Audio stream
Lauren
Lauren is hiring help in her business. She wanted to talk about how to go about it wisely. Specifically, how might she approach budgeting for the expense of new team members?
My first thought about when/how to hire is:
It’s time to hire when lower-paying administrative work is getting in the way of higher-paying business-building work. If you find you’re running out of time for marketing and interacting with your clients because you’re managing technology, answering basic email, etc, then it’s time to look for someone in the $20 – $30 per hour range to take some of that work off your hands.
In other words, your first hires will be a reaction to increased profitable demands on your time.
Another hiring scenario is more aspirational. When your business reaches a degree of stability and you have some extra cash, you might try some experiments with filling a role in your business before it seems absolutely necessary.
For example, I’m currently hiring a content manager/copywriter/editor. Filling this role isn’t essential in my business right now; I can serve my CFO clients without making the hire.
But I’m feeling confident to fill this role because:
I’ve budgeted an amount for the position that will not risk my own income or my ability to pay my other team members.
I have multiple examples where publishing content has led directly to new relationships and revenue.
I seem not to easily generate the enthusiasm or focus for publishing on my own.
So I’ll make the hire and then work to make it a success. If it pays no dividends I’d let the person go. (But I feel confident it will pay dividends. Our world runs on content. It’s the best way to build the “like and trust” that leads to revenue.
Patience is the key to making any hire as effective and durable as possible. There’ve been a few times where I became infatuated with the first applicant for a job, made a hire in a hurry, and ended up with someone whose work and/or personality weren’t ideal for the position.
The solution is to require yourself to talk to more applicants before saying yes to any of them. You may end up hiring the first applicant, but if you stretch the process out a little more and talk to more people, you’ll end up more confident and clear about why you’re hiring the first person.
Just this week I’ve had five interviews for my new content editor/copywriter, and I’ve found that each additional interview helps me see more clearly what I liked about previous candidates. Each new conversation creates contrast that makes my final decision easier.
As to how much to pay a person:
DON’T use your entrepreneurial aspirations for income as the benchmark. If the person wanted to have unlimited upside in her income, she’d either start her own business or get into commission-only sales.
DON’T be cheap. Last year I chose the less-expensive option when I was hiring and ended up having to go through a period of low productivity and an awkward firing. Heidi’s income expectations were twice as much as the person I had to let go, and it’s been the best money I’ve spent in my business.
A note for those of us in the life coaching industry: I’ve noticed a lot of “rate inflation” in our world. Aspirational coaches paying unnecessarily high wages to aspirational contractors. It’s not necessary, and it sets the relationship up for failure in the long run.So, how do you decide how much to pay? My friend Jesse Mecham (founder of You Need a Budget and employer of 110-ish people) gave me this advice: pay a person the amount that lets them stop thinking about money and just focus on loving their job. I love that.
Lindsay
Lindsay is launching a podcast. No big deal. Except for the fact that she works at Amazon, is currently putting in 12+ hour days, just had to convert her entire team to remote instead of in-office. Oh, and by the way: her niche is Amazon employees who are trying to NOT wash out of their jobs. The irony.
She’s wondering if it’s (at worst) insensitive or (at best) ineffective to launch a podcast during this bonkers time in the world and in her company in particular.
Here’s the thing: we have no idea when the right time will present itself. All any of us can do is publish our stuff, do our thing, and do the best work we can to help the world get back to normal.
I’ve read great stories of businesses started in the middle of the 2008 mess and right at the peak of the 1929 crash that kicked off the depression. There may be no ideal time to share our work, but now will continue to be the best time.
Marci
A few weeks ago Marci came to Office Hours and asked me to give feedback on it. I could tell she felt unsure and unenthusiastic about it, but she had written it because she’d been told to “write blog posts” so she wrote a blog post. It was obvious that she felt no confidence or enthusiasm about it.
Fast forward a couple of weeks and she gets the idea to go for a hike and record video of workouts she did throughout the hike. In the video she includes ideas and tools that come from her training as a life coach.
I need you to understand how different Marci’s voice and body language were as she told me about this video. She loved making it and sharing it.
I could stop right there and say that’s it. Marci wins. She found a way to create and share content that felt great and valuable to her. That kind of effort, over time, guarantees some transfer of enthusiasm to people who see the content, whatever form it takes.
In this case a friend of Marci’s saw the video, reached out for help, and set up a call for the next day. It doesn’t matter whether that particular person hires or pays Marci.
What matters is that Marci got a glimpse of a full “marketing cycle:” she created and shared content that felt great to her, her enthusiasm came across to a viewer, the viewer reached out for help.
Repeat daily, forever, and you’ll have whatever business you want.
By the way, Marci’s original question was “how do I blend my fitness business with my life coaching business?”
I pointed out that she obviously knows how: create fitness-related content and let it attract people to her coaching work. Great job.
Hailey
When I was talking to Haily I kind of got into one my rambles and covered a lot of territory. There were several tangents. Bless Hailey for saying she liked the tangents.
Here’s a few thoughts about each of the topics we covered:
Her pricing: she worries that she’s packages and retainers too low. I asked her what she charges. $3,000 to $5,000 to build out a marketing funnel and $1,000 to $1,500 for ongoing ad management. Yes, I told her, that’s a little low for managing people’s ads.
Now, it’s not quite fair to make such a blanket statement about her pricing. To clarify, I told her it’s hard to do great work in that particular field for such that amount. In fact, if my clients are considering an ad manager and the ongoing fee is less then $3,000, I get concerned.
Hailey told me she likes her rates because they’re accessible. I told her that accessible is a word I’ve used and heard a lot in the world of coaching and freelance, and I’ve decided that accessible is code for “underpriced.”
So, she obviously doesn’t have to change her prices. She may do just fine with them as they are. It’s just an area of inquiry for her.
Her team: Hailey told me she’d like to work a little less and take a few more vacations. She’s wondering if raising her prices is the way to achieve that (see above). Maybe, I told her, but let me ask you about your team:
Are there any members of your team whose performance lags behind everyone else’s? Are there any members of your team whose work has to be reviewed by other, more-reliable team members?
Yes, she told me, two out of seven members of the team chronically underperform. She’s in a cycle of giving them warnings, seeing their performance improve for a while, then seeing it slip again, then giving them more warnings…and around we go.
She knows they’re not ideal, and she’s gone so far as to hire and train a replacement for one of them. But then the pandemic craziness hit and she felt like she just couldn’t let a person go in the current situation.
I’m afraid I sounded a little callous about this part, but I told Hailey that two team members chronically underperform are costing her way more time and money than she wants to admit. It also might be hurting her credibility with her higher performers. She’s unintentionally sending the message that underperformance is fine, and that higher performers will be asked to clean up after the B-team. Yikes, it all sounds so harsh. But I know all this because I’ve been where she is and done what she’s doing.
Hailey did tell me she likes the idea of improving the lives of people in her community who wouldn’t otherwise have this kind of opportunity: a well-paid, online job that helps develop an in-demand skill set.
I’m all for that, I told her. You just have to make sure that’s the business you want to be in and accept the associated costs. Some of those costs might be missed vacations and increased stress associated with having to double and triple check the work of people you just can’t quite bring yourself to let go.
Hailey has such a great business: her services are in-demand (and I think will be especially valuable to businesses in the current economic environment). She cares about her team and her clients. She delivers results.
My final encouragement to Hailey was to go confidently into sales conversations, even at a higher price, because customers are the lifeblood of a business, and she delivers customers.
Sara
Sara’s in basically the same situation as Linsday: wondering if mid-pandemic is really the time to be starting a life coaching business.
Here’s my thought for Sara and for all of us:
In my conversations with clients I’ve noticed that people are giving the same types of reasons for waiting to do their work:
“My people are too busy…”
“It’s bad timing…”
“I don’t want to be seen as…”
The only difference I’m seeing now is how we’re ending those sentences:
“My people are too busy…” could end with “because it’s summer” or “because of the pandemic.”
“It’s bad timing…” could end with “because of the holidays” or “because of the pandemic.”
“I don’t want to be seen as…” could end with “salesy” (like a network marketer) or “insensitive” (because of the pandemic).
They’re the same basic reasons, and that’s why I’m not sure we should trust them.
I wouldn’t criticize anyone for taking their eye off business right now. Many of us will shift focus for a while. But let’s not tell ourselves it’s because we can’t do anything in business at the moment. We can build our relationships and our skills, and I think we do the world a great service by reaching out and making offers throughout this entire experience.
Dara
Dara had a small coaching group that she was charging $20 per month. She knows her goals will require her to charge a lot more than that, so she invited the people in that group to hire her for $2,400 for six months (which is half-off her normal rate). In that group she had no takers (although there was one yes from a different group that had been paying a similar amount).
When no one took her up on the offer, she understandably felt a little hurt. The members of the group seemed to take it pretty hard (almost personally) and let her know they’d go ahead without her.
She felt a little rejected and wondered if she’d done something wrong. If they’d gotten some great results from the work so far, why wouldn’t they want to go further in spite of the new price?
I can’t claim to know, but here’s my thought:
Price isn’t just the amount our clients pay us. It’s part of the social contract we enter with the client when the hire us. A jump from $20 to $2400 is a fundamentally different relationship because $20 is a very different amount in the context of that person’s entire financial situation.
When we ask someone to pay over 100x what they used to pay us, it might go beyond the simple math. It might strike them as crazy or even offensive. When I raised my CFO prices 5x a couple of years ago, some of those clients were stunned. They couldn’t believe it. They probably could have processed a 2x increase, but 5x was in a totally different category. None of the stunned clients paid me the new rate.
So, I don’t think Dara did anything wrong here. I view it as the completion of her $20 internship and her graduation to a whole new level of business. It’s all part of the journey.
That’s it. Stay safe and healthy this week. And stay home!