Dealing with price dickering

One of the huge annoyances service providers encounter when they start talking pricing with clients is when the client asks you to provide the service for less.

You say you can do a job for $1500 and the next question out of the client’s mouth is:

How about doing it for $1000.

Yeah great way to ruin your day and to start the whole project off on the wrong foot. I think there is a reason that clients do this though and it’s partially your fault.

Intangible

When you hire me to build a website for you much of the work is intangible. I’m a knowledge worker which is defined by Wikipedia as:

Knowledge workers are workers whose main capital is knowledge. Typical examples may include software engineers, architects, engineers, scientists and lawyers, because they “think for a living”.

Your thought isn’t something that your client can touch. They can’t touch the website I built and while they can touch the brochure you designed it is a small piece of paper that cost a lot to print.

Since it’s intangible stuff it’s easy to think that it didn’t take me 6 years of coding WordPress sites to learn how do build huge eCommerce sites. It’s easy to think that you haven’t spent 10 years designing for lots of different fields and have learned what works in some and what just falls flat.

That time spent becoming an expert isn’t something that can be touched by a client.

Since they can’t touch it they easily devalue it’s worth.

That’s where positioning and showing the value of your work come in to play.

Bringing Value Back

Once I’ve decided that a client is someone I want to work with we go over our business goals for the site and make sure we have a plan to measure them.

Measuring data is something that makes sense to clients and it shows them the value that you are bringing to their business.

For eCommerce sites we measure improvements in conversions (if they had a store before) or increase in total sales (if this is their first online store).

For many other sites we look at pageviews (since we are surfacing more relevant content to the user) or sign ups to email lists.

Numbers have a tangible feel to them.

We’ll talk more about value based pricing tomorrow when we dive into price anchoring.

But my client doesn’t have business goals

If your client doesn’t have business goals then why on earth are you working with them? Are they actually invested in the work or is it just something that they feel they should do ‘because’.

I ask for business goals right up front and if there aren’t any my first suggestion is to hire me to help them develop some proper goals for the site. If they aren’t in to that then I’m not in to working with them.

I only want to work with people that I can provide real value for. Value that we can measure.

Reduced prices mean reduced scope

I do understand that some clients may have a smaller budget than their initial vision allows so I’m not against reducing prices on projects. I just don’t do it by reducing what I make.

I reduce pricing by reducing the scope to fit the price.

Say a client comes to me wanting an eCommerce site and they want to use their own custom
payment gateway that interfaces with their bank. But their budget is only $5k.

Their budget doesn’t match their desired features. The site development alone (for me to build the site from a well organized PSD) will start at $5k. The payment gateway will be $1 − 2k.

I don’t say yes to doing the project and reduce my rates to match their budget we look at an existing payment gateway and use that for our site. If that doesn’t work then the client will need find more money to get the work done or hire a different contractor that can do the work while matching their budget.

Take Away

Get and set measurable business goals on projects to show your business value to customers.
Only work with people that want to set and measure business goals since they are the ones properly invested in their work.

If they start drilling you down on price take a real hard look to see if they are someone you want to work with.

photo credit: pfala via photopin cc

How should I price my services?

Our first post in the Pricing Series talked about all the different methods you could use to price your services. Yesterday I talked about how your speed at something shouldn’t affect your pricing (which is why hourly is a big bag of suck).

Today I’m going to talk about the 2 pricing methods I use for 90% of my projects and tell you why I like them.

Weekly

My top pricing method is weekly. I charge $3000/week (as of December 2013) for my services. I think that weekly pricing suits how I want to work with my clients (focused on one project at a time) and aligns well with my clients needs.

It lets me change scope without worrying as long as the new scope also fits inside the allotted time. I love serving my clients and being able to be dynamic. Weekly pricing lets me do that.

When I bill weekly I also know that I only need to work 3 out of 4 weeks in a month to make ends meet. That fourth week can be used to take a break or work on personal projects or if I’m ready to jump into a new project I just schedule it into that week. I’ve never had a client dislike getting to start a week earlier than anticipated.

The other main reason I love weekly pricing is that it fits how I work very well. I hate having many projects on the go. Changing between projects takes me forever and I easily drift into social media.

My productive billable time drops by about 30% when I’m switching between competing projects.

When I’m working on the same project all week I simply get up and get started on the project. Then I have lunch and get back to the project for the week.

I don’t have to decide which of my 5 clients currently has the biggest fire, I just have to work for the client I have booked for the week.

My wife has even noticed my stress level decrease and commented on it.

Flat rate based on value

My second method of pricing structure has been flat rate for fixed features. Yes you take more of a risk here but as you gain experience you also improve at pricing these projects.

I only do weekly now since context switching is something I suck at.

Last year I knew my client was paying $50k a year for a tool. I worked for 4 weeks to replace that tool and charged them $20k for it. That means I made $5000/week but I saved them $30k this year and next year the upkeep on our custom solution (which has features the old tool didn’t) will be less than $20k so they save even more.

Even when I’m billing based on value I treat it internally as a weekly project. So that $20k project was actually set for 6 weeks on my calendar just in case it needed extra time. I still have the advantage of scheduling myself for the proper amount of time and I get to make more than I do with weekly billing.

A word on effective hourly rate

Yes I think that hourly is a dumb way to price your services but I do still have an ‘hourly’ rate. Well actually I have an effective hourly rate.

An effective hourly rate means I take the hours I worked on a project and divide the total project cost by the hours. That tells me how much I really earned on the project. Lets do some math together to show you.

10 hours for $1000 dollars means I have an effective hourly rate of $100/hour.

15 hours for $1000 dollars means I have an effective hourly rate of $66/hour.

See not hard math at all.

I want to know the effective hourly rate of every project I work on and I want to see it over $150/hour. Yes my effective hourly rate is $150/hour (or at least that’s what I want it to be).

Do some projects come in under that mark? Of course some projects do. As I write this I’ve got a project that went over time and was entirely my fault. My effective hourly rate for this project is around $60 at this point.

No it’s not a weekly project and yes there is a personal relationship I am preserving. Be super careful about what type of work you do for friends.

Not a project I love working on as I see that number get smaller and smaller the longer I work on it but that is the reality of working for yourself sometimes.

Setting an effective hourly rate for yourself allows you to evaluate which projects you actually make the most money on. If you’re not making the effective hourly rate you set then you know you need to take a look at your business and change how you do things.

But

What do you do if most of your projects are smaller like if you typically have 1 or 2 week projects? Getting full payment before a one week project would mean that the client is going out on a limb with you having 100% payment and them having nothing.

I can certainly see how some clients would not love that idea at all.

The best way I’ve seen of dealing with this comes from Bill Erickson. He often does WordPress theme builds on Genesis and many of his projects take a single week.

He links his payment to his deliverables and invoices up front. So on a one week project he will send the invoice on day one with a due date slightly after the project is completed. This gives the client time to check the work out and approve it.

He also doesn’t wait for clients to enter content he ties the project completion to him delivering the theme work. Once that’s done the project is done. If it takes 10 months for a client to add all their content then it takes that long and Bill launches the site after.

I’d recommend listening to Bill explain this himself though. I haven’t talked to him, just listened to him speak so the above is my observations about how he runs his business.

photo credit: pfala via photopin cc

Speed and Pricing

When you start any type of work you’re slow. When I started building WordPress themes it took me 2 weeks to get something that I’d barely say is halfway passable (looking back at it now).

Now that I’ve been building themes for 5 years I can build a basic theme that would pass all of the pertinent items on the WordPress Theme Review standards in less than a week and I charge more.

When I started I also priced hourly at $50/hour and a theme build took me around 20 hours to do. That meant I made about $1000 on a theme. If I stuck with pricing my services hourly then as I got faster I’d be making less for the same amount of work. At the same time I’m providing more value in the form of better code.

Doesn’t seem right to me.

Price on hours to be poor

The speed at which you accomplish a task should have no bearing on how much you get paid to do it. You should be pricing based on value (and we’ll talk about how to approach this in a later post).

Does that design work increase the conversions to your clients coaching business? How many extra people convert and what are they worth?

Does the custom plugin you’re building mean that the client can stop using an external service they pay monthly for? How much do they pay?

Those are the questions you should be asking yourself and your client as you talk about starting a project with them.

Charging time and materials (another way of saying hourly plus any costs like subscriptions to services) caps your income by how many hours you can put in. It does not reward the value you bring to a project, just your “butt in chair time”.

photo credit: pfala via photopin cc

Some initial thoughts on CRM tools

Clients are the life of any freelancer’s business. You should always be marketing to and talking to possible new clients to keep your pipeline full of work.

Let it drop off and you’d better go find a fridge box to live in.

Enter the CRM

If you don’t know what a CRM is lets get a definition from Wikipedia

Customer relationship management (CRM) is a model for managing a company’s interactions with current and future customers.

So it’s a system to help you interact with customers and leads easily.

For a while I used Trello to manage incoming clients. I simply created a card for each client with their contact information on it and moved it along a set of lists.

My Trello lists were:

  1. Prospects
  2. Meeting Scheduled
  3. Estimated
  4. Follow Up
  5. Won
  6. Lost
  7. When it’s slow

Most of those are pretty obvious so I’ll just mention the ‘When it’s slow’ list. That was longer term clients that often have work when I approach them or agencies that might be in the same boat.

Cards get due dates so I’d be notified when it was time to deal with the lead and that was about it.

A simple system.

I found a few problems with my Trello system though.

Problem 1: No centralized contact management

Getting a new customer means recording their contact information in my Mac Contacts book. Then I’d need to transfer the pertinent information to Trello.

Bah to repeated work.

I hate repeating myself. I hate repeating myself.

Problem 2: A lead is worth????

What is a lead worth and how much time have I spent on it? Is Client A worth $1000 but I’ve spent 10 hours on them? That means I’m loosing money if I figure my client acquisition at my effective hourly rate of $150.

Trello doesn’t provide a great way to list how much a lead is worth or to track how much time I’ve spent on a lead.

Problem 3: Analytics

This is a fault of Trello in general, it doesn’t have any analytics at all. Sure it has that gold feature that fades a card as it gets ‘old’ but that’s it.

I’d love to see all cards that I lost because I was priced too high. Or how about prospects that simply stopped replying. Maybe I thought the project was a bad fit and I backed out?

I tried to apply labels for these scenarios and yes it works but there are no views to really dive in to the data.

Problem 4: Lead Source Tracking

Yes this is still an analytics problem but it’s one that has weight on it’s own.

I want to know where my leads come from. Did I get $2k worth of work from one referral source or $20k? That makes a big difference and I want to know about it.

Maybe interviews on other sites/podcasts are the best lead source and I should work for more of those?

The thing is I just don’t know with Trello unless I dig through each card and pull the data into a spreadsheet.

Ugh spreadsheets.

Ugh 2x data entry.

So my Trello system ended up rotting away in favour of OmniFocus tasks that linked back to MailPlane. Using those 2 things meant that I didn’t have to double enter addresses since they were already on my Mac.

No it didn’t solve any of the other issues but I’m already invested in OmniFocus and GTD so it makes sense to stick with what you know till you find something better.

That quest to find something better is why I started trying other CRM tools.

In a few days we’ll be taking a good look at OnePageCRM which was my first stop of note in my look for a CRM solution.

Breaking down my expense categories

So far this week we’ve talked about our personal financial journey at home, what a budget is and why you should consider creating one for your business, and how I broke down the numbers from years past to come up with what we hope is a realistic budget for the business.

Today we’ll talk about what we included in this magic budget of ours by breaking it down a little bit further.

Our budget seriously accounts for every dollar that comes into the business this coming year. When Curtis set his goals for 2014 he set an income goal of 175k. We worked with that number as the starting point when we set the budget for the year. Acknowledging that this is a significant increase over 2013 I also ran our numbers on 150K – still an increase over 2013, but one that I think he’ll hit no problem. Doing so helped us to know that we were being realistic.

If the numbers stay the same (but I don’t think they will) this year as last then we will have to re-work a few things and that’s ok. We are using this as a guideline. I am sure that we will have to make adjustments as the year goes on.

We have 4 main categories:

Taxes 25% – This one is pretty easy. We are in a 25% tax bracket so 25% of every check that comes in is instantly set aside for taxes. NO QUESTIONS ASKED. I really couldn’t imagine getting to tax season an being slapped with a $15K bill and having no savings for that. It seems crazy. And DUMB!

(Note from Curtis: If you can’t save taxes then you’re not running a viable business. We’ve been stuck paying taxes not saved and it’s a very painful experience.)

Salary 45% – We looked at how much we’d LIKE to bring home this year (little bit of a dream goal). We also looked at what made our family’s life a little bit more comfortable (a very realistic goal). Finally we discussed keeping the salary the same as it is currently which we have determined is comfortably snug. We set goals for both our reasonable salary increase (June) and our “dream” salary increase (September) and we’ll see if we hit them.

Profits 12-15% – Curtis automatically sets aside 5% that will stay in the business. We are actually hoping this year that the number will be more like 10-15% but again that will depend on what he earns. Why do we do this? It’s kind of like having a rainy day fund. It gives him some breathing room. It means that if for some reason there is a major meltdown and he has to buy a new computer, or give a client a refund (see post series here about when a contract goes bad) then there is money there to cover that without taking food from our mouths.

(Note from Curtis: If you can’t save that extra 5% then you’re not running a viable business.)

Expenses 15-17% – Expenses are broken down into a number of sub-categories, and I’ll outline them below for you so that you know exactly what we’re counting as expenses. These are basically things that the business pays 100% of. Write off’s – like housing costs, vehicle costs etc. are not counted amongst these items. Our direct business expenses are as follows:

Telus – Internet Connection – we took our current monthly cost & multiplied it by 12 then added a small cushion.

Bell Mobility– Curtis’ Cell phone – he uses this number as his business number. To calculate this number we did the same as above.

Software – This includes monthly subscription based products like Adobe Cloud an his invoicing tools, as well as plug-ins, apps, and other programs used to run his business. Based on last year’s number with a small cutback.

Hardware – Computers, headphones, phones, tablets etc. We have laid out a replacement schedule for some hardware items (like laptops and desktops) and are actually setting a budgeted amount aside every month so that at the scheduled time we will have the funds to replace his equipment as needed. In order to execute our replacement plans properly any “surplus” in this category will be rolled over to the next year as opposed to assumed as profits.

Office Supplies – Paper, printer cartridges, pens, you know, the basics. As you can imagine with the on-line nature of the business we don’t spend much in this area. We based this on last year’s spending.

Advertising – Again this is a pretty small category, but includes dollars set aside for sponsoring events like WordCamp etc. Again based on last year’s numbers.

Bank Fee’s – PayPal, Stripe, and other business banking fees. This is a percentage (about 2.2%) of our TOTAL projected earnings for the business based on the way the numbers worked out last year.

Education – On-line courses, books, conference fees. Loosely based on last year’s numbers, but increased based on Curtis’ goals for 2014. This is one number that will fluctuate depending on what he chooses to pursue as education, and also on his overall income.

Travel – Expenses directly related to attending conferences such as; airline tickets, hotel expenses, meals, bridge tolls etc. Again we tried to come up with a realistic number for this category based on conferences that he was interested in going to and their locations, but this number may also fluctuate depending on the overall income for the year.

Entertainment – Coffee, and any other expenses related to working in a “remote office” ie. Starbucks. Because our master bedroom functions as the Nursery, Bedroom and Office this is what we consider his “rent” to go out and work when the house is chaotic. This is one category that we do keep a close eye on to make sure that we’re not going overboard. In 2013 we were able to cut this category back by almost 1/2 over 2012. We’re planning on using the same number for 2014.

Other – I know sounds nebulous, but there are always miscellaneous things that don’t fall into another category easily. These include things like gifts given by the business, business licenses, etc. We based this number on last year’s expenses and chose to keep it the same. I don’t expect that we’ll spend to the max in this category either.

Whew, ok, that may be more than you wanted to know about budgeting but that is how we’ve done it for 2014. This is a bit of a trial for us having never really “set” a budget for the business and so we have entered into it with an open mind. I expect that as the year wears on we’ll adjust some of these numbers slightly but I do think that we’ve set them realistically enough to see little change.

Have you ever set a budget for your business? What worked or didn’t work for you?

How we set a business budget

As we’ve started assigning me tasks over the last few months it’s become obvious that my main task has been to take over the bookkeeping. I’ve started entering receipts, tracking expenses, and monitoring income. Curtis still has responsibilities in this area as well, but it has literally cut the time he spends on it down to about an hour a month.

Lucky for him working with numbers is something I really enjoy. I LIKE tracking spending, I like analyzing the percentages we’ve spent on things, I like setting a spending goal and then seeing if we can stay BELOW it. Ok, so I’m a little bit of a nerd. This is no surprise. My favorite aspect of my full time job as a buyer was analyzing the sales numbers and projecting our targeted sales for each inventory item in the store. Yup, that’s me.

I am no math genius and I’m not an accountant. I scraped through Math 12 by the skins on my teeth seeing a tutor multiple times a week, and getting extra help from my teacher as often as he was willing to suffer through my lack of comprehension. However, I am NOT using hard formulas here. I’m talking about pretty easy addition and subtraction with real numbers. Throw in the occasional equation to figure out a percentage and you’ve got the extent of the math that I’m doing here. It’s not hard and if I can do it so can you.

This fall when I started taking over the books I noticed one HUGE thing. The business income had doubled, but so had the expenses – in fact they had more than doubled. At that point I had no idea what percentage income should be going towards straight expenses in a business like this with what I would think is pretty low overhead, so I thought the spending was more than a little out of hand.

We have been living on a budget for our family finances for some time now and it works beautifully. It ensures that we always have money for the things we need and that there is also still some left over at the end of the month. If it could be so effective personally why wouldn’t it be just as effective for the business?

My thoughts – if we set a number for each of the categories on the expenses spreadsheet then we have something to work with, AND we can probably improve the profitability of the business – this is good right?!

So I asked Curtis what he thought, we both agreed that this is a good idea and I set to work. I know you’re thinking that this is all well and good but HOW did we actually go about doing this?

The How

One of the first things I did was break down the percentage of business income that was spent yearly for the last three years on expenses. I was surprised to discover that while the numbers looked high this year, percentage wise he was well within the same range of spending as he has been for the last three years running. Over the last three years he has spent between 17-20% of his income directly on business expenses.

In the meantime he wrote his post on 6 figure WordPress consulting and received a little bit of push back in regards to his expenses. Once he broke it down and started asking around amongst his peers with similar businesses it became obvious that his expenses were in line and in fact a little below that of a lot of his fellow developers running a similar style business. So he followed it up with a post breaking down the expenses.

(Note from Curtis: Check the comments on my expense post for some other expense percentages)

The next thing I had to do was sift through the expense categories I thought were high with a fine toothed comb to see exactly where the money was being spent and whether or not there were ways we could cut back.

The most glaring of these were the Software expenses. They had more than doubled which seemed a bit ridiculous to me. Since we track all the expenses on a Numbers Spread sheet it was actually a pretty simple process. I pasted the description column and the software columns into a new sheet and deleted the rows that had no software entries so I was ONLY looking at the software. Because I wanted to see where the increases had occurred I did this for the last 3 years and put them all side by side on one sheet to see how/where the dollars had historically been spent.

Do I know exactly what each line means? No. I don’t know if some of these items are plugin’s, app’s, programs, or other tools. I can however see what the monthly subscription based tools are and what the one time expenses are. The rest of it Curtis had to sort through and figure out.

I also took a close look at his “hardware” column, and the “other” column to make sure that we are making our dollars work for us as we spend them. For the rest of the columns or expense areas I basically looked at what we had spent, and tried to assign a realistic figure for future spending.

In some areas we cut back, in other’s we increased. We even added some new categories to make things a little bit more clear and to be able to track spending more easily.

Have you broken down your expenses? If not do it now so you can get a better handle on your business.

Why on earth should you create a budget for your business?

This seems like a simple concept but let me give you a bit of a working definition of exactly WHAT a budget is. That way maybe you can understand WHY you should create a budget for your business.

WHAT is a Budget?

A budget is an INTENTIONAL spending plan for your business. It gives you spending parameters that you are working to stay within. It gives you goals or targets to meet. It creates a plan. It gives each dollar you earn a specific job.

In business I think we can all agree that you are way more successful if you are intentional in your actions. If you’re wandering aimlessly with no target then I guarantee you’ll spend more than you intended to and end up feeling like you have very little to show for your efforts.

WHY should you create a budget for your business?

WHY go through the pain of creating a budget? Well there are a few reasons and I’ll share them with you.

Truthfully for me it’s not painful, it’s interesting. I think Curtis would rather run 100K barefoot and naked in -50degree weather. (Note from Curtis: Yes I would. I know they are good but I hate doing them.)

As a business grows it’s only reasonable that the expenses will also increase. HOWEVER I think that the end goal of any business is to MAKE money and be PROFITABLE. It’s really easy to say – oh, I made x extra dollars this month I can afford to splurge on Y app, or Z hardware item etc. etc.

Unfortunately in doing so you are directly decreasing the profitability of your business. In some instances you may unwittingly be taking food from your kids mouths. No one wants to work just to pay the bills, but if your expenses are out of hand and your business isn’t really making a profit then that is all you’re really doing.

Freedom

I know, sounds funny. Most people associate a “budget” with this tight, chaffing, uncomfortable thing that restricts your fun. We have certainly found personally that a well thought through budget offers a lot of Freedom. I think that Curtis will find the same in the upcoming year as he works on keeping the budget for his business.

Now that coffee you just bought is GUILT FREE. Why? You have intentionally set money aside for “entertainment” each month. The money is THERE. You are free to spend it, no strings attached. You know what your other monthly expenses are and you know that the money is there to cover them. You aren’t buying coffee then hoping that you still have enough to pay the internet bill. You are free to spend that money on coffee because it’s job is to buy coffee.

Accountability

MMMHMM. I said it. Accountability. When you are working on your own this is especially important. There is no accountant, comptroller, manager, or corporate office telling you that you can or can’t spend the businesses hard earned funds on the latest Angry Birds. So you “splurge” and spend the $9.99 (or whatever it is) on the game. You work hard, you deserve it right? WRONG.

“Rewards” are important in business as they can be huge motivators for nailing that big contract, or hitting an income goal but there still needs to be some accountability for where that money is going. It’s EASY to “reward” yourself here and there with small app’s, books, treats, and other items but these expenses add up and ultimately detract from your businesses profitability.

When we sat down and looked at Curtis’ software expenses for 2013 we very quickly identified about $1000 spent on small apps that he was going to try to use for this that or the other but that hadn’t worked out the way he had hoped.

There needs to be room for that kind of experimentation in his business. We were able to come up with a number that gives him the freedom to try new tools with some regularity but he is going to have to be a bit more intentional about how he spends those dollars to stay within the budgeted amount. The realistic assigned dollar figure for his software column gives him a little bit more accountability while also leaving some cushion.

Profitability

I’ve mentioned profitability but it deserves some attention here.

Why do you run your business?

Just to pay your bills?

Wrong answer!!

If you are simply working to pay your bills and just scraping by you have a few problems:

  1. You aren’t running a viable business and you have some things to work on.
  2. I’m going to guess that you’re not having much fun. You basically own your job.
  3. You have no cushion, and you probably feel stressed about it when you sit down and think about it.

Being Profitable is the POINT of running a business. Once your business starts to be profitable (that means expenses paid, taxes paid, salary paid, and my oh my there’s money left over at the end of the month) then things start to get fun. You start to have incredible freedom (ha funny how that ties in here).

You can start to choose your clients rather than taking every job that comes along.

You can start dreaming.

You can start specializing.

You can start focusing on really growing your business.

You will feel like a huge weight has been taken off your shoulders when you look at your business bank account and realize that next months salary is already accounted for.

You will make better decisions.

You will do better work.

Your business will grow.

Don’t believe me? Fine, but I’m telling you we are the living truth here.

Having a BUDGET for your expense allows you to ensure that your business retains some PROFITS. When you have a set amount that you are going to spend and you cut off spending once that amount has been reached then you are allowing your business to have some PROFIT and as you continue to budget your profits will GROW. WOW what a concept.

So, the main reasons for creating a budget? Freedom, accountability, and profitability.

photo credit: kenteegardin via photopin cc

Creating an Effective Budget for Your Business

This week we’re going to be talking about creating an effective budget for your business. I know, most people hear the word budget and shudder. However a budget is a very effective tool that will allow you track your expenses, profits, taxes, and set a realistic salary for yourself. It will ensure that you actually MAKE money and I think that we can all agree that’s pretty important when you are in business for yourself.

I’m not sure what Curtis has shared about our personal financial journey so today to give you some perspective as to where this is coming from I’ll tell you a little bit about our life.

Over the last two years Curtis and I have been on a journey to improve our financial life in hopes of giving us more freedom to pursue our dreams and relieve the “pinch” that young families often feel.

When we started this journey in January of 2012 we had a mess of debt to clean up in the personal side of our finances. Curtis had been self employed for about 3 years at that point and his business had been growing steadily but it wasn’t what I would call flourishing. He pretty much owned his job.

A HUGE part of our journey and definitely the key to our success personally was creating then actually sticking to a budget.

We were both working full time and making decent money. Sadly we had little to show for it but a stack of bills and some fun toys. We had very little savings, no long term plan, and nothing to show for our efforts.

By learning to create a new budget every month then live within the numbers we committed to at the beginning of the month we actually “found” a huge amount of money that we didn’t know we had. That enabled us to eliminate our debt pretty quickly.

We’d been spending ourselves to death on little things here and there.

Our debt hadn’t grown in years at that point but it hadn’t decreased significantly either. We always paid cash for our purchases but we were still overspending in that we weren’t saving.

So what does all of this have to do with setting an effective business budget? Well, it was the starting point for us in a significant amount of change and growth; financially, personally, and as Entrepreneurs and leaders.

It was through our progress on our financial journey that we became aware of podcasts, blogs, and other resources that would help us become more successful in business. It got us started with goal setting, and motivated us to continue doing things that would move the needle. We saw that we could have a significant affect on our situation by being willing to roll up our sleeves and get to work. It has become incredibly motivating in all areas of our lives.

Over the last year Curtis has managed to more that double his business’ income. (**Note from Curtis: I wrote about my 2012 income in my January 2013 Income Report and my 2013 income in my recap.) This has allowed me to leave my full time job and be a full time parent to our two young children. It has also allowed me the privilege of being more involved in the day to day runnings of our business – it really has become OUR business over the last few months for me rather than Curtis’ job. I credit Curtis’ success in the last year to our family’s journey over the last two.

As I took on more tasks within the business over the fall it became increasingly obvious that while the business income had doubled so had the expenses (which he published. I’ve been the driving force behind the budgeting on the personal side of our life (always with Curtis’ input and consent I just happen to be the one that organizes the numbers because I enjoy it).

(Note from Curtis: I hate budgeting there are forms of invasive surgery that sound like they’d be more fun. Luckily I’ve got an awesome wife that likes budgeting. Who helps you?)

One day while we were discussing the steep rise in his business expenses this year it dawned on me that we were functioning without a budget. It was like a lightbulb came on. The reason we’ve managed to eliminate debt, build savings and have more financial freedom personally is because we’ve successfully lived within our budget. WHY haven’t we done this in the business too?

So this week we’re going to be talking about budgets. This may not excite some of you, but I think it’s valuable information. Tomorrow we’re going to talk about what a budget is and why you should have one.

photo credit: kenteegardin via photopin cc

I just turned off email on my phone

I’m a huge proponent of GTD. I use it to run my whole business and pretty much all of my life tasks.

GTD is all about removing cognitive load by putting tasks and notes in a trusted system. For me that system is OmniFocus and Evernote.

The thing is that I break my own system way too often by checking email on my phone.

For email on the desktop I use MailPlane and it has a great bridge that sends email links to OmniFocus. That means by highlighting some text in MailPlane I can create a to do note in OmniFocus with a link back to the email.

When I click the link in OmniFocus it opens MailPlane and takes me directly to that message.

It’s easy and means I don’t have to go hunting for email threads.

The thing is that I can’t do this from my phone. Sure I can email myself a to do item and it will show up in the OmniFocus inbox but there is no link back to the message.

Nor can I accomplish email tasks easily from my phone out of OmniFocus since the link goes to an application that doesn’t exist on my phone.

That means checking email on my phone (outside of when I’m out of the office for the day and need to) is a total waste of time.

Not in the system

Checking email from my phone means that I end up with a huge list of emails that are just sitting in the inbox and taking up some of my brain power.

Most of the emails simply can’t be dealt with. They need a server password, or links to multiple things. Maybe I need to look at the PSD file I was just sent. Maybe I need to type a long response that just isn’t suited to phone typing at all.

So they sit in the back of my brain and inbox not dealt with. Taking up valuable focus.

I need that brain power to get other things done.

I need those cycles to be fully invested in my family.

Instead I keep (yes despite best efforts) wasting them checking email on my phone.

So as I write this I’m turning off email on my phone. The simple fact is that if I need email I can toggle a switch and email will be back on my phone and if it’s really an emergency then call me.

For a long time I’ve had all notifications off for email. No badges, or beeps. Now I’ve taken the next logical step.

Do you have a system for email? Do you actually stick to it or do you get back to the habit of checking email in places where you can do nothing about it?

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How much is your attitude?

The garden needed to be cleaned. It had a winter’s worth of pine cones and pine needles in it. There were weeds everywhere. It looked terrible.

There I stood making the communal townhouse garden presentable grumbling under my breath about the injustice of it all.

I’m the one who does most of the snow shoveling as well.

When the walk around needs to be done on the property it’s me or my wife that has to do it.

It’s totally not fair that the other owners here just let the place look like crap and I have to clean it all up.

The simple fact is that I could do it and grumble, or I could have a good attitude about it. Either way the job needed to be done and my only helper was a 2 year old.

The longer I live, the more I realize the impact of attitude on life. Attitude, to me, is more important than facts. It is more important than the past, the education, the money, than circumstances, than failure, than successes, than what other people think or say or do. It is more important than appearance, giftedness or skill. It will make or break a company…a church…a home. The remarkable thing is we have a choice everyday regarding the attitude we will embrace for that day. We cannot change our past…we cannot change the fact that people will act in a certain way. We cannot change the inevitable. The only thing we can do is play on the one string we have, and that is our attitude. I am convinced that life is 10% what happens to me and 90% of how I react to it. And so it is with you. We are in charge of our attitudes. – Chuck Swindoll

That bad project you grumble about and avoid, is it your attitude towards it that is the problem? Is your bad attitude creating a cycle that makes the project suck?

If you made the effort to work on the project happily, would you find that it’s really not bad to work on at all?

How much of your bad day is simply your attitude? How much is actually what happened?

photo credit: Ian Sane via photopin cc