that you care.
When I look back at the website we launched two years ago, it pains me. It contained so many grammatical errors, sloppy formatting and less-than-stellar work. But that first version got us going.
When I look at the current version of our site two years from now, I want to feel equally repulsed because that shows growth.
Clearly define when you’ll offer free and discounted services
This will be the lengthiest lesson because it’s been the most problematic lesson to learn. As discussed earlier, be ready to break your rules, so take what I have to say with a grain of salt here.
For some reason, people in marketing, creative or communications roles are frequently asked for free work.
It’s a mystery to me because if you ask a car mechanic to work on your car, they’ll give you an hourly estimate plus their hourly rate. If you argue that it should just take a few minutes, they’ll tell you that you should handle it yourself before going to the next customer.
Here’s what I’ve most frequently noticed with discounted work: they forget it’s discounted. They might recommend you to their friends, but they’ll also share that price you gave them. That friend will then expect that same price.
Going back to not making hard rules, there’s always a time for free or discounted work. It might be a cause you care about or something truly unique that you can add to your portfolio. For that reason, it’s important to be flexible.
I’ve learned that most people who ask for free or underpaid work fit into the following categories:
- They’re friends or family. Friends and family will burn you quicker than any other client, so proceed with caution. They will cancel meetings at the last minute, take forever to respond to emails and try to add out-of-scope items because they had an idea halfway through a project. I quit offering discounted rates to people in this category but don’t markup services. However, I have an upfront conversation about expectations and boundaries before starting.
- They don’t value your time. Some people think of people with creative backgrounds as kids who never grew up and got a real job. You won’t be able to change their mind no matter how good of a job you do.
- They don’t see a return on the project. The lack of return can be in terms of money and/or time (e.g. when the next shiny opportunity presents itself).
- They’ve been burned by other vendors in the past. It’s an unfortunate yet frequent occurrence. This client might be okay to work with, but you’ll need to be okay with them watching over your shoulder until you prove your worth.
We want to help good causes and do good for our community, but we also have bills to pay, so we created Mammoth Cause, an annual initiative in which we donate a free website overhaul to a local nonprofit that shows a financial need.
We’ve had a lot of success with it so far, but most importantly for this lesson, it establishes clear boundaries around how and when we donate our services.
Prioritize paying yourself
Many owners forget to pay themselves. We might be worried about unexpected costs, have this one item we must buy or any other imaginable excuse.
We forget that their company’s health is intricately connected to our personal health. Hence, taking care of yourself is also taking care of your business.
We get into business because we want to create a good life for ourselves. We can’t do that if we’re starving and worried about paying the bills.
If you haven’t, purchase Profit First right now and read it this week. Then, find a bookkeeper like Perfectly Polley to help you understand your financials.
Related to paying yourself first, have more runway than you need. I had six months when starting. I wish I’d had 18 months.
You’re going to burn through your savings, and it’s easier to make smart decisions when you’re not worried about paying off this month’s credit card bill.
Reduce your reliance on any one income stream
Related to the previous topic, it’s easy to make smart decisions when you don’t rely too heavily on any one client or partner.
Most clients are great, but one bad apple that equals 70% of your business is a bad problem to have.
It’s nice to have that big client who pays the bills, but you need to have other reliable clients if things go south. If they have a bad year and decide to slash their marketing budget, you’ll have an easier time sleeping at night knowing that you can rely on your other clients a bit more until you find a client another client to replace them.
An added benefit is that by making sure you don’t rely on keeping one person happy to continue operations, you can distance yourself from bad clients or referral partners.
The best way to do this is to wait until your projects are wrapped up or you’re re-negotiating contracts and bump your rate up 30% or more. All you have to say is that your business picked up or you have increased costs, and you have to raise rates for everyone.
If they still decide to move forward, you can now collect extra compensation for the headaches that will happen again (i.e. PITA tax)
Create something others want to join
This is the thing that I’ve been thinking about most recently.
Initially, I focused solely on my vision, passion and dreams—myself. That’s self-centered thinking. People are selfish, and no one is going about their day thinking about you.
I want my focus to shift from “What do I want to do?” to “How can I create something others want to be a part of?”
I don’t have an answer yet as to how to create this contagious energy about a thing we’re excited about, but we’re getting closer.
Anyways, we’re “staying busy” and have “been blessed thus far.”
Sent from my 1951 Underwood Finger Flite Champion,
Dixon