 So, Word Camp Atlanta, it's 9 a.m. on Sunday, and I am very happy to see all of you here, not too hungover from the after party last night, hopefully. And so today, I am here to try and help everyone in this room avoid all of the landmines that I stepped on, so very, very delicately and accidentally over and over and over again for the last 15 years of my career, seven years starting off as a freelancer, and then the last eight years starting to grow a small agency, and then this year we have a team of 10 salaried employees and we are about a million dollar a year agency at this stage. So it took us a long time to get there, and we're going to talk about some hard lessons learned throughout that process this morning. Just before I get started, just to give me a rough idea of where everybody in the room is, how many in here work for somebody else? You're an employee, you're on a team, or you have an employer currently? Okay. Okay. So here are full-time or part-time freelancers, okay, awesome. And is there anybody in the room that runs a small business with employees or an agency? Okay. Okay. Awesome. We got a good mix. So this applies to everybody that falls into that range. If you didn't raise your hand for any of those, I assume that you're either a Nigerian prince or perhaps you inherited a lot of money from an uncle in Alaska. I think those are the only other two options there. Good morning everybody. Good morning. All right. So we're going to jump right into this fun. I'm going to be taking us down a road today. This story is a long hard road and our goal as we're going on our journey in building our business, building our agency, building our freelancer universe is to try and stay on the main road, try and stay out of the weeds, and that's what we're going to talk about a little bit more now. So here's the road to success. And I'm going to start off with a long road of failure here. I come from a very, very long line of business owners. All of them lower-class business owners. Just to be very, very clear here, I looked back in my family history and the oldest record I have of a business owner in my family was a Smithie in the Highlands in New England. There's actually a hamlet in New England that is called High Forge. It's in the Highlands up there. So that's actually the oldest place. I don't know if that's actually where the Smithie was, but it's close enough and that's kind of where the name of our agency came from. I'm guessing that that's about what's left of it today. So that's our first record of a failed business in our family. My grandfather, he ran a cement business into the ground. He had way too many friends. In fact, all of his clients were his friends. He gave his business away. My mom, she's a master leather Smith. There's only a handful of people like that in the world. Not necessarily in high demand, but if you need a master leather Smith, you're going to have to look pretty hard to find one. And my mother for the last 30 years of her life has built custom leather creations for about $10 an hour. Failed business. And then my dad. My dad was the nicest guy you'll ever meet in your life. He was born in 1929. He grew up in the Great Depression. He spent his entire life giving everything he earned away to other people. Literally the shirt off his back. I saw him do it once on the side of the road. He was a mechanic. He pulled over on the side of the road any time a hood was up. It didn't matter where we were. If we were late to something, if we were going to church, it didn't matter. He was pulling over. He was helping them fix their car. And his mechanic shop, he literally did most of his work for free. He's like, you buy the parts, I'll take care of the rest. I can't tell you how many times local farmers would just drop by our house and drop off a month's worth of a vegetable just to say thanks. Thanks for fixing my stuff. And the bottom line is all of them ultimately failed businesses. Not saying that they didn't have a rewarding life doing it, but they weren't able to sustain them. They weren't able to bring other people into their enterprise. They weren't able to help other people succeed. This is also a common scenario where we'd be driving along the road, and he would pull over really, really fast for this. So there are some other dangers here. When you're giving your business away, there's a lot of things that we're going to go over today. We're going to kind of touch on these points a little bit more and more. Just read that, learn it, memorize it, burn it into your mind. Be very, very aware of the most important part of your life, which is your time. The one thing in the world that you can never get back is your time. So be very, very aware of how you're using it, and think about how much you can help more people if you handle your time wisely instead of just freely giving to the first person that asks you for it. Let's move further down this road. If you give, make it a strategy. If somebody asks you to give, and it's not a part of a strategy that you've already planned in advance, don't give, think twice. So as you can see, I'm going to back up here. We went from the main road over here. We're going to jump off the road, and we're going to go way off into the weeds here. If you haven't read a book called Atlas Shrugged, this is where the term looter comes from, but looters are people who are very, very good at asking for help and are not very good at rewarding other people for getting that help. And so I'm going to say some things. For all the freelancers and agency owners in here, you have very, very likely heard one or all of these phrases in the course of your career so far. And these are the things. These are the keyword phrases that you should be putting in your anti-SEO vocabulary. You want these to be your negative keywords for doing business with people. Can you do it cheap or free because we're about to get funding or national exposure and you'll get all of our future work? We're a popular nonprofit and we'll give you credit and sponsorship credit on our future events. Tens of thousands of people will see your name up in lights at all of our events. I will be the first to tell you that that does not lead to future business. No matter how many times you do it, it does not lead to future business. It does not lead to other people knowing who you are or how awesome you are. Please help us be a hero and save our hacked or broken website now and we'll pay you later and give you lots more work. Yeah, the do the work now and we'll pay you later scenario. That is absolutely not the way to get respect in your business. Do this for me cheap and I'll refer you to some big companies I know who need your help and I'll give you all of my future work at full price too. Right? Yeah, so if they were going to pay you full price, why don't they do it now? If they respected you and if they respected the quality of your work, they would pay full price up front every time. And hey, I can't afford you, but I'll pay you this flat amount. That's all I got. This is my budget for the project. That's all I can give you and I promise you I will not be a pain in the neck. However you want to do the project is totally up to you. I'll make it so easy on you that it won't even feel like work. So if you haven't stepped on this landmine before, I will tell you now that this is the most difficult client to work with. They will absolutely have more demands and more requirements than any other client you have ever worked with in your entire life. I think the last time I stepped on that landmine, it was an $8,000 project. It was about $25,000 in labor by the time it was done. And that was about five years ago and that's the last time we ever did a flat rate project based on someone else's limited budget. So let's get back over to the road here. What is another way that you're giving away your business and you don't even realize it? This guy here, discounting is one of those ways that sneaks up on you and you have no idea how much of your business you're giving away until it's too late. We started in QuickBooks about five years ago, we started tracking our discounts. And then at the end of the year, we pulled up a report and we looked at the total dollar figure of discounts we were giving away at 10% here, 5% there, $100 off this project, $25 off hosting, whatever the number was, we added it all up. And it turns out we were giving about 25% of our business away over the course of a year over what our, quote, retail prices were. And the reality was, all of those people would have paid our full rate. Had we not offered the discount, had we just simply said, we don't do discounts. This is what we are worth. That 25% I could have used to catapult my business at a much higher trajectory, higher on better talent, people who are even more amazing at their job, than I am at doing any one thing in the business. And then be doing much better work. And then in fact, charging more money than our normal retail rates. So you can kind of see the steam rule that can occur by discounting. Be very, very careful about that. So here are some dangers in it. Offering discounts is a form of selling on your price. The second you give a discount, you are taking the focus away from the value that you're giving. And you're saying, hey, it's just a price thing. It's just dollars. And let's focus on how much something costs instead of how much I'm worth, right? So any reduction in your price damages your integrity. This is a really important point. It's a very important psychological point. If you discount your prices, the reality is, people will respect you less, and they will trust you less, believe it or not. They actually did some studies on this. And the studies were really, really simple. They had people, two different groups, and they've done a study over and over again. One group bought it at full price, and one group got it at a severe discount. They both got the same exact thing, product and services they've done this test on. And they did a study afterwards to ask people what they felt, how they felt about the value of what they got. And the people who paid full price every single time were happier with the end result. So, I kind of have a little bit of nice guy disease. I think a lot of people in here, anybody who would call themselves a people, pleaser falls into this realm. And I am calling it a little bit of a disease. However, it can be cured and you can still stay nice. And these are some of my tactics to handle that scenario. If something is small, let's say we've been doing work for a client on a regular basis. Let's say it's a scoped project, so we gave them a flat rate price. And they ask for something that's in a little bit of a gray area. Maybe it's just a little bit out of scope. We really should be charging that client for that extra time. If it's not a big thing, this is my favorite thing to use in the world. I'm giving a client a one-time warning. This is my, I'm being nice, hey, we're going to do this for you. It's no extra cost. I am going to have a communication. I'm going to have a conversation with the client about this thing so that they know this is the only time that will ever happen. And so they're very, very thankful. And then they're expecting to get charged the next time it happens. So yeah, total win-win for everybody. Going back onto the discount scenario, there are worlds where discounts are absolutely critical to a business. For example, if you're selling a product or a SaaS type of a thing, or you've got some sort of business that has a cyclical scenario, you've got a lot of competition in some scenario. Again, this is going back to, if you're giving it away, you have a very, very good strategy for it. You can use discounts as a strategy, but only, only if you're giving the reason for why you're giving the discount. If the client's asking you for it, you don't have a strategy there. It's like, oh, well, okay, I'll do it cheaper. No, it doesn't work that way. You actually have to say, hey, I am giving you this discount up front to buy right now, but it's because we're doing this just for the winter and this is a summer business that we have, so we're doing it for that reason. Or hey, if you're buying a whole bunch of something, then we'll give you a discount. If you're paying for everything in advance, let's say a retainer that you normally do monthly and somebody wants to pay for it a year in advance and you're getting that cash flow benefit, there's a valid reason to give a little bit of a discount there. All right, so here's another way that everybody gives their business away. A lot of people do. I know I did for a long time. At one point, again, about five years ago, I think we had 60 different clients with overdue invoices and those invoices ranged in being overdue from 30 days all the way up to one of them was at 235 days, I believe. None of them were getting penalized for being late. None of them were sent to collections. We were quite literally giving our business away in just not chasing people for getting paid. So try and move, and this is what we've done. We're getting paid upfront for everything that we do now, with rare exception. For some enterprise level clients, we're doing a 50% upfront, which is technically getting the payment for the whole project cost upfront. And then we get our profit on the end, or we might have, if it's a much larger project, let's say it's a six month or 12 month project, we may have regular milestones with payments attached to them. But if we don't get paid for that next milestone, we literally stop the project and then we charge them a fee to reboot the project once they pick it back up again whenever that payment comes in. Net terms is a dangerous thing. Whether it's net 10, whether it's net 15, whether it's net 30, what you're saying is I'm going to do the work now and you can pay me later. If you've got really, really good clients, maybe you can get away with that. But the reality is, is you're giving away your cash flow. And if you start to get really busy, and let's say you're trying to pay yourself, you're trying to pay your bills, or you're trying to pay your first team member or something like that, and you get a bunch of work all at once, and they're all paying net 30, you will have what you call a cash flow crisis. And nothing will destroy a business faster than a cash flow crisis. If you can't pay your bills or you can't pay your employee because you have 10 projects that came in simultaneously and you have to cover the costs yourself for the first 30 days and you don't have that much in the bank, you are sitting on a landmine. So be very wary of those net terms in the beginning because it will scale up and potentially harm you later. So here's another little trick for larger clients. They've got billing cycles. What we noticed is that we were sending bills to clients and it was on a net 30 basis. And we were getting paid at 45 days consistently every single time. So what you do in that scenario, you can actually call the client, get a hold of their controller and say, hey, what's your billing cycle? On this date every month, if you get in the invoice, then it will get put in their earlier billing cycle. You won't actually fall in between the cracks between their cycles and you will start getting paid on time every time. You just got to know what their little secret sauce on the timing is. If clients are late, you can offer discounts to pay you faster or you can work towards ending the relationship. That's honestly how strongly I feel about this subject. There are all sorts of different tools online. FreshBooks does it, ViewPost does it, Fat Merchant does it. Lots of cool startups are doing it where you can send invoices to clients and it will be built right into the secret sauce that if they pay you really, really fast on something, they'll get a 1% or a 2% discount. And if cash flow is really important to you, offering that 1% or 2% discount moves you to the top of their vendor payment line and you will get paid very, very quickly if you haven't gone to the all up front method like we have. So this might be really hard. We had a client that had been with us for 15 years. Ever since I was a freelancer, they had started as a mom and pop shop. I helped grow their business into 300 plus employees over the course of the relationship. But they kind of treated us like family. We kind of treated them like family. And they just never paid on time. I mean, literally not once in the history of that company do they ever pay us on time? It was just like they'll get to it when they get to it and usually I'd have to remind them three or four times a month. And eventually I got to the point where I was like, hey guys, we love you to death. You're amazing. We'd love to keep you as a client. Unfortunately our business model no longer allows us to work with clients that pay past their due date. So either you guys can remedy the situation or we're gonna have to move on. Let me tell you, that was very, very hard. This was a client that was paying us a large retainer. But the reality was I was stressed out about it all the time. I was chasing them all the time. And we'd gotten to the point where we had a enough good clients now that it was not as painful to say goodbye to the tough clients, the ones that bring stress. And so that was exactly how it went down. They paid on time for about 90 days and then they went right back to their old habits and then we helped them transition to working with another agency. So other ways to speed things up, just make sure that you have a way for people to be able to pay online obviously. And then I'll give you just a quick little trick that helped us dramatically. And it's specifically using a piece of SaaS software that's not super popular. A lot of people don't know about it yet. But again, back five years ago, actually this was about three years ago, we still had, I wanna say we had about, we had about 45 overdue invoices. We signed up for a piece of software called Invoice Sherpa. And Invoice Sherpa basically automates chasing clients for payments. And we tied into that system. And in a matter of three weeks, our 35 late invoices went down to two. Honestly, it was like some sort of like miracle occurred. I think, I'm pretty sure I heard a chorus in the background, lift up and harmony. It was awesome. So good piece of software, it's relatively cheap if you find yourself in a situation where you have a bunch of overdue invoices, give it a shot, you might be shocked. All right, so this is another thing that I was doing all the time. As a people pleaser, I like to just do an awesome job. I like to do, I like to go above and beyond and deliver way more than they were expecting and do it quietly. And I say that again, do it quietly because hey, if you do a good job, you shouldn't need to tell anybody you did a good job. They should just know it on their own, right? Every good boss should recognize your good work without you having to tell them, right? I will tell you, it's a dramatic world of difference when I started standing on top of a mountain and screaming to the client, I did you this favor. Just want to let you know. Occasionally you'll run into a client, that will make them kind of angry. They're like, stop telling me what you're doing, you're awesome, okay, you can leave that client alone. But everybody else scream it because none of them know it. None of them have any clue how much awesome value you're giving them. Let no favor go unspoken in your business from this day forward. It will make a dramatic difference in the perceived value that your clients and customers have. Yeah, so there's two different ways. If it's a big favor, it's always a phone call. If it's a big favor, it's something that took more than a couple hours to do and it's not technically something maybe that they paid for or maybe you were able to work it in. It wasn't part of scope but you were able to make it work within the time frame. I give them a call and say, hey, look, this is this really cool thing that we did. I wanted to let you know that it wasn't part of the deal but I think you might be really impressed with the thing. Another way that I build it into our process now, actually our team, when they're building out websites, I don't have time to go in and look at all the cool things that they did. So I've actually trained my entire team to make a running bullet point list of all the cool features or things that we worked into a project as we were going along and when we launch or when we release the code to the client, we give them this list of all the cool extra value ads that we worked into it and then the feedback that we get from that point is usually overwhelming and dramatic. They'll give us reviews and testimonials. When in the past they were like, okay, thanks for the thing. Now they're like, oh my gosh, thanks for the thing. So yeah, that's the two of the ways that we do it. So qualify potential clients early. This is about giving it a way up front. Giving it a way up front is all of the conversations and emails that you have with somebody before you have a check in your hand. These are other ways that you're giving your business away and you don't realize it. And it can, as you start to grow your business, you might start to realize how dramatic a piece of it you are giving away there. So those four things are the most important things but I'm actually gonna go out on a line and say that of all of those things, the power to buy, the money, they're kind of interrelated. The power to buy means that there's somebody in the company who has the ability to get a check stroked. So a marketing manager might say that, hey, the CEO has to sign off on purchasing this. So then that person technically that you're talking to does not have the power to buy. You need that CEO in the room to get that power to buy. But money is the key. And how do you find out if somebody has enough money for your project without wasting time on them? We wasted hundreds of hours one year when we started tracking, hundreds of hours. And what turns out is if we had just asked a couple questions up front or given a very loose ballpark range on a project before we get into the details of something, then we would have saved those hundreds of hours of labor. I mean, honestly, it's unbelievable. So just asking a couple questions. Sometimes you can do some research. When somebody comes in, if a new client or customer is coming in and they're hitting you from a Gmail or Yahoo account, likely they do not have the power to buy, they do not have the money. You need to qualify them aggressively. If they're a large enterprise level client or they're a brand name in your local market, you don't have to qualify them as aggressively, but you still need to get them a range upfront to make sure it's within their realm of viability. So the faster you get money in your pocket from a client, I promise you the more that they will respect you. If you do a lot of discovery work for them upfront, if you help them build a scope of work, if you create documents for them on how to plan it out, if you work with them to determine what technology should be used, oh yeah, we're gonna use WordPress, we're gonna use all of these plugins, this is how we're gonna solve the problem. If you're doing all of that without a check in your hand, you are giving your business away. Perhaps the most important part of your business, the most valuable part of your business is being given away in that scenario. So even with our enterprise level clients now, we are getting a discovery fee or a project audit, money upfront before we have a second meeting with them every single time. There are no exceptions to that. If they wanna do business with us, they're paying for our time to figure things out if they haven't already got it figured out themselves. Yeah, we're gonna have questions right at the end if you wanna, because I gotta burn through this real quick and then just save it and we're gonna have like 15 minutes for that and then of course I'll be here for you for everything after that. And this is where I'm saying, get paid for, you can call it any number of these things, discovering, audits, planning, these are all different ways that you're gonna give your business away that you should be getting charged for. So let's jump on down the road here. There's a little bit of word to the wise. This is something that I've, we haven't run into, but I know some people that this has happened to, but on a weekly basis now, we get solicited by a new client that's like, hey, you guys look awesome. We looked at your website. You guys do awesome work. You're amazing. We wanna hire you sight unseen. We're ready to rock on this project right now. It's a $10,000 project. Hey, do you accept credit cards? So this is the key. This is the absolute key. I promise you, if any of you have a website and you do kind of digital work, the fraudsters are targeting everybody in this audience right now. And I know people who are at this word camp who have been affected by this specific type of fraud. What happens is, they will absolutely pay you with a credit card upfront. You will be like, oh my gosh, I just made the most money on a project upfront I've ever made in my life. This is awesome. And then they're like, by the way, we've got this other vendor that you're working with and they only accept cash. So we're actually gonna pay you more than the project's worth. You just need to send them a little bit of that money. And you get to keep the rest, right? Money's already in your bank account. Like, okay, it seems obvious, okay, you do the thing. Well, it doesn't matter whether you do the thing or not. That is a stolen credit card. You will start to spend that money and then you will get a charge back for all of it. And you will lose it every single time. So the key phrase is here, and these guys will send you all sorts of messages, all sorts of different ways. They'll say they're deaf so they can't talk on the phone. They'll say that they're a wounded Vietnam vet. There are all sorts of tactics that they use. But the one thing that they all say upfront is do you take credit cards in the first communication they have? If you see that, run screaming for the hills, you know they're the bad guys. All right, so another way, you're giving your business away. You probably heard this preached if you've been to other word camps in the past, this is a very common subject, it's a very common topic. And how you raise your prices, the way that you do it, the methods that you use, the style that you have. All of them are applicable. I'll kind of briefly run through some of those today. But the first thing I will say is 90% of this room is charging way too little for what they're doing. And that might be a conservative number. Everybody in here is worth more than they're charging. And in fact, I'm gonna raise my hand on that one too. I'm not charging what my agency is worth right now. Our agency hourly is 150, but the honest truth is is I've seen other agencies who don't do work as good as us charging 250 and 350 an hour. Just doing WordPress consulting work and small commercial websites. You will be absolutely shocked what your value is in this market today. The people who build the internets should be charging what lawyers are charging, honestly. You're the core of their business. You're where their business is born. You're not the guys clawing pieces off the side of it like lawyers. You're the ones building it. Let's get what we're worth. So level up regularly. A good tactic for leveling up regularly. How about this? How about you raise your prices 20% every single time you get a new client? Do that every time until you start to get pushback. That's how you find what you're worth. Until you, and not just one pushback, until you're consistently getting pushback on your price. Raise your price 20% every time you get a new lead. You will find out very, very quickly what you're worth and what people are willing to pay for how confident you are in selling the thing that you're doing. Set expectations up front and remind clients in advance of price increases. So here's another very important point. If you bring somebody in, it's on a monthly or it's a retainer, don't let that sit. Tell them that this holds for 90 days or this holds for a year or these rates are good for X amount of time. Build that into your contract so that, and then put it on your calendar so that you get to have a conversation regularly about your rates. If you don't create a talking point in the expectations up front, it makes it really awkward and weird to call them out of the blue and say, hey, we gotta raise our rates. It's so much easier to say, hey, remember when we signed up on your contract, it looks like we've hit our 90 day point or we've hit our year point and we're gonna talk about our rates. You've actually been a wonderful client. We've been raising our rates with all of our other clients about this amount but because you're so awesome, we're only gonna raise you by this amount. There's a lot of really nice ways to still have it but they're expecting the conversation. It's not awkward, they're expecting it. They know that it's coming. So, and every time you raise them, you do need to have reasons. You need to be confident about it. Hey, I have a lot more experience than when we first started working together. Hey, we've added new resources to our team. We're actually providing a higher level of service now. We're doing cool things. We've added this new piece to what we're doing here. Whatever it is, just make sure that you're not arbitrarily doing it. That being said, SiteGround for example is arbitrarily raising their prices. They did give a reason though and this is awesome. I don't know if anybody saw the email from SiteGround a couple weeks ago. They're a great hosting company, awesome folks and they just sent an email and said, hey, everybody thinks we're too cheap. So we're raising our prices so people think we're more valuable. That's literally the reason they gave which is an awesome reason you gotta have respect for that. But when you're raising your prices, you need to be, when you go to a client and if they say, oh, I can't work with you then, you absolutely, before you even start the conversation, you need to be willing to lose the client. It happens exceptionally rarely if it's handled well but you can't have confidence and you can't raise that price if you're not confident. Cause if they say no and you still agree, you're stuck. You're kinda stuck for life there with that client. They own you and they will never respect you again. So stand firm. Here's another way we're all giving our businesses away. Nonprofits, social companies, I love nonprofits. I absolutely spend a ton of my volunteer time working with nonprofits and we certainly do pro bono work for nonprofits but the first five years of my business, I was doing pro bono work for nonprofits that asked me to help them. These weren't companies I was passionate about. Yeah, they all had awesome causes but they weren't companies I was personally passionate about. Just because you can do something doesn't mean that you should. These are really, really good questions here. This is the important point. I suggest, if someone suggests to you that you do pro bono work, I say to you, say no every single time. If somebody comes to you and asks for free work, the answer by default is no. If you go to them to offer pro bono work, that is the time that it makes sense. That is the only time it should ever make sense for you if you're running a business, if you're a freelancer, if you're trying to level up your business. That is the key determination on how to do it. So be proactive, not reactive to giving your business away in that sense. So you can give your business away for three things, money, knowledge, and relationships. I think when you do work for anybody, I feel like you're gaining knowledge and you're building a relationship every time by default. So why not make it all three? And that leads us to the end of the road and a lot of success, hopefully for all of you and hopefully you will step on less of these landmines. But every single thing you saw in there is something that I have done and it has harmed my business. And what you're looking at right now is a wounded warrior. Not in the literal sense, I don't wanna take anything away from our vets, but every agency wound that you can get, every psychological scar that you can get from being too nice for somebody, I have been slapped for it. No good favor goes unpunished. I can't tell you enough how many times I went out of my way to save somebody or help them solve an impossible problem only for them to walk all over us at the end of that project only because I didn't set it up right up front, I didn't get the respect that I deserved before we started and I didn't make sure that they know how awesome of a job we did it all the way through to the end of the project. So we're good. This is, we're about perfect on time so I like to have a lot of time for questions afterwards so, thank you. And I'm gonna repeat your questions because it'll be on wordpress.tv so make them good because they'll make you famous too. So, Karen, yeah, Karen has a great point when somebody's asking you for pro bono work or a discount, say we have a certain amount that we can give away every year and we've already given away that amount, feel free to come back and approach us next year. So, yeah, that's a great tactic. Yeah. You said that you always have a summary feeling when you try to get back and sign how do you handle it? Yeah, so actually we're testing out three different ways right now but I'll give you kind of the two that we're doing the most of. First off, Discovery is a slippery slope. It could take two hours, it could take 200 hours to do Discovery on a project. The more you're in business and the more you see the same kind of projects coming in, the more you kind of get a good feel for how long it'll take to figure something out but there is a mystery portion to this that you can't control, which is the client. Like every client's totally different, like you already know what this project's gonna take, you know it'll take about 10 hours to do Discovery on this project but what you didn't count on was the fact that this client is gonna ask a million questions and they're gonna change their mind 10 times in the middle of Discovery. That 10 hours is now 40 hours, right? So how do you control that? So there's a couple of things. Typically for small stuff, yeah, we're gonna charge like a thousand dollar for a flat Discovery, for almost anything as a minimum, just for us to get engaged with somebody. It's not worth it to do it for just a couple hours. So yeah, we'll charge a thousand dollars or if it's a large project, we might charge five or even $10,000 but then yeah, whatever time and materials aren't used in that would get applied towards the actual quote that's being generated from Discovery. At the end of Discovery, you're putting together an actual scope of work with dollar value with scope. So yeah, you can do the credit method but then there's another way that you can do this as well. You can just do flat time and materials. As much time as they're willing to pay for it. You're charging them on rent. Right, so we're charging them in labor blocks upfront. So let's say we do 10 hours of labor or 30 hours of labor or whatever the amount is. We're charged by the block upfront. The money is in our hand before we set the meeting. And in fact, because they want the meeting so bad, they will pay it way faster than they normally would. They wanna get started. So that solves the problem we were talking about earlier about getting money upfront because it'll get you the respect and it'll get you their proper attention. So charging that block of time upfront allows you to then start doing the work. When you get close to the end of the block, you tell them, hey, it looks like it's gonna take longer. We're continuing on. If they're enjoying working with you, if they like the process, if they feel confident that you're going the right direction, they will pay for that other block. But you need to tell them that when this block runs out, we stop until the next one is paid. We will literally stop and not have the meeting. So make sure, make sure you tell your billing team, that's gotta get paid really quick because we're getting close to the end of this block and we wanna keep going on this. Does that make sense? Yeah, so that was technically two of them. One of them is to charge some sort of flat rate and then credit towards the end. The other one is to do blocks. And then the other one, which we did for a little while, but we don't do anymore, is just tracking time and materials. We say, hey, client, what limit do you wanna put on how much money we spend on discovery? We let them kind of pick a limit. They say, oh, well, don't spend more than 20 hours on it at whatever your hourly rate is or don't spend more than five hours on it at whatever your hourly rate is. And we're like, okay, no problem. We track our time on it and when we hit that limit, we send them a bill. And so we're doing it in arrears in that way. Does that make sense? And so some of them, where money is not an object and they're gonna pay on time every time, you can just track time and materials and invoice that every week on however much time you spend. So let's say you could spend five hours on a week or you could spend 60 hours on it on a week as long as you're not surprising the client with a bill, you're doing it the right way. I wanna repeat that. That's a really important point. If you don't surprise a client with a bill, then you're doing it the right way. There should never be a scenario where a client gets a bill and they're like, what? And their eyebrows go up? Yeah, don't know. That always has to be communicated up front. There always needs to be a stopping point where they agree, they won't spend more than that and hey, if it goes higher than that, let us know in advance. And so that's how we do business. So yeah, in the back. What are some of the main drivers to get good clients in the door? What are some of the main drivers to get good clients? Good clients or any clients? Good clients, great clients. Yeah, so the reality is there are two effective ways of getting new business. The first and by far the most powerful is literally what you're doing right now. Everybody in this room is doing the most important thing they can do to get new good clients and that is networking. Showing up at a tech event, you're in person. You're doing more than 99% of the other people out there who are trying to start up a business in their home. Everyone in this room is doing that stuff. I would say take it even further. You shouldn't just be going to tech events. You should be going to local networking events. You should be getting involved in the Chamber of Commerce. You should be joining referral lead groups like B&I or any of the meetup groups. If there's, and here's another thing. This is important. If you join a group and you're in that group for a year, you should consider taking your time. No matter how much you like the group, you should consider taking the same time you've invested in that group and move to another group the following year. You will find an entirely new circle of people that you can do business with. So, okay, that's the physical world of getting new business. The other way is digital marketing. Everybody in here probably has a rough idea of what digital marketing is, but the reality is is when you're a shoestring budget startup, you have to get creative online. There are all sorts of free, awesome tools, though, that you can use that don't cost money to build clientele online. I'll give you an example. One of our larger enterprise clients, we literally picked up off of a WordPress question forum on Facebook. This guy went in there and posted, hey, I need some help with this thing, and all these people responded and said, hey, you should go ask this other company. They specialize in that thing. I was like, huh, those people don't know who I am, but I'm gonna message that guy personally and I'm gonna say, hey, that company, everybody's recommending, they're awesome. If you can afford them, do business with them. But we do similar quality of work and we're in Orlando and we have a different price point than them and we can do the same kind of thing. So if you're interested, let me know. They're one of our best clients today. That totally cost me nothing. I didn't pay a penny on Google AdWords. I didn't have to advertise on Facebook. I was just hanging out in the right places online and that's really the key. Whatever you're passionate about, the thing that you love to do, go join all of the groups online, all of those forums and start answering everybody's questions. I promise you, we'll lead a business. Yeah. No, no, okay, so yeah, great question. So he was asking about discounts for clients on invoices. So there's two different things. Clients who pay late, my suggestion is simply have a conversation with them about how they can't do that anymore if they wanna continue to do business with you. They won't be the best client for you long term. The percentage discounts, those are for clients that pay early and this is different than clients who are paying up front. So a lot of people are still doing invoice billing on net terms. If you've got a net 30 or something with a client and agreement for a net 30 already, offer them a one or 2% discount off their bill if they pay in the first five days. So that's exactly, yeah, exactly. She had her hand, I'll come back around. Yep. Some of your paying, the client's paying, all of a sudden, let's say you're getting, you're doing 50% and 50% or one third, one third, one third and they stop paying. They say, we wanna take our project to somebody else because they don't like your rates anymore or whatever else. Do you give them that project or do you say, I'm sorry, do you have something that, is it theirs at that point if it's not a completed project? That is actually a very gray area and let me repeat her question. Her question is, if you're doing a milestone project that has set points where payments are made at each point in the project and then the client mid-project decides that they don't wanna continue forward, how do you handle that, who owns the code, who owns the work that's done up to that point? So this is handled different ways by different agencies. It's up to you, but what I do recommend is that you build it into your contract upfront. You decide how you want that to happen. So everybody in here who's starting to grow a business who's starting to grow an agency or starting to build a freelance business, your contract's gonna start off very simple and then every time you get burned, you're gonna add a new thing into your contract, right? So we've added this thing into our contract and the way that we do it is with milestone projects, technically I like to consider it a little bit of a waterfall or an agile method, technically. I mean, you can call it whatever you want. The shiny new word is agile, but any work that's done up to a paid milestone, we treat that as belonging to the client. We consider ourselves a nice guy agency and because we live in a WordPress world, an open source world, as far as I've been started, if they've paid for it up to that point, it's theirs, right? Anything beyond that point, let's say you're doing it in arrears, right? So this is where it gets sticky. You're billing them for a milestone in arrears instead of an advance, if you're doing that and then they cancel before making this payment and you've already done all this work in the middle, now we've got an awkward situation. The situation now is we don't give you any code, none of this belongs to you and you can't have it until you pay for that milestone. So that's basically it. And what I would recommend is just making sure you bake it into your contract up front, however you want that breakup situation to occur. If you do that, don't give them a WordPress login. You guys don't give it to another developer that can just strip all that code. Yeah, no passwords go out, no access goes out until you've been paid for the work you've done up to that point. Yeah, next, yeah, sure. So her question is, how do you gently raise rates with a client that you really don't wanna lose? And what I'm gonna tell you might be hard news for you, but the reality is you can't. If you don't wanna lose them, if you're not willing to lose them, you've already lost. You can't raise your rates. You need to be willing to lose the client before you can have that conversation. And if you have that conversation with confidence, so first off, you have to have the conversation with confidence. You got a great deal. I am now moving up, all of my other clients are paying me this rate. We are more than worth it. We're awesome, we love working with you. We'd like for you to come along on the ride. And if they're a good client, and if they value you, they will come along for the ride and they will raise their rates. But you can't have that conversation and say, hey, we're gonna raise it. And then they say no, and you're like, ah, well, I guess we'll just keep doing it. Yeah, just kidding, it's a good way to put it. Then you, yeah, yes. So in fact, what you're talking about is what I call the leapfrog method of raising your rates. If you work off retainers, this is an awesome, awesome way to level up your business pricing. If you work off of retainers or a steady set income over time, it's really, really, you can't just blanket raise your prices because you could lose the big chunk of your business. There's actually another way to do it, which is very, very effective, which is, like I mentioned before, raise your rates 20% each time with each new client that you add on. So that means your old clients are getting, are paying very little and your new clients are paying a lot, right? So what you're aiming for is look at your books, look at your business's books, look at your profit and loss, look at your overhead. As soon as you have enough business that covers your overhead, including your salary, covers the cost of your team, covers the cost of your software, covers the cost of replacing your equipment over time, once you have enough retainer work that you're covering all of that cost, the next new client you add on at the highest rate allows you to go back to the first client and say, we're raising our rates to this new rate, would you like to stay or would you like to go? Guess what? If you lose them, your overhead's still covered because this one just replaced them. So you can go into that conversation not carrying the slightest bit about losing them. It will not be painful at all. And you'd be surprised, most people will sign on to the new rate. So then you get a double win-win there. So just leapfrog it. Yeah. All right, so feel free to say my question's just too weird. I'm a client that pays really well. He pays on time, he's a nice guy. Problem is he's so unfocused that we have a hard time getting things accomplished. And so I'm wondering, is there a conversation I could have about price of a jolt him into being more... Yes. Yes, I've had a couple of those clients. So his question is, we have a really awesome client. We do good work, they're good money. We love working with them, but he's super unfocused and so it's really hard working with them all the time. Is that a good way? Okay, so with those types of clients, it's really, really simple. It's painful because you're not getting paid for all of that unfocused figuring it out time and wishy-washy time. That's why it's painful. It would not actually be painful if you're billing time and materials for that odd ball time. So if he's on a retainer, okay, you need to start setting a, you get this much time per month in that retainer, put that and make that part of the writing and then beyond that, you get charged hourly. One of two things will happen. Either you'll start making a lot more money and it won't feel painful or he will suddenly get magically focused. So yeah, that's how we solved that problem. We had like four of those clients. Yeah, yeah, one or the other. So just refocus it in the back. Yeah, I just want to make a statement. When I raised my prices, my business actually increased by 25%. Yep, yep. All the way around. Yeah. I've never talked about this number of days. So it's 14 days and we're still not there. So they still have to pay and I don't move forward or 30 days. Yeah, good, good, good comment there. Any other questions? Yeah, well, I'll go over here first. You had one earlier, so I'm trying to give it a spread around a little bit. Yeah, arbitrarily cutting 20% of your business out makes no sense. That's dangerous and painful. The way that I said is safe and guaranteed. So yeah, that's a good way to put it. Yeah. How did you do that? Oh, you didn't? Sorry. I'm terrible at this. Okay. For new clients, how do you ask? Oh yeah, how do you close? Yeah, so she's asking when you've got somebody on the line, you've had a conversation, how do you get them to stroke a check? Really, it comes down to one word. Confidence. You need to know what your process is and you already need to be walking the client down the path as if you're already doing business. If you're acting like you're bidding against a bunch of other people, then you're bidding against a bunch of other people. If you act like you're already their client, you would be shocked how many of them will become your client. So know what your process is and when you get to the point of asking for a close, one of the most important and most powerful phrases you can say is I want your business. Please tell me what it'll take to get your business and let's move forward and get to work, right? All right. I think we're out of time. I'm gonna go ahead and move on out into the hallway and if anybody has any other questions, we'll be happy to chill and... Yeah.