Tag Archives: media

Self-employment Tips: the Missing Manual

Normally when you start a new job, you get an employee manual that gives you rules, procedures and other useful bits of information. But when you’re self-employed, you get no manual. No one gives you tips for the newly self-employed.

Fortunately, we now have Google, and any specific problem (How do I register as an S-corp?) can be pretty easily answered.

The tricky bit is those things that Google can’t answer, because you don’t think to ask. Things that have changed from the world of other-employment, but no one told you that they changed.

So here I present my 10 most important self-employment tips: what I wish people had told me when I became self-employed.

“Productivity” is measured differently

This is really obvious when you think about it, but you have to stop and think about it.

When you were employed, someone else was measuring whether you were being “productive”. And just between you and me: I know that you weren’t always productive when you looked busy. At 3 PM on a Friday, you were just moving the mouse around, or fiddling with files, or writing useless memos. It’s OK – we all do it.

But there’s no need to do it now. Now you’re the one measuring productivity. And that means that you get to decide what counts as “productive”.

Surfing the web doing mostly useless internet “research”? Probably not productive.

Taking 30 minutes off to go for a walk / do some yoga / sip tea and contemplate the direction of your business? Probably productive.

Resources for Further Reading: What is Productive?

More is not always better

It’s easy to feel like you’re not doing enough. Like you’re not good enough. Like you can’t be charging very much for this, because somebody else does it “better”.

Odds are good that your old employer was intent on being everything to everyone. On shipping products with hundreds of features, that did everything you could possibly desire. Back in the days when a single doodad could cost a week’s worth of wages, and nobody could reach customers except through mass markets, that kind of thinking made sense.

But now you can make profitable products that cost as little as 30-seconds worth of wages. And you can target amazingly specific markets, like people who have WordPress blogs and want blue backgrounds with dark blue text or people who think that pictures of cats with misspelled captions are the very pinnacle of humor. So the one-size-fits all product doesn’t make sense any more. Their products are not better. They’re just bigger

Resources for Further Reading:
Opportunity cost: More Is Not Always Better
Who’s the Best?
Risky Compared to What?

Don’t sell to everyone

This is a corollary of the above. If there’s no one definition of best because everyone has their own opinions about what’s important, then there are some people for whom your product is the best. There are also some people for whom your product is not the best.

Ignore those people.

There is no obligation to try to sell to everyone. There is no benefit to trying to sell to everyone. It wastes your time and annoys the prospects. Don’t worry about people who don’t like your product; focus on finding the people who do. Everyone will be happier.

(Side note: it also follows that you’re allowed to fire customers. When you were an employee, your employer got the to make the decision about which customers were worth dealing with, and you had to work with whoever they sent to you. Now that decision is yours. Someone aggravating you so much that you don’t want to work with them? Say, “I’m sorry, but I don’t believe I’ll be able to meet your needs, so I’ll have to decline. I hope you’re able to find someone who can help you.” You don’t have to work with anyone.)

Resources for Further Reading
Target Market: Who are your clients?
Target Market: Segmentation
Target Market: Getting to Know Them

You’re now in sales

OK, actually, lots of people told me that. I even, at some level believed them. But not deep down. I still hoped that, somehow, people would just show up on my doorstep without being asked.

I don’t expect that my saying it again will convince you any better than anyone else’s has, so I won’t try. But when you wake up one morning and say “OMG! I’m in sales!”, here are some resources for you to browse.

Resources for Further Reading
The Hardest Thing You’ll Do
You’re Great at Sales
Are Marketing And Sales Unethical?
Do You Suck?

The decisions you’re making now aren’t actually that important

This attitude probably actually came from school; at least that’s where I got it from. In the US school system, you’re given one try. One essay on Pride and Prejudice, one guess on the history test. If you get it wrong, you fail. So making the right decision becomes hugely important. Your employer may or may not have had this sort of culture, but odds are good that they didn’t do much to discourage it.

Which is sad, because the real world works almost NOTHING like that. In the real world you get almost infinite guesses. There’s nothing wrong with guess-and-check: it’s called testing, and it’s recommended by every intelligent marketer, SEO, and business coach.

Experiment with your business’ name. Experiment with your products’ names. Experiment with your business model. Experiment with your web page. Experiment with your sales techniques. Experiment with your prices.

Don’t know what to do? Pick something and try it. You can always change it later.

Resources for Further Reading
Flickr used to be an MMORPG
Play it safe.. and experiment
Picking a name
This ain’t middle school

Lack of instant success is NOT failure

This is a corollary to the above. We got our definition of failure from school, where, if you’ve failed the first time, you’ve failed forever.

The real world, as noted above, works nothing like that. You try something. It doesn’t work as well as you’d like. Maybe it doesn’t work at all. You have not failed. Your first try failed. You get as many guesses as you want.

I mean, imagine you’re in math class and the teacher says that on this test, you can retake it as many times as you want, and whichever you want to count towards your grade will be the one that counts. Furthermore, you can have your previous graded tests with you when you take the text the next time. How could you possibly fail? There’s only one way, really, and that’s to quit while you’re behind.

That’s how the real world works. You cannot fail except by choosing to give up and stop trying. Hey, wait, other people have already said that.

I know that seems obvious at this point. That’s ‘cuz I’m very persuasive. After your first failure, it won’t feel so obvious. All the cultural and educational conditioning will kick in, and you’ll feel like a pathetic, suicidal, good-for-nothing loser. But that perception will be wrong, so try to remember that, and come back here if you need some inspirational reading.

Resources for Further Reading
Lack of instant success is NOT failure
Think You’re Not an Expert?

Your definition of risk has changed

The philosophy of US educational system and of US corporate culture can be pretty well summed up as follows: Don’t Make Waves.

We’re trained to shut up and keep our heads down. Write the same tired essay about how the fall of the Roman Empire was due to decreased democratic principles. Don’t nag the teachers about obvious exceptions to the broad statements they’re making. That’s how you avoid failing.

That doesn’t work here. Your biggest risk is not that you’ll irritate someone. Your biggest risk is that no one will realize you exist. That no one will think your product is good enough to bother with. That every single competitor will be a better choice than you are for some reason.

If you do something crazy, you have a chance of being awesome. If you do nothing crazy, you’ll drown quietly in a sea of mediocrity.

Resources for Further Reading
Who’s the Best?
Risky Compared to What?
Dangerous or Gutsy?
When More Volatile is Less Risky
Examples: When Predictable is Risky

PLAN!!!

In every organization, there must be someone who knows what’s happening and why. Employees can simply rely on the Strategic Planning department of their company, but your organization now consists of you. No more just muddling along waiting for someone to tell you what to do. It’s now your job to decide what to do, how to do it, and then to get it done.

So you really need to start planning. I don’t care if you plan your days out in a little hour-by-hour grid — that sort of planning seems to work well for some and horribly for others, and I trust you to make your own decisions. But you really need to have some idea of what you hope to accomplish in (a) your lifetime, (b) this year, and (c) this month. It serves all sorts of useful purposes: it helps you define “productive”; it helps you decide who to sell to; it helps you identify opportunities vs distractions; it helps you assess risk. It helps you actually to be productive. There’s really no substitute for it.

Trust me on this. Plan.

Resources for Further Reading
Annual Planning: What do you want to accomplish this year?
Monthly Planning

No Kamikaze Pricing

Hey, odds are good that you were getting paid a lot less per hour at your last job. “Standard market price” feels like a heck of a raise. OK, so it’s what your boss was charging for your time — which is part of why you decided to become self-employed — so you were always worth that much, right? But it feels like a lot, and maybe you don’t quite feel like you’re worth that much, and anyway if your prices are lower, you’ll get lots of customers, right?

Well…. no.

There are several problems with that:

  1. You can’t profit at that price There’s a reason your boss was charging that much for your time: it’s what they had to charge in order to buy supplies, pay overhead, and still pay you. By the time all the business expenses are paid out, you’ll be making basically the same amount as you did before. Did you really want to take a pay cut?
  2. Customers will think you’re sleazy If you’re significantly below market price, customers aren’t going to look at your prices and think Wow, what a bargain!. They’re going to look at your prices and think Wow, how is this guy staying in business? Is he staying in business? Maybe it’s just a scam; he’s going to take my money and skip town. Or maybe he just does shoddy work, so he doesn’t have as high of costs. Either way, I certainly can’t get anything good for that price. I’ll stick with the big-box corporate competitor.
  3. You’ll be locked into price wars If you do manage to make sales, you won’t have gotten them on the basis of your stellar workmanship or awesome customer service: they’ll be based on your prices. If you raise your prices, you’ll lose all your customers. You’ll be stuck forever at the bottom of the barrel.
  4. You’ll get the worst customers There are always customers who are willing to risk shoddy worksmanship and sleazy business in order to save a few bucks. But they’re not the people who will happily pay for good work. They’re the people who resent every penny they pay you. Who will ask for discounts on above-average work. Who, when you give them a 10% discount, will ask for 20%. Who will complain about your prices and your work. Who will demand refunds on “faulty” products that aren’t faulty. Who will put off paying you until you’ve asked politely 3 times and less politely another 4. Easiest way to avoid those customers? Raise your prices.
  5. You can’t out-WalMart Walmart The big box stores can always be cheaper than you can; they’ve got better efficiencies of scale. So all you can do is trigger a price war that you’re guaranteed to lose.
  6. Charge what the market will bear. No kamikaze pricing.

    Resources for Further Reading
    Are you using kamikaze pricing?

    Most businesses fail.. but most jobs succeed

    When you decided to become self-employed, or possibly when you very first brought up the possibility, some “friend” said to you: “You know 95% of businesses fail in their first 5 years, right?”.

    Subtext: Who the hell do you think you are? How dare you think you’re good enough to move out of the employment hellhole? Stay here and suffer with the rest of us, like a Real Man!

    The statistic is accurate, but the conclusion drawn from it (that you should just give up now and not even try) is entirely false.

    First off, we use definitions of “failure” for businesses that we wouldn’t use for anything else.

    Secondly, “failure” of a business doesn’t mean that the owner went bankrupt and starved on the street: it means that the owner had to make another guess and try again. Remember the infinite math tests?

    Thirdly, many “failed” businesses supported their owners & their owners’ families for years before they “failed”.

    Fourthly, that statistic conflates true “Business” ownership with being self-employed, and so the 95% failure rate is a purely meaningless number. It’s not only lumping in apples and oranges but also bananas and pears and pineapples in an attempt to scare you out of making an intelligent, challenging, fun, and generous choice.

    Maybe you can’t do this. But maybe you can. Don’t let some loser scare you off with an invisible mallet.

    Resources for Further Reading
    Most Businesses Fail… But Most Jobs Succeed
    80% of New Employees Fail Within the First 5 Years
    You’re Not In It For the Money
    The Invisible Mallet

    What do you wish someone had told you when you became self-employed?

What is “Too Good to be True?”

Let it be noted that there are a lot of scams on the internet. I mean, there are a lot of scams everywhere, but the internet is a favorite medium due to its anonymity and relative novelty. So I guarantee you that you can, with little effort, find a website dedicated to separating people from their money without providing any value in return.

Almost as prevalent are sites dedicated to helping people spot and avoid those scams. Some are better than others, but almost every single one includes the line “Remember: if it sounds too good to be true, it probably is.”

What is “Too Good to be True”?

Am I the only person who doesn’t find that terribly helpful? I mean, yes, I agree that many con artists will try to lure you in with a deal that’s unsustainable. But it’s also true that a lot of weird $*!& goes on in the world. Who am I to say what’s realistic? I’m well-educated enough to know that (to a first approximation) I know essentially nothing at all. I’m also young enough to have seen dozens of rounds of

    It’s not Possible! ->
    Well, it’s possible but stupid ->
    Well, OK, sometimes it’s alright ->
    What are you talking about? Everybody does that.

So I just don’t feel like asking my gut to make a decision is the best heuristic. I mean, in most cases I have literally no data on the topic being discussed, and that’s what your gut uses to make its judgments. So I’d be just as well off flipping a coin.

Asking my social network is even worse: my friends’ guts are equally uninformed, and it only takes one loud idiot to make a bad group judgement.

The World is Changing

A lot of things are possible now that weren’t possible when I was born.

  • A store can make money — and drive competitors to bankruptcy — without any storefront at all.
  • An author can make more than $1,000,000 a year without any help from a publisher and without selling any paper books.
  • An advertising agency can get better results by not hiring any employees at all, and instead using only freelancers.
  • Jobs that used to require a commute and fixed hours are now done from your own house whenever you have time.

So there are a lot of opportunities out there that could only have been scams 30 years ago — it was simply technologically impossible to make them work — that are becoming commonplace now. “Too good to be true” has become not only a lot fuzzier, but a lot harder to judge.

How Does That Work?

So how about some new heuristics?

Ask When someone proposes an “opportunity” that you think might be a scam, ask them for more information. How does that work? Where do you get customers? Products? Funding? How do you get paid? What’s in it for me? What’s in it for you? What’s in it for them? Whether it’s a scam or not, you should never proceed until you truly understand what’s going on.

Research Of course, any con artist worth their salt can spin a line of BS that sounds convincing, so you should also research independently. Google is good for this, as is your local Business Bureau. Research the concept: are other people trying this? How long has this company been around? Does the technology work the way they said it does? Have other people tried this and liked it? Google “[Company name] scam” and see what comes up (do read whatever comes up — anyone can post a website saying that so-and-so is a scam, whether so-and-so is Bernie Madoff or the Red Cross. You have to judge for yourself whether either party consists of kooks, honest people, or some mixture of both).

Ask people in the industry Hollywood is forever creating tech-based plots that even fairly un-techie geeks like me can tell are flat-out impossible. Our guts don’t have enough data to make good judgement calls on most things, but there’s someone out there who can make a good judgement call on anything. So find someone who knows business to ask about this “investment opportunity”, or someone who knows tech to ask about this new “polarization regulator”.

Perform a Risk Analysis Still not sure? What do you have to lose? No, really, what do you have to lose? Knowing what you’re risking is a huge part of determining the best course of action. Plus, you get a nifty free download. :)

Let’s start making assessments on the basis of facts instead of fear.

The 4-Hour Workweek Book Review

The Cover of Timothy Ferriss' The Four Hour Work WeekYou need to read this book. Go to the library, bookstore, or whatever source you prefer to use. Get this book. Read it. Then read it again. If you are serious about monetizing yourself without working 40 hours/week, this book is the single greatest resource towards that end. (Other than me and my website, obviously.)

And if you’re just looking for the summary of the review, you can stop reading. But I’ll go into more detail, in case you’re interested.

Why you should read this book

Because it helps explain the whole monetizing-yourself concept
I posted a while back about resources for self-monetization fundamentals, and included The 4-Hour Workweek in that list. Timothy Ferriss is well aware that what he’s advocating is not normal. There’s a significant section on how to accept not being normal, realize that “normal” actually is really pretty awful, how much work it’s going to be, and why it’s worth the work. In fact, about half of the book has nothing at all to do with money, and instead talks about the actions and ideas that you’ll have to incorporate into your life to make this transition.

Because it’s specific
There’s still a lot of stuff you’ll have to figure out on your own, don’t get me wrong. It’s the nature of this new world — if you make the decision to be in charge of your monetization, then you have to accept that you no longer get your tasks spoon-fed to you in idiot-proof sound bytes. But each chapter ends with specific actions to take that will help you implement the ideas in that chapter.

Because it helps you build courage
I explained a while back why I focus on courage so much– because you’ll need it in many different aspects of your new, non-employment life. Ferriss is also aware of this need, and so each chapter also has “Comfort Challenges” to help you get comfortable with being uncomfortable, starting with the fairly low-risk “Look someone in the eye until they look away” and becoming progressively more scary, although no more dangerous.

Because it’s inspiring
Monetizing yourself is a lot of work. Consider the amount of work you know you’ll have to put in — finding a niche, learning new skills, implementing your plans — and consider that there are probably some things you don’t yet know about. Then consider that the amount of work you have to do in the world is 50% – 90% less than the amount of work you have to do on the inside to develop your strength, courage and tenacity to the point where you can do the “outside work”. It’s a lot of work.

The 4-Hour Workweek includes stories, ideas, and descriptions of what else you could be doing with your life, if you didn’t have to spend 2/3 of it working. Stories from Tim, stories from people he’s helped, or just ideas of things you might like to do. It can be a nice reminder when you are feeling overwhelmed and frustrated.

Read this book

That is all.

Monetize Yourself Case Study

The last 3 posts have talked about specific ways you can monetize yourself: by selling your time and expertise, by selling your expertise directly, and by giving your expertise away. But in actuality, these categories are not so clear-cut, and the applications get a bit messier. So I thought it would be helpful to look at an example of someone trying to plan out a monetization mix.

    Jargon Alert: in marketing, a “mix” is the list of things that you’re going to do for a particular purpose. So a product mix is the products you intend to sell; a promotional mix indicates how much of your budget is going towards TV ads, how much towards radio ads, and so on. In this case, a monetization mix is a list of which monetization methods you wish to use, and to what extent you intend to use them.

Case Study: Andrea the Accountant

Andrea is in her mid-20s, with a bachelor’s degree and a few years of work experience. She’s determined that, although jobs have their uses under certain circumstances, she doesn’t want to have a job as a long-term solution; her independent and creative spirit will be happier without a boss, and she feels she can provide more and better value to the world by sharing her expertise directly.

Andrea has an interest in personal finance, and a talent for organization and practicality. Over the last few years she’s done a lot of research on budgeting, investing, and getting out of debt. From what she’s learned, she’s created a few spreadsheets to help keep an eye on her family’s finances. Lately she’s found that she has enough knowledge and information to be able to help others out: she’s taught college friends about debt management techniques, and helped her grandmother create a monthly budget.

Andrea’s Monetization Mix

Sell your time
Although Andrea doesn’t want a job long-term, she has bills to pay right now, and she doesn’t want to have to worry about whether or not her business will be able to support her instantly. She calculates that she needs to bring in $900/month to supplement her husband’s income and keep the family budget running smoothly, so she’s going to get a part-time job while her business is getting started.

She also is going to sell her services as a consultant to anyone who wants help with setting up a budget or making a financial management plan. Because she wants to be affordable to those who need help, and because she doesn’t have a lot of experience as a consultant, she decides to charge $25/hour.

Sell Your Expertise
Andrea’s done a lot of reading about personal finance, and she has noticed that some books on personal finance are too theory-oriented, with not enough information on how to actually use those theories.

She’s written an e-book with practical tips on how to actually track your expenses and calculate your cash flow. It includes example categories of spending, ideas on how to figure out how much you’re spending in each category, and the equations you need to do the necessary financial calculations. It also includes a link to a spreadsheet that Andrea made, that will do the calculations for you. She plans to sell this ebook, but she hasn’t decided on the price yet.

Share Your Expertise For Free
Andrea still has student loan payments, and remembers how hard it is to manage your money when you’re not sure what to do. So she wants to make sure that she’s providing free resources as well. She’s going to set up a website and a blog, where she can provide information on personal finance, and keep it up-to-date with whatever she finds during the week.

Since the goal is to create a free resource, Andrea doesn’t want to charge for access. Instead, she’ll monetize her website through ads and affiliate programs. Companies that want to reach personal-finance audiences will pay Andrea to advertise on her site (she’ll weed out the ones that she doesn’t want to be associated with). When someone clicks on those ads, Andrea will get paid. Products that are particularly good, Andrea will review and recommend. She’ll set up an affiliate program with those products, and whenever they’re sold, Andrea will get a share of the money.

A Harmonious Mix

Notice that none of Andrea’s monetization methods is operating in isolation, but that they all support each other:

  • Her website is easy to find, and a free resource for those who want help with their finances. It helps Andrea’s customers feel comfortable with her before they purchase: they know that she’s competent, and they know what kind of advice they’ll be getting. With ads and affiliate programs, it’s also a source of revenue.
  • Her ebook is a way for Andrea’s customers to get a little more information than is on the website, without having to go “all the way” and hire her as a consultant. It builds on the information found on the website, and again establishes her competence in the minds of anyone who reads it. It provides another way to monetize the website, and it helps her reach potential consulting customers. She can price it medium-high ($5-$10) to maximize revenue out of it, or she can price it very low ($.99) if she wants to use the ebook primarily as a marketing tool for her consulting.
  • Her consulting service gives Andrea with a way to provide personalized, timely information to her customers. It lets her give a boost to people who have read the ebook but still need a little more help. It also gives her another way to monetize the website, and it lets her practice her financial management skills. Although this is owning a job, because she has to spend time to get money, what she has to spend time on is
    1. helping people
    2. working with money, and
    3. organizing things

    — three things she loves to do.

Also notice that Andrea can add other monetization methods as she has time, resources, or desire to do so. As interest grows in her services, she could set up a class on personal finances at the local library or community college. She could start creating a podcast to complement her blog. If she gets enough traffic, a publisher may approach her with a book deal. She might want to make videos on personal finance: she could post them for free on YouTube, and sell them bundled on a DVD for anyone who’s interested. None of these are critical to start right now, but they leave Andrea plenty of room for development in the future.

Summary: Lessons Learned

You don’t have to pick a single method of monetization — in fact, a diversified income stream is better. And your monetization methods will usually work together in mutual support.

This list of options I gave is neither comprehensive nor exclusive. Use my ideas to get ideas of your own, and experiment with what works for you. My goal is not to make you try to fit into my pre-ordained categories, but to give you as many options as possible to express your creativity.

Monetize Yourself Media – Share Your Expertise For Free

This post is part a series on specific media for monetizing yourself. Today I’m going to talk about another category of potential media: sharing your expertise for free.

That Doesn’t Sound Like Monetizing Myself

This is the least intuitive category, so let’s take a moment to examine it. As I discussed in Distillery Tours and Alternate Monetization, “free” doesn’t necessarily mean that you’re not making money. That post used the example of Maker’s Mark Bourbon, who will let you tour their facilities for free, and make a lot more money selling you souvenirs than they ever could have made on the tour itself.

Free is the newest craze, and it works really well in some cases. The best example is our favorite search engine: Google doesn’t charge you for the use of its amazing search technology. They make their money “through the side door”, as Jeff Jarvis would say.

You, too, can open a side door.

Share your expertise…

Make a website

A website is actually just another form of Information Product: a way to provide information to those who need it. It can be less daunting than writing a book, and may be a better fit for the information you want to provide, since it lets readers easily browse information in whatever order is useful to them. It’s also easier to edit and update than a book, which is great if your area of expertise is expected to change itself in your lifetime.

Start a blog

Blogs are another way to share what you know. Since the days when they began, as a way for teenage girls to keep each other constantly updated on their social lives, blogs have evolved into a great source of information for whatever you may be interested in — from fantasy football to making money. And whatever you’re an expert in, you could write one, too.

…or site-blog

Blogs are great because you can keep them constantly up-to-date, and can write about whatever comes to mind. But websites are really nice because your readers can find the information they’re looking for (without digging through years of chronological posts). A compromise that’s coming into vogue is the site-blog: a blog that has all its posts in chronological order, so you may read back issues to your heart’s content, but also has the posts sorted into categories like a website, so that you can find specific, targeted information.

Make a podcast

Does your area of expertise lend itself better to audio or visual media than to text? Make a podcast or a video podcast. It’s not as hard as you think, and it can probably be done with free software.

Check out my first YouTube video.

You can do better than that. So why don’t you? You get to talk about your favorite stuff once a week, and you can call your mom and tell her you’re in a video.

… and monetize

If you make good stuff — a website with good information, a podcast that’s entertaining, or a blog that keeps people up-to-date in your industry — people will enjoy receiving it. And then all you have to do is monetize. Do this by

  • Selling ads
  • creating premium content, available for a fee
  • selling your services as a consultant
  • selling related products through an affiliate program
  • creating an information product you can sell to people who want more
  • selling t-shirts and coffee mugs related to your work

Low Risk… So Why Not?

All of the above can be done for free, or for very low cost. So why not try it out?

Resources For Further Reading
Site Build It! (A great resource for making a website – but the only resource on this list that isn’t free.)
WordPress (This is where I started my blog)
How to Podcast: 4 Basic Steps
How To Make Money From Your Blog