Archive for April, 2009

Growing Pains and Strategies

So yesterday I was answering a colleague’s question on business growth, and I wanted to talk a bit more about strategy, as I mentioned in the last sentence of that post.

By strategies, I mean tightening your operations, policies, workflows and standards up with purpose, intention and critical thinking. Reviewing how you’ve been doing things and putting a new critical eye to those things and considering whole new possibilities. Because with growth comes choice and the ability to refine. Some of the things you can do when your business is in a state of growth and choice include:

1. Increase your rates. As Mikelann Valterra says, not everyone should be able to afford you. If literally every client who approaches you can afford you, that’s a good indicator that you’re far overdue to give yourself a raise. When you become a hot commodity, you simply aren’t going to be able to work with everyone, nor should you. Raising your rates will not only help sort the wheat from the chaff, it will also increase the caliber of clients you have to choose from.

2. Lose the dead weight. If you have any clients that you don’t enjoy working with for any reason, let them go. The mental anguish and negative energy they create in your business literally pulls your business down. Really, you will physically feel a weight lifted from your shoulders and a new spring in your step. The time and energy you get back will triple, which you can then set loose on replacing those poor-fitting clients with more ideal clients, focusing on your business instead of constantly working in it, and indulging the newfound creativity that always occurs when mental gunk is cleared away.

3. Make some mental shifts. I find that most people in the beginning years of their business operate as if they were still admin assistants, that secretary sitting outside the boss’ door with the only exception being they are now working from home. They really don’t do anything differently from when they were an employee except that they now call themselves business owners. But really, for all intents and purposes, those are just words that don’t really mean anything. Traditionally, that’s how the industry originated. But when you reach a stage of growth that you now find yourself in, it’s a perfect opportunity for you to take a more critical look at who you are as a business owner. Ask yourself… Am I just a lackey, just an assistant, just a gopher? Or am I an administrative expert?

When you start to better define your role and the business you are in, you start to realize that not only can you portray your business differently, you also don’t have to operate or take on work in the same way as an employee.

Don’t let anyone tell you that your value depends on you being able to take on or handle everything that a client throws your way. You don’t have to work with clients on a daily basis. You don’t have to manage their email boxes. You don’t have to act as their receptionist on top of everything else. You don’t have to run their personal errands or deal with anything that isn’t directly related to their business. You can focus just on administrative works—because that’s what experts do. And they get a pretty penny to do it.

4. Review your operations. With the mental shifts, you will also start to realize how you can tighten things up in your policies and work processes. For one thing, you can lose the timesheets and reporting. You aren’t anyone’s employee and you don’t have to agonizingly report every minute detail of how you spent every second of time on behalf of a client. Some of the things you can look at changing are how you package and frame your offerings to clients, the support you provide and don’t provide, your pricing, your communication protocols and processes, refining your prequalifying processes, how you consult with prospective clients, where you can delegate (while understanding what work is critical for you to focus on and not abdicate), creating support plans and taking charge of the delegation process, taking a look at what you are offering and identifying services or support that can be classified in separate business categories (to create additional revenue streams), and coming up with info products or stand-alone/DIY products/services (because not only will those things allows you to provide something for those clients you can’t work with or who aren’t ready to work with you, they also create passive income streams).

5. Narrow your focus. If you don’t already, this is a perfect time to decide on a target market or refine the one you have even further. Not only will it give you clearer direction, it will laser-focus your efforts so you aren’t willy-nilly exerting them without any strategy or focus (which means the ROI yielded will be based more on luck than purpose and intention). When you do this, you get really good at marketing to a specific group. You spend less time marketing and networking. People have a much clearer idea of who to refer to you and thus, will do so  more often. Your message becomes more attractive, compelling and resonate (in fact, it will attract even more people beyond your target market, creating even more choice for you in your business). You get to know that group way better than you ever could marketing to anyone and everyone and therefore can hone your offerings specifically to their needs and wants. And ultimately, all of this allows you to command higher fees working less and with fewer clients. It’s not magic and it’s not a secret. It’s as basic as 1+1=2.

Bigger isn’t necessarily better. Everyone is always telling us how to become successful doing or becoming something else. Well, my passion is helping administrative experts be successful AS ADMINISTRATIVE EXPERTS. You aren’t some lowly person on the totem pole. My advice is always geared towards the person who loves what she does and wants to be financially and operationally successful as an administrative specialist.

Dear Danielle: What Is Your Advice on Growing?

Dear Danielle:

I wanted to know your advice on growing. I am just on the verge of maybe needing help. Do I hire a colleague with her own company, hire an employee, or bring in a partner?  I just don’t know. I feel like hiring is taking me out of the industry that I hold so near and dear to my heart. Also, do you have advice on how to select a person to bring into your business. I have had some offers from people, but they are not familiar with the industry.  Not sure if this is a good or bad thing.  Could be good to teach someone from ground zero, but also time-consuming. –LE

Here’s what I always tell people:  Just because you are a solopreneur doesn’t mean you should be working alone.

Solopreneur does not mean you doing everything yourself. It just means that the stock you are trading in is your own intellectual capital and your particular skill, talent, know-how and experience in your craft.

You can’t delegate those things, but you can certainly surround yourself with the right professional support so that the primary thing you are doing in your business is your stock-in-trade and letting those in supporting roles to you handle the rest.

Those supporting roles could be a bookkeeper so that you aren’t expending your time on that work (and also ensuring that it’s done correctly), an accountant to make sure you stay in compliance with any financial or taxing agencies and to give you the best financial management advice, and/or a business attorney to look over your contracts (both those in your own business as well as those others may want you to sign), run legal things by, and get advice on situations that hold potential liability for you and any other business matters that arise.

I also recommend that Administrative Consultants have their own Administrative Consultant, staff or a combination of both.

When you work with someone you develop a relationship with over time, the possibilies are endless with regard to the support they can provide. In an ongoing relationship like that, they get to know you and how things work in your business, they are able to support you in a way and to a degree that you just can’t get by outsourcing individual tasks occasionally to people you don’t work with consistently.

On top of that, there is a greater ease and efficiency when you have someone you work closely and continuously like that.

You may even identify non-critical parts of the work you do with clients that don’t require your particular brand of expertise that you can have them do for you.

Of course, the relationship is always between you and your client and I never recommend outsourcing that. When clients hire you, it’s for your brain, your critical thinking, your creativity and your expertise.

Never abdicate that. It’s part of your value and part of the thing that makes your business distinctive.

But that doesn’t mean that parts of the work can’t be delegated within your own house to staff or your own Administrative Consultant you have hired because they have impeccable skills and in whom you have absolute confidence.

In fact, I will tell you that you will always be stuck within a certain income level if you don’t ever get your own help.

As already mentioned, another way to get support is to hire staff (an employee or two).

You really don’t need much help in order for that support to make a hugely significant difference in your business.

And there are all kinds of ways to get that kind of help. You can post to job boards at local colleges. You can participant in state work-study programs (where the state will repay you a percentage of whatever wages are paid to the student employee). You can put family members to work (I’ve always thought getting the kids involved is such a great thing to do as a parent).

Of course with employees, there is more administration and taxes involved, but if you have a professional bookkeeper, you should have them take care of processing paychecks and so forth.

I personally like a combination of both. I like to have someone in-house who can take care of filing and other things that just require a physical presence. Once a week or two for just a few hours, just light clerical stuff. Someone like that you might not even end up paying more than $600 in a year in which case you may not even be required to formally process that person as an employee.

But for the bigger, more important meat-and-potatoes work, if you will, I definitely recommend hiring the best, most highly skilled person you can find. Someone competent, running their own business should not require “training” and will have her own process for learning what she needs from you in order to support you. Otherwise, it just defeats the purpose of easing your burden and take just too much time and energy.

It also doesn’t happen overnight. Think of yourself. It took years to establish the kind of skill and expertise you now possess. How much time and energy will you have to invest before that unskilled, untrained person becomes a real, viable asset to your business rather than a drain? Just something to think about.

As far as bringing on a partner, I can only offer my opinion which is emphatically NO!

Seriously, I have never seen a business partnership end well. There are far too many agreements and understandings and potentialities to take into consideration.

It’s always the one thing you didn’t think about ahead of time that ends up causing a rift. There can really only ever been one captain of a ship. And regardless of legalities, the person who started the business always feels (at least emotionally) that they “own” more of the business and that feeling of “more ownership” often causes resentment with the other partner.

Decision-making, conflicting workstyles, having to compromise, differing visions or opinions… all of these things are tedious and cumbersome. They just complicate and slow down the business.

On top of that, the business now has to earn for two owners instead of just the one—you. I don’t think you need a partner. I think you just need the right panel of informal professional advisors, and business support and strategies.

More on strategies tomorrow…

Fun Stuff: Typealyzer

I came across a fun little distraction called Typealyzer a couple week ago. What you do is enter your blog url, and it analyzes your personality type based on your posts.

Typealyzer classifies me as an INTJ – The Scientists

“The long-range thinking and individualistic type. They are especially good at looking at almost anything and figuring out a way of improving it–often with a highly creative and imaginative touch. They are intellectually curious and daring, but might be physically hesitant to try new things.

“The Scientists enjoy theoretical work that allows them to use their strong mind and bold creativity. Since they tend to be so abtract and theoretical in their communication, they often have a problem communicating their visions to other people and need to learn patience and use concrete examples (me: so true!). Since they are extremely good at concentrating, they often have no trouble working alone (me: again, so true!).”

I thought mine was eerily dead-on.

Colleague Q & A: Working with Clients

A colleague and I were chatting online recently. It was a great conversation and I realized afterward the information would be so helpful to others as well.

With that in mind, here’s a transcript of our mini Q & A session:

Danielle: So you had a great call with a client this week?

KT: This morning. I’ve really found my rhythm with all of my clients. It feels great.

Danielle: What was it about the call that made it especially energizing?

KT: I discovered that I need to know my clients in order to do a good job with them. We got to know each other a little better on a personal and professional level. I feel more confident in myself as a service provider and as a business owner. I think that is coming across to the clients.

Danielle: So what was not happening before that you weren’t getting to know your clients?

KT: I think I was busy getting to know me, the business owner. I am great with people. I just had no idea how much of my successful interaction with them was dependent on visual cues. Initially, virtual relationships were a bit disconcerting for me. Truth be told, they still are in some ways. However, I do think I’ve found my sea legs and I’m becoming more comfortable.

Danielle: Excellent! And how often were you meeting with clients? How often are you meeting now?

KT: Before, it was very irregular. With one client, we have a scheduled monthly update meeting, but we call each other in between if necessary. Another client is bi-weekly. The third client is as needed.

Danielle: May I suggest something that I think will help?

KT: Absolutely.

Danielle: Cool… I suggest weekly telephone meeting with clients, especially, and most importantly, with new clients, at least for the first 3 to 6 months (if not the first year). Make it part of the process and part of your standards. Because it absolutely will work like nothing else in: a) establishing and maintaining that personal connection that is vital to the partnership, and b) creating a platform in order to better serve clients and thereby growing and increasing your role and understanding in the work.

KT: I have found it immensely helpful to have that regular personal contact, so making it a regular part of the week sounds good to me. I really like the opportunity to find out how the client’s priorities may have shifted, and what new information may impact projects we’re working on.

Danielle: Absolutely! Eventually, when you’ve worked with a client for a number of years, you may both find that the connection is so solid you don’t need that level of frequency, that your communication and relationship with each other is so sympatico that your email exchanges pretty much take care of everything. At that point, you may find that twice or once monthly meetings is all that’s needed. But do continue to meet on a regular basis of some kind. It helps “water” the relationship and keep it thriving.

KT. I think this is a fabulous idea!

Danielle: The important factor, I’ve also found, is making it systematic. Don’t let it be willy nilly. Make it a planned and regularly scheduled event in the relationship. Not only will it make it that much easier to manage all your weekly telephone meetings with clients, but it will also be less disruptive to actual work. Set it and forget it is the idea (not forget it, of course, but just get it scheduled for the same time/same day every week so it becomes a routine for everyone).

KT: Ideally, I would like to do them on Monday morning. I can’t think of a more productive way to start the week.

Danielle: Whatever day makes sense for you. I don’t know how you feel about this, but one thing that’s helped my business run smoothly is that I don’t let clients decide what day these calls are held. I tell them right in the consultation process that we’ll have a weekly one-hour meeting and I do those on Tuesdays and I give them a couple times to choose from that will be their regular “slot” from that point on. They don’t get options so they have to be able to work with that or we can’t work together.

KT: How do you get around a client saying that they aren’t available at the time you want to schedule the call?

Danielle: What I tell them is that if they aren’t available for a particular week’s call, I would expect them to give me advance (not last minute) notice so that I can schedule other things and that we’ll just resume the following week. I don’t do reschedules for that same week. I have a very systematic, scheduled system and I serve clients exceptionally well because of it. I don’t worry too much about the time unless it feels like there’s a real abuse or disrespect going on. Then we’ll have a talk and if it ever comes down to it, the time will come out of their hours. Of course, when that is the case, it’s usually time to recognize whether a client is a fit or not. But that’s worst case scenario stuff. Personally, I haven’t had much problem with that in many, many years and you usually don’t when you make sure you’re working with ideal clients who value you in the first place.

KT: Is there any advantage regarding who places the call, you or the client?

Danielle: Whatever your personal preference is. I think there can be power plays with that whole thing, which isn’t of any interest to me personally. I tend to see that stuff as game-playing and that’s definitely not relational. I call clients because I feel it’s an opportunity to demonstrate customer service. But either way, you might both decide that it will be the client who calls you. I don’t think there’s a right or wrong way as long as it’s not decided out of game-playing or power-tripping.

KT: Are your clients fairly long-term?

Danielle: All of my clients since about 2002 have been long-term (i.e., monthly retainer).

KT: When a client wants to work with you, what criteria do you use to determine whether you want to work with the client?

Danielle: That’s a good question… of course, there are my hard criteria — the qualifiers and list of prerequisites that help ensure I’m not wasting your time with anyone who is absolutely not going to be a fit. They have to be in my target market (I work with solo attorneys in business, intellectual property and entertainment law). They have to be at a certain income level. I avoid those in start-up phase; they’re generally too disorganized and tend to have no money or reliable cashflow at that stage. Then, once I do meet with someone in consultation and I determine that their goals are things I can help them with, I look at the person themselves and ask questions to get some insight into their their relationship/communication/work styles are. That’s when it comes down to intuition and chemistry. If you have a reasonable sense that you’d enjoy working with someone, go for it. You do what you can to make as educated a decision as possible when choosing clients (because it’s definitely not profitable to work with poor-fitting clients and after all that work you’ve invested onboarding them, you want it to be worth your while), but if it doesn’t work out, no big deal. Either of you can walk away at any time (with some courteous amount of notice, of course).

KT: Regarding certain income, how do you verify that the client isn’t just telling you what you want to hear?

Danielle: Well, you don’t ever know absolutely for sure. Trust goes both ways. You just have to go with your gut. If they appear to be truthful (looking the part) and you feel they are being truthful, and you feel a good chemistry and authenticity, go for it. And again, if it doesn’t work out, walk away. Exercise your option to terminate the contract with whatever notice is stipulated. Simple as that.

KT: How did you handle it when your gut was telling you to walk away, but your wallet was telling you that you desperately need the income? (I ended up walking away, but not nearly soon enough.)

Danielle: There’s no miracle solution for that. Reality is reality. I think the best you can do when you feel you can’t immediately walk away (because you need the money), but recognize that the situation isn’t good for you or your business, is that you work as hard as you can to replace that client ASAP so that you can let them go. I’ll say this, however: that being invested in the money or outcomes is exactly what enslaves you to poor-fitting clients. It’s a tricky business, but if you can somehow mentally train yourself not to care about the money or what happens, however you want to explain how that works in the world (laws of attraction, power of intention, whatever), it really does work out for the best. In fact, I would tell you just out of my own experience, things always work out far better when you can do that. You make better decisions and more ideal things come in to replace the unideal much more quickly.

KT: Danielle, you are such a sweetheart to share your wisdom with me. I really do appreciate it! I’m gonna try and log some billable time in this afternoon, but even though it wasn’t billable, this has been the most productive part of my day.

Danielle: My pleasure; it was fun talking with you. You ask really smart questions and I love that about you.

Dear Danielle: Is Training Necessary?

Dear Danielle:

I am  currently  writing my business plan. I have been working in the Administration field as an administrative assistant since I graduated from college in 2000. My question to you is: does one need to enroll in a specialed training to persue a career in this profession. –PV

Depends on what you mean by training. Are we talking about skills training or business education?

As far as skills, you don’t necessarily need training to go into the administrative support business. If you feel you have the background and the skill level that qualifies you to do this work, then go for it. You’re going to be acquiring new skills and improving upon others all the time and as you work with more and more clients.

Of course, skills training is never a bad idea. Anytime you can improve your skills or your business knowledge, that’s only going to increase your value to clients. And this is a competitive market. Clients won’t shell out their hard-earned money to folks who don’t have a masterful, professional level of administrative skill and know-how. If you have little or no skill level, you’re going to have a very difficult time in this business.

Now, I do want to point something out to your attention because it’s going to be critical to your success in this industry. Spelling, grammar punctuation… all of it is very, very important.

I notice in your question, you have what I presume is a typo (“specialed”), an incorrect capitalization (“Administration”) and a misspelling (“persue”).  I’m personally not concerned so much with a typo here and there. That happens to the best of us. We’re not perfect and we’re not robots. We can check and double-check our work and still miss one or two occasionally.

However, grammar, spelling, punctuation, proper capitalization… those things are critical because it indicates a level of literacy that is going to be important in everything you do as an administrative support provider and business owner.

Your work and skills are a reflection on you and your business as well as on your clients when you are working on their behalf. There is simply no room for a less than stellar command of the written word.

It’s important because: a) clients don’t want the work you do for them to have these kinds of errors, and b) everything you write and type is a reflection of your competence.

If you don’t demonstrate competence in all that you do, it’s going to cast you in an unprofessional/unskilled light and undermine your ability to establish trust and confidence in your would-be clients.

Clients will see these errors and assume that the work you do for them is going to be subject to typos, misspellings and incorrect usage.

So if written (and oral, for that matter) communication is where you lack proficiency, then I would definitely encourage you to do whatever you need to do to improve in that area.

What most people lack when they enter this profession is business knowledge.

A lot of it you will learn from trial and error in the School of Hard Knocks.

That’s okay. It will be a much longer, harder road, but you will learn some very important, valuable business skills and lessons from those kind of experiences.

You will learn some good things from your colleagues who have been in business longer.

At the same time, you will also learn some not so good things from people who don’t have any more knowledge or experience in business than you do, nor achieved any kind of track record of established business and financial success, but seem to think that their opinion or guesses somehow qualify as smart business advice.

So be smart about who you take advice from. Try not to be the blind person following other blind people. ;)

Flame Wars (This Cracks Me Up)

Have you been catching any of the flame wars between the two offshoring companies, GetFriday and CatchFriday?

I had a Google alert come in over the weekend and the latest just cracked me up.

See, GetFriday is the Indian company mentioned in Tim Ferriss’ book, “The 4-Hour Work Week.”

So, you know how a lot of people are upset in the U.S. (and probably elsewhere) about offshoring to India, right?

I would venture to say the anger isn’t really at the Indian’s themselves per se. They’re just trying to make a living like everyone one else in this world.

It’s more about the idea overall of sending work out of our own country that could be supporting our own citizen’s and economy.

For the last few years, where there’s been resentment by Americans about Indians taking their work and jobs, the Indians are now up in arms over the Philippine labor force taking away their foreign business because they are even cheaper.

So in a way, they’re getting a taste of their own medicine.

Or at least, they’re now experiencing what it feels like for Americans (and others) who are having their livelihoods (and their very lives) sold down the river to the lowest bidder.

I do think the Philippine agency is pretty sleazy.

First off, they plagiarized GetFriday’s tradename, albeit, not very original in the first place and itself plagiarizing from other established Friday brands.

(The whole “Friday” thing is so cliche and such a stupid name anyway; why would they even want it? Because it is a very blatant, deliberate cash grab to siphon off the original business’s established marketshare. These are the kinds of acts that trademark/trade name law protects against. But no one said those running the infringing company were very smart.)

Also, from what I’ve been observing, it’s the Philippine agency that initiated the slimy, unprofessional, unethical and aggressive mud slinging and smear campaign.

I could be wrong, but I haven’t come across any of these exchanges where GetFriday was the aggressor. I’ve only read them posting responses more along the lines of self-defense.

Comedy aside, it’s actually pretty ugly.

CatchFriday (the infringing copycat Philippine company) even brings up religious bigotry (yes, they actually go there!), insinuating that they are somehow superior because they are Christian and GetFriday is Hindu.

What on earth does that have to do with the price of tea in China?!

And if they are English immigrants, I’ll be a monkey’s uncle (er, auntie). They sure don’t demonstrate the syntax or grammar of someone who is a native.

Neither of them are true virtual assistants anyway. They’ve just coopted a term that doesn’t represent what they do in the least.

VAs are administrative experts who specialize in providing one-on-one, continuous administrative support to clients they work with in collaborative relationship.

These two firms are more accurately categorized as call centers and virtual staffing agencies. They do not in any way provide or represent what virtual assistance is all about.

But the whole dynamic of their competition with each other is very interesting.

Competing on price is a doomed premise that guarantees failure. You will never be able to be the cheapest. There will always be someone willing to outbid you and if you try to participate that way, you will have to keep bidding lower and lower until finally there’s nothing left but working for free.

On top of that, you are creating your own failure by enabling the very behaviors in the marketplace that set about your business demise: tirekicking and priceshopping.

If this is how you are engaging in marketing, it is you yourself who is reinforcing these behaviors and training clients to focus on cheap. It’s crazy!

You are not responsible for a client’s inability to afford you. It’s not your job to “fix” them. Because you absolutely can not afford to work with any client who can’t afford you (tip of the hat to whomever originally authored that line–it’s brilliant).

So I ask you, do you offer so little value to your clients that you can’t think of any other thing to focus them on than hiring you as the cheapest bidder?

Thank You to Our Members!

What a fantastic experience our first teleseminar was!

Everything went smoothly and there was such great energy on the call.

I want to thank all the wonderful colleagues who attended. You really made my day!

Such smart people with smart questions. You were a fabulous audience!

And congrats, Tracy Carson, on winning the drawing for the free Activity & Time Analysis Tool. Let me know how you end up using it in your practice.

Thanks again for attending, and if you ever have any questions about the administrative support business and marketing, feel free to submit those here.

See you next time!

Dear Danielle: Should I Get a Tax ID?

Dear Danielle:

I’m a sole proprietor Virtual Assistant. Should I get a tax ID number? –AK

I’m not sure how it works in other countries, but if you’re in the U.S., and especially since you are a sole proprietor, yes, you should absolutely go ahead and get an EIN (Employer Identification Number) from the IRS.

Used to be , the IRS only wanted businesses to get an EIN if they planned to have employees or operated as a corporation or partnership.

It frowned upon the practice of getting one if that wasn’t the case.

However, with identity theft so rampant, they’ve changed their position on this.

Sole proprietors can now quickly and easily get an EIN to be used as a general purpose business identification number so they don’t have to give out their Social Security number (SSN) to anyone.

Taking the Marketing and Referral Bull by the Horns

In my own practice, I had a wonderful experience recently working with an out-of-state vendor.

One of my clients needed to serve a lawsuit we’re handling in another state and I needed to find a process server for the job.

The service wasn’t entirely straightforward, but the process server handled everything in stride and followed up very diligently and with great attention to detail.

Once completed, he sent his invoice which we promptly paid.

Afterward, we got a very nice message from him thanking us for the business and speedy payment. He went on to ask us this:

“I was wondering if you would please spread my contact information around to others in the profession who might need service done in Minnesota. Also, if you have a chance, would you be so kind as to write a review/referral that I could post on my website and/or my marketing materials.”

I was more than happy to oblige him and sent him a fabulous testimonial.

Why am I sharing this with you?

Because it’s such a fantastic example of taking the bull by the horns and asking for what you want or need in business.

The way he worded his request was perfect in its simplicity, sincerity and directness.

Administrative Consultants can and should be doing the same thing in their businesses.

Here are some pointers to help you do that:

  1. First, make sure your loves the work and service. No one is going to recommend you to others if this isn’t the case (and asking for their referral in this event will be even more off-putting) so be sure to elicit feedback and make sure they are happy and satisfied before asking anything of them.
  2. Don’t ask for referrals/testimonials/recommendations prematurely. Again, this can be very offputting. If the work is project-based, don’t ask in the middle of things. Wait until it is fully completed and your client is happy before asking. If the client is one you work with continuously (such as on a retained basis), make it part of your process to elicit feedback and testimonials at least every six months.
  3. Ask for what you want, just like this business owner did. On a regular basis and at the end of every project, ask clients for their recommendations and to spread the word about your service. You act proactively on behalf of clients; do the same for yourself!
  4. Make it as easy for clients to refer you. This fellow’s request made it very clear who we should refer (“anyone needing process service in  Minnesota.”). The more you have your target market specifically defined, the easier and more frequently folks will refer to you and spread the word.

Now go get those referrals and recommendations!

Dear Danielle: How Do I Price My Service?

Dear Danielle:

With all the info I’ve learned so far in establishing myself, I’m finding it to be “taboo” to ask what a reasonable asking price should be. While I earned a comfortable living as an employee, I have done some research enough to know that I should charge an amount that would allow me to buy good medical insurance. Why is it such a no-no to ask colleagues what to charge? Some of them are offering their services well below what I would consider a decent wage. I have more than 18 years of experience in the executive assistance world. I don’t want to out-price myself but I don’t want to undersell myself either. Can you provide guidance on where to start on this perplexing and critical issue? –AK

The reason you’re running into problems getting this question answered directly is due to antitrust laws. It’s against the law for businesses and industries to “conspire” to fix industry pricing standards.

But don’t fret, because what you need to know isn’t based on what anyone else in the industry is charging. In fact, one of the worst strategies you can employ (if you even want to call it that) is looking at what your peers charge–especially since most of them are not in fact earning well or charging profitably in the first place (as you recognized).

In our industry, people do struggle in this area. Some of that has to due with lack of business knowledge or sense. Some of it has to do with many people entering this field and still thinking in terms of being an employee. They don’t understand that this isn’t a job, but rather a business and a profession. They then end up charging what amounts to an employee’s wage (without any of the requisite benefits!) because they just don’t know any better.

But you don’t have to fall into that trap and asking the question shows that you are a sharp, thinking person who is well on her way to business success!

The first thing you want to look at (and I would review this every year) is what it costs to run your business. That means adding up and anticipating all the overhead, expenses and capital outlay involved in your business. We have a free, automated Income & Pricing Calculator (in Excel format) that will help you do just that.

Two of the most important things you’ll also want to account for in your calculations are 1) your own salary and 2) creating profit. This is because you shouldn’t just be operating to cover your business expenses. Think of your own salary as above and beyond all your other operating costs and expenses. You’ll therefore want to make sure you’re charging enough to not only provide for the business, but also pay yourself a salary on top of that.

You also want to create profit because it is what allows your business to grow, makes sure there is operating capital during lean times and, perhaps most importantly, it gives you choice in your business. Lack of money creates lack of options. Lack causes you to step over your standards and feel forced to accept things or make choices that aren’t ideal for you or your business. That is often the death knell for businesses. In that situation, many ”die” before they ever get a chance to get off the ground for that very reason.

Pricing is also every bit a marketing strategy as anything else. Price too low and the message you send to your marketplace is probably going to be that you aren’t top quality and that what they’ll receive may be unskilled, amateur or subpar. Many good clients with needs you are every bit qualified to support will pass you by because of that message and the perception it creates. Pricing on the high-end (as long as you’ve got the chops to back it up) tells them that you’re an expert in the field and they’re going to get real quality, skill and value.

Now, if you’re like most people entering a new industry or business, just because you may have every reason to price at the high-end doesn’t mean you necessarily have the confidence at first to do that. And that’s okay.

You’ll grow into your confidence as you work with clients. It will become easier and easier to charge exactly your right rate, one that not only sustains the business, but creates profit and honors the skill, expertise and value you provide clients.

I would definitely recommend that you at least try to start somewhere in the middle of the average industry range, even if it makes you uncomfortable. Be uncomfortable (and get used to feeling that way)! If you aren’t ever uncomfortable, it means you aren’t growing or stretching. And one thing you definitely can’t do is operate at a loss.

The other side of pricing as a marketing strategy is who you attract. Price too low and you’ll attract all the worst kinds of clients, the ones who always want something for nothing, always complain and never respect you or your services.

But when you start pricing more appropriately and professionally, you’ll begin to see that it attracts a whole other (higher) caliber of client. These clients are more interested in value and quality. Cost is less of a concern for them and they definitely aren’t looking for something for nothing.

They are focused on accomplishing their objectives and running smoothly, and feel that any solution that helps them do that well, happily and easily is worth its weight in gold. They know that a solution like that pays for itself and that they get out of it far more than they pay for it.  They are typically more successful and established and because they have a higher quality of business-mindedness, they are much easier to work with.

So keep all that in mind as well. Your price is going to attract a certain group or mindset of clients—which kind do you want?

Pricing professional services is a field of study in and of itself. Your learning in this area of business will be constant, ongoing and evolving throughout the life of your business. But hopefully, this helps give you some direction and food for thought to get started. :)