Archives for December 2012

A few years ago, I thought that I’d find more success and fulfillment by learning about everything I could wrap my mind around. I grew up around men in my family who fix everything from wooden things to mechanical things to electrical things.

As a kid I thought, “one day, I’ll know how to do ALL of those things if I put my mind to it.”

Now I’m well into adulthood with a house, wife, kids, and our microwave broke a couple of weeks ago. I went at it with my usual gusto:

• Google for trouble-shooting steps
• Google for parts pricing, which led to the later steps because of noted high prices
• Google for microwave pricing
• YouTube for how to test components
• Ordering a new magnetron (aftermarket for 1/3 the price of GE parts – and it was identical)
• Ordering a new diode at 32x bulk pricing
• Very handily replacing both components

Unfortunately the result was that the glass of water I put in after all of that was still the same temperature as before I ran it for 2 minutes. Thankfully, I’ve learned my lesson after doing such repairs for years to know not to close it up and re-mount the unit on the wall before testing it.

It’s not worth it to know everything

I knew how to do all of those things, things a hefty portion of the population of DIY dudes would have stopped when they saw how much of a modern microwave is electronics. Yet I still could not fix our unit.

All told, I likely spent 6-8 hours on the list mentioned above, too upset to do client work for one morning of this process, and working on Saturday for the rest. I also dropped $45 on a magnetron and $28 on a tiny GE-branded diode you can buy for pennies in bulk.

Weigh your time/skill against that of a pro

You are worth more if you know something very well, however you water down your worth if you know 100 things well enough to take it apart and throw your hands up. Stuck. It is blatantly evident that I’m not an expert in home appliance repair.

I know WordPress. I know how to either do 99.99% of things asked of me or I know who to ask who has even further specialization in something within WordPress. For that thing, that person holds more worth to be able to do what’s requested. Can they do the rest?

Save money, hire a specialist

I can’t do my business taxes. I hire a professional who knows what questions to ask, what numbers to enter where, and what itemizations or credits we qualify for. He saves us well over 60 hours of work and charges less than $350. Our CPA is a specialist in business taxes.

Right after the holiday, I’m calling a microwave repairman to come fix our problem.

If you’re tinkering with WordPress, hire an expert.

If you’re not getting results from what you’ve done, it’s time to revisit the process that got you there. Was it a “this person was cheapest” thing? Maybe it was a friend or family member who did it for free or next to nothing. Lots of people mean well, but they can’t fix your microwave, do your taxes, or give you a top-notch website.

I’ve reconfirmed my own arguments to wary or jumpy clients by failing miserably at this particular home repair. I hope it’s a long time before I forget this lesson.

What things did you used to do before you started hiring experts?

It’s surprising how many areas of life and how many disciplines fall subject to the 80-20 Rule, also known as the Pareto Principle, named after the Italian economist, Vilfredo Pareto. Hardly a week goes by that I don’t read or hear a reference to it.

The last five business books I’ve read go into pretty good detail on harnessing the power gained by being aware of its benefits. This is what I’ve learned, so let’s take a look at your situation.

First step: analysis

Take a look at your business. For me, as a solopreneur, everything project- and client-related falls on my plate. For you, there may be vast wiggle room to delegate or outsource. To be transparent, I’m still working on how to do any of that, but since I’ve positioned myself as a quality and integrity brand, it’s very difficult for me to loosen the reigns on anything. But, nevertheless, take a look at your operations.

• Does 80% of your revenue generate from 20% of your clients?
• Does 80% of your e-mail load originate from the same 20%?
• If you concentrated on 20% of your to-do list, would things keep on trucking?
• Are you stressed out over only 20% of your projects, clients, or tasks?

Those are the things to look at: load, stress, profit, revenue, expenses, etc. The key metrics of your business should fall in line with the 80-20 rule… let’s say 80% of the time. That makes sense, so let’s go with it.

Second step: trial period

Try, for one week, one area of your business and concentrate on the 20%. Whatever that area is, either neglect the other 80%, delegate to others, refer to others (work out a commission or a flat rate for a win-win-win), or handle them much more quickly than the primary 20%.

After that week is over, re-analyze the data and look introspectively at yourself and the state of your organization. If it’s not in better shape after that week, ditch the trial, resume business as normal for a week, and try another area of your business.

Rinse and repeat.

Rebuilding your current plan

After you’ve looked at all of the areas of your business that you want to improve, come up with a plan to make the trial period changes more permanent. For some that will include a new hire or fire (I’ve been on the business end of an 80-20 firing in my younger years). There is also outsourcing e-mail support, fulfillment, and many other service.

Remember that not all major improvements necessarily mean major changes. One example of that is Chris Brogan’s 7-day challenge to get more done.

For my business, the immediate realizations were that 80% of my steady repeat business comes from 20% (or fewer) of my clients. I’m talking about work every few weeks or months or complete redesigns every year or two. I could nearly survive on those 20% if I was proactive and made myself available to help them in more areas of their business using my services.

As a result, I’ve become very picky about new clients because my current top 20% clients are already top-notch.

Resources

There are three books I’ve read on the subject in 2012 that will help you work on a new plan and course for your business and life.

I highly recommend Tim Ferriss’ book, The 4-Hour Workweek for tips on delegating and outsourcing. While it had a lot of scenarios that didn’t work for my situation, he and I are both writing to a broader audience — and I will be putting some items into action.

The second book I most recommend to improve your day-to-day business activities by way of finding your peak products or services and your best clients is Michael Port’s book, Book Yourself Solid, which also comes with a 90+ page downloadable workbook to follow along and vastly improve nearly everything about your business. Prepare to be pumped up.

Lastly, on this subject I recommend Your Brain at Work by David Rock. He goes into great, yet simple, detail on how we hijack our own day by trying to multi-task, work when we’re least efficient, and much, much more.

Discussion

What have you learned about your business by evaluating it through the lens of the 80-20 Rule? How’s that working for you?

Mistakes are a prerequisite to success. Without mistakes, you’ll only reach partial success (if any) before a mistake topples everything you’ve worked hard on. Sometimes one mistake snowballs into another and a chain of events produces demise.

I heard that quote listening to The 4-Hour Workweek by Tim Ferriss on Sunday while driving home from town. It was good enough that I skipped backwards twice to hear it again and drop a bookmark there to look it up in more detail when I got home. Take a minute to think about it.

If you don’t make mistakes, you’re not working on hard enough problems. And that’s a big mistake. – Frank Wilczek

Mistakes or failures

Okay, that was good, wasn’t it? That’s coming from a Nobel Prize-winning physicist. Work on hard problems and make mistakes.

You know, another word for “mistakes” in the business world would be “failures.” Every success story includes failures along the way, or at least 99.9999% of them. Very rare are the successful without blemish. Without risk (calculated risks are better than wild risks), one doesn’t have as much of an opportunity to grow or learn. Usually the learning part comes from the failing part, but there is learning during success, too.

Fail in order to improve

Back in 2009, I read a book by Barry Moltz called Bounce. It was all about failures and how to bounce back from them. What is often the case after a failure or a mistake is the phenomenon called “improvement.” When you were in school and took a test or exam and didn’t do very well, did you ever have a teacher allow you to re-take it? You did better the second time, didn’t you?

Without learning from mistakes, we’d never have 99.999% of our innovations we live with today because nearly everything imaginable comes as a product of several, if not hundreds of mistakes. We all know about how many “lessons” it took before Thomas Edison finally came up with the correct combinations of materials and design to make a lightbulb.

Teflon, Velcro, and “super glue” were all mistakes made by their inventors, and look how much they’re used today.

Mistakes “make the man”

It’s flat out difficult to be a success without making mistakes. The saying “you win some, you lose some” always goes with the message that you learn more from your losses than you do from your wins.

My experiences thus far in business regarding hosting, theme choice, who to consult with when I need help, vendors for dozens of things have all taught me countless things that add up to some serious gains and saved me from some even more serious losses.

How much does it cost you, as a business owner hosting 50 sites (like I am), when everyone is hacked and you don’t have a backup that goes back far enough to recover from it? If that happens, we can safely conclude everyone is going to abandon ship.

Life isn’t fair. Life isn’t perfect. Mistakes are all part of becoming a better (fill in the blank).

Live long and make mistakes!

Yes, $14,400 per hour to fix a WordPress site, you read that correctly. There’s both a story and a lesson to be found in there for every solopreneur, so read past the story for the nugget. Some of the comments are top-notch, too.

Several years ago, before I started this company, I had an urgent request from a customer of the company I was with at the time. Her site was down. Hard. It was either a full page of errors or a white PHP screen of death and she wanted my personal, out of support scope help.

I told her that I’d get her running for $120. The short of the story is that I either went into her .htaccess file or her wp-config.php file and fixed it. In 30 seconds. Done. Site up, customer clapping hands over the Internet 1s and 0s.

The guilt

Then the guilt hit me. I just “took” $120 from a lady for something that took me 30 seconds to fix. That would be $14,400 per hour for 30 seconds of my life. I’ll never forget it.

I immediately e-mailed her a moment after telling her it was online again, thinking she was going to be pissed that she just spent $120 so quickly. I asked her if she wanted most of it back, like $100 of it.

No, I spent over an hour trying to fix it myself. I’m happy to pay that much for having my site back online, regardless of how much time it took you. It was worth $120 to me and I wish I’d asked you sooner so I could have that hour of my life and my site uptime back.

The lesson

Your skills, whether it be physical or intellectual, are worth a certain amount regardless of how much time you spend using those skills.

Changing a lightbulb is a pretty simple task that anyone can do. Changing a lightbulb at the top of a 300′ tower on the edge of a 1000′ cliff will come with a hefty price tag. Get where I’m going with this? Skill — particularly the scarcity of it — directly influences the market price. It’s simple supply and demand. Certain skills take that to an extreme.

No one in their right mind is going to pay $14,400/hr for WordPress services, but they will pay $120 to get their site back online. So don’t settle for $1 for such a task.

Application as a solopreneur

I was encouraged by Brian Gardner of StudioPress to raise my hourly rates by 50% in 2011. He said it’d weed out the riff-raff and make my life easier. I was afraid I’d lose opportunities when people were pricing me out against others. It did. I lost opportunities. I’m glad, though, because it turns out those were probably clients I didn’t want to work with. I raised my rates again. Same thing happened: I got higher quality jobs and clients who didn’t complain or want more for nothing.

According to the 80/20 rule, 20% of your clients create 80% of your problems, extra work, and misery. It’s amazing how many things the 80/20 rule apply to. So, I took the 20% best clients and made them 80% of my work by raising my rates. I was many thousands of hours into using WordPress all day, every day and that made me more valuable than someone who uses a little of this and a little of that. They struggle where purists in one platform breeze through.

Stop there – kill your rates altogether

Now that you’ve raised your rates as you’ve learned more, kill them. Hourly rates hold you back. They make you an employee again, working time to get paid.

I attended my second WordCamp Orlando in 2012 and heard a great presentation from Syed Balkhi of WPBeginner, someone I met at the first WordCamp Orlando in 2009. He was a surprise presentation on getting paid what you’re worth and a lot of his (pep) talk revolved around not posting an hourly rate and not charging by the hour.

Instead, charge by the task or project for what it’s worth when it’s done by you.

One of his more awesome points was when you give a project price and include a bunch of features, and the client comes back wanting to pull out features to save money. First, you should be selling benefits, not features. Second, it doesn’t really save money because you’re already in the mindset that your delivery of said project is worth X. Adding or removing little items isn’t going to move the needle unless it’s a qualified scope change.

He’s right

I looked back over the last 3-6 months of 2012 and it’s been pretty rare the number of times I’ve billed someone by the hour or fraction of an hour. When I did, it was often an arbitrary price the task or project was worth on the market. That price was then converted into time because they’re old school and were expecting an hourly price.

The first week of December 2102 I killed my hourly rate. Have you killed yours? How is it going? Let’s talk below.