Have you ever said to yourself, “it will all work out”?
I first came across the phrase “drinking the Kool-Aid” when I worked at a car dealership in late 2009.
It was the only job I’ve ever been fired from. Surprisingly, it was for *not* drinking the Kool-aid. Continue reading Drinking the Kool-Aid
Our charter school is going through some investigation with the state school board. It’s been interesting to watch it play out, but it made me think about how people reach in different situations.
It’s really easy to sit in the bleachers or the sidelines and talk about how you’d handle a situation, and how your opinions change when all of a sudden it’s not so far removed.
When it’s your school. Or your friends. Or your business. Or your kids.
Overall what I think is important is to spend time thinking about what you would do in X situation, and try to be as principled as possible. If you’re guided by principles throughout your life, the tough decisions like transparency, honesty, and admitting when you’re wrong become easier in the moment.
I’ve been a Jason Fried fan for years now. It probably started when I stumbled across ReWork, which I purchased on October 29, 2013 and promptly devoured. Every once and a while a book will engulf me so fully that it’s only when I put it down that I realize it’s 2am and I haven’t moved in hours.
This was one of those books.
I realize only now what I felt then: this book is different. Even the format of the book goes against the norms. I could feel that these authors were doing something different and that I needed to pay attention.
Fast forward a few years and I’m following Jason literally everywhere I can. Twitter. Instagram. Medium. Oh, and his podcast. I’ve read all of his posts, watched his Ted talks. Man, this is starting to sound creepy.
All this is to say that after all this time, it wasn’t until today that I signed up for Basecamp, the product his company makes and has made for well over a decade.
I don’t know why I was surprised. The product is brilliant. It’s slack/email/Dropbox/asana all wrapped in one minimalistic, simple, intuitive product. I was shaking my head, mainly at myself for waiting this long to try it out.
From the very first second you login it’s different from anything else out there.
This post isn’t about Basecamp though. It’s about how much I admire Jason and the way he’s structured his business and his life. How he takes care of his company and his employees. How incredibly successful he and Basecamp are.
Plus, he’s a writer. I set out to write 100 days in a row because I wanted to become better at thinking. The writing is a byproduct. I wouldn’t be surprised if Jason got many of the principles he lives by from his writing and thinking practice.
So, that’s why I want to be more like him. I think we all need people we can emulate that fit the kind of life we want to emulate. I’m not sure you can do bunch better than Jason.
Do you know how much work you need to stay afloat? To pay the bills? To be profitable!? It’s a pretty simple equation but man, it took me like 5 years in business until I finally realized how simple it was.
Oh, and then I’ve forgotten it many times.
Here’s the simple equation to work all that out. (This works both for freelancers and for business owners).
First, how much money do you need? You need to know your personal finances, and you’ll want to think about not just how much you need to pay the bills, but also to have some profit margin in your personal life, just as you do in your business.
So – how much do you need? Let’s use $5,000 for our example.
Next – how many projects you can do per month? If you’re a photographer doing on site shoots that require little prep, maybe you can do 20 shoots a month. If you’re a film director, it’s not uncommon to spend 18 months on a movie between prep, production, and post.
Now, say you’re a photographer. You need $5000/month for personal finances, and you’d like to have a healthy profit margin in your business as well so you can grow it. A good equation to get to a healthy margin is to multiply your take home pay by 2.5.
$5000 x 2.5 = $12,500
The cool thing about this is it shows you what you need to charge your clients. At 20 shoots a month you should be charging $625 on average. Maybe you do a mixture of weddings, smaller shoots, and commercial work. This gives you a simple way to determine what to charge.
Now, maybe you’re just starting out. Well, your personal expenses are probably lower, but you also may only average 10 shoots per month. Time to make some adjustments to the budget and your business model.
On the flip side, you can figure out what your monthly potential income is. Take your average income per project, multiply by how many you can do in a month, and that’s your total potential income. If you’re like us where an average project for a client is around $10,000, and you can do 2 per week, then you know what your potential is each month and not to scale beyond that. You don’t want to be hiring employees you can’t afford.
Next – how much work do you need to book!? In our experience, we have to meet with 4-5 potential clients — like, sit down and talk about a project with them, at their office — in order to book one. In the last two months we’ve had meetings where the projects would total around $400k. How much actually came through? About $125-150k. That’s what it’s looking like now, but that amount could be as low as $85k. (Ouch. Hurts a little to type that out.)
Back to our photographer – in order to make $12,500 they need to book 20 shoots, which means they may need to meet between 50-100 potential clients per month. Our business model is looking less feasible at this point, so they’re either going to have to increase their rates, or do a better job at booking a higher percentage of the potential work.
This is a good way to stress test your business model to see if what you’re getting into is going to work on paper. Maybe you have a job but want to start freelancing. Don’t quit that day job with benefits until you know you can charge enough, prospect enough, and boom enough work to sustain your lifestyle.
Have employees or thinking about taking them on? Use the 2.5 x Salary equation to see how much extra you need in order to afford them. Then make sure that by adding them it either allows you to raise your rates or complete more work.
It’s important to stress test your business this way, especially when you’re starting out.
Try it, let me know what you discover in the comments!
Morning pages: a simple morning routine that can change your entire day. Continue reading Morning Pages
The new year typically begins with a loudly proclaimed set of goals for the year: lose weight, eat better, make more money, create more, etc.
However, these goals often lack the well known SMART qualities, as well as a system to achieve them. We find ourselves, months later, frustrated and ashamed that we failed at our goals.
There’s a better way. Continue reading Getting Stuff Done in 2017