024 - It's Business Time
First off, some news! This is our 24th episode, almost 6 months of putting out an episode every single week. It's been a lot. A lot of work, a lot of fun, and a lot of growth. We have grown a ton doing this by putting out content weekly. However, we want to up our quality. We have been feeling like our weekly commitment has been hurting our quality since we already do multiple creative projects a week with our full time jobs and freelancing. We want to make the best stuff possible for you guys, and stuff that will help us grow. We want to do more long form storytelling stuff, more interviews, more planning, more pre-production… basically we just want to up our game, and to do that we need to take a short break. So Season 2 will be coming soon! In the meantime, we have one more episode after this one, so get ready because it's business time.
This episode is basically the Sparknotes of how to start a freelancing business, if you want deep dives, check out our other linked episodes!
Ok, so freelancing is awesome. But it's even more awesome when you set yourself and your business up for success. If you want even more info about that, check out Episode 3!
Now to break a few freelancing myths…
If you think Freelancing is your way to be more creative and make more stuff, that's probably not true . If you don't want to be in charge of everything, maybe it would be better to look for another position that lets you focus on what you like to do is the answer.
Freelancing, running your own business, will add stress to your life, not relieve it.
Running your own business will amplify your weaknesses. When you start your business, you are taking on every job of running that business. You have to be not only the Creative, but also the accountant, the marketer, the web developer, the sales person, the CEO, the CFO, & the COO... When you are having to fill all those roles, your weaknesses will show and could possibly cripple your business. If you can afford to hire for your weaknesses, do so. However, most of us can't do that starting out. Take advantage of the time in your current job to beef up your weaknesses or automate tasks that you don't enjoy doing before making the jump. It will save you time, money, and many headaches down the road.
Get your toes wet first before making the big jump. Start working on the side while you make your guaranteed income. Weekends and evenings become your freelancing hours, that gives you plenty of time to knock out a few projects.
Quantify your current cost of living, that is now your target to hit with your freelance income. Once you are consistently making enough money to pay the bills with your freelance income, you can start to consider making the full-time jump.
Being in business for yourself is more expensive than you think it will be. Just owning a camera doesn't mean that you are now ready to operate as a full-time photographer. Running a business and being in business for yourself will introduce multiple expenditures that you aren't expecting. Do your research and get a ballpark figure of what it will cost to fully operate your business before jumping in.
People asking about your work or liking your work doesn't count for anything. A lot of people will be interested in hiring you but won't be willing to pay what it costs. Get used to hearing a lot of "no's" but don't lose hope or focus. It takes time to get a new client and build a network.
When you are working for a company, the majority of your time is spent doing your job description. Going freelance is first and foremost running a business. Most of your time will be taking care of administrative tasks until you can afford to hire someone to take that off your plate.
Practice! Work on the weekends, get client work, practice negotiating, study the market. That stuff does not happen overnight and takes a lot of practice to get it down.
Save while you can! Before making the jump to full-time freelancing, you should try to have 6 months worth of living expenses in the bank. It will take some time before you get a consistent income.
Get into a community! Surround yourself with like-minded individuals. Not only will they help you learn and improve, but it will also be a great way to get work. Creativity is a team sport. You need people to bounce ideas off of and ask questions. Even just a couple of people will help you grow so much faster.
Think hard about if you are actually ready to make the jump. It takes a lot of work. Make sure you are ready to make that commitment.
Don't follow your passion, your passion will follow effort. The more you invest time and effort into something, the more passionate you will become about something. Make sure you are giving your current employer your full effort, you might find you aren't and doing so will make you more passionate about that job. Also, start investing your effort into you freelancing now. Your passion will grow, as will your talents and your client base.
Set goals, write a mission statement, and stick to them -
Goals need to be measurable. They need to be financially based. Personal goals are great, like a Vimeo staff pick, but the financial goal needs to be the focus. If you set a goal, you can then work backwards from where you want to be and establish checkpoints a long the way.
You need to setup the business by talking to professionals like a Lawyer or a CPA - Taxes is not an area to just “wing it”. You need to talk to a tax and business professional to make sure that from the start you operating within the constraints of the law. Taxes for photography are different than video which are different than graphic design. Unfortunately, there is not an obvious answer to the tax question. That’s what accountants are for and they are worth the money. We know that it is not fun to pay them for their help; however, remember how frustrating it is when a client thinks that they can do their own creative work in house without your expertise? Well that’s what you are doing with taxes, but if you mess up you go to jail. SO HIRE A CPA AND ASK THEM QUESTIONS ABOUT YOUR BUSINESS IN YOUR STATE AND CITY.
Actually setting up your business… - An LLC or Sole Proprietorship isn’t right for everyone. Talk to a CPA or a lawyer about what type of business you actually need to form and how to set that up. If you don’t have enough money to hire these people, then you are not ready to go into business. In the long run, not hiring these professionals will cost you more by having to fix your mistakes.
Lawyer’s and CPA's are worth the money, just like you are. INVEST IN THEM. They are not just an expense.
Separate your Income from your Personal Money - Even if you are not setting up the business yet, do not mix personal and business money. Open up a separate account and run everything that is relevant to your business through that. Mixing money is how people get audited and get in trouble.
Taxes are very different than being a W-2 Employee - As an employee somewhere, taxes are just taken out of your paycheck each month. If you are a freelancer, everything you make is later taxed by the government and you are responsible for writing that check on time. Do not be surprised by that first check you have to write to Good Ole Uncle Sam. Put at least 30% of every job you get paid for in a savings account and do not touch it! That is not your money, that is Uncle Sam’s money. Whatever you do not owe becomes your tax return, congrats and welcome to freelancing. Taxes suck, do it right or else it will suck way more. Ask a professional about how to set it up for your business. You might not just need to setup for taxes but also obtain business permits or a specific type of insurance… you have to have those to be a viable business.
You need to run everything through your goals and mission statement. That is your “constitution”. This will keep you on tract to achieve the actual goals you’ve set for yourself. Then brand and promote yourself for what you want the future of your business to look like.
Anything you can track, you can manage - A data trail will give you information to make adjustments for your business. Email tracking, time tracking… all of these tools will (if used properly) change your business.
One of the hardest things about freelancing is finding clients and figuring out how to price yourself. For more info, check out Episode 4! Here are the basics:
Without clients, you don’t have a business.
What you are charging people needs to cover your time working on the project, whether you are with the client or not. Also, you need to make sure that you are covering your cost of living in between jobs, you need margin. You also need to be able to justify what you are charging if questioned. Your time, your expertise, your equipment, your software… these are just a few of the things that they are hiring you for. Know what you are worth and make sure you are being compensated fairly.
There are two pricing mindsets in our industry: hourly/set rates and per project pricing. The industry you are in can somewhat dictate this.
Charging per project. The difference between a commodity (wedding photography) and business services (video, design, marketing…) is the potential value realized by the client. Wedding photography will not help make the bride and groom make money, it is an expense that is worth the money for the bride and groom. Their clients are not realizing a financial return on investment. If you are working with a business, present yourself as an investment because you are bringing your experience to hopefully help them make more money.
Return on Investment varies greatly between companies, and that’s why pricing fluctuates between businesses. You wouldn’t charge a huge company the same you charge a small local business. That even applies for a small project for a big company, just because it is a big company doesn’t mean you can charge a lot if they don’t expect to see a return on their investment.
You want to present yourself as an investment to the company. You want to partner with them, don’t be an outside contractor, be a part of the company. Say “we”, not you.
So how to price: try to find out what the company expects to make on this campaign, and price underneath that. If you are happy with that number, and if it’s well below their expected return, then everybody wins and they should green light that project. Put yourself in their shoes, if you could pay $10,000 now to make an expected $75,000 in 6 months, no brainer. They will say yes to that and you will make $10,000 at the end of the project.
They hired you to provide a solution to their problem. Spend time with them on the front end to understand the problem and their culture, then come back with your solution and talk numbers. If you don’t have a full understanding of their problem and your solution, whatever number you suggest is arbitrary.
If you are charging hourly rates, you are hurting yourself. The better you do your work, the more efficient you are… the less money you make. Then to make more money, you work slower, which is unfair to the client.
Know why you are charging what you are charging for everything you do, then present it to the client as the whole project sum with all the services you are offering. If they then ask why that costs what it costs, you can break down for them each service and what that costs.
If they have a marketing team and already have a great idea, ask for reference material or examples of what they want the final product to be similar to. This will give you a starting point for just the cost of production and see if the client knows what that would cost.
The client is hiring you as the professional. You offer solutions. They are hiring you to come up with the ideas and solutions. Work with them, don’t feel like you are just a hired camera. Own it. Make a situation proactive, not reactive. Their idea might not be the right answer to their solution, you can offer that answer and by offering the specific answer to their specific problem, you can probably charge more.
It’s okay to work for free. GASP. Yep. If you are looking to grow or want total creative control, work for free. Sometimes the only way a growth opportunity will come along is to do it for free.
Don’t work for free for a company that can afford to pay you. If a big company comes to you and offers you “exposure” but can’t afford to pay you, say no cause that’s bull crap. We are talking about very small start ups or charities that you believe in. You sometimes have to pay your dues and grind to build the necessary relationships.
Finding Clients. Choose who you would love to work with and try to build a relationship with them. If they are a small company, they are probably hosting events to get their name out there. Go to those events and network. Build trust and then begin to pitch your idea.
Just because a company that you like is putting out great content, doesn’t mean they don’t need more help. Keep trying to build that relationship. The chances of someone responding to you from a sales perspective increases exponentially after the 7th-8th time you’ve contacted them. They may already have some people they use, but one day those people are going to be busy and the decision maker will be in a bind and you can be the answer to their solution.
Sales is hard. You will hear a lot of no’s and will make a lot of cold calls.
Turn clients into accounts. Instead of just doing things on a per project basis, you can look at the entire year with a company and establish a budget for the year that they will work out of with you.
Marketing/self-promotion. You are a content creator, you should be doing it to market yourself. You will get hired for what you project yourself to be. Own your talents and promote them.
Jakes Project Evaluation Rule. The project must meet 2 out of the following 3 requirements for me to definitely say yes: 1) Is it good money? 2) Is it a product or a company that I believe in? 3) Am I getting an opportunity to work with good people?
So now that you have clients and know how to price yourself, you need contracts! You also need to know how to communicate with those clients. For a deep dive on that, check out Episode 6!
If you have a feeling that a client may be a bad client, they will be a bad client. They are not worth the headache. If you see a red flag in pre-production, don’t do it.
If there is ever a dispute between you and the client, you just go back to the contract. It outlines the terms and expectations by both parties. The contract not only protects both parties, it will answer a lot of your questions throughout the project because it has already determined the expectations.
Contract provide clear communication and outline expectations. Leaves no assumptions.
Secret to getting rid of problem clients? Don’t take on problem clients. The early meetings with a potential client is when you ask the necessary questions and go over contracts to weed out those potential problem clients. Clear it up on the front end. Never operate off of assumptions. Assumptions bring about poor client experiences.
Not outlining expectations early on with a contract, you are setting yourself up for scope creep from the client, especially when you are young and starting out. If they push for something in addition to what is already on the contract, you need to create a new contract.
Never take a job for easy money if the client is being problematic from the start.
If you see one red flag, there are 1000 red flags behind it. - Sean McCabe. Do not take the project.
Our legal definition as freelance creatives is “Contractor”. Have a contract! A contract is expected from you.
Maximizing communication minimizes misunderstanding.
Taking on a problem client is a huge opportunity cost. Saying yes to a problem client means you are saying no to every other good opportunity that could possibly happen to you over that period of time. It has never been worth it for us.
If you didn’t communicate something clearly, that’s on you. Go the extra mile and try to make it happen for the client. Everything is a learning experience.
So what goes in a contract? From our experience (photo/video), the following: the money involved (deposit/invoice), the timeline of the project, the delivery date and format, and how many edits are allowed in the cost. Those are abstract and can be determined by you and the client. There are other things you just need to have to be protected, talk to a lawyer about that.
The amount of edits need to be included in your contract. If you don’t, you can get taken advantage of. It will help you and the client.
A lot of the process with getting a contract together is educating the client about how you work. Go through it with them in plain english and establish expectations and responsibilities by both parties.
When you start out, you want to be able to please your client and just say yes to everything. Don’t be afraid to not be a "yes man”. Even when it comes to their ideas, you don’t have to say yes. They are hiring you to be the creative and their problem solvers.
When you start out, you don’t know the value of your time or money, so saying yes builds up to the point of being stuck. Saying no to scope creep unless they pay more is the right way to do business. It makes you more professional. It’s how business is done.
You don’t realize the value of your time when you start out, but you also don’t realize the value of your brain. You are the professional. They hired you to solve their problem. Let them know that their idea is great, but you might have a better one.
Establish a “Point-Person” for your client. Having a single person that you are communicating with makes life so much easier. They will filter out and relay the opinions of the rest of the company. Usually that person is the Director of Communications or someone in Marketing.
Anytime you communicate with a client, make sure you get it in writing somewhere. If you have a phone call, send them a quick email that recaps what you talked about. Having a paper trail is essential. Everything in writing is tracked and timestamped and searchable.
When money is involved, emotions can get amplified. People can take things personally. If you make a mistake, you need to try to put out that fire as fast as possible. You need to be empathetic to your clients. They might really want something specific that you think is dumb, ask them why they need that thing and you might be able to understand their mindset and be able to fix their problem in a better way. Communicate with them. Yes, business is business, but emotion will still be a part of it.
If you talk through everything at the beginning and they agree that your work will amplify sales and you keep communication lines open, then things will go smoothly. People get excited about investments. Position yourself as an investment in their company, not an expense. People get stressed about expenses.
If you want to hear more about working with clients, check out the Austin Mann episode! The dude is amazing at getting good clients to pay for good work, Episode 19!
You're worth a lot. Don't constantly undersell yourself and add extra stress to your already stressful life. Stick with it, power through, and level up. Don't be afraid to fail, learn from it, and make yourself and your business better. Be smart, have fun! It's a lot of fun! Be creative!
Richard's Recommend: http://www.builtinwellington.com/went-desert-3-million-cash-left-150-tons-cashmere/
Video from Director Jake worked with: The Encounter Collection
Incredible Campaign: https://www.behance.net/gallery/34921117/Upton-MMXV-Campaign