Jan 30, 2021
It was only a few short years ago that I left my job and ventured out on my own. For the most part, this was a wonderful decision, and for as difficult as people make entrepreneurship out to be - I have to say, the benefits have far outweighed the disadvantages. With that being said - not everything has been perfect, and my first couple of years in business, I made a lot of mistakes. The good news is, these mistakes weren’t dealbreakers, and ended up being valuable learning experiences.
Today, I want to share with you five of the biggest mistakes I made when I was first starting out.
Recurring revenue is the lifeblood of any business, and is what will provide cash flow from month to month. When I first started out, I had my personal web host, and whenever I landed a new client, I would simply create a new folder on that web host, and let that clients website live there, for free.
This eventually became a problem for a couple of different reasons. First, when it came time for me to move to a more stable and reliable web host, transferring all of my clients over was a time consuming process, that I wasn’t getting paid for.
Secondly, when I realized eventually that I would need to start charging for hosting, clients who were used to getting their website for free, were not happy about suddenly having to pay a fee to host their website.
So here’s the deal. Whether you host your clients website or not - if they want a website published online, they’re going to be paying somebody. It might as well be you.
Sure, clients can get away with paying less by purchasing their own hosting… but that also makes them responsible for keeping up with it, which entails a lot more than just paying the bill.
If the web host decides to upgrade their servers, or use a different version of PHP, which causes their website to crash - it falls on their shoulders to get it fixed. If their SSL certificate expires - it’s on them to update it.
The reality is - there is any number of things that could go wrong with web hosting, and “most” clients do not want to deal with the headaches. It’s out of their skill level and comfort zone. Most of the time, they are glad to pass that responsibility onto someone else.
Now, my agency charges between $50-$100/month for hosting. And while most of my clients are on a retainer where the hosting is included in that, there were some clients who had no retainer in place, which resulted in several hundreds of dollars lost each month.
When I was employed at another agency, they were sticklers for tracking your time… and I HATED it. It felt intrusive, and like my productivity was being monitored on a daily basis.
So when I first started out on my own, I told myself I’d never punch another time-clock again.
Not only was I leaving myself in a potentially ugly situation if a client would ever have questions about the hours I was charging them for - but the bigger problem was that many of my clients were getting far MORE hours than they were paying me for.
It was not uncommon for me to feel like I was putting 80 hour weeks in (which I was), but only getting paid for about 20 of them.
As it turned out - I felt that way, because that was exactly what was happening. In truth - I am actually terrible at realizing how much time I spent on something.
I would often get lost in a task - and after it was completed, say “Eh, that was about 45 minutes” - totally not realizing that I had actually spent the last 2 hours working on it.
Bottom line was - I was not tracking my time properly.
Once I finally got into the habit of monitoring my time for everything, I started noticing my monthly invoices growing larger and larger.
And now, as a result, I could also provide accurate and detailed evidence to the clients exactly what I did and when.
Another early mistake I made was charging by the hour for bigger projects.
“What’s wrong with charging by the hour”, you might ask.
The problem is - as your skill level improves, you get faster and more efficient at your job. When you charge by the hour, you basically penalize yourself for being good at what you do.
While a beginner might take between 40-80 hours to code a website, a seasoned pro might be able to do it in 20. Is it fair then that the seasoned pro only gets paid for 20 hours of work, when a beginner gets paid for 40?
When you charge by the project, you are able to avoid this issue altogether. When you can arrive at a cost based on generous estimates, previous experience, and ultimately, what you want to make on the project in order for it to be worth your while - you are able to start getting paid what you are worth.
When I was first starting out, it was just me. And for a good, long while, my clients got into the habit of emailing/calling/texting me whenever they needed something (more on that shortly).
Whenever I grew from one person to two in my agency, what was once a convenience, quickly became a bottleneck to productivity.
When all of my clients were emailing ME, I was suddenly spending a lot more time in my inbox, forwarding emails and text messages to my employee. Not only would I have to forward emails, but I would also have to send login credentials, brand assets, and give context to whatever the project was.
In short, most of the times it would have been just as fast to have done it myself.
What I needed was a task manager that both my team and my clients had access to. That way, when clients submitted requests into the task management system, the entire team could see them and take care of them, without me having to pass everything along.
This allowed me to focus more of my time on growing the business, and less on distributing work to my team.
As I mentioned in the previous point - when I was first starting out, clients had no inhibitions about calling me, texting me, or emailing me at any time or day of the week. At first, I didn’t mind. I was happy to have had the work coming in.
As the business grew however, I started to feel like a prisoner to my phone. Clients were texting me after hours and over the weekends. It seemed like no matter where I went or what I was doing, I was always getting a call, text or email from somebody needing something.
And because I tend to be a people-pleaser by nature, I had a difficult time relaxing until I could give the client whatever they were asking for.
What I failed to do was set boundaries with my clients.
They grew accustomed to having me respond to their texts at 10:30pm, or their emails over weekends… and so that is what they came to expect.
Of all of the mistakes I’ve made, this was the most difficult to fix. It required a lot of frank conversations with clients, and letting them know that I would no longer be answering calls past 5:00, or over the weekends.
This was especially difficult with those clients who were also considered friends.
But, as I explained to them - a stressed-out and burned-out John is not good to anyone. And so for my own sake, and for the sake of giving the very best service to all of my clients, I needed to start being a bit more protective of my time. It wasn’t anything personal. Just something that I had to do.
And ya know what? Most of them were totally cool with it. A few of them had questions about what they should do if there was an emergency after hours… but beyond the random call here and there, it really has never been a problem.
Whenever you are first starting out in business, you’re going to make mistakes. It’s normal, it’s natural, and the entrepreneur who never makes any mistakes is an entrepreneur who isn’t growing.
However, just because it’s an unavoidable fact that you will make mistakes, it doesn’t mean you have to make the same mistakes that I did.
I hope that this list helps to guide you in a way that allows you to sideskirt these same mistakes that I made.
If you’ve already been making some of these mistakes, hopefully it gives you some insight into how to go about fixing them.
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