strategy – Page 13 – Michele Christensen

Every day, do something to build your business

As a solopreneur, it’s so easy to sucked into working on what’s in front right now rather than what will help you build the business you want to have later. Always “firestomping” may keep the business from burning down but probably won’t help you get ahead. A certain amount of time to crank out some tasks is really important, but make sure to spend time every day doing something to create, grow and build the business you dream of.

What are these activities? They vary from business to business, but here’s some ideas to get you thinking:

Building your community of people interested in what you offer. This includes social media, real life and your newsletter.
Planning your next projects and long-term projects
Brainstorming
Educating yourself
Creating new products or services to sell

That’s just a few of the things you could be doing to build your business. What else do you do to build your business? How often? Leave a comment and let me know.

3 tips for calculating your hourly rate

If you’re a solopreneur who offers at least some services by the hour, you’ll need need to calculate what rate to charge. This can be tough – aside from just figuring out the dollar amount it usually causes us to bump up against all sorts of mindset issues like “Would anyone pay that much?” Mindset is a big topic all by itself, but here are 3 tips to help you with the math.

Your hourly rate may be a flat $x per hour, or you may have a sliding fee based on how much time they book. If someone books you for a day or half-day, they might get you at a lower hourly rate. This makes sense for the business owner because you aren’t spending any time selling that additional time, and it makes sense to the client as a volume discount. It’s also cheaper for you to deliver a block of hours together instead of one hour at a time because you minimize your switching costs, i.e. time preparing and sending any follow up.
Don’t be intimidated by a number much larger than your comparable salary at a job. As a business owner, you need that rate to cover many things it didn’t when you had a job. Some examples include: overhead, business taxes, specific business expenses and all the time it takes to sign up new clients. Your hourly rate also has to compensate you not only for the hour you work but for all the expertise you bring into the situation. How many years have you been building your knowledge? How many classes have you taken? How many books have you read? Your currently hourly rate should reflect how much expertise you bring to the client.
Post your rates. Or don’t. There’s loads of debate about this, and ultimately I suggest taking it all in and start by doing what feels best and then test, test, test. See if posting or not posting helps you serve more people. I’m on the side of posting my rates right now. I almost never go any further with purchasing a product or service or even reading sales copy if I can’t see a price right away. If my rate scares someone off, then we’re not a good fit and we shouldn’t go any further.

Do you sell services by the hour? How did you calculate your rate? Leave a comment and tell me about it.

How not to build a mailing list

Throughout 2010, I did a lot of business networking. My efforts paid off in loads of new contacts, which was great, but not so great was the unexpected side effect of SPAM in my email box! About once a month, I got added to a newsletter without giving verbal or written permission (being in possession of someone’s business card does not mean they want to be added to a newsletter). These SPAM messages usually came from directly from someone’s email address without the use of an email list management service like Aweber (affiliate link). This meant that there was no “unsubscribe” button, and I had to email the person directly and tell them to remove me. If the spammer was on top of their email, I sometimes got removed. Often, it took more than once and I sometimes got added repeatedly after being removed.

This is SPAM as defined by the CAN-SPAM act (easy-to-read guidelines here), and is a great example of how not to build an email newsletter mailing list. It looks unprofessional and slapped together. If people aren’t opting in, the sender has no way of knowing if the newsletter is of value to the recipient of not. Only the recipient can determine that, and if they don’t want the newsletter then the sender is just being a pest by sending it.

There’s loads of reasons why this type of spamming isn’t a good idea, but the main one for me is that I’m irritated that the sender presumes to know their newsletter is good for me even if I don’t think it is. The way to avoid this is simple and not very expensive. Use a newsletter service like Aweber, and only send your newsletter to people that have expressed clearly that they want it. The rewards are huge – I’m still in awe every time I hit send that I have a community of people waiting to hear from me.

How relevant are GTD contexts to the Solopreneur?

Sometimes the context for an activity is critical

(If you’re not familiar with GTD, it’s the productivity and time management system outlined in the book “Getting Things Done” by David Allen.)

When I first read “Getting Things Done,” (“GTD“) I loved it. There were a handful of points that changed my life and the way I manage my time and one of them was contexts. The idea that our tasks occur in a physical setting or context, and that by segregating your to-do list into GTD contexts, you’ll have a ready-made list of tasks that are relevant to the context you are in. This idea helped me tremendously – when I was planning to go out and do errands, I had an errand list. If I was doing messy home repair, I had a home improvement list. If I was at my desk, I had an admin list.

It worked great for a while, but as is almost inevitable my life changed over time. My system no longer worked and I felt more scattered and stressed than I needed to be. When I looked at the problem, I realized that as someone who is self-employed and works from home, contexts aren’t all that important. Most of what I do both personally and professionally occurs at home in casual clothes. I do tag a few to-do items that I need to go out for or have some other noteworthy characteristic in their context, but for the most part, context is not very relevant to me. What is more relevant is blocking my time out for work and personal time, so that’s what I now do.

So the question is, how much do solopreneurs who work from home need GTD contexts? Do you use them or something similar? Is it a useful concept for you life right now? Why or why not?

The costs of doing business

Do you have a good handle on your costs of doing business? How much revenue do you need just to keep the doors open? How much in costs do you incur each time you sell something?

Lots of solopreneurs don’t have a solid grasp of their cost of business. So often, solopreneurs just want to help others and do what they love. They don’t want to know about or manage the business side of things. In fact, a lot of solopreneurs love their work so much they don’t even think of it as a business – they’d give their services away if they could.

The problem with this is that it doesn’t work. Not paying attention to the costs of business means you are operating in the dark and can’t make sound decisions. Many people start their solopreneur business thinking they just need to print a few business cards, put up a website and start doing their work. Word of mouth and the fact that the world needs their brilliance will handle the rest, right? Wrong.

You are as much as business owner and manager as you are a provider of whatever product or service you provide. You need to handle the business end of things in a manner that supports you and your work. Part of this is always having a handle on the costs of doing business. When I worked for big corporations, the budget was a huge ominous document that took months to prepare and was both revered and feared. I’m not suggesting you do that, but you can start by making a list of the costs of doing business that you incur just to open your doors. These costs are generally fixed, i.e. stable and predictable within the range of business volume you could expect in the near future.

Some examples of fixed costs could include:

web hosting
domain registration
phone and utility bills
rent
ongoing training you are investing in

It helps to know what costs of doing business you have each month so that you know how much you need to cover them. It’s the first step to understanding and managing the profitability of your solopreneur business.

You also incur costs that only happen when you generate revenue. These costs are variable and depend on how much you sell and may vary by product.

Have you ever tallied your costs of doing business? Were you surprised, either in a good way or a bad way?

Update profiles regularly when using social media for business

First of all, if you aren’t using social media for your business you probably could benefit from it. How to use social media for promoting your business is more complex than can be covered in one article, but watch for future articles explaining some of the benefits of using social media to promote your business. For starters, it’s mostly free of monetary cost and has a huge reach. No matter what your business is, your customers are probably hanging out somewhere on the social sites.

If you’ve been reading my articles or been in my community for any time, you probably know I love processes and systems. Any time you have to do a task over and over, it pays to create a simple system for doing it. Make sure to also include an automatic reminder so you don’t have to remember to do the task. I use this strategy for updating the profiles I use to promote my business.

I recommend you keep a simple, clickable list of the social media profiles you use for business, including any you use mainly for personal use and update (or at least review) them monthly. It should take under half an hour unless you have a very large number of profiles you are using for social media. If you aren’t in the habit of updating regularly, this may seem like a lot of updates. I hardly ever looked at my profiles when I first started using social media for business. It seemed like something to do once and then the goal was to provide regular content. Once I started checking monthly though, I was surprised at how often I changed my language, tag lines, current service array and activities. I’m learning constantly, so often I take a look and realize I haven’t put my newest bit of knowledge into a profile. Your profile is a really important piece of your social media strategy, so it’s important to keep improving it.

One month is a good interval to use for updating the social media profiles you use for business. It’s long enough that you’ll have a fresh outlook every time you look, and short enough that you won’t have information out of date for very long.

When using social media for your business, don’t treat your profiles like a one-time task – they are business asset and the first impression your new connections have of you.

Want to connect? I’m on Facebook, Twitter and LinkedIn.

Make use of holiday slow time, part 3

This is part 3 of a 3 part series. Click here for part 2.

The final idea I have to share about making use of a slow time in your business is to use the time to create processes and systems for things you do regularly. I’ve seen many business owners get caught up in reinventing the wheel for tasks they do all the time. My rule is this: the first time you do a repeating task, write down the steps you think you need to do in order to complete the task. As you do the work, adjust your list and add notes to help you next time. The second time you do it, work from your list and again improve it based on what you learned. By the third time, you should have a pretty solid process that continues to change over time as needed. The more you can systematize and document repeating tasks, the more efficient you’ll be at doing them. You’ll be less overwhelmed and it will be easier to start. Finally, if the time comes for you to hire some help, you’ll have a process in which to train the person not just an ill-defined result you want.

Don’t get stuck on making your processes perfect. Paper is fine to start with (and maybe for a long time after). Don’t worry too much about formatting or formality. This isn’t for your customers, it’s just to make you more efficient.

Here are some ideas on processes you might want to start with:

sorting and filing paperwork
bank, credit card and cash reconciliations
data entry
compiling your newsletter
cleaning and maintenance
opening and closing if applicable

Give it a try! Leave a comment if you have any other processes you can write up.

Is your business slow right now?

If so, you can use this time to help make 2011 a great year. By getting ready now, you can hit the ground running on that first day back to work after the new year and not waste any time figuring out what to do. You’ll want to work on both your big picture plan and some detail items as well.

Here are some ideas to help you do some planning for 2011 right now:

If you haven’t done any planning for 2011, aim for a simple plan since it’s already December 16. Next year, you can start earlier and be more detailed and complex. Start by looking at a calendar (electronic or paper) and write in all the big events you already know about, including both personal and professional. Some ideas to get you started: holidays, birthdays, anniversaries, yearly family events, school events, community events, business events, medical issues and big personal projects like home improvement.

Knowing these events and date ranges ahead of time will help you know when you may be less available to work or simply less productive. Schedule your major business projects around these events. Look at what you want to accomplish in the year and set some time frames. Consider what projects need to be done before others. Look at how you can use yearly events in your marketing – think “back to school sale” or “summer seminar.” Make sure to schedule prep and marketing time before any events or products you launch.

Planning can be done on a much greater scale, but doing just this much should give you a good overview of the year. Knowing the order in which things are happening will help you prioritize what needs to be done first, and will help you know where you are in your yearly journey.

Along with planning, you’ll want to set some numerical targets for the projects you are planning. If you are doing a list-building project, how many new subscribers do you hope to gain? If you are doing some SEO or traffic building, what numbers would tell you you’ve been successful? You don’t always need specific numbers – sometimes just an idea or a direction will do. If you have 500 subscribers now and more than that after your list building project then you know it worked to some degree. If you’re trying to save time on something, the hours spent should be going down.

In my next post, I’ll tell you about how you can prepare your space and files for the new year.