AWDG: Business of Design 101 (April 16, 2014)

April 16, 2014 - Atlanta Web Design Group - The Business of Design 1011

Sponsor: Shakelaw (http://www.shakelaw.com/)

Location Sponsor: Hypepotamus

Panel1. Jason Swenk (jasonswenk.com and https://twitter.com/jswenk). Digitalpreneur;

founder of SolarVelocity, digital agency. Sold after running for 12 years.

2. Matthew May (http://acuitycomplete.com/). Accountant. Former partner at

accountancy firm. Outsourced accounting departments. Cfo, controller.

Bookkeeping.

3. Mark Hershovitz (http://www.hershovitz.com/). Legal. Contacts, IP

4. Jeff Lovejoy (http://www.actioncoach.com/jefflovejoy). Business consultant

5. Gene Hammet (https://twitter.com/genehammett). Business coach; podcast:

Leaders in the trenches.

TOPIC: MAJOR MISTAKES1. Not charging enough. If you're too busy, you're not charging enough. Should you

raise prices by half. Ask: "What kind of value am I providing?"

2. Not having separate bank accounts; combined (co-mingled) funds. Solution:

Keep a separate charge card and bank account. Find a bank. Hint: Big banks

integrate well with software like Freshbooks, etc.

3. Not incorporating. Solution: Find a legal entity that will limit your personal liability.

LLCs are very flexible and are the tool of choice if you're just starting out.

4. Doing businesses without contacts. Solution: Stop doing handshake deals and

sign contracts for everything.

Not knowing where the business needs to go. Solution: Determine your destination. Don't

forget the strategic level.

● Riches are in the niches. Find what you're good at, and what you can do better than

others.

● Charge more money; don't be seen as a commodity (you do websites too?).

● Who do you want too serve? Stack up successes. See a common story. Stop

undercharging. Can't solve your problems by working more hours.

TOPIC: PROCESS● Start with goal. Goal is to get to a no. What kind of work do you not want to do?

1 Evernote version of notes here: http://bit.ly/1fdUwaq

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● Marketing - Need to specialize. It can be more profitable to "Land and expand": Sell

a small product up front. Sell a discovery. Have them pay you for that. Makes it

easier to sell other projects.

● Identity your niches and the frustrations they experience.

● Process. Need to measure; need to analyze and see how your performance actually

is.

● Think of the challenges that your clients (or potential clients) have. Think of

solutions to solve them. Focus on the change.

○ Give away 80, charge for 20. One mistake is going after small market

that was ready to buy right away.

● Clients that you don't take are just as important as those you do.

What are red flags?

● Clients who won't meet with you

● Client that cannot describe how a stated product fits their overall strategy.

○ Ask: How does this [website] align with your company goals? If they

don't know, who does know this? Find the strategic contract and

decision maker.

● Have your own contract and present it to them. If they mark it up, the changes they

make will tell you about them, their values, and their goals.

Audience Question: How good is docracy.com, LegalZoom, or other sites that provide legal

documents?

● They're good up to a point.

● Will you care if you lose money? Will it matter if you lose $5000, $10,000? If not,

then go ahead without a contract or lawyer.

● Thing to think about:

○ Know who owns the product. Example: If you have an independent

contractor do the work, do you have an assignment of work so the client

owns the code at end of project?

○ If contract says client owns code (exclusive code), that means you can

charge the client a premium for exclusivity.

○ Limitation of liability is limited to contact price.

○ Learn from experience. You will always change your agreements

according to how you get hurt.

TOPIC: INSURANCEErrors and Omissions (E and O) Insurance. General liability.

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There are a lot of insurance products out there.

Non-hired auto coverage. So agents cannot be sued as they travel too their work.

Infringement copyright. Coverage? For freelancers.

Have a bank account and separate credit card.

OPERATIONS● Thinking of all different signoffs you need from client. Develop a systematic process

○ Jason Swenk's company did a "creative brief on steroids". It acted as

their guide. Signoffs: Approve site map. Approve wireframe. For

example, They wouldn't start on design until client had sent content etc.

○ "You can change anything that is non structural." One round of

changes.

○ Once they pay you, you send them launch form.

○ Think: What do you need to start your work?

○ Plug: Jason is selling every single document and process he used on

his website: Jasonswenk.com.

● Act more professional in everything you do.

● External communications, need internal too. Talk to your employees, coworkers.

● Charge based on value of pain solved. Make a profit on it.

Contractors vs. EmployeesCulture.

For example, your client contract specifies who can work on your client's work.

H1N1 for contractors outside USA

Lots of tax issues with using contractors outside USA.

TOPIC: GETTING PAID● IDEA: Bill weekly if you bill by the hour.

○ Instant feedback on stuff that just happened.

○ People feel guilty about there bills.

○ Why shouldn't you bill weekly?

■ Jason Swek's company: Bill by project. They got paid 100%

before completing thirty percent of project.

■ Bill 50% up front. Then based on later date, pay a quarter.

■ Website concept approval etc. At project completion get last

quarter. Could charge their credit card.

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● Small jobs: Anything under 5k, you pay up front.

● J. Cornelius' team: Paid in increments of 40, 30, 30.

Whichever comes first, deliverable or date.

Matthew May's awesome suggestion: "Do you want the points?" Get clients to use credit

card.

Another pricing strategy: Get a deposit against final. Have right to stop work if they don't pay,

and the final becomes deposit.

Protect against shady clients: Look up company legal name on Secretary of state website.

You many need to get a business license for any place you have an office.

TOPIC: CONTINUATION STRATEGY● Figure out lifetime value of customer.

● What is average spend with you?

● How long do you usually keep customer?

● Demonstrate the result.

● Constantly let them know the value you provide. What are the other things you can

do?

● Educate them. Just worked with client, found this out. Want to know more?

Tracking project results.

Most clients want recurring recurrent revenue.

They want analytics on how their business is doing.

Jason Swenk's company pulled out CRM. Examined which leads converted into sales? How

much profit? "You made 50k on a10k investment." = demonstrated value.

What are warning signs you're doing too much and you need help?

● What are you giving up?

● Are your employees suffering because you're not focusing on them?

● Don't work below your worth.

● How to automate things : Use a screen recording software to record yourself doing

task. Give to virtual assistant abd they will do it identical to you. How I tweet, etc.

Camtasia. Screenflow. Can edit after the fact. Geem?

● If it frees you up to do other things at a more profitable rate, then spin it off.

QUESTIONS● How do you avoid scope creep?

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○ Do the work and issue a zero charge change order (don't charge client

but show them line item).

○ Tune estimate to this. Mail client a physical change order which they

have to sign and send back.

○ This way, agency owner can calculate how much he was losing. If

clients have to physically sign something, clients remember how much

they make you do.

○ Keep in touch with someone. Send them invoice for no charge. Call

them. Did you get invoice? What else is going on?

● What are good project manager software?

○ Myintervals.com. track hours. Tells you what you really need to charge.

○ Link to a comparison I put together: http://bit.ly/1gLTEu1

● How to raise new rates on an old client?

○ Sit down with them. Tell them why. You might be surprised (if they

shrug and say ok that means you've been undercharging them). They

will stay with you if they can't go elsewhere to get same level of service

and design.

○ Don't discount. Lesser rate, lower scope. If lower in your side, they have

to do something. Give them something they value and low cost but high

perceived value. Product.

○ No two projects are the same.

○ Change orders are hourly since outside scope.

○ My takeaway: "Niches scratch itches and make riches"

Accounting software● Waveapps

● Infusionsoft - CRM, all in one

● Xero

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Contact info for all panelists (thanks to Courtney Robb ([email protected]) for compiling)

Matthew May

Email: [email protected]

Twitter: @thetechcpa

Jason Swenk

Podcast: http://jasonswenk.com/masterclass

Coaching: http://jasonswenk.com

Twitter: @jswenk

Marc Hershovitz


Website: www.hershovitz.com

Facebook: www.facebook.com/mbhpc

Twitter: www.twitter.com/Hershovitz

Jeff Lovejoy


Blog: http://jefflovejoy.wordpress.com/

Website: www.actioncoachatlanta.com

Gene Hammett

Podcast: http://leadersinthetrenches.com

Coaching: http://coreelevation.com

Twitter: @genehammett


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AWDG: Business of Design 101 (April 16, 2014)

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