Setting Your Fees

Setting fees is a mathematical process, not a shot at a dart board.  There are two ways to calculate what you should charge.  

The first method is based on financial requirements.  Total up everything you need to cover personal living expenses – be sure to include deposits to savings, retirement, everything.  You can work from either an annual figure or a monthly averaged figure.  Add up everything you expect to spend in the business plus 20% more to be left in the company to grow it to the next level.  Add the two figures together to get the total dollar amount you need to generate from the business.  Divide by the number of billable hours the same time frame (month or year).   A typical service provider can bill about 25 hours per week.

The second method converts an employee pay rate to an independent contractor fee.  Take the hourly rate you made or wanted to make and multiply it by a number between 2.5 and 3.0 which adjusts the base rate to cover the fact that you now have the business overhead, the health insurance and retirement plan.  Take that result and multiply it by the typical 40 hours per week.  As a final step, take that result and divide it by the number of hours per week you plan to bill – not just work, but actually bill.  So the net same money as a $20 per employee you would have to charge $80 per hour as an independent contractor.  Here’s the math:

EX: 20$ per hour as an employee x 2.5 = $50 per hour. 

        50$ per hour x 40 = $2,000 per week

        $2,000 per week divided by 25 billable hours per week = $80 per hour as an independent contractor

Regardless of which method you use – I use both – you then need to determine if your target market will be willing to pay your rate.  If not, you have choices, bill more hours at a lower rate, reduce your costs or move to a higher market.  Even better than an hourly rate is value based project pricing but that will be another post!

2 Early Lessons I’ve Never Forgotten

If nothing else, starting a business is starting a journey of learning.  In my case, that was a good thing!  I love to learn – always have and always will.  Here are two things I learned early on that have served me well for more than 20 years.

If a client is concerned about the cost, change the scope of the proposed project but not your rate.  Nothing shows a lack of confidence in your own skills faster than lowering the rate as soon as the customer flinches.  It’s much better to counter propose with a smaller amount of work that fits in their budget and leave the opportunity for future work. 

I later learned that a good test of your rates is based on the pushback percentage.  About 20% of your prospects should complain.  If no one is complaining, you are charging too little.  If more than 20% are complaining you are priced to high for the market you are reaching – change your price to meet the market or find a better market. 

Not every prospect is a true client prospect.  I can organize anything or anyone, but that’s not what I am best at doing.  Resdiential organizing projects are not in my market. While I have done projects for Fortune 100 companies, I find working directly with an owner to be more satisfiying and I use a wider range of my skills.  Small businesses that are under financed are not my market because they can’t afford my services.  Prospects that are not yet ready to change are not in my market regardless of how much they might need me. 

What qualities does your true client prospect have?

What Being Organized Really Means and How It Can Make Your Work Easier

With TV shows like ‘Clean Sweep’ and similar programs that are metaphorically ‘waving magic wands’ and turning unbelievable quantities of excess into sparkling cleanliness, it is tempting to believe that you don’t need to get organized because you don’t have a garage bulging at the seams or a desk and chair you cannot find in your office.  There is a subtler side to organizing that gets less attention but delivers a bigger impact.  Consider the implications of these four concepts…

Organization is about flow … how easily do tasks and information move into your environment, get completed or used and then leave your environment.  ‘Stuff ( a technical term I like to use because it is widely applicable :>) moves in almost of their own accord, especially in the work environment.  While items are in use, they are are worth having.  But, few people have systems for the last step – getting them out of the environment – to make way for what is next – that is a place organization can really help.  Unlike cleaning which is a repetitive chore, getting organized involves engineering systems.

Everything you use will become useless.  Every thing you have – information, material goods, technology is always in a state of dying – some quickly, some slowly, but all inevitably will be used, put away, and ‘die’ because they are no longer useful.  Why?  Because, change is happening to all of us, all of the time.  It is a natural process and it requires periodic attention.  This organizational process of reviewing and moving out – to donate, recycle or discard – those things that are no longer useful is a periodic process that creates the space you need for what is coming next.

Organization is about how well your environment is supporting your ability get to important work accomplished – which has nothing to do with what the space looks like but everything to do with how it functions.  This is a very different measure – for left brain dominant, linear thinkers, it is a clear space, cupboards and one task at a time.  For right-brain dominant, creative thinkers it is a structure within what can appear to be a cluttered mess, piles, shelves and multiple projects at once.  When you look at the Felix Unger and Oscar Madison characters of The Odd Couple, Felix spent all his time tidying the environment but accomplished little more, while Oscar, though often buried in clutter, was a working columnist meeting deadlines in spite of what his environment looked like.  It could be argued that Oscar – not Felix – was more organized though Felix was clearly neater.

Change is happening at an ever-increasing pace.  We are experiencing as much change in just 2 years as the generation before us experienced in a decade.  This means information, material goods and technology are ‘dying’ even faster – in fact projects are dying before they can even be completed.  It can leave people feeling what they do is pointless and they are frustrated.  One only has to look at what has happened to television in the last 2 – 3 years to see this reality of the increasing rate of change.

 For the first 30 years about the only change in television was the size of the screen, the addition of color, the number of hours that were broadcast and the development of a handful of ‘major’ networks. During the next 20 years – things moved faster – cable TV and satellite TV with many, many more channels and networks, and the already come-and-gone video tape recorder – making way for digital recording – it all changed a lot of how and when we viewed TV. 

Look back two years ago – was it even on your radar that you would be watching your favorite show on a cell phone or PDA? That the episode you missed could be watched on-line?  That a snippet would turn viral and be seen all over the world in less than 48 hours (just ask Susan Boyle)? That you would be interacting with your show by voting a winner while the show was being broadcast?  That a local show would interact with viewers sending interview questions in to the reporter via Twitter? That isn’t even the big stuff (digital TV, HD TV, the death of analog TV) and there’s much, much more, but you get the idea.  It feels like suddenly, there are more changes than we can process or care about, and, of course, it is not just television – its just about everything.  In a time of  massive change, organization is a coping tool to manage these rapid changes – to make choices and have some control rather than being ‘swept along with the flood’.

The Bottom Line – this view of organization as process engineering and system design is a more realistic view of what it means to get organized.  It also illustrates why everyone needs some basic organizing skills.  As the world keeps changing, operational models can be re-engineered to meet new demands.  It helps information, material goods, technology and everything else flow through your life with a built-in exit strategy.  You can stay focused and accomplish the things that important to you and you have a tool to help you cope with today’s rapidly increasing speed of change.

Owning Your Job

For almost a decade I owned a business. Then I learned that what I really owned was my job.

I had the privledge of learning small business management under the guiding hand of Dr. Thoma Jones, PhD. through my local Small Business Development Center.  During one of the classes he talked about the importance of understanding what you really own because each has a different model and a different set of challenges.

You can own your hobby.  Owning your hobby means you do what you love but the money doesn’t matter.  This is a viable model for a second income, a retirement business or if you are independently wealthy.  It has an unstable business model but since the income is less important than the activity you are pursuing, the instability doesn’t matter very much. The challenge is to just keep it going enough to be happy with the hobby.

You can own your job.  When you own your job, you do what you love, it is the main source of your income but the long term view is more about independence and keeping things small.  I own my job.  This too is an unstable business model but, since the income matters, the challenge is to keep it as stable as possible and that takes effort, attention and focus.

You can own a business.  Owning a business is really a commitment to growing in size, adding employees,  being a manager and leaving a business legacy.  This is a stable business model and the challenge is successfully building it to the size you want it to be and how it will survive beyond your leadership.

You can be an entrepreneur.  The true entrepreneur enjoys the start-up process.  They start a business so they can sell it and start another.  The goal at start-up is to build a company that will sell.  The challenge is getting all the processes developed and documented so it can be handed off in a selling process to someone who wants to own a business.

I own my job

Owning a job is like being a plate spinner

It takes effort to keep it moving forward.  It’s like being a plate spinner.    You have to put enough effort into marketing to get it going and then move over to work with a client, then look at the finances, then plan for growth and get back to marketing before the lack of momentum causes any one of the pieces to break. 

I’ve been doing this juggling act for more than 20 years.  There have been times when some of those critical ‘plates’ got pretty wobbely and almost fell.  New technologies are making it easier to keep them all going because there are more options for getting help other than employees.  Barter, virtual assistants, contract help can all make the business model a little more stable.  It’s been an adventure – one I wouldn’t trade for anything.

How about you – what do you own – your hobby, your job, a business or is your real passion entrepreneurship?

What’s In A Name?

Changing biz card reflects evolving business

The first order of business now that I had a business, was figuring out the company name.  It has been both enduring and ever evolving.

In 1987, I had never heard of a professional organizer but I knew that what I was now doing independently was something I had done in every job I’d ever had.  I was organizing.  I was untangling messes, finding simpler ways to to get work done, creating systems and processes to make work flow and in general taking action to move towards a desired goal.  So ORGANIZATION was clearly a key word and at the time unique. I capitalized it because it was important.

The Plus! part of the name was easy too.  I didn’t know what I might have to do to earn a buck doing something I had never seen or heard of before.   Plus! was a nice catch all.  I added the exclamation point because things were exciting and new. Seriosuly, that is how I came up with the name ORGANIZATION Plus! 

Turns out, although I hadn’t heard of it, there was already a fledgling professional organizing industry coming together in California under the banner of the National Association of Professional Organizers – NAPO.  There were also at least four of us around the U.S. using the name Organization Plus – though no one else capitalized ORGANIZATION and no one else used the exclamation point.  Three of the four of us our still in business and NAPO now has over 4,000 members.  I served 13 years on their national board of directors in a number of positions, founded the Oregon Chapter of NAPO and generally had the joy of being a contributing part of building my industry from some of the earliest days.

But I digress :>)

The nice thing about owning your own business is it gives you massive opportunities to grow personally and professionally.  About every 5 – 7 years, I set aside some serious thinking time to recognize what I’ve learned, how I have changed and what activities I’m doing now that I wasn’t doing before.  I use that information to evolve the business model, change the tagline, my color pallet, my service offerings, my mission and vision statements and to relook at the company name.

Over the years I have been too unknowing to have a tag line, to ‘We help put your business together’ to ‘ The business organizing professionals’ to the newly minted “Liberate time to think and space to act”  I have revisited the company name many times. I have worried it was too generic since that vast majority of the 4000 professional organizers use the word ‘organize’ in some form in their name and that my name gets lost in that crowd.  But I keep coming back to the Plus!  

The Plus! in my company name has also evolved over the years.  It started as a way to give me an ‘out’ to do anything in case this wild idea of helping other business owners organize the non-exciting, but ever essential back end of the business did not work out. 

Today, it stands for some pretty specialized talents and learning that I have built, sharpened and honed over the last 23 years. These special talents allow me to work with clients at a level above the physical ‘stuff’.  I may have to ‘clear the decks’ once in a while as a part of the process but the real gift I bring my clients is helping them to order and focus their thinking.  I am very proud of all the time, effort, learning and thinking that make my Plus! something unique.

What’s your business name and how did you come up with it?  What does it reflect?

The Accidental Business

Since my goal for this blog is to share my journey and the lessons along the way, it makes sense to start at the beginning.  This is the how and why of my start as a business owner.

The general thinking is that people who own businesses always dreamed of owning one until they succeeded.  The truth is that almost half of businesses are started out of necessity or from a place of pain. I didn’t reallly start my business, it started itself and in the early going I was just along for the ride.

I had a 10 year career going with a local small business that ended badly and left me feeling that I was unwilling to trust someone else with my future.  In this economy – there may be a lot of people feeling this way.  I cried for a day or two – that’s what we women do when we are hurt and in emotional pain.

It would have been easy to pull the shades down and  the blankets over my head – to wallow in the misery for more than a day or two.   Everyone I knew wanted me to fight back – sue the owner.  That is not my style.  I believe that old axiom that when a door closes another one opens somewhere.  I started thinking about what to do next.   I knew that I was fairly unique at the time.  I both understood the accounting process – which back in 1987 only the accountants knew and computer processing side – which only the software companies knew.  There was opportunity there but I couldn’t see what to do with that knowledge.

I decided the most important action to take was to do something – anything, while I tried to figure out how to use my dual knowledge of accounting and computers.  I signed up with Kelly Girl – now the more  PC (politically correct) Kelly Services, so I could do temp work while I tired to figure out my next career move.

I went out on my first assignment to do some peg-board bookkeeping (an archaic manual accounting system) for a local drywall contractor. At the end of the day a salesman walked in to deliver their new Kapypro computer (it was pre-PC).  The owner, Emry, starts saying “I don’t know what I’m going to do.  I don’t know anything about accounting or computers. I just let me bookkeeper go.” Then he looks over at me and asks if I know anything about accounting and computers.  Ah that master Fate.

The first part of my answer is totally guessable – “yes” but my intuition and mouth followed that up with “but not through Kelly.”  He asked what I would change.  I gave him the incredibly foolish, unplanned answer of $15 per hour.  His response?  “You’re on.”  I’m not sure why neither one of us used the word employee. 

As an honest person, I went back to Kelly to see what if any issues needed to be resolved. There were none, as I was offering to work with Emry to do work other than pegboard booking.  So I was clear, my business was born by accident or by cosmic plan depending on your persuasion and so my journey as a business owner began.

So how did I start my business?  It  accidentally started itself.  Why did I start it? Because my sense of trust in an employer was badly broken and having control of my own future just made more sense.

How about you?  Did you always dream of owning a business or was yours born out of necessity or pain?

To Blog or Not To Blog

OK, so it’s a bit cliché to fall back on Shakespeare in my first blog post but it is relevant to my ambivalence about blogging.  To blog or not to blog has been a question I’ve been wrestling with for some time.  You already know my answer – you’re reading it – but what went in to the final decision?  Why was it such a difficult decision?

I had to decide to let go of something.  I teach my clients that life is a pie chart, not a to-do list.  The difference is critical.  A to do list is endless and you can add forever. A pie chart shows you that all your time is already allocated to something.  You can’t add anything. You can only substitute – give up something you are currently doing in order to take on the new activity.  I had to decide what I am doing now that is less important than adding blogging to my marketing mix and let that activity go.

I had to make the choice to blog for my own reasons.  Lots of people are telling me I need one – the guy who wrote the book, the woman offering classes on how easy it is, the marketing guru who tells me it is no-cost marketing.  Not anyone I know personally or who knows me or my business, just people who are telling everyone – hoping enough someone’s will buy in so they can make living.  Since I want to make a living too, I can’t begrudge them that but, without a connection to my mission, my purpose, my reason for doing what I do, I won’t be able to sustain my own interest much less yours.  There’s probably a reason 60%-80% of blogs are sitting untouched – yikes!  

I had to learn the technology.  I am a speaker and a writer so at least have that much going for me but this is a new tool and more importantly a structure I had to learn.  As the universe does, just as I was revisiting the to blog or not to blog issue again, an opportunity to attend a class by Sean Harry and Eric Mann on how to set up a blog that offered an appealing build-it-on-your-laptop-while-you-are-in-class format came along. I learned all the basics….yesterday.

I had to reconcile my own ambivalence about contributing to information overload – something else I help my clients with. There is already so much information out there – a cacophony of words – that most us are overwhelmed.  I needed one really good reason why I should add to the clamor. Even sitting in Sean Harry’s class, learning how to set up a blog, I was torn on this one.  Enough so that I spoke up about it at the end of class.  The answer came on the drive home when I started thinking about how many people I have never met, have impacted my life because they told someone, who told someone else, who told me a story, or shared a piece of advice, or passed on a snippet of wisdom.

Here’s my blog.

I decided to give up the late news watching habit (I can check it on line much faster) and go to bed 30 minutes earlier to rise 30 minutes earlier to write this blog.  It really means I have consciously, knowingly, swapped 30 minutes of personal time to add 30 minutes of work time. I am hoping the value return will make it worthwhile.  It shouldn’t be too hard given how I was using the personal time and maybe I’ll make some new friends which means I am leveraging by blending business and personal time in the same 30 minutes.

I choose to share the stories of my journey in the hope, the wish, the belief that some of what I have learned about how to use focus and simple processes to keep a healthy life-work balance, how to innovate and renew enthusiasm for owning my business and how to keep ‘swinging the bat’ – trying something new when times are hard, will help others – maybe you on your journey as a solo-preneuer.    Happy Trails!

So how did you make the decision to blog?  Has it been a good decision?