Archive for the ‘Starting Your Biz’ Category

I Can’t Work for Pennies, How Are You Making This Work?

I Can't Work for Pennies; How Are You Making This Work?

I am still trying to lock down clients. Any suggestions as to how to obtain clients? I have been using Fiverr for sample gigs (decent income for small projects). I am reaching out to people on Linkedin as well as my previous employer (we have a great relationship so it’s no fluff, but no clients need me yet), but once I move to the pricing for everyone else, they are no longer interested. I feel my price point is comparable, but I can’t work for pennies on the hour. How are you guys making it work? —RB

Fiverr might be good for pocket change if that’s all your needing out of it. But you’re never going to find real clients there (i.e., the kind that pay the kind of money you can actually live on), much less retainer clients who pay a monthly upfront fee for across-the-board administrative support.

“Decent income” is relative. What does it mean to you? Have you done any cost and pricing analysis on what it takes to run your business, earn an income (yes, they are two separate things) and earn a profit? (Profit is yet a third category of earning; you don’t have a business unless you are earning above and beyond your operational and income needs.)

It’s important to understand that there’s a big difference between the economics of employment and the economics of business. That is a huge area of education for a lot of people who are new in business. They often don’t initially understand that $12/hour employee wage will not begin to earn them a living as a business.

You’re also looking at things from the wrong angle and going about the process too generally. Because it’s not about the price point.

(Don’t worry. Everyone goes through this thinking when they’re new in business—it’s a process of education, and I’m here to  help you with that). 

Getting clients begins and ends with WHO your target market is. Have you done that work yet?

RB: I have my target market (insurance), I guess it’s that I am not known maybe? Yeah, I love Fiverr for some quick cash, but trying to convert the folks I am talking to is what I am having trouble with (none from Fiverr). Maybe I need to reevaluate.

You’re not going to be able to convert those people because they aren’t the right audience, and it’s the wrong process/intention on the wrong platform. You’re trying to fish in an empty pond basically.

It’s not about being known. You don’t have to be known. Prospective clients don’t even need to have ever heard about our industry whatsoever.

It’s about YOU understanding THEM (your target market), their business, their industry, how their business is run and how you can support them, a
nd you understanding what they gain and how they benefit from this solution (this is how you will articulate your value to them).

And, of course, choosing the right market.

“Insurance” is pretty broad/generic. What does that mean? What kind of insurance specifically? Who in the “insurance” field are you focusing on?

Because insurance “companies” don’t need what we do. When a company is large enough that the workload inherently requires in-house staff, and has their own staff, you are barking up the wrong tree.

You want to target solo/boutique business owners. They are the ones who have the highest/greatest need for the solution we’re in business to offer, value it more, and are thus more interested and willing to pay for it.

Once you get clearer about all of these things, that is going to tell you where you should be focusing your efforts for more fruitful results.

And the smarter you get about that, you’ll find that you won’t want or need to waste your time in places like Fiverr. 😉

Here’s what I recommend:

1. Get my free ACA Income & Pricing Calculator and go through those exercises. It’s important to get very clear about your numbers and know your pricing baseline.

2. Download my free guide on How to Choose Your Target Market and go through those exercises. This is a necessary part of the process of getting clients. If you don’t know and specifically define who you are talking to, how can you ever find them much less know how to support them administratively? 😉 Once you get clearer about who it is you are seeking, that will inform all your next steps and answer all the questions you have about how to find them, where to find them, how to support them, how to craft your solution and speak their language. This is such a vital step that will make finding clients so much easier.

There’s a lot more to it than this, of course, but these two exercises are the best place to start.

You CAN do this! It’s work, but it’s legwork that must be done first if you’re going to start seeing results. The alternative is to keep plodding along for years on end as many people do.

SEE ALSO:

Dear Danielle: What Do You Think of Odesk and Elance?

Dear Danielle: Should I Market on Craigslist?

What Zirtual (and Any Virtual Staffing Agency) Workers Need to Know

What Zirtual Workers Need to Know

You may have heard that virtual staffing agency Zirtual abruptly ceased operations August 10 without any warning or notice to workers or clients.

Today, we learned that Zirtual has been bought by Startup.co.

There were a lot of problems with this company, not the least of which was poor business planning, unsustainable growth, and the illegal misclassification of employees as independent contractors, the latter of which is my biggest peeve.

A business model based on exploiting workers and disregarding employment laws is bound to fail sooner or later.

This is why it’s so important for business owners to do business with companies and independent professionals who operate legally and ethically.

It’s also why it’s important for you, as a worker, to recognize going in whether a company you consider working for is operating legally and going to treat you fairly and lawfully.

Nothing angers me more than people being taken advantage of and exploited without their knowledgeable and fully-informed consent.

For anyone who worked at Zirtual (or any virtual staffing company), before you jump from one exploitive situation to another, I want to shed some light on employment and business so that you cannot be taken advantage of so easily in the future.

First, Some Basics

In the world of work and services, you are either an employee or you’re a business.

There is no legal middle classification where someone “works like an employee but is paid like an IC.”

That is illegal.

Independent contractor, 1099 contractor, freelancer, self-employed, independent professional… these are all just different terms that mean the same thing: business owner.

As an IC, you are required to pay 100% of your own employment taxes whereas when you are employee, your employer pays half as well as other taxes that are fully employer-paid.

There is also no such thing as a 1099 employee. That’s a made-up, imaginary term for a classification that does not exist and is in fact illegal.

You are either an employee (in which case you enjoy the rights and benefits provided to employees by law) or you are a 1099 contractor, which (again) is just another name for independent contractor and means you are in business for yourself and as such are responsible for all the duties, taxes and reporting obligations that entails.

This is where the problem starts because most of these workers do not understand the difference and the legal and financial implications involved. They don’t realize that when they allow an employer to call them an IC, they just became self-employed business owners.

That’s not what most of them bargained for. Most aren’t fully aware of all the rights and benefits that they are deprived of in the process.

What this also means is, even if a company classified you as an independent contractor (even if you signed a contract), the law may still consider you an employee. The law does not uphold contracts that are illegal in the first place.

What Is an Employee?

An employee is someone who works for a company in exchange for a paycheck.

Being an employee or independent contractor isn’t something individual employers get to arbitrarily decide.

There are legal standards and definitions about what constitutes an employee, control being first and foremost.

As an employee, the company you work for has the right to dictate (among other things) your work schedule, hours, pay, where you do the work, what equipment to use, and when, where and how to do the work. (When you are an independent, self-employed business owner—in other words, independent contractor—clients MAY NOT dictate ANY of that whatsoever. YOU are the one who decides your fees, when, where and how you will work, what you will and won’t do, etc., and you do NOT “report” nor are you managed by clients in any way, shape or form. The only thing a client has the right to convey to you is what they would like accomplished, what outcome/result they desire for the work to produce, and what their timeframe/deadlines are.)

As an employee, you are supervised and directed by your employer who requires you to report to them and turn in timesheets. You may also be required to undergo training at the company’s direction.

If a company exerts any measure of control and management over a worker, that worker is an employee (and must be lawfully classified as such).

Likewise, if the workers ARE the very product of the biz (as is the case with temp agencies, staffing agencies, virtual staffing agencies, etc.), they must be classified as employees.

In exchange for this luxury and privilege of control and the benefit that is gained therefrom, an employer is held to some legal and financial obligations and requirements.

How Are Employees Paid?

At the start of employment, an employee completes an IRS Form W-4.

The employee is then given a paycheck in exchange for their work at the usual established company pay cycles and in accordance with local, state and federal laws.

By January 31 of every year, the employer is then required to provide the employee with an IRS Form W-2 Wage & Tax Statement which summaries the total monies you earned the previous year, the amount of taxes that were withheld from your pay, as well the employer-paid half of your FICA taxes (Social Security, Medicare, FUTA) and any other particular taxes (eg., unemployment) as may be required by local, state and federal law.

I highlight that last part because this is what many people don’t understand.

They don’t realize that when an employer illegally misclassifies them as an IC (self-employed independent contractor), that employer is essentially stealing from them.

Those are rightful monies owed to you that they are legally required to pay when you are an employee according to the legal definition.

What that means is that by illegally misclassifying you, they are shifting 100% and more of those costs onto you instead of paying their legally-required share.

Understanding Employment Taxes

Everyone who works and has earnings must pay FICA (Federal Insurance Contributions Act) taxes.

FICA consists of 12.4% Social Security tax (up to whatever a given year’s wage cap is; for 2014 the cap was $117,000) and 2.9% Medicare (there is no wage cap on Medicare tax; however, beginning in 2013, if an employee earns more than $200,000, there is an additional 0.9% Medicare surtax that must be withheld from their wages).

If you are an employee, 6.2% Social Security and 1.45% Medicare tax is withheld from your paycheck, and your employer must pay the other 6.2% Social Security and 1.45% Medicare taxes.

FUTA (Federal Unemployment Tax Act) is another tax that must be paid, which is 6.2% up to $7,000 in wages. This tax is paid 100% by the employer. If you are an employee, there is no employee portion to be withheld.

If you are an employee who has been illegally misclassified as an IC, this is more money that is rightfully due to you that the employer is cheating you out of.

FUTA, in conjunction with state unemployment insurance systems, provides for unemployment compensation to workers who have lost their jobs.

This is another of the rights and benefits that an employee enjoys that an independent contractor is not eligible for.

Why Do Companies Classify Employees as Independent Contractors?

Why do they do anything? Because of the money.

Employees cost a business a lot of money. And I don’t mean only in terms of pay.

Besides their benefits and pay, it costs a lot to manage them. Taxing and reporting responsibilities must met. There are employee rights and labor laws that must be observed and complied with.

Compared with all that, it’s easier and cheaper to work with ICs than it is employees.

So a lot of companies will think, “You know what? We can’t afford these employees. Let’s call them independent contractors instead.”

But here’s the problem with that: it’s illegal.

The legal phrase is “illegal missclassification of employees.”

They don’t get to have their cake and eat it, too. Not when it cheats those workers out of their lawful, rightful employer-paid taxes and benefits.

If they don’t want the cost and headache, then they have to give up the control.

And if they don’t want to give up the privilege and luxury of control that comes with beck-and-call employees, then they have to comply with the law.

That’s just how it works, folks.

Companies don’t get to decide at their whim whether to classify someone as independent contractor just because it’s cheaper and more convenient for them.

The second they start exerting the control of an employer over a worker, that worker becomes an employee.

What to Do if You Feel You Have Been Misclassified as an Independent Contractor

As I said before, even if a company you have worked for classified you as an independent contractor, even if they had you sign a contract, the law may still consider you an employee if that company exerted any of the control that only an employer is allowed to exert (see Independent Contractor or Employee?)

The first thing to know is that it is 100% the company’s duty and responsibility to properly classify workers. The worker is never responsible for this.

I mention this only because many workers worry about taking recourse for fear the law will come down on them, and that is not the case.

Keep in mind that if you were an employee missclassified as an IC, you were missing out on all the usual rights, benefits and perks afforded regular employees of the company that ICs are not eligible for such as : unemployment benefits; worker’s comp benefits; severance pay; workplace rights such as minimum wage, overtime pay, sick pay, rest breaks, vacations; healthcare coverage under the Affordable Care Act.

The law may determine that you were entitled to those as an misclassified employee.

And if you worked for a company that closed up shop and left you high and dry, you’re going to want those unemployment checks.

The good news is that you have nothing to lose by looking into these things and possibly a lot to gain.

If you were feel you were misclassified as an IC, one of the simplest things you can do is fill out an IRS Form SS-8. The IRS will do the rest of the work after that. If they find that you were misclassified and should have been an employee, it’s the employer who is on the hook any penalties and back taxes you were deprived of.

If you’re young, it may not mean much right now, but when you get older and near retirement age, those retirement funds and medical benefits become more real and relevant to you. No matter what your age, those are accounts you should be concerned about and attentive to. They are part of your rightful benefits.

Another way a lot of these misclassifications come to light is when people file for unemployment insurance.

Yes, even if you were told by the company that you were an independent contractor, even if you signed a contract, I  encourage you to file for unemployment insurance.

Once you do that, they will also examine the relationship and make a determination. If they find that you should have actually been classified as an employee, it’s the employer who will be liable for those benefits and back tax payments.

And, talk to a local employment law attorney. Because I am not one and I don’t want any of this information to be construed as legal advice. I only share this information to point you in some directions where you can get the full information and advice from the proper agencies and legal advisors.

That kind of attorney can better and more fully explain all the ramifications of being misclassified as an IC, what benefits and rights you may have been deprived of, how long the statutes of limitations are in your case, the recourse and remedies available to you, and what the next best steps are.

There may even be, as we speak, some attorneys or law firms working on some kind of class action.

Moving Forward

Armed with this information, you can be more knowledgeable of your rights and how things are supposed to work should you decide to work with another company similar to Zirtual.

If you work for anyone who dictates any of your working conditions to you, you know now that you must be classified as an employee, that there are employer-paid taxes and other employee rights and benefits that are your right.

And if any employer exerting a level of control over you tries to tell you they are going to start paying you as an IC, you can say:

“Hold up! Not so fast! That’s not correct. People who are in business for themselves as ICs, know they are in business for themselves. Last I checked, I don’t recall starting a business, and I am not in business for myself. You are exerting a level of control over my pay, schedule and work conditions that constitutes employment. As such, I am an employee and must be paid accordingly, including all the rights and benefits afforded to employees. If there’s any question about that, we can have the IRS make the determination.”

Okay, I’m being a bit snarky, lol. But you get my drift.

Now that you are better informed, in whatever pleasant or diplomatic fashion is your preference, you can be more assertive and point people in the direction of the resources I have linked throughout this post.

If you have any questions about any of this, I am happy to answer and help in any way. Please post your questions in the comments.

And if you are in a former Zirtual worker, I understand several groups have been started to support each other.

I would be happy to speak to your group, either by phone or online, and help shed further light and answer any questions you may have about any of this information about employee classification.

Likewise, if any of you are interested in actually starting your own business (otherwise known as self-employment, being an independent contractor), I can definitely answer any of those questions as well. As a business owner since 1997 and the founder of the Administrative Consultants Association, that is my specialty!

RELATED ARTICLES: The topic of subcontractors is another important area for people in business to understand. I have a whole category on my blog that covers subcontracting:

ACA Blog: Subcontracting Articles 

Definition of Subcontracting

What You Need to Know About Subcontracting

Dear Danielle: Sole Proprietor or LLC?

Dear Danielle: Sole Proprietor or LLC?

Dear Danielle:

Would you recommend filing a state business license as a sole proprietor or an LLC when doing business as an Administrative Consultant? I’ve looked on the Nevada state business sites and am unable to find the information needed. Please advise and thank you in advance. —Tiphenie Montes

Hi Tiphenie :)

So here’s the thing. States aren’t in the business of advising you about what corporate formation you should seek. That’s why you aren’t finding that information.

You might find something on their websites that explains what the different corporate forms are to choose from in your state, but they aren’t going to tell you or advise one way or the other which one to choose or which one may be best for your business.

That’s a question for an attorney or CPA in your local area or state.

Whenever it comes to legalities, it’s so important to talk to the proper, licensed professionals. No colleague, even the most experienced and knowledgeable one, is qualified or licensed to give you advice on that kind of thing.

And you definitely don’t want to rely on the guesses and “legal opinions” of unqualified, unlicensed laypeople because that could cause you some serious harm or get you into legal hot water at some point or in some way or another.

When you start a business, you are by default a sole proprietor (or a partnership if there is more than one owner). And there’s no special incorporating you need to do for that (although, you may still need to register the business with your local and/or state agencies, but you’ll have to research that as every city/county/state is different).

If you do incorporate, there are possibly some protections and advantages. There is also a lot more filing and reporting obligations and tax designations you may also need to determine.

You might hear around the industry that LLC is the most common form of incorporation for our kind of service-based business. However, that’s a generalization that doesn’t take into account your specific and unique business circumstances and information and the kind of work you are doing in your business and how you are doing it.

If you were to talk to a CPA or attorney, it’s possible they might tell you that depending on your stage in business, incorporating is too soon or not the right time just yet, or may be overkill, or may not give you the kind of tax breaks or protections you thought you might get.

There are just SO many variables unique to your business and your circumstances that have to be weighed and considered by those who are licensed and qualified to advise you properly.

So I can’t recommend highly enough that you do that so you can make the best decisions for your new business based on the right information from the right people. It would be irresponsible and unhelpful for me to tell you otherwise. And I wish for the best for you as well so I won’t tell you otherwise. 😉

Here is another blog post that touches a little bit more on this topic from another angle that you may also find some helpful tidbits in:

Dear Danielle: How Do I Pay Myself?

Also, just to let everyone know, you get an Introduction to Business Formations guide included when you purchase the Administrative Consultant Business Plan Set (FRM-32) from the ACA Success Store.

Thanks for the question. Hope this has been helpful. :)

Dear Danielle: I Have a Bunch of Questions

Dear Danielle: I Have a Bunch of Questions

Dear Danielle:

Thank you so much for all of your offerings through the Success Store! Getting my company planned and put together has been much easier thanks to you than it might have been.  I just need some clarification:

  1. How exactly do referrals work?  I am giving a two-hour free referral bonus to any client who refers another paying client. What do you think of that idea?
  2. What marketing tools have you found the most effective?  I am on unemployment which is not enough to make ends meet, and I have had to get things for my business by raiding my grocery money (maxed out credit).  I am trying to get a micro-business loan, but have not done so yet. Are online directories and search engines the way to go?
  3. How did you find your industries small prospects for sales calls?  Do we have to worry about “Do Not Call” lists if someone uses one phone number for everything?  How much “cold calling” did you do to get started?
  4. About your website screening intake form:  I could not find your business website, nor could I find anything in the store about an intake form.  Is there another resource or should I just pull together my own and tweak it through experience?
  5. If a client asks for a particularly dicey project that I am not sure I can handle, how do I address that without looking incompetent, undersupplied technologically, or setting myself up to fail?

I apologize if you have already addressed these issues. Thanks for your help! –AJ

Whew! I’ll do my best to answer these and keep ’em short and sweet…

1. How do referrals work and what about giving a referral bonus?

A referral is when someone (could be a client, could be a colleague, could be a business associate… anyone) refers/recommends/tells someone about your business.

What do I personally think about paying people to refer you? I don’t advise it.

Let referrals come organically through the good will and high esteem you generate from doing good work. Those recommendations and referrals will carry far greater weight because of it.

Plus, keeping track of referrals and rewards just creates another needless task and complication in your administration that you don’t need.

Here are a couple blog posts that expand on this topic that I think you’ll find helpful:

Dear Danielle: How Do I Advertise for Referral Partners?

Tips for Harnessing the Power of Referrals

2. What marketing methods are most effective? Are online directories and search engines the way to go?

It doesn’t hurt to be in directories, but you don’t need them.

And SEO is the least effective way your most ideal, qualified client prospects will find you. It’s not the thing to waste your time focusing on right now at this stage of your start up.

Your best leads will always come from your own incoming marketing pipelines. And how do you do that?

In our business (as it is with most professional service-based businesses), networking is hands-down the most effective marketing strategy.

Not ads. Not cold-calling. Not direct mail.

The great thing about networking is that it doesn’t cost anything but your time. And that’s not a cost, it’s an investment because those efforts will ultimately pay with new clients and prospects.

The reason networking is so effective is because people look to work with those with whom they have established some kind of relationship and feel some kind of rapport.

Every opportunity you have that lets a group of people get to know, like and trust you is going to make it that much easier for you to attract clients.

Of course, the key to networking successfully starts with a target market. Otherwise, you’ll wear yourself out networking anywhere willy nilly.

Be sure you download the free ACA guide on How to Choose Your Target Market, which elaborates a bit more on what a target market is and how it will make growing your business and getting clients much faster and easier.

3. What cold calling did you do to get started and how did you find prospects for sales calls?

None. I didn’t look for any.

I never did cold calling and I don’t advise you do either.

People don’t like to be sold to; it’s completely the wrong strategy.

Professional services are a bigger ticket item and requires more relationship building and nurturing than that.

Sure, you might hear some people say they got this client or that project all from a sales call. But those are the exceptions, not the rule.

I can just about guarantee you don’t have the kind of money and energy to ever make cold calling a worthwhile ROI.

Even if you get one project, it isn’t going to come close to covering all the time, energy and effort you put into getting it.

And think about it. Do you really think you can keep putting in that kind of work just to get one or two nickel-and-dime projects? You need bigger money and bigger clients to stay in business and be profitable.

There are MUCH better, faster, more effective strategies for getting clients, one of which is deciding on a target market to focus on and then getting involved with that industry in every way you can (online forums, business groups, events, etc.). The more you interact, the more they get to know, like and trust you.

4. Is there a resource for an online intake/consultation request form?

If I’m understanding your question, I think you are referring to an online form you have clients fill out to request a consultation.

Having a form like this on your website will help screen and prequalify prospects.

By asking a few simple questions, this form can help you determine what stage of readiness a potential client is at, whether or not they are in your target market, and whether they can afford your services.

Depending on the questions you ask and how they fill out your online consultation form (which has the dual underlying purpose of helping prequalify clients), this can tell you what level of priority or attention to give a potential client or whether to guide them to further information on your website to learn more before moving on in the process.

For example, if someone is only “browsing,” you may not want to waste your limited time and effort on a consultation. You may instead want to send them to a white paper you have prepared for these kind of instances, and invite them to subscribe to your blog or ezine.

Many clients are not ready to work with us immediately so it’s all a process.

Here is a blog post that talks more about how the consult form can act a prequalifier: One Way to Sort the Ideal form the Unideal.

As far as a resource, I recommend you get my Client Consultation guide. Not only does it give you usuable examples of an online intake/consultation form and questions you may want to ask, it will walk you through the entire consultation process from start to finish: from targeting clients, identifying your ideal client profile, prequalifying clients, how to conduct the actual consultation conversation and what questions to ask, how to follow-up afterward and what the next steps are once you take on a new client. It’s VERY thorough!

5. How do I handle a request for something I don’t know how to do (or do well)?

First, you have to distinguish what kind of business you are in.

Are you in the secretarial business where you’re simply doing one-off, transactional, piecemeal project work?

Or are you in the business of administrative support?

Because the two are completely different business models.

Once you answer that question, it will help answer subsequent questions about what kind of client needs that work, what work is entailed and so forth.

When you know what you do and who you do it for, and educate clients accordingly, this kind of thing isn’t as much of an issue.

However, let’s say you are in the administrative support business and the client asks if you do X thing.

Honesty is always best so tell them if it isn’t something you know how to do or that you have limited experience/knowledge with it.

That said, you can always let them know that you are willing to learn how to do it (IF you are interested in doing so, that is).

Or, you might look at this project or work and think to yourself: You know, this really doesn’t fall under administrative support at all and isn’t what I’m in business to do. They really need to be working with someone who is in the X business.

In that case, you might offer to help them locate the proper professional who IS in business to do that thing.

Or, in yet another example, perhaps you have a separate division in your company that does this thing, in which case you would take them through those separate processes for intaking that kind of work or project and charge them separately for it.

You have to always remember that administrative support is not a catchall term for “anything and everything.”

Just because a client asks doesn’t mean you’re supposed to comply. They need educating.

If you were a plumber and someone asked you to fix their car, that wouldn’t make any sense, right?

And you’d inform them very simply and helpfully that what they need is an auto mechanic, not a plumber.

Same thing here.

YOU have to decide what administrative support consists of in your business and what doesn’t.

When you have that clarity yourself, you shouldn’t have any qualms about letting clients know when something doesn’t fall under the umbrella of your support.

Always be clear and upfront with clients about what’s what in your business. You’re not going to look bad in any way for not taking on or knowing how to do something or needing to refer them to another kind of professional entirely when that’s the case.

The only time you will look bad and create ill will is by not being honest and straightforward.

I hope that helps! Let me know if you questions on any of this. :)

Do You Understand the Difference Between a Project-Based vs. Ongoing Admin Support Business?

Do You Understand the Difference Between a Project-Based vs. Ongoing Admin Support Business?

When I started out (and didn’t really understand the concept of providing administrative support as a business), I was what is correctly termed a secretarial service doing one-off projects here and there where I could find them.

Someone would hire me to do their resume, make a flyer or brochure, type some documents, that kind of thing.

It’s equivalent to the business model of a print shop for example.

A customer might be someone who only ever uses you once or it could be someone who is a repeat customer, but still on only an as-needed basis—occasional and sporadic.

The problem as I discovered was it was a paltry income, nothing I could actually live on. It was pocket money at best, and I still needed to work a full time job to pay the bills.

Okay, I thought, how do I make a living at that?

There is no recurring or consistent income when a business is project-based. You never know where your next meal or client will come from or when.

In order to make a living in a project-based business, it inherently requires that it be volume-driven, which comes with its own set of problems.

In a project-based, volume-driven business, you have to CONSTANTLY be marketing and networking and ever on the hunt for your next project, that next not one but five clients, all while you still have work in front of you to do.

It was EXHAUSTING.

It was a huge amount of work just getting those projects and clients I did have coming in here and there. It was this never-ending hamster wheel that left me little time to breathe.

And to have to multiply all those efforts 20-fold? No way. That was NOT the kind of business I wanted.

You also can never make up for in volume what you really need to make a living, not as a solo/boutique business.

The answer would seem to be add more people doing the work.

But that wasn’t a solution that worked for me either because:

  1. I never set out to be nor do I ever want to be in the people management business, which is exactly what I’d have to do if I added more people;
  2. I would make even less money because my profit margins would be reduced with all the additional expenses and my business would be much more complicated and less easy with all the added administration; and
  3. it would turn the work into an assembly line which is NOT what I want in my business or my life. I believe in artistry and craftsmanship in work product and that’s the quality I want to give to my clients. Churning work day in and day out as fast as possible (which is what you are forced to do in a volume-driven business) is NOT how I want to do things.

It’s not that a volume-driven project business can’t work. But it’s a much bigger and more difficult business to build and sustain. And it’s simply a different business model altogether, one I had not the slightest interest in.

That’s when I started realizing that the way to make better money and more consistent income was to provide support as an ongoing RELATIONSHIP, not a one-off, piecemeal transaction.

Once I got conscious about that, I started building a retainer-based practice where clients paid me in advance on the 1st of every month for ongoing administrative support in their business, not a project here or there. I took on specific areas and roles that were ongoing in their business.

It was a lot more money—money I could actually LIVE on.

It was consistent, recurring CASHFLOW.

AND it didn’t require the constant merry-go-round of chasing after new clients and new work every minute of every hour of every day.

I could live and work in a much more relaxed, sustainable, breathable pace, growing my roster slowly one client at a time.

But I still had a lot of things to learn in my early years. I was still operating with the poor professional self-esteem that many in our industry suffer from: that I wasn’t enough, that admin support wasn’t enough.

Part of the problem was I still didn’t really have a target market.

And without that, I couldn’t really envision, much less paint a picture for prospects, about what admin support could look like in the context of their business and how it could help them in anything except the vaguest, most general (and uncompelling) terms.

So I thought I needed to offer a lot more. I thought I had to DO everything, BE everything, and be ANYTHING a client tried to twist me into at their whim in order to be of value.

First, I added web design.

And then I thought bookkeeping would be a good service to also offer because who doesn’t need bookkeeping?

What I failed to realize is that these are separate businesses in and of themselves.

It’s a full time job to just to provide bookkeeping to a roster of clients.

And design work requires a whole other part of the brain. It requires a switching of gears and lots of creative space that are simply too crowded when you are trying to do too many other things.

Eventually, as I got busier and busier (without really ever getting too far in anything much less making any better money), I realized that I needed to focus on ONE thing, be in ONE business, not multiple businesses.

Trying to be too many different kinds of businesses not only was keeping me from earning well, I wasn’t able to fully commit to any of them and was constantly distracted and pulled in different directions due to too many multiple focuses.

That’s not a recipe for doing your best work for clients.

I also realized that by focusing on ONE business (I got out of the bookkeeping business and then later discontinued doing any kind of design work completely), I did far better, more high quality work for clients, built my business faster, and ended up with far more discretionary time (i.e., freedom and flexibility) as a byproduct.

All of which ultimately benefited my clients in a multitude of ways.

I also realized (and look back now at how foolish I was back then) that if I had just gotten clear about being in ONE business earlier, I would have built my business and made more money so much faster.

Because once I did, I also soon realized that by focusing on the ONE business (admin support), I didn’t have the time or need to do anything else.

So now I’m VERY clear about what I’m in business to do and what I’m not.

If a client needs something I’m not in business to do (e.g., you wouldn’t ask a plumber to fix your car), I point out that they need to talk to the professionals who are in those other professions. If I happen to know someone good, I will refer them.

But I don’t bend over backwards making it my job to find them someone any more than it would be my doctor’s job to find me a lawyer. The only people who think that’s their job are those who are operating their business like an employee (or being trained to).

Whether You Think You Can or Think You Can’t, You’re Right

Whether You Think You Can or Think You Can't, You're Right

This quote stuck out to me after reading (yet another) a post on a business forum by someone who wanted to start her business, but had just lost her job, had no money, lived in a rural area… and so on and so forth.

She had every excuse in the book about how there was absolutely nothing she could do about her circumstances.

I wanted to point out to her, “Whether you think you can or think you can’t, you are right.” 😉

Whether You Think You Can or Think You Can't, You're Right

She was looking at all the negatives and resigning herself to her circumstance—and victimhood—instead of focusing on what she COULD do, what opportunities she COULD find or create for herself, what circumstances she could change and which actually had more options available to her than the ones she was resigning herself to if she just put her mind to it.

I’m not saying certain challenging circumstances don’t exist. I’m no Pollyana when it comes to facing facts.

There IS a difference, however, in taking stock of what IS and acknowledging those things, and staying stuck in self-pity and creating self-fulfilling prophesies.

How you deal with the hand you are dealt and what you do to make optimum use of that hand is going to determine your success not only in business, but in life.

Instead of lamenting about everything that is wrong, focus on what is RIGHT and how you can go about making lemonade about of whatever lemons you’ve got in your basket at the moment.

Put on your thinking cap and you can always create new possibilities for yourself and your life.

May not be easy, it may even be incredibly difficult (who said it was all supposed to be easy anyway?). It might be something you’d rather not have to do (and don’t have to do forever), but there is ALWAYS a way forward, a way out, a way around, a way up.

It all depends on your own outlook.

Not Having Any Luck in this Business? Here’s What Could Be Going On

Ask Danielle

Last week I told you about asking colleagues on my mailing list why they are in this business.

I received a wonderful outpouring of responses, and I’m still working on responding personally to every one.

Several people wrote about having difficulty getting anywhere. Here’s an example from one colleague:

Unfortunately, nothing was happening with the business and then I got very discouraged and didn’t pursue it further.  I decided to put a pause on the business and change my career.”

This colleague plans to come back to the business at a later date. The thing is, though, when she does come back to it, she is likely to have the same difficulties. You aren’t going to get different results doing the same things that weren’t working in the first place.

So I probed a little further and asked her to elaborate and try to give me some more specific details about what she was experiencing. I asked if her difficulty was in finding clients. I asked if she had done a business plan. I asked if she had a target market (and if so, what was it). I asked if she had a website (because the website is a big window into the business as a whole and I can tell a whole lot just by taking a look there).

Here’s what she told me:

“I was having difficulty finding clients. I do have a website. My target market was individuals and corporations. Yes, I have done a business plan. I have networked and reached out to prospects about my company but I think the services I offer is not what popular. I’m not sure what I attribute my difficulties to, maybe marketing and the services.

There are a few things that immediately jump out at me as the cause of some of this colleague’s difficulties. I share because maybe you are in the same boat and it may help you as well:

  1. “Individuals and corporations” are not target markets, they are demographics. A target market is a single, specific industry/field/profession that you cater your administrative support and marketing message to. Saying “individuals” is your target market is like saying “people” is your target market. That could literally be anyone and mean anything. It’s the complete opposite of the definition of a target market. Because the point of having a target market is to get clarity and direction for who you are talking to (you can’t come up with any kind of compelling message unless you decide definitively who your audience is to be), what that group’s particular needs, goals, challenges and pains are, how you can help them in those things and structure your offerings in a way that will be of most interest and value to them, and where to find them. If you don’t decide who to focus on, you’re going to be all over the place talking about things in a way that can only be vague, generic and nebulous. That’s not going to have any impact on anyone.
  2. As a demographic, corporations are rarely, if ever, the best fit for what we do. That’s because they don’t need the solution Administrative Consultants are in business to offer. (And just to clarify, in the context of my conversation with this colleague, she’s using “corporations” in terms of “big business,” not literally anyone who happens to have incorporated their business.) Here’s the thing: generally speaking, big business has the kind of workloads that inherently require full-time, in-house, dedicated staff (and Administrative Consultants are not going to be able to work with any clients like that, from both a legal and practical standpoint). They also have the resources to pay for and house them. They don’t really need us. If they are even remotely interested in us, it’s only to offload non-core functions as cheaply as possible. That’s what offshoring/outsourcing is all about. They could care less about the relationship, and when there isn’t a real need, they don’t place much value on the service. And you can’t be in business to be cheap. It’s always the solopreneurs and boutique businesses that have the greatest need for what we’re in business to offer. They, therefore, place greater value in it and are more willing to pay well for it. So it’s important to understand who makes the best fit (who has the highest and greatest need) for what we do so that you aren’t wasting your time barking up the wrong trees.
  3. When it comes to the service, you aren’t selling hammers, you’re selling what a hammer does, what it builds. My colleague states she thought she was offering services that weren’t popular. Here’s what she’s not understanding: It’s not “services” that you’re selling. As an Administrative Consultant, you are offering one thing: an ongoing relationship of administrative support. What that support is comprised of depends on the target market. This is why you need a target market. Once you decide specifically who to cater your support to, you can determine what body of tasks, functions and roles will be most helpful and compelling to that group. That’s when you’ll find the “popularity” you were lacking before.
  4. People don’t want to hear about your company, they want to hear about what your company can do for them. Read that two or three times and let it sink in. This makes a critical difference in how you are approaching people. But here’s the other thing, when you don’t know who you’re aiming for (because you’re just aiming at anyone and everyone), you don’t know anything about them and therefore don’t know how to talk to these people or what to talk about, you automatically default to talking about yourself and your company. If you had a target market, you would know specifically who you are aiming for, know what their common needs, goals, challenges and pains are in their industry, and you have something to talk about with them. My philosophy about networking is don’t do it. Instead, go to help, be of service, learn more about the people you meet and simply make friends. You’re going to have a lot better results that way. (For further insight when it comes to in-person networking, read this post: Are Business Cards Dead?)

For anyone out there who hasn’t yet decided on a target market, please do download the free ACA guide on “How to Choose Your Target Market.” It will help you TONS!

How about you? Have you had similar difficulty in your business? Do you find this information I’ve shared helpful?

On Ageism and Business

On Ageism and Business

I emailed a question to my subscribers yesterday, and I’ve been getting such wonderful, inspiring, fascinating responses!

(Thank you so much to everyone who has responded! I’m slowly going through everyone’s emails and writing back.)

Basically, I wanted to know: Why are you in this business?

And not the obligatory, politically correct, goody-two-shoes reasons (a la “I just love my clients and helping people!”).

I wanted to know the real, down-to-earth, self-related reasons they chose to be in the administrative support business, what they are hoping to gain, to achieve in business; what they want their business to do for their life.

I was also curious about their money goals and what kinds of aspirations and feelings they have around money. I’m always curious about this because I notice a big element of guilt in this industry when it comes to money.

Among others, one theme I’ve been hearing a lot in these responses is related to age.

We already know that a lot of the younger women enter this business because they want to be around more in their children’s lives and be home to raise them while also nurturing themselves through professional pursuits and contributing to the household income.

(And guys, too; I’m not trying to exclude them. We just happen to be predominately women in this industry and we have different, perhaps even more, challenges than men in business so these conversations tend to be geared more toward women. Just FYI.)

But I’ve also been hearing from women in their 40s, 50s and 60s who basically encountered age discrimination in the world of employment at this stage of their lives. Many have shared a similar story about finding themselves being laid off and having difficulty finding work again, all the jobs seemingly going to younger people.

They state that they started this business because they were seeing no other options, felt they had no alternatives.

You can definitely detect a hint of dejection about these experiences in many of the responses. But what I see and hear in them is a resourcefulness and determination of spirit that says, “I am of value and I have something to contribute!”

I love this!

So getting older and how that is experienced while being in business is what what I’m curious about today… because I’m no spring chicken anymore and I’m going through a journey of coming to grips with that myself.

Does this relate to you? How have you been experiencing getting older in your life? Has it affected your professional life in any way (and if so, how)?

Have you ever encountered ageism/age discrimination in the workplace? Did that contribute to you starting your own business? Do you feel business ownership is more resistant to age-ism (why or why not)?

Do you feel (like me) that business ownership keeps your mind youthful and vital? Have you ever worked with clients much younger than yourself? What was your experience with that?

Would love to hear your thoughts and feelings and any other interesting anecdotes you have on this subject!

Dear Danielle: What Do You Think of Odesk and Elance?

Dear Danielle: What Do You Think of Odesk and Elance?

Hello Danielle!

Hope you are having a great day. What do you think of Odesk and Elance as starting places for an Administrative Consultant? I currently am just starting out, just had a baby three months ago so I was thinking of starting out with these sites? Thoughts?  Thank you so much for all you do! —Maekeshia Smith, eOffice Business Solutions, LLC

Hi Maekeshia :)

It depends on what your motivations and intentions are.

If you’re just looking to make some pocket money on the side, then those places might serve your interests.

If you are looking to start a real business making real money (i.e., money you can actually live and operate profitably and sustainably on), oDesk, Elance and the like are no places for Administrative Consultants to be wasting their time.

That said, if you are not still working and need the funding, the little jobs you get here and there in those places could be a way to fund yourself and purchase necessary products, tools and training to grow your real business.

But don’t confuse that work with building your real business, because the kind of clients you need for the latter are not the kind you’re going to find on Odesk, Elance, etc.

Of course, whenever I say that, inevitably someone pipes up to exclaim how they got a great client from those places.

What I say to that is:

a) They are the exception, not the rule, and exceptions do not make for immutable laws of business. If you shop yourself amongst cheapskates, people who want to pay pennies and expect something for nothing (else why on earth would they be shopping for REAL professionals in those places), that’s exactly who you’re going to get. The odds of you finding that diamond client in what amounts to a yard sale are not in your favor. Has it ever happened at any time in the history of the world? Of course. But I would no more tell you to buy lottery tickets to build your business. The ROI is just not there as would cost you more in time and energy bidding and auditioning for “jobs” than you’d earn. There are better, faster, more profitable, effective and productive ways to build a financially successful business built with clients who value what you do for them and pay well for it. Leave Odesk and Elance for the hobbyists who have no business sense and don’t know or value their worth.

b) “Great” is relative. We would have to look closer at their business, under the hood, to see if their “great” is really all that great. Is their business really profitable? How much are they earning from that client? How hard are they working, how many hours a day, only to be barely scraping by? That’s not being profitable. They might think $15, $25, even $35 an hour is “great,” but that’s only because they have no frame of reference other than it is more than they were making as an employee. They don’t understand that the economics of employment are not the same as those of business. I’ve been in this business 20 years and all it takes is a few details for me to know how a business is really doing financially. And actually, their “great” doesn’t have any bearing on what your great is. So first order of business, so we can get real about what kind of money YOU need to earn and what kind of revenues your business needs to survive and be profitable, is to download the free ACA Income & Pricing Calculator.

Bottom line is the only kind of clients you’ll find in those places are cheapskates looking for the cheapest bidder, not ideal clients who value what the work produces and are ready and willing to pay well for it.

Here’s another blog post you should read on this topic: Dear Danielle: Should I Market on Craigslist?

You mention that you are just starting out and that’s the right time to be getting your foundations in place. I don’t know how far along in the process you are, but here are what I recommend for your next steps:

  1. Get your starting forms, documents and contracts in place so you have them and can adjust, update and adapt as you go along. You’ll be ready then when you get that first client.
  2. Get a website up. It doesn’t matter that you aren’t sure what to put on it or what to say right now. Just get it up there! Because otherwise, you’ll just stay stuck in analysis paralysis. The simple act of getting your site up is the catalyst for those next steps. A website is THE most important marketing tool you have in your business (people distrust and wonder what is wrong with a business if it doesn’t have one). It’s an integral and indispensible part of the process of properly educating prospects so you can get those ideal clients you’re seeking. AND I have a guide for building a website that works that gives you my own conversion system that you can implement in your website. It tells you exactly what pages in what order to have on your website and all the other vital elements that are needed to convert more of your prospects into clients and consultations. It also includes my patented 1-2-3 plug-n-play system that will walk you through, step-by-step, in creating your own unique, compelling and irresistible marketing message. It makes the process of writing easy as pie, even if you don’t think you are a writer (because you don’t have to be; this stuff writes itself with my formula).
  3. Choose a target market (i.e., an industry/field/profession you cater your administrative support to). Then gear your message and solutions to that market, and go start interacting with them on their industry blogs, forums and listservs and get involved in their groups, professional associations, events, etc. Be sure to download my free guide on How to Choose Your Target Market that will help you with this process and begin identifying the places to find them.

How Do You Handle the Naysayers?

How Do You Handle the Naysayers

Someone asked a great question today on our ACA LinkedIn group:

Q. I am curious to know how you handle naysayers. When I tell people that I am starting a business I get all sorts of reactions, but when people tell me that it can be “daunting” or “difficult” I start to doubt my own intentions. I know I am on the younger side with less than 10 years experience and a newlywed looking to start a family in the next two years. But I do have a lot of experience if not in years but in quality. I also feel that this is something I really want to do. Please let me know how you hand this, I’m interested in your feedback. Thank you again. —MA

I don’t know if there is any solution to this, really. If there is, I sure never found it, lol.

To this day and in the face of all that I’ve achieved including the money and the lifestyle, I STILL get no respect from my dad.

His generation seems to think anyone “working from home” is just playing around on the computer or that they’re running some kind of Internet scam.

He literally never asks about my business. I take him to the nicest places and he never has to pay a dime. You’d think he’d be at least somewhat interested in and happy about the success of his daughter. In nearly 20 years, I’ve gotten exactly ONE attagirl from him. ONE!

And my significant other who had the patience of a saint would also go back and forth between being very supportive (as long as things seemed to be moving along) to “maybe it’s time to give up on this and get a real job” (when it was tough-going).

He met me right when I was getting really serious about my business and there was no way in hell I was walking away from it. I was prepared to lose the relationship rather than do that and told him as much. I HAD to make it happen.

So, what I learned is to just not talk about business with family. They just don’t get it and they are the WORST with the naysaying.

I’ve found friends to be much more supportive. Heck, they wish THEY could do what I do and live the way I live.

But even they don’t really get it.

Although I do have an extremely flexibile and freedom-filled lifestyle (because I worked my ass off for many years engineering my business to have it like that), you still always have family and friends who think just because you’re home, they can pop in and interrupt any ol’ time they please to gab. They just don’t see it as a “real” business in many ways.

And there are some family and friends who are going to be jealous (consciously or subconsciously) and will want to pee in your cornflakes at every turn. Who are you to better your life and take chances when they are stuck toiling a 9-5 every day, is how they think.

What I can tell you is that starting this business was the best thing I ever did, despite all the hard work, the time, the set-backs and all the rest.

This journey of self-actualization, self-determination and personal growth and discovery never stops. It’s rewarding and exhilarating every day, and now in the years when I am really reaping the fruits of my labor, I am so proud of myself and pinch myself every day in gratitude at how lucky I am to have this life and lifestyle.

When it comes down to it, you have to believe in yourself, and have the determination to stick with it and the ability to tune out and ignore the Debbie Downers.  Don’t ask them for their opinions and don’t talk about your business with them if you know they’re just going to try to discourage you.

So how about you? What kind of naysayers do you have in your life and how do you handle it? Does it daunt you or make you more determined than ever? What advice do you have to share about dealing with the naysayers?