In this episode, Kristen explains how knowing your worth as a business owner (and in life!) helps attract the right clients. Each podcast episode serves to provide you, the listener, with both inspiration and insight into being a creative entrepreneur.
The topic of knowing your worth and attracting and managing clients is something that Kristen has experienced first hand. “I literally remember THE DAY that I decided I was done working with assholes. I had to figure out a way to attract better clients,” she says. “It was a turning point that I’ll remember forever. For me, I think it was an all over shift in my business from the mind set I had toward employees and hiring, to the mindset I had with clients. I didn’t know what to google or that this was even a common problem until years later. And I don’t think I could really tell it was working for months after I started.”
She’s come to learn that attracting the right clients and knowing your worth go hand in hand in so many ways. Some, you many not event realize.
If you’re a freelancer, creative business owner (or any business owner, really), someone working in a creative business…this episode is for you! “If you are a responsible party for any relationship where there is a client and a provider, I think there is a lot of meat in this episode that can help you,” Kristen says.
In just three episodes, we’ve found that you guys like tactics! You like to hear where Kristen has been, what she did in the situations we’ve discussed so far, and for her to tell you what she did, and point you in the right direction so you can adapt and use it in your own life.
“Remember, I can only teach my experience, especially because I don’t have a PHD, or even a Bachelor’s degree for that matter, in anything! I just know enough to be dangerous and I like to think I’ve been paying enough attention to this entrepreneur thing to learn a little bit along the way. All of these points are what lead me to having some control, not total control, but some in our business and our clients. Which ultimately is still and hopefully always will be our bread and butter,” says Kristen.
Let’s get to it!
What you’ll learn in this episode
1. Ask yourself, “What’s your most natural way of being and working?”
This is a rhetorical question, so take a second and think about it! If you can confidently answer that question, you will be one step closer to attracting and landing the right clients. If you don’t the answer to this question, how are you going to attract clients that know and understand that about you? Have a hard look in the mirror, figure this out about yourself and then put it in the center of everything you do in business. For Kristen, this exercise led her to one of the most buzz worthy words of the moment - authenticity. Kristen is a casual person and runs her business in that same way BUT, don’t mistake the rose and think we don’t have our shit together (lack of organization and poor business practices have no place at LCo)!
In the beginning when you’re trying to establish your business identity, it’s hard! But instead of trying to get a strike first try, just try to stay in the bumpers. Write down words and phrases that describe you. Actually putting pen to paper will really help in establishing yourself as a business and brand.
2. What’s your value add prop and why/how are you different than the rest of the market?
This point might even be more important than #1. There HAS to be something about you that’s different and hopefully the exercises explained above will help you figure that out if you don’t already know. To get you on the right track, LCo, for example, specifically markets our “Organic Desert Living” aesthetic. Our clients know that the service we provide them will be consistent with that aesthetic, and that we work hard to be kickass and honest designers (and friends) for them! This doesn’t work for everyone, but because it goes hand in hand with what Kristen’s most natural way of being/working is, it works!
3. Establish your “non-negotiables”!
Yes, this is another buzz word in business, but it’s important! If you’re a little fuzzy on the concept, non-negotiables are basically “I will not do X for Y,” “I’m not willing to compromise this for that.” Be careful that you don’t have a list of say, 15, because at that point there won’t be anybody across the table from you to negotiate with.
Your list of non-negotiables should probably be a pretty short list, but they need to have some force behind them and you need to be 100% confident in being able to enforce. This concept is more of a checks and balances system for yourself internally.
Kristen’s List of Non-negotiables:
4. Figure out how much you need to make.
Work backwards, if you’re a freelancer, single designer, etc. how much do you want to make per year? If you are operating a growing team, how much revenue do you need to derive per year (and count yourself as an employee)? Take that number annually and further breakdown the equation. Let’s say you want/need to make $50,000/year. Divide that by 12 months and that gives you roughly $4100/month. If you want to go even further than that, break it down into weeks. You have to put it in terms that you yourself will understand, either by where your debts fall, or based on your project calendar (if that’s the case, you need to have a rolling understanding of your project calendar so you don’t end up cash poor).
5. Understand what your largest business actions/drivers actually COST you. This is a HUGE one.
Numbers four and five work hand in hand. Let’s take this down to selling cookies. How are you going to know how much to sell your cookies for when you don’t even know how much each thing is that goes into the cookies! Be that ingredients, labor, whatever, you gotta know this as a business owner. The thing that differentiates a product based company and a service based company in this area, is simply time.
Are you making money? But most importantly, are you covering your costs? If you haven’t done this in your business, do it. It doesn’t have to be fancy with spreadsheets - unless of course you love that - just get this value assessment DONE. Especially in your largest revenue driving tasks.
The other thing this helps with is saying “no.” We’re in a very yes-man culture, but it’s so important to establish boundaries. Especially when it comes to your time and energy. This is what you do for a living! Don’t forget that!
6. Establish a cost break even, a minimum fee (meaning minimum profit) and a reach fee (meaning maximum profit).
Cost = cost + 10%. The 10% will help you with things that are unknown as a buffer.
Minimum fee = cost + minimum profit margin. If you want to run your profit margin at 20%, that would be your minimum cost + 20% in profit margin (not 20% over your cost).
Reach fee = cost + maximum profit margin. This is where you want to be most of the time, although it might not always happen - and that’s okay! This is your best case scenario.
It’s important to understand where your pricing falls within the market and how it relates to your service offering.
7. How to set up your business in a way that attracts the right people. This includes branding, social media and just generally having your shit together.
Example time! Way back when there was an employee that left on bad terms. After this person had left, a client pulled Kristen aside and said, “Yeah. I never would have given that person a check for $100,000.” Light bulb moment. Protect your brand. Make sure every employee you hire and component of your branding, is an extension of yourself, has like-minded values, and operates to the standard put forth by your brand.
8. (or 10 or 11 if you’re Barbs) Be OK with business that walks.
In attracting the right clients, you have to be okay enforcing your non-negotiables, and being confident that the business you’re turning down is okay and worth it. You have to learn how to say no and you have to be okay with the business that walks. Be charming and kind when they do, but authentically and transparently be accepting of it, knowing that there’s a reason it didn’t work out. For some of the people that walk, some always come back - and that’s why it’s important to be graceful, patient and kind when the answer is initially “no.”
Note, when the answer is “no,” don’t internalize and beat yourself up over it. There are a lot of times where it’s not even something that you, the business owner, did. The first “no” is the hardest, but it gets easier with time.