The 1% Errors that Kill your Freelance Business

August 13, 2019 Curtis McHale

When you start a business, you’re buoyed by dreams. Of course, the business will be successful. You know you’re great at your job because you’ve been told that before. You’re a technical or design genius, and you’re just waiting to be able to work for yourself and have some more freedom. Unfortunately, for many beginning freelancers, there is a big wake up call coming.

For me, there were a number of small things that almost killed my business, some of them many times over the time I’ve been working for myself.

Business Killing Errors

Let’s start by looking at the errors, then I’ll show you what the solutions to these business problems are so that you can run a successful freelance business.

Too Much Chasing

When I started my business I determined I’d make 10 solid contacts a day to keep my business running. When you’re starting, that’s the type of action it’s going to take. Unfortunately, most freelancers spend far too long talking to anyone who has a wallet and a pulse.

It’s not about sending prospects away because you don’t want to work for the prices they want to pay, although that is part of it. Every client you finish working with should inform you more about the projects you do best and enjoy the most so that you can start taking more of those projects instead of spreading yourself thin across projects where you can’t bring high value.

A side effect of this is that freelancers who continually chase every possible client are often undercharging for their services. When you chase everyone that comes knocking on your door, it’s far too easy to get into a race for the bottom as you try to win every possible contract.

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Skimming Client Correspondence

Once you’ve won a project, it’s time to start selling yourself and the value you bring all over again. This time, you’re not trying to convince a prospect to become a client, you’re trying to show a client that they made the right decision in hiring you.

As you do this, make sure you carefully read every piece of correspondence your client sends you. More than once I’ve gotten myself into trouble when I didn’t read every little part of a note in Trello. I’ve ended up answering part of the question, and the client has to ask again to make sure that I answer the whole question.

Trello

If you’re not careful when you address emails and notes from your clients, it’s easy to make yourself look unprofessional as you make your client do twice the work they should have to do.

Too Much Freedom

In my first few months working for myself, I would get up around 8am, eat breakfast, and check email. Then, I would walk the dog for an hour around 10am and have lunch at 12pm for an hour. After lunch, I’d realize I didn’t do any work to move client projects forward so I’d try to put in a flurry of work after 1pm.

Almost invariably, I’d look up after what felt like a long work session to realize that it was only 2:30pm and I had checked social media a bunch instead of working. Many days in those first few months would end with maybe an hour or two billed to a client, but I had a nice tan from walking the dog.

The opposite of this is also bad for you. Working every second of the day isn’t healthy. If you’re answering emails all night and on weekends, or if you’re diving into code for clients with every minute you can spare, you’re on track for burnout.

Keep reading and I’ll show you how I schedule my days to balance work and rest so that I can be more productive than most.

Late Delivery

The latest I’ve ever delivered a project is a year late. Wait, it was 11 months, that makes a difference right?

No, it doesn’t and I’m lucky my client was gracious and that I had worked with them well for years previously. We still work together, only because my client is gracious and because I’ve been delivering regularly for a few years again.

Did you know that about 68% of software projects fail? Out of that 68%, half of them either take 180% more time to deliver or produce less than 70% of the intended functionality.

clock

The fact is that even 2 days late is late and if you do this regularly, your business isn’t going to survive. Keep reading to see how I manage projects so that they deliver on time.

You Think Your Clients Will Remember You

It’s easy to think that because you delivered a great project to a client, they’ll remember you the next time they have work to do. Unfortunately, this isn’t the truth.

I can’t count the number of times in my 11 years of building WordPress sites I’ve looked at a client site two years later only to find that it’s totally changed and I had no idea. Many clients will work with whatever developer or designer is currently top of mind.

This can be fixed by building a good follow up system.

You Spend Too Much

I love new shiny stuff. As I write this, DJI came out with a new action camera to compete with my GoPro Hero 7 Black, and boy do I want to purchase it. I don’t need it, but it’s pretty dang cool and the DJI Action Cam is cheaper than that GoPro. But I already own a GoPro Hero 7 Black, and there really isn’t a reason to purchase the DJI camera. 

When I started my business, I would already have an order placed for the new DJI camera. It wouldn’t have mattered that I didn’t have the money. I would see some new shiny piece of technology and I’d order it for “work” reasons.

More than once, I spent the money I needed to use to pay myself on something cool just because it was new and cool. Luckily, I’ve solved that problem for myself, despite still loving to purchase new shiny stuff.

Fixing These Business Killing Errors

Those are the big problems that kill businesses and if you read them and see yourself in them, remember I’ve made each and every mistake listed. Some of them more than once. Let me tell you about the systems and processes I use to help me not fall into these business-killing traps.

Start Vetting Prospects

The first problem was too much chasing prospects, and this is fixed by building a client vetting process. The way to start this is to establish a few ground rules about working with you. My process starts with a set of questions that you must answer if you want to work with me. I’ve shared the exact initial email I send every prospect.

Book a Call

Once a prospect has answered those questions, the next step is to book a call with me. No, I don’t work with first-time clients without this call. For specific reasons outlined below, I only book these calls on Friday before noon.

Yes, some prospects don’t like this and choose not to work with me. To me, this means that we weren’t a good fit because any calls during the project will also take place on Friday before noon. Far from trying to be belligerent about calls, as we’ll talk about in a minute, I do this because I schedule the rest of my week for work on the projects I currently have on my plate.

Collaborate on a Proposal

The next step is producing a written proposal for a prospect. I start by writing out the initial draft, and then we work on it together. If my prospects aren’t up for a bit of collaborative work on a proposal, I bow out of the running. 

I only do collaborative proposals because it’s a great test to work together before anything has been signed. In early May of this year, we got to this point with one particular client and working together on the proposal showed me that the client wasn’t thoroughly reading my emails. I learned this as they asked questions during the week for things that were clearly spelled out in the proposal at their original request.

Without this step of working together on the proposal, I would have headed into a project that was way more management than I desired.

Land the Project

Once you’ve put this work in with a prospect, you’re highly likely to land the work. The prospects that were mostly “kicking the tires” bowed out earlier because of your requirements.

A great side effect of a solid client vetting process is that it lets prospects know that they’re dealing with a professional that has an established process that works to deliver winning projects. By taking the time to talk with prospects two or three times, you’ll be better equipped to understand their problems so that you can solve them well.

Both of these things show your prospects that you’re a high-value freelancer, so you can charge more. When I started to implement this process I almost doubled my rates in a few months. Simply because I showed that I was a professional, my prospects started to treat me like one.

This whole process isn’t about weeding out certain clients as much as it’s about finding ideal clients where you can truly deliver high value. It’s about finding clients you can work with for years. Most of my current clients have been with me for 7+ years and while we’ve had rocky roads, we continue to work together because we treat each other as professionals and trust that we will continue to act professionally together.

Read, Write, Then Read Again

Another key aspect of showing that you’re a professional is being thorough with your client correspondence. This was something I struggled with early in my business and it was harming me because I looked unprofessional and used so much time communicating with clients. To combat this, I added a few rules to my client correspondence.

First, I never reply inline to a client. If I’m replying to an email, I open Drafts (iOS or macOS) to write the reply. If I’m replying to something in Trello, I open up Drafts to write the reply. When I started I was so strict with this that even if my client had a six-word question and my answer was yes/no I would write it in another application.

Second, read the customer request. Then write the reply in another app. Next, read the customer request in detail again and physically point to the sentence or paragraph that addresses their question. As you do this, make sure to read it again to ensure that the paragraph you’re pointing to does indeed answer the question completely.

Third, copy and paste the answer into the email or project management system and… do step two again.

While it may seem like a lot of work, it’s worth it. I first heard about pointing and calling in a book that talked about the Japanese transit system doing it so that workers didn’t miss a step. Yes, I felt silly, but it stopped me from wasting my client’s time and helped me to reply professionally to their requests the first time.

Now, I’m more likely to hear that my responses are the most complete responses that a customer has ever had instead of getting a repeat of a part of the question I didn’t address.

Schedule Work Time (Too Much Freedom)

I’ve already alluded to this, but I schedule my day and I stick to my schedule. I start by scheduling out my week in a notebook, which you can see below.

I start each day at around 5:30-6:00 am by reading for an hour. Then I write and do client work for around two hours. I follow this working block with a 2-3 hour break. Some days I run. Some days I take a kid to figure skating and some days my wife runs while I hang out with our kids who aren’t in school.

Then from around noon until 3 pm, I get back to work and focus on only work. During this window, I’ll look at email or other tasks that are less mentally demanding than my morning work.

Each section of this schedule is intentional and specific. In the book When by Daniel Pink, we learn that it doesn’t matter if you’re a morning person or a night person, you focus best shortly after you wake up. Morning people like me do it early, night people have better focus later in the day because they got up later in the day.

Once you’re through your first peak of focus, you hit a trough where you don’t focus very well. This is my mid-day break.

Later in the day, you hit a second peak of focus before slowly declining until you go to bed. I use my second peak for less cognitively demanding tasks like dealing with email and basic project management.

When I started my business, I figured every minute was the same so I didn’t plan different types of tasks for different times in the day. I’d often start with email, using my best brain time on a task that wasn’t demanding. Then late in the day, I’d try to dig deep into a client problem and wonder why it was so much work?

One of the keys to scheduling your work time well is cutting distractions. I do most of my work on an iPad with all the notifications turned off. Instead of huge screen real estate, I have a single window to view. I don’t have overlapping applications so I simply focus on the task at hand instead of looking around at which window on my screen is the most interesting currently.

I also don’t put my phone on my desk. Yes, it’s in my office, but it’s on a shelf where I can’t see it and it’s set to only ring if my wife calls me. No, it doesn’t even make a sound when my wife sends me a text message.

When I’m working, I focus on work. When I’m not working, I don’t let work creep into my life.

The final way to make sure that you focus on your work is to start tracking your time. I track every minute I’m in the office, every day of the week. I can tell you that I spent 20 minutes before writing this article adjusting a few things on my desk so that my monitor stand could be mounted exactly where I want it mounted.

I use Cushion for this, but most billing software has some form of time tracking built-in. At the very least, they have an integration with Toggl which does awesome with time tracking.

While it may seem like a burden to track your time, it’s the only way you’re going to be able to find problems in the work you’re doing. I color-code all the work for my business in red. I know that if I have too much red in a day, I didn’t directly earn any money because I wasn’t working for clients. At the end of every week, I take a quick count of the hours I worked focusing on the number of hours I worked for clients so that I can be sure that I’m earning enough to pay the bills.

Late Delivery

Once you have a system that lets you get enough focused work hours in the day, you’re well on your way to delivering projects on time. You’re also going to need some type of project management system. If you’re on the lookout for that, check out my previous article on Project Management Basics for Freelancers.

Those aren’t the only pieces you need though. You need to have a system to regularly review your projects and all your tasks so that you don’t drop any balls. For me, the most productive hour of the week is my Friday shutdown routine. The times I miss this shutdown, I can measure a 10-15% drop in my productivity during the following week.

That’s not the only shutdown routine I have though. I have a daily process I use to check in with my projects and plan the work that needs to get done the following day. You’re not going to be surprised to hear that I also have a system to transition months so that I have a handle on the projects that should be the focus of each month.

Let’s start by walking through my monthly routine because the other systems require information from my monthly routine. Each month, I plan an hour to survey the last month of notes in my Bullet Journal and look ahead based on the future log of my Bullet Journal. Armed with this information I take every project I have to work on in a month and start to list it out.

The goal here is to have a reference for each week when I’m doing my planning. When I came to the time I had planned to write, I looked up the article that we had already planned because it was written in my monthly list.

My monthly list trickles down into my weekly list, which is generated every Friday in about 30 minutes as I wind down from the week. The goal of the weekly shut down is to look at the week that has passed and see if anything got missed. If something got missed, I need to plan to fit it in the following week. I also use this time to build out a plan for the week so that at any given moment I know what type of work I should be doing.

I start this weekly plan with my runs, then follow it with any family commitments that take up time I could be working. You can see skating listed here as something I need to take into account as I plan the week. Then I look at the projects and tasks that need to be accomplished in a week and slot them into times when I can do them.

At any given moment of the week, I know what I should be working on. It’s possible that I’m not working on that item, but if I don’t start with a plan I spend a bunch of time trying to decide what I should be working on instead of doing something to push my work forward.

My daily routine starts with 30 minutes left in the day. I stop my work and look through what was planned for the day. If I got everything done, I move on to the next day and make sure I have everything I need to get work done. If I’ve missed something in the day, I evaluate the time left in the week to see where I can get the item in.

When I said above that I schedule everything down to my call time, you can see I was serious.

Build a Follow Up Process

It’s unfortunate, but many clients will work with whatever development shop or freelancer is most recent in memory. That means you need to have a long term follow up process so that you stay top of mind for your clients.

In my business, I did a small project for a client in 2011. It was less than $1k, but I spent the next six years following up with them and they turned into a $50k client in year six. There was more than one year where I only heard back from them once despite my regular communication. I didn’t do anything special, I just dropped them into my follow up process.

While there is a lot of great software out there, you don’t need to use it. I have used Contactually and Pipedrive in the past, but I’ve centralized everything in my Bullet Journal now.

My process is as simple as reaching out to a prospect I still feel is worth reaching out to every three months. When I send them an email I mention a resource that may be relevant to their business and then I bump them forward three months in the Future Log of my Bullet Journal.

I got away from Contactually and Pipedrive because they ended up turning into huge lists of people I hadn’t contacted in a long time as they both kept bringing forward anyone I had talked to for any reason.

When it comes to following up with prospects, I start with a weekly email for 3 weeks to see if they’re ready to move forward with a project. After 3 weeks, I email them every month for a quarter, and then I move them to the quarterly follow up. As long as I’ve heard from someone in the last calendar year, I keep following up until they tell me to stop.

You may look at this and think it’s not manageable, but I can get through all the follow up I have to do in a week in 30 minutes, usually on Fridays as I’m between calls. If you can’t set aside those 30 minutes to check-in with old clients and prospects, then it’s going to be hard to keep your business running over the long term.

Have a Business Budget

One of the final things that almost sunk my business was budgeting. From the beginning of my business, when I took my wife on a “date” and just happened to be near a client where I could pick up a check that allowed me to pay us, all the way to 2018 when there was a bunch of shiny tech I wanted, I’ve made some dumb mistakes with my business. Luckily I read Profit First by Mike Michalowicz, adopted the system in the middle of 2018, and I couldn’t have made a better decision.

The basics of Profit First are that on the 10th and 25th of the month you deal with your finances. You take all the income you’ve had come in and divide it up based on percentages. Here are the percentages I use now:

  • Taxes: 15%
  • Pay: 60%
  • Expenses: 20%
  • Profit: 1%
  • Extra: 4%

Those numbers mean that I put 15% away for taxes, and since I’m a bit of a spender, I send that money directly to my tax account. I put aside 60% of everything I earn to pay myself. Another 20% goes towards any business expenses. I always have a profit because I put 1% away in a profit account and that extra 4% heads to the government as I pay off some tax debt. I did mention that I made some bad financial decisions, and being in debt on taxes is the result of some of those.

The great thing about this system is that I can purchase anything I want with the 20% expenses. I don’t need to feel bad about spending that on things that the business needs. By the same token, if there isn’t money in the expense account, it’s time to trim the fat in the business.

Out of the 60% listed above, I pay myself on the 10th and the 25th a set amount. It’s not everything I have in the account, and if I don’t have enough to pay myself what is expected, we have to deal with less.

The best part of the whole thing is the 1% Profit that you put aside no matter what. Every quarter, I get to spend that on whatever seems like it would be cool for the family. We’ve put it towards a babysitter and dinner out, or a bicycle. The only rule is that I can’t spend it on anything that’s for the business.

Back when I adopted Profit First, times we tight. By adopting this system I didn’t start earning more, but there was instant relief in my stress about finances and as I got less stressed, I made better business decisions, which in turn helped the business become more profitable again. I recommend Profit First to every freelancer I talk to and they’ve all been surprised at how much better it makes them feel.

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The post The 1% Errors that Kill your Freelance Business appeared first on Liquid Web.

About the Author

Curtis McHale

Curtis is a husband, father, developer and business coach. He specializes in helping people build a business that lets them spend time with their family instead of working all the time. To learn more about running an effective business visit: https://curtismchale.ca.

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