How To Run A Creative Business: In-depth breakdown w/ Melinda LivseyOn October 14, 2019 by Raul Dinwiddie
CHRIS: Hey guys it’s Chris here for the process. Today’s episode we’re going to get nitty-gritty we’re going to get into the minutiae, the details and we’re gonna talk about mindset. On what you need to do to overcome the power that money has over you. But before we do all that stuff I’m gonna
introduce our new co-host. She’s an amazing person and I’m excited to do that with you right now so stick around (MUSIC) CHRIS: Who’s this person sitting to my right? This is Melinda Livesy and she’s a practicing graphic designer. We’re gonna get into her story and then we’re gonna jump into her question. Okay, so, you’ve been out of school now for something like nine years if I got that
right. And seven of which you worked in-house as a graphic designer, on and off. Where’d you work at, what did you do, that kind of thing? MELINDA: I worked at a large eye wear company in the action sports industry. And so I first started out working in the graphics department doing marketing and advertising. And then later I went into the branding department we worked on product graphics and in-store graphics, retail displays and packaging. CHRIS: How did you get this jo b?
MELINDA: I originally got it from a portfolio review CHRIS: OHHH
MELINDA: At an AIGA event, the portfolio review, and I got picked up there as an intern, and that started my career. CHRIS: And did that happen while you were still in school or after you finished school. MELINDA: Yes it happened when I was still in school about two months before I graduated. CHRIS: Oh perfect timing then, OK. So, doing the portfolio reviews can be
helpful, becoming part of the AIGA can be helpful. And that led you to get an internship and after you finish the internship. How long was internship? MELINDA: The internship lasted probably about six months. CHRIS: Okay, it’s a longer, on the internship side and then did you get a job offer right after that? MELINDA: I got full-time freelance from there, and they were trying to put me into a full-time position. So that’s why the internship took longer too. Cause they were waiting to hire me on. CHRIS: Okay, that’s great, so, you’re taking little steps towards getting the ultimate goal which is to secure a full-time job with your degree in design. Now you went to Cal State Fullerton.
MELINDA: Yes. CHRIS: And what did you study there?
MELINDA: I studied graphic design and illustration. CHRIS: And what drew you to go to Cal State Fullerton? It’s not exactly like the mecca for graphic design education right? (MELINDA: Right) and
I hope I’m not offending everybody when I say that but there’s a handful of
schools that you know about that always come up in terms of where you should go
for graphic design. That’s not one of them. That’s not to say it’s a bad school I’m not trying to throw judgment on anybody and get all snooty on anybody but why did you go there? MELINDA: I went there out of convenience sake
(CHRIS: SNORTS) I lived very close there and I originally didn’t apply there for the graphic design program. I fell into the graphic design program.
CHRIS: That’s a double whammy. You went there for convenience sake, and you didn’t even pick it, you just kind of fell into it. MELINDA: Yes.
CHRIS: But I’m sure that it’s gonna relate to a lot of people who are watching this right now like yeah, maybe that sounds like you, I
don’t know and I chose you very specifically to be on the show. Because I
think you’re perfectly positioned from somebody who maybe went to a second or
third-tier school, studied graphic design. But that wasn’t the hot burning thing that you
knew you wanted to do until you did it And you’ve been in-house and now you’re on your own. So this is a perfect opportunity for us to
answer a lot of the questions that people might have,
that are in your shoes right now. Should we jump into it?
MELINDA: Yes. CHRIS: All right, what’s the question you have for me? MELINDA: I’d like to start off with getting clients so —
CHRIS: Everybody wants to get clients MELINDA: I know, well I do get a
good amount of clients that keep me busy. But, there are times where I have to
answer the phones, I have to filter the clients and see if they can afford me.
But I don’t always have the time and resources to take away from the time
that I’m working on projects with clients to then getting new business.
CHRIS: Okay let me get into some diagnostic things. Now those of you guys that are
watching right now I want you to get a piece of paper
or something and take some notes. Because I’m going to ask Melinda these questions
and then you can write them down and play along okay. So let’s go. all right, you’re working, so how
many hours a week are you working on average? MELINDA: On admin and client work? Or
would you say on the actual project? CHRIS: On the actual projects. Like what’s taking up all your time? MELINDA: I would say about, if I’m working roughly 40 hours a week, then 30 are going to project work. CHRIS: Okay and the other 10 is going to admin, or?
MELINDA: Admin, phone calls. CHRIS: phone calls what do you mean, who are you calling? MELINDA: Incoming clients,
so people who –(CHRIS:New biz?)– yes. CHRIS: All right so how much time are you spending a week dealing with new biz inquiries being that this is a brand new person that you don’t even know about, OK? MELINDA: Brand new people I get at least two to three inquiries.
CHRIS: You do? that’s, that’s pretty good. A week? MELINDA: I mean it’s feast or famine
sometimes it’s that much
(CHRIS: It could be crickets) and sometimes it’s zero for three weeks.
But when it’s an average good week then. CHRIS: yeah I’m talking about average, so we lop off the high and the low right. MELINDA: okay, if we’re doing average
CHRIS: I believe that’s what we said at the beginning of the show. MELINDA: So let’s go with one inquiry a week
–(CHRIS: that’s still good)–
yeah. CHRIS: So one new business inquiry a week. Are they calling you up?
Are they sending you an email?
How are they reaching out to you? MELINDA: They’re both. I get text, email and calls. (CHRIS: Text?) yes.
CHRIS: People have your cell phone number? MELINDA: They do, because it’s normally referrals. So it’s a family members referred them they just give them my phone number
and they probably say go shoot her a text. I get emails and most of my clients come from referrals.
Actually a lot, probably 90%. CHRIS: So 90%. Okay. What is the average size of engagement. We’re talking about the size of one project. It could be a logo, a brochure, anything that you do. Dollar-wise what’s the average size?
MELINDA: Average would be about 800 to 1000. CHRIS: Okay. Is that what you want to charge? Or is that
just what they can afford? MELINDA: I would like to charge more but that’s what they can afford
CHRIS: How much more? MELINDA: How much more?
MELINDA: Well for projects I would like to charge a lot more. MELINDA: because I feel like the tinier projects are what eats up most of my time CHRIS: Okay
MELINDA: So I feel good about where my branding, my logo pricing is at, which is around 5,000 – 6,000. But those smaller projects that are coming in, come in anywhere from like 200 – 600 or 800. CHRIS: Okay that then puts you at your average between 800 and 1000. MELINDA: So those projects are bringing down my average.
CHRIS: So why do you agree to accept them? MELINDA: Because I need the money. CHRIS: How badly do you need
the money? When you say you need the money I just need to clarify that. I mean everybody needs, I need to be famous I need to be a superstar, I need to be
dating somebody amazing. That’s really a want. MELINDA: Sure
CHRIS: So do you have some kind of financial need that is driving that decision to take on work that is a lot less? MELINDA: Well I have agreed with myself to give myself a paycheck a certain amount so that I can count on that to pay my bills. And so there is a certain number that I am trying too meet.
CHRIS: How much is that number? MELINDA: $1750 every two weeks, after taxes.
CHRIS: Okay $1750 every two weeks. So that’s $3000 thousand dollars a month after tax. MELINDA: Right, after tax and —
CHRIS: No, that’s more than three thousand right? MELINDA: 3,500.
CHRIS: 3,500, yeah, sorry, my math is not good this morning you guys. So 3.5 K after taxes so what is
it before tax? This is too complicated for me, I need to know what your gross revenue needs to be every single month.
What would that be? MELINDA: Then I need to bring out my spreadsheet.
My gross should be double that. At around $6000 if I’m bringingin. Cause I —
CHRIS: Yeah, probably about 6 cause it’s not quite 50% tax yet. Is it? MELINDA: No, but I try and save extra for business expenses too. So that’s — CHRIS: Okay. Let’s just say 7 then. You want to say 7?
MELINDA: Sure, why not?
CHRIS: Alright so you have to gross $7,000 a month. To run your business. Without it feeling like oh my gosh I’m eating into savings, I’m not making the rent, or whatever it is you’re making, okay? MELINDA: Right.
CHRIS: And you’re a dual family income right so this is just your contribution to your family. MELINDA: Right
CHRIS: Now it’s an expensive thing to live in California. We know that. So some of you guys that are watching saying 7,000 bucks, that’s more than I make in a year.
Let’s just put it in context you guys. It costs a lot to live here we don’t want
to get into all that in terms of the rent. The single biggest thing that you’re going
to be paying out is probably rent right? MELINDA: Mmhmm
CHRIS: yeah that’s your single largest living expense. So 7,000 okay. So let’s do a little bit of math for these local jobs,
let’s say it’s 5,500 it’s a weird number
so you’re gonna have to do the math for me. How many hours are you putting into doing that?
MELINDA: Umm, I put in normally, hold on — CHRIS: We’re probably losing half the audience right now because we’re doing a lot of math. But guys stick with me you’ll see why we’re
talking about this okay. We gotta get into the business of design and part of
that is knowing your numbers. MELINDA: 36 – 40 hours hours or what I’m averaging on these branding jobs.
CHRIS: Okay you know what that average is? Just give me one number.
MELINDA: 40 hours.
CHRIS: 40 hours. So do the math and how much are you getting paid per hour –(MELINDA: 137.50)– 137.50 perfect. an hour.
MELINDA: Yes CHRIS: Okay, have you ever calculated thisbefore?
MELINDA: Oh yeah I have a spreadsheet for all my branding clients. CHRIS: So you know this?
MELINDA: Yeah –(CHRIS: Okay)– I just don’t have it pulled up right now. CHRIS: Okay that’s fine. And then when you do this other work that is in the lower tier what are you working for in terms of an hour?
MELINDA: Amm, I usually don’t charge per hour but if I do. CHRIS: No, but forget about you charging
in an hour. If the project’s $500 and you spend ten hours on it that’s
what you’re effectively getting paid. Not what they’re paying you but that’s you
know that’s the rate you’re working at so we need to figure that out. So let’s take an average one of these lower tier referrals. That’s not a logo,
branding job and they’re going to pay you $500 or 700 or 800, whatever you wanna say it’s going to be. How long does it take for you to typically produce that work?
MELINDA: I usually break it down to $100 an hour. CHRIS: So you’re doing it for
–(MELINDA: It’s rough)– eight hours? MELINDA: Roughly goes into eight hours maybe less –(CHRIS: It’s probably less)– it wouldn’t go over eight hours. CHRIS: Oh, okay. I see. All right so are we gonna say it’s about $100 an hour?
MELINDA: Yeah CHRIS: Okay, you sure about this?
Something, my spider-sense is going off. You’re saying that it takes you
significantly less time to do the lower budget jobs. But also you could do it
faster and so it works out just fine. MELINDA: Right.
CHRIS: I thought it’d be a more dramatic difference to be honest. MELINDA: There are, but I do have one client in particular I’m doing production work on which is $75 an hour. And it’s on-call basis. Which
I need to update that relationship. Because that’s also breaking into my task switching a lot
–(CHRIS: Yeah, it’s hard to do that)–
so I’m losing a lot of mental energy and time when I’m
task switching on that too. CHRIS: Okay, so in order for us to get a really clear picture as to what’s going on here. You are working at a lot of different rates. When you’re working at your highest rate which is $137.50 you’re doing really
well for yourself and when you’re doing production work it’s 75 bucks an hour
and that’s not bad per se that’s that’s actually pretty good except for the
thing that we’re not taking into account is the time it takes you to get back
into the work to find the files to kind of recover your steps and say okay I’m
back in it and now I begin work and then the time it takes you to get out of that
project into the next thing. So there’s such a thing as billable
hours and then you look at wow I can only bill for four hours today, but it’s
now nine o’clock at night. What have I done? What is going on? What happened to
the time? Okay? So the first thing that you’re going to need to realize is when
you do work at a rate that is effectively almost half of your normal
rate this is what you’re costing yourself and your company. Now I want you to start thinking about your company now. Okay? Now a couple things we want to think about.
So the initial question is how do I deal with new biz? And if you don’t deal with new business you’re
not going to have a company for very long. It’s the single most important part of
what you’re doing. You work really hard, you do really good work in hopes that
somebody will call you. And when they do call you, you have to bring your A-game,
and you have to give ’em your full attention. So a couple of things right now
that I’m seeing immediately, okay? My first action item for you is to get some help. And I also think that if you realistically are working 40 hours a week. I’m just going to be real with you right now, it’s not enough. 40 hours a week is what you do at a desk job somewhere clocking in and clocking out. That’s the full-time gig and that’s why people
work a full-time gig because their hours are
more manageable. It’s a fallacy to think that people can go
start their own business and work the same or less hours that’s not the case. Because, now you’re your own boss and you need to be doing the jobs of three
people – the person does the work the person who does admin, client relationship
things and then doing sales and marketing. And so effectively like I’ve not worked at 40 hour
a week maybe ever since I started my own company. The hours are somewhere between 60 to 80
or something crazy like that okay even more. And so some of you guys are sitting there
thinking okay now I’m a workaholic.
I’m advocating an unhealthy lifestyle. I’m just a realist you guys. I’m just
trying to tell you what it takes to start a business. Like let’s not pile this upon a facade of fantasies
and wishes and hopes and dreams. It’s a lot of work it’s the grind life.
And nobody’s joking about that okay.
It does take a lot of work. So this is when people — the way I always said
this, is like when you’re sleeping, dreaming
and thinking about breakfast I’m sitting there grinding, hustling, doing new
business development, writing content. And it will separate the two of us really quickly.
Work in work out okay. I don’t mean to say that you should try to destroy your life and not have a
personal relationship, but just to be a realist about that so first
thing is I’m not sure you’re working enough. And two, you need to get some help,
you need to get some help. So when you feel like I’m gonna burn out that’s the time you start to think I need some help. Okay? MELINDA: Great.
And I have a question based off that now.
CHRIS: Yes. MELINDA: Because I do outsource, not a ton, because and what’s stopping me is the project
management time. Explaining the project to someone new sometimes takes
more time and eats up more time than it’s worth. And so that too is a hard
transition going from doing it all myself. To then taking the time to
explain it to someone else and manage that relationship then, between them and
me and client. CHRIS: Okay you’re not alone in this, every entrepreneur every business
owner has had the same exact dilemma. I’m really good at what I do, I’m very
efficient so giving it to somebody else Who, a) is not going to work at the same
level, and you have to accept that they’re never going to be at the same
level, but to take the time to explain it to them, to develop a process. It eats up more time. but it’s something that you’re gonna have to do. You just have to accept
it and figure out an optimal way of doing it okay? If you’re working with a revolving roster
of designers and people like that. That’s gonna be tough it’s good to
identify people that you like working with. That do great work and that are easy to
talk to and take direction really well. And start to kind of say here are my
two or three people my go-to people. And I want to develop a relationship with them okay. I want to give them steady work so they don’t
have to go look for work from somebody else. Because if I don’t give them enough work
inevitably they have to work for somebody else And then they won’t be
available when you need them. MELINDA: I’ve already had that happen too. CHRIS: It happens. This is like – welcome to running a business okay. So you want to delegate. So
you want to develop systems that you have in place where it requires over time,
less and less effort for you to job it out. To a certain point that you’re just
gonna bring the person in-house. MELINDA: Can you describe a system
that I could put in place right now? CHRIS: Well let’s talk about what you’re doing now. How are you sending out the work to them? Do you have shared file structures? Do you talk to them via Skype? Do you record a video explaining the project? How do you get assets to them etc. MELINDA: Currently it’s all through email and then
if I’m file sharing most likely it’s through Dropbox or I have Trello, the project management system
that I share with them and track the project that way CHRIS: Okay.
MELIDA: But if it’s something really fast
and I need them fast, I’ll just shoot ’em an email and attach what I need. Be
like hey, this is what it is, or copy and
paste the email from the client. Explain you know, put in my description my
explanation and then attach what I need to. CHRIS: Okay. so I will share with
you what has worked for me and then you you sit there and think
about what’s gonna work for you. We’re using the same tools for sure.
There isn’t some kind of fancy tool or
secret service that I’m using. Essentially my night ends with me writing up
what I need the team to do the next day. And so we’re talking about the work
you have to do after work okay. So I sit there and I really try to be as clear
and to use as few words as possible to
describe what it is that I’m looking for. Or if I have references I’ll put
it together. I’ll create a document. I want to be very clear and thorough about this.
And a tip that you can do that I haven’t done is to record you talking about the
notes. Because the way you say it maybe you fill in some of the gaps but
all the bullet point stuff is already there. And you send them that video so it
will be there in their inbox at the beginning of their day no matter
where they’re at in the world. if they’re in the same time zone that will be at
9:00 or 10:00 a.m. And then they can get to work. Give them all the assets and you could
link everything to Trello if you want. You create a ticket and that’s
usually when I put in the notes there and any assets and I link it all into
Dropbox so it’s one little thing and then I can have visibility on where it’s at.
So if you guys haven’t used Trello before. Trello is a great piece of software that
allows you to manage and track cards. Essentially you create different vertical columns right. And the columns could be – “need to do”,
“I’m doing”, “for review” and “done”. And so they can move the cards back and forth. So let’s say I need three logo ideas for this client. And you put it in there and you tag the
person and then when they’re ready
they move it to “I’m doing it”. And they work on it for a while. So you like
to see things move from the “to do” to “doing”. And you love to see then from “doing” to “review”. And then when you write notes to it
you put it back to “to do”. And then they keep moving these cards back and forth and you can manage a pretty large team this way okay. And then they can ping each other and they can talk to each other. Is that how you’re using Trello today? MELINDA: Yes, more or less it’s very close to that. CHRIS: Okay so you’re good on that front.
MELINDA: YES CHRIS: So I think the thing that I think
we’re assuming is it’s just going to be magic that I can then just download my
brain to somebody. It takes time. MELINDA: Yeah. But the recording. I think the
recording that’s an idea that I have not tried at all. Cuz typing and describing what I want
takes so much longer than just speaking it. Like if I was to talk with the person or
hopping on a Skype call too so. I think that would help maximize my time. CHRIS: There are a lot of tools and resources
out there that allow you to record. But let’s say you don’t want to spend
money you can just use QuickTime. You can screen capture via QuickTime it’s totally free. You can speak into it. Another
function that people don’t know too much about Is inside keynote, let’s say all your bullet points and the images that you want a reference are already there
you can rehearse and record the audio and then export the file with audio
annotations attached to it done.
(MELINDA: Oh) And that’s a super clean system and
you can even edit it if you want. It’s not a great editor but that’s what you can do okay.
so you go into rehearse mode. You speak into it and you step through the
slides it syncs up the voice with where you’re at in terms of the slides and youcan export
it as a QuickTime movie upload it and be done. MELINDA: That helps
CHRIS: okay. So let’s get back into it. How do you feel about me saying
you need to work longer? MELINDA: Well now I feel like my 40 hours
I feel like I do work a ton more. And so maybe my 40 hours it was under
averaging how much I work. CHRIS: You sandbagged the estimate?
Okay, all right, that’s fair. So what time do you get up to work and
what time do you go to bed typically? MELINDA: What time do I get up?
I probably get up at 7:30. CHRIS: Okay, and what time are you ready to
work though? –(MELINDA: nine) — So we’re
going to call it nine. So that’s you getting ready, working out, eating breakfast getting your game face on whatever it is. And what time are you going to bed? At
what time do you stop working? MELINDA: Umm average probably 7 pm. CHRIS: No, that sounds kind of like a
40-hour work week to me so don’t try and drag yourself back in there. MELINDA: Yeah
CHRIS: Nine to seven
MELINDA: So you’re probably right. MELINDA: you’re probably right
CHRIS: Well if that’s what you’re saying?
MELINDA: Nine to seven, yeah. CHRIS: So maybe in your mind it’s like I work really, really hard. So my day usually begins at
7 a.m. and I’m working from 7 a.m. And I’ll tell you how I do it but this
will be insane okay. My day usually begins at 7 a.m.
and it usually winds up around
1:00 to 2:00 a.m. that I’m going to bed That is my day okay. Now not all of my day Actually very little of my day is actually making stuff.
So I’m mostly in the management supervising, writing, content creation
process so the first thing I do usually after I wake up is I sit there for about
10 minutes and I just think about what it is I want to do today and then right
from there I jump straight into social media and start answering questions and
that takes me about an hour to go through. The reason why I do that is because the
content ideas come from the people. So I’m listening and something that I’ve
talked about before which is social
listening. This is what I’m talking about. I’m answering questions and somebody had a question. So somebody said – Chris how did you learn all your keyboard shortcuts? Especially when it comes to type? Is there a resource somewhere and I don’t know, I haven’t searched for one. But it gave me an idea I will create a guide,
a PDF, that I will share with everybody for free on how to quickly adjust your type so that’s a content idea. So I’m listening and my thing is about
giving people what they ask for okay. And so I’m going to grind through the
whole day in depending on what day it is I might spend more time at home:
writing, reading, researching, getting decks together or doing something like
that or I’ll come in and check in with the team. And my day just keeps going like that
when I’m driving I’m usually calling people that are in my network to check in with them to see how they’re doing, businesswise,
personal, just checking in it so my day is just working most of the time.
MELINDA: Okay question based off of your day.
(CHRIS: Yeah) How do you stay so focused because that’s
one issue, that’s a big issue with me
(CHRIS: Yes) Is the task switching and not being
able then to focus. How do you focus on each of those things and give it full attention to them. CHRIS: This is how you stay focused. Not the piece of paper but what you write on it okay. During the day you’re gonna get pulled a hundred different directions and everything is gonna seem equally important to you.
And I fall victim to this all the time. Just, so if you guys were to spy on me your like
dude he’s not doing what he’s saying he’s doing. And I find that there are days when
I’m scattered and I feel a little stressed out. And I’m not sure why and
getting that weird feeling in my gut. It’s because I don’t have a focus sheet, so
the focus sheet is just you writing down what you’re supposed to get done that
day. It’s not that important that you finish every single thing on the list.
Maybe it’s not possible. However, remember when I said when you wake up you think
about what you need to do, okay. So the first thing on my list today is to do a
keyboard shortcut guide. I have a video idea on how to use a burrito as a
metaphor so I’m going to do that. I want to make a video on visual storytelling
using B-roll. I want to do a golden ratio drawing like just with hand my
hand tools and compass and things like that. I want to show somebody how to do a
vector stipple effect, so I’m going to do that, I want to do Fields Notes
collaboration with a Mr. Aaron Draplin so I got to shoot him an email. I want to show
people how we light our set. So these are just ideas, things that I would like to
get done today. Now this gets compiled or piled on top
of the list of things I didn’t do yesterday. And so these things allow me to focus.
So when somebody sends you an email about something randomly about
the weekend or something appears on my timeline, or not my timeline, in my email box about oh there’s a sale for a new pair
of shoes, like not now, I just delete it or move on. Because that can take you
down another path. You go into the shoe site and 30 minutes later you’re like what am I doing here I didn’t even want to buy these shoes and it’s already in my cart what
happened? You know you get that shopping blackout thing. All right so focus with a piece of paper and constantly update it, every single day
okay. Don’t make a list about what you need to do for the next year. Just what
do you need to do today. In the end of the week, review what you need to
do for the next week so you have big goals that are chopped up into medium goals,
into small goals, into hourly goals
and now you know what you need to do. MELINDA: Okay, so this then ties back in with the original question about getting clients and handling the incoming calls with them.
So then how do you get that done while handling the newer clients that are calling while well I guess we’ve hit upon the current
work because I can outsource So we got that handled. But now handling focusing on that sheet and handling the new business coming in. CHRIS: Yeah, okay, you cannot make more time in the day. It’s 24 hours every single day. What you
can do is to spend more of that time working. And the time that you’re working to be
more optimized and focused. Right?
MELINDA: Right So we’ve taken care of a bunch of those
problems one is we expand our day a little bit. You don’t have to go from an
eight-hour day to a 12-hour day. You can just add one or two more hours to your day. Let’s say now you’re going to work a 50 hour work week. Which doesn’t sound like a lot from
where you’re at and it’s more manageable. So like say now you have an extra two
hours to do something every single day Some of this you’re going to send out to other people so you’re clearing the deck so to speak. So
that you can spend the time to work on the business of your business and that’s really
important all right. So now let’s talk about the clients. MELINDA: Yes.
CHRIS: Okay, when clients come calling
responsiveness is really important. You need to understand that.
What I mean by responsiveness I mean from the time in which they send you an
email how long does it take for you to reply. Okay, and that’s very important because a
client’s going to think I’m going to give you good money to help me solve a problem but I don’t want to be calling
you three times a week asking like where’s the project? What are we doing?
etc okay. So you want to be very responsive. So now the question is you need to build a
better gate to keep out people who are not qualified to be working with
you okay. So let’s talk about that real fast. We need to bring the subject of money
up upfront and quickly. So we’re gonna do a really
quick role play with each other
MELINDA: Okay CHRIS: I think I’m going to be you, and
you could be your client, because I don’t
really know your client. MELINDA: Okay
CHRIS: Let’s say this is one of those referral
clients that is just kind of slumming it a little bit. The budgets are too low all right? All right. So, hey Melinda thanks for calling me. What do you got going on? MELINDA: Well I want you to work on a logo for me.
CHRIS: Okay great. Tell me a little bit more about what you’re trying to do with the logo. MELINDA: Well it’s for my new business
that I’m starting. I’m an online entrepreneur and I need a logo for my site and for my business. CHRIS: Okay, so for logo work we typically charge somewhere between five to eight thousand dollars is that something that’s within your budget? MELINDA: No, not at all.
CHRIS: What do you have?
MELINDA: $200. CHRIS: $200, yikes! Melinda I can’t do work for $200. There’s probably a site somewhere that you can find. Now, I know Mary’s a mutual friend,
and there was a time in my life when I did work for that, but I can’t sustain
myself, you know we live in California you know how that is. I can’t do work for that.
I’m trying to run a business. And so I do appreciate you calling me and
unless you can significantly raise your budget and we can talk about that. Otherwise I don’t even know who I can refer this to. But maybe there’s somebody in my
network that I can refer you to How does that sound?
MELINDA: That’s great. Can you shoot
me over those names? CHRIS: Yeah absolutely.
Thanks very much have a great day.
(MELINDA: All right thanks) Say hi to Mary for me.
(MELINDA: Will do)
And then we’re out. Okay. So that’s the
two-minute kiss-off. Does that feel comfortable for you? (MELINDA: Yeah) Is
that what you’re doing today? MELINDA: With some, after watching most of your videos, yes. I’ve been working on talking about money upfront –(CHRIS: okay)– Instead
of writing up say a proposal. Which in my words a proposal is –(CHRIS: A bid.)– yeah
but it’s not. Like when I heard you talking about a proposal. You were talking
about testimonials and case studies. Mine’s very down and dirty, like scope of
work, these are the goals, timeline and price. And so sometimes when someone
comes to me instead of starting out with those questions and the call. Then I would
be like, okay, well I got all the information I need on the project and
then I would write up a proposal. CHRIS: Right, okay. Blair Enns talks about
this in the Win Without Pitching Manifesto. He says – you know I’m not in the bid building
business I’m in the creative service business. And I’m not going to build a
bid unless I know the budget and that we have agreement on scope. There’s no point. So you can just say that, you can say that, maybe not like that. But you
can say it like, you know before I go and make a bid and spend all this time and
energy trying to figure out your project. I just need to know what kind of
ballpark are we in in terms of the budget that you have set aside to do this. What do you have to spend?
MELINDA: Okay MELINDA: And so you recommend —
CHRIS: It’s like you know, let me give you a little story you guys. People like stories. Let’s say that you and your
husband are planning a trip, a vacation. And he says, you know Melinda let’s go on
vacation honey, you work way too hard those forty hours a week are just
totally killing you, I can see it. Let’s take a break. Why don’t you plan
someplace to go and let’s go. And you go okay. So you go through travel sites and
whatever those sites are. We’re gonna go to Tahiti baby.
I think we deserve this. Let’s take three weeks off. He goes Tahiti! I was talking about Temecula or
Torrance. What are you talking about? We have $300 to go and have a nice lunch. But I spent all that time and doing research and I wrote you know.
I had like the hotel was picked it was the cutest little cottage
we were going to stay in. We just wasted a lot of time. Let’s try to have an
understanding of what done looks like to rein this thing in, And I know creative
people we’re very optimistic, the world’s our oyster, everything’s going to be
great and the clients love me. And they’re going to spend so much money on
this project well welcome back to reality take off the happy ears, put those things down and listen for the things that are
really there. And just don’t be afraid to ask. Now I’m going to ask you this
question. Why were you hesitant, reluctant, to just ask about the money? What was it?
Was it something that was kind of like, is it crass? Like why wouldn’t you
just ask ’em about the budget. MELINDA: I think because I’m afraid, not necessarily currently, because I feel that I’ve grown a lot since I wasn’t asking for money on the phone or
about price. But during that time that I was scared to talk about it. It was that
I didn’t want to hear the word no. And so if I came to them and said hey we charge
between five and eight thousand dollars and then their reaction is no and I was
afraid to hear that. CHRIS: Would you rather hear no after doing all that work? Putting hours into the budget and the estimate and the time line, writing just a
beautiful scope of work document. And then they’re like no and crickets are chirping.
MELINDA: It’s an easier no to take. CHRIS: Why? That’s insane to me.
MELINDA: Because talking, and I’m saying this that I’ve definitely gr own since then so I can
handle it much more now. But at that time I think just not hearing back from them or just getting an email back is less of a confrontation. CHRIS: Oh, hold on hold on. Now you’re saying this is confrontational. MELINDA: Well depending on what your
definition of confrontation is. CHRIS: Well tell me what’s your
definition of confrontation. You’re the
one who used the word. MELINDA: Anytime that there could be a no
in there, I consider a confrontation. Which that’s not what other people see it as. CHRIS: Will you drive me later today to the airport. — (MELINDA: No) —
You’re being so confrontational. MELINDA: I knew you set me up.
CHRIS: Yeah but that’s what you’re saying To hear no is like a confrontation. No it’s not. MELINDA: I used to think that though.
I used to think that a no, because
I was a major people pleaser. CHRIS: I am too believe it or not
MELINDA: And so I would avoid saying no or hearing no. CHRIS: Yeah. You’ll do anything to avoid a no.
Is that what you’re saying? MELINDA: Yeah, used to.
CHRIS: But you know who you’re saying no to?
MELINDA: Myself CHRIS: You are.
MELINDA: Yeah.CHRIS: And that’s okay?
MELINDA: No CHRIS: And if you one day raise a child, and have a kid, and they’re gonna go through the same process. What kind of advice would you give to that
child when dealing with “confrontation”? About doing everything to
avoid no. What would you say to them? Could you imagine that?
Let’s just say you have a daughter and she’s 22 years old. Just graduated from
school, is getting on with her life is started a design practice and she’s
talking to clients. And she’s telling you mom these clients just can’t afford
what I do and then I do all these budgets and it just doesn’t go anywhere.
What would you say to her? MELINDA: Can you rephrase that question again?
CHRIS: Yeah. Sorry you’re thinking about your daughter. MELINDA: (LAUGHS)
CHRIS: Your daughter. Yeah, that would be pretty nice right. Okay you have a 22 year old
daughter and she started a design practice. Not unlike what you’re doing. And she’s
running into the same problem as you. What kind of advice would you give to
your daughter, when it comes to talking about the money? What would you say to her. MELINDA: To talk about it quickly and upfront. CHRIS: But why would you say it? Mom I
don’t like hearing no. MELINDA: Well it’s easier for me as a person not involved in the situation to just tell her it’s easy to say no, just tell them no.
CHRIS: And what do you think her hang-up would be? How could you say it to her that she could hear it? MELINDA: That the no does not reflect
anything on her personally. CHRIS: But it feels like I’m getting rejected mom? MELINDA: It may feel like that, but you’re not actually getting rejected. CHRIS: What’s happening then?
MELINDA: The price is getting rejected. CHRIS: Oh. Am i charging too much money then? Should I just take it cause I need the money? MELINDA: No. That’s where I, that’s where I
still struggle, that if I really did —
CHRIS: Help me out mom. Mom, you’re breaking character.
stay in character.
MELINDA: Dang it. Back to mom. Mom. Well the better jobs, if you say no to the
smaller ones that can’t afford you. CHRIS: Look right into the camera and say this okay. MELINDA: If you say no to the ones that can’t afford you you’re making room for the ones that can. CHRIS: Say that one more time. MELINDA: If you say no to the smaller jobs, the ones
that can’t afford you then you’re making room for those that can. CHRIS: Afford you.
MELINDA: Afford you.
CHRIS: Okay. MELINDA: Yes.
CHRIS: Yeah. Can you hear that? MELINDA: Yeah.
CHRIS: Why the hesitation?
MELINDA: Because the immediate need is larger sometimes. The need to make that certain
amount, that dollar amount. Seems more real than the belief that the
larger jobs will come because I don’t see them I don’t see them currently. CHRIS: Okay. Without getting too deep
into your personal history. Did you grow up in a middle class, upper middle class, lower middle class? Where did you grow up
in terms of socio-economic status? MELINDA: Upper to middle class.
CHRIS: Okay so you’re a person who’s used to having things. And things taken care of for you. So you
don’t know what it’s like to scrape.
MELINDA: No. CHRIS: All right. I do okay. I really do.
When we came to this country and I’m a first generation, somebody
corrected me, I said’m a first-generation American. They’re like no you’re not.
You’re a first-generation immigrant I was not born in the United States having
escaped communism and coming to America. We didn’t have much and we haven’t had much and we’ve worked with very kind
of immigrant mentality. Don’t waste, don’t spend, just work hard and save your money. And I always looked at, like this,
when I graduated school my parents did the best
that they could to help me. But I owed a lot of money in loans, my
credit cards were maxed out. I’m talking about I think two cards in excess of $5,000 each. And I was thinking you know what my whole mentality has been I come from
nothing, I will go back to nothing I’m comfortable in nothingness. I’m not used
to any of this stuff so if one day I’m making money, it’s like I don’t care, it’s
here and it’s gone it doesn’t really matter to me. So the power that money has over me it’s
whatever it is I give it. So I give it no power over me, I always think,
you know and I like to think somebody’s like you’re a really
courageous person Chris. You’re a risk-taker, you do all these
things. And I say, well thank you very much for saying that but I am not a risk
taker. I am not a courageous person. Courage is taking action when you know
the odds are against you right. To show courage, like to fight a bully that you
know is going to kick your butt That takes courage. To fight a kid who is
much smaller than you, that you’re gonna squash That takes no courage whatsoever.
So the reason why I don’t have courage is I’ve never seen it as, there’s a bully
or that this was risky, that I have a lot to lose because I’m like whatever and I’m able
to bet the farm on the business decisions we make at the office because
in the back of my mind I have a secret back-up plan. And the back-up plan is I’m
gonna go work for somebody else and let them deal with all the nonsense, and
get paid hundreds of thousands of dollars and my life is easy, back to 40 hours a
week and barbecue weekends.
MELINDA: Mmhmm. That’s my backup plan. I’ve never had to
even come close to executing the back-up plan but that’s the mentality so we need
to change the mindset. You’re looking like, oh you know the apartment,
it’s like you know what I don’t care I’ve lived in apartments where people
got shot outside the street okay. I’ve been there, these things have happened. And it doesn’t matter to me, so the money has no power. To this day I don’t know
what’s in my bank account. I don’t even really care it’s all a game and I’ve talked to a friend of mine
before when he was bidding on a project. He gave the money all this power over him,
so he started to behave unlike himself. And this guy is a very good poker player, and when he plays poker he does really well. Cause you know why? He doesn’t care if he wins or
loses, and you can’t have that attachment. When he’s pushing chips into the table, it’s nothing.
And that’s how you succeed at that. So you have to like release the
power that money has over you and go ahead and say no to these other things,
because they’re not really in your best interest they’re not moving you forward. Some of it is half of the rate that you’re getting paid anyways. Why would you accept that? You’re not half the person you’re not going to do half the work. Your
expenses are not going to disappear by half So just say no to that, and you’re much better off working on developing your brand. Now there’s one other thing I want to talk about before we end this segment okay. I said you have to do a better job of lifting up the gates. The gates is talk about money early and often
and, the other gate is to say it on your site. Now, there’s many ways to interpret
this and I have to be careful here I don’t necessarily mean in
a prescriptive way for you to go put on we do brand identities for $7,000 on
your site. I don’t mean that. How do you bring up the gate? The way we
bring up the gate is we show the kind of clients we work with. They are blue chip Fortune
500, Fortune 100 companies. And they’re big brands that you’ve seen. The work is
super glossy so most people come to our site saying I can’t afford you. On the
off chance that I can I’m going to call them okay. So you need to put up work that starts
to speak and feel like, I’m expensive. I’m worth it. I work with these big companies
and this is how I operate. If you are that kind of
company, then I’d like to work with you. There’s a simple law of attraction, like
attracts like, so when you start working with middle to upper end clients, the
little clients, the little mom-and-pop shops that want you to do a hundred dollar logo, they’re going to disappear. Cause they’re going to say she’s not for us, “I don’t think we can afford her Bobby.” They’re going to move on. And you need to
do that okay. Now some people will actually put on their site the entire process, what it cost, cause that’s how they
know to talk about money and it works really well for them too. So either option works.
MELINDA: Okay so either put that, break down the actual cost or show the
types of clients in that range. CHRIS: Just raise the gate. Okay you ever go to Barneys New York do you shop at Barneys? MELINDA: I’ve probably been there once.
CHRIS: Okay, I’ve been there a couple of times and even when I had money, even when I had money
it’s intimidating to go shop at Barneys I don’t know why. And I’m like what’s going on with me?
I have money to buy whatever I want here. That’s expensive clothing, and why is it expensive? Well you walk in and it’s beautiful marble,
there’s a spiral staircase in the middle of the thing. Everybody looks really
sharp, there’s beautiful people walking around brands and things you’ve not seen,
and curated window displays and all this kind of stuff. And they haven’t told me
one thing with words but they told me everything with the brand experience
there’s a valet guy he’s out front. The last time I went shopping where there’s a valet
guy was like never. And it’s in Beverly Hills. So it’s saying all these things to
me. You can’t afford this. Now, that’s a little snooty, a little bit snooty,
but not on purpose I guess and it’s something I imposed on myself, right.
So the entire brand experience can be designed to filter out certain kinds of
clients. If you show a site with a hundred logos, which some people do, literally
just a grid of 100 logos. It looks like they’re worth $20 to me, and so
they will continue to get work for that price and if that works for them more power to you,
it’s working. I wouldn’t show work like that I would show less work I would
spend more time developing case studies and showing each project in its best
possible light so that it looks like it’s really expensive and really thoughtful and
intentional that’s what I’m going to do all right. That’s it for this segment you guys. I know this is a lot for us to think about and talk about we went all over the place. But let’s try and sum this thing up. If you are a solopreneur
and you’re running a creative business it doesn’t really matter where you’re at.
You need to actually try to buy more time in a day and you can do that. So
let’s recap really quickly, can you recap for me? MELINDA: Yeah
CHRIS: Miss co-host. What are the top high-level things that you need to do to buy more time for your life? MELINDA: Well add on more time to
your day, even if it’s just a little bit, an hour at least. Then outsource what you
can, say no to the little jobs that are eating up your time that you’re getting
paid half of what you should, and make sure money has no power over you.
CHRIS: There’s one other thing. Get focused in the data in which you’re working so your focused sheet, a to-do list for that day that you need to get done. And when
things cross your path that don’t help you achieve those things. Don’t do them, save
them for later, even if it gives you great pleasure, save it for later. So you
have to be a really disciplined business owner now alright. Guys thanks so much. I
hope that you guys really enjoy this episode with Melinda. if so we’re going
to continue to make more we’ve got a couple more ideas we’re gonna run by,
so give it some time. I know this one got a little heady but I’m hoping that it
was helpful to you. See you guys next time. (MUSIC)