Things I Learned Starting My Own Business
In a few days, I will have been working on building Practical Works for four months. In my entire career, I’ve been a part of a lot of different businesses: from small startups just getting off the ground, to enormous tech giants, to mid-sized commerce and media companies. But before August, I’d never started a company all on my own. And even as a solo operation, I found myself learning all sorts of things, bumping into frustrations (some of which other solo practitioners could help me with, others that were solely my own) and generally learning a lot about the complexities and nuances of setting a business up from scratch.
When I started Practical Works, one of my promises was that I would share the things I learn as I go along. And one of the most often-requested topics so far — from friends, old colleagues and even people I’m currently coaching — has been what has been surprising or interesting from an operational perspective. So, I’ve taken some time and compiled a list below, along with a couple questions I received directly from Twitter when I mentioned I’d be writing about this. If you’re thinking about starting your own thing, hopefully this helps a little! If you’re not, maybe this will at least be a bit interesting, and also build a bit of empathy the next time you work with a freelancer or solo consultant.
Some Stats and Info
Since the first question everyone asks me lately is, “How’s it going?” I thought it might be useful to share, so you can get a sense of the scope and work I’m talking about. As of November 2018:
- I have 42 individual coaching clients that I work with either on a monthly or bi-weekly basis. That sounds like a lot to people, but keep in mind around half are monthly clients, meaning I still have a lot of hours I could potentially fill!
- My coaching clients include Designers, Design Managers, Engineers, Eng Managers, Product Managers and a couple Heads of Product from all over the Tech industry: startups of all sizes, large corporations, non-profits. The variety has been pretty awesome and unexpected!
- Additionally, I had four companies hire me in a consulting capacity this month. The engagements range from helping recruit a startups first designer, to giving a talk on product development, or coaching a few folks from the same company in parallel.
- Without getting too into the weeds, my current running income is about where my salary was six or seven years ago as a senior designer. It’s not bad for four months and I’m in a position now where my living expenses are covered and I’m contributing back into my savings a little.
- Very few of my clients are in New York (this has been a surprise to everyone I tell). At a quick glance, I think maybe three folks I’m currently coaching are in my city.
Getting Started Is Confusing
Once I decided to go full-time running Practical Works, I realized that I should immediately figure out how to incorporate. Mostly, I was worried about protecting myself in case something went wrong and a client decided to try and hold me personally liable. While I don’t anticipate anyone ever suing me, my understanding is that’s what everyone thinks until it happens. So, I Googled for how to start an LLC and immediately blacked out from being completely overwhelmed. As a general rule, I’ve found that almost any question you have about starting a company results in a very convoluted answer (or set of answers!) that, if you’re not careful, will suck the will to start a company right out of you. I’ve read tons of articles and am still not sure that I’m paying myself correctly, or that I’m expensing things properly. In most cases, there’s no substitute for talking to a professional. Luckily, my wife and I already have an accountant we trust and made an appointment to go over everything with them.
I’m also lucky that I know a lot of folks who’ve been freelancing for way longer than I have! I frequently shoot friends a DM or grab coffee together and ask them my amateur questions and they have all been very gracious in helping me out. ❤
Quick plug for Stripe Atlas
Before I start waxing poetic, I’m not getting asked to promote Stripe and there is literally nothing in it for me if people sign up and use it. So, believe me when I tell you that Stripe Atlas is awesome. I was already using Stripe to accept payments from my clients, so that made using Atlas to establish my company a no-brainer. I filled out a couple forms online, hit submit, and they literally did everything else. Outside of a mishap with how they applied my Tax ID number at the tail-end of the process, everything was super smooth and simple. Thanks, Internets.
Tracking My Business
To start, a bunch of people have asked me what tools I’m using. Here’s a list of what I constantly use or have open in a window in Chrome during the day:
- Gmail (duh) - For emailing people!
- Google Calendar + Google Meet - I keep track of meetings this way, but also the Google Meet integration is awesome since 99% of my meetings are over video conferencing.
- Calendly - I’ve yet to find a better way to schedule meetings with people in a painless and efficient way. Worth every penny.
- Todoist - Wunderlist is slowly dying. Todoist is simple and has a lovely web interface.
- Bonsai - My CRM. Not sure it’s what I’d pick if I was starting over (more on that later), but it’s got some nice features like a contract generator, and the Stripe integration is pretty slick. Bonsai even auto-adds your Bonsai subscription payment as an expense.
- Twitter - Um yes. For the tweets.
- Stripe - Payments! They don’t have to be scary!
- Azlo - Where the payments go! Business banking that’s pretty straightforward and auto-setup when you start an LLC with Stripe.
- Google Sheets…
The other day on Twitter, I mentioned how much I’ve learned about spreadsheets simply from running my company and wanting to understand different performance vectors. It started so innocently: at first, I was just using a sheet to track each session, whether I’d invoiced for that session and whether I’d been paid. I had that information duplicated in the CRM I use, but found that having a second place to track that invaluable, as it helped me prevent mistakes and double-check my own work.
But then one day, I added fields to calculate my gross, net and tax amounts. Easy enough! But I’d also like to see a running total across months (which are all in different tabs). And wait, how do I show my projected income for the month vs my actual realized income? What about tracking how many of my monthly clients scheduled their session each month? And so on, and so on. I find that the time I spend organizing and managing my spreadsheets is honestly pretty small (maybe an hour a week total, and that seems liberal). But that time always proves super valuable and gives me more insight than I had before.
A note on tools
Picking the right tools is hard, but probably one of the more important things you can do. For instance, I chose a CRM early on that seemed good enough (“How complex does it really need to be?” I asked myself stupidly), but has since proven to be a huge pain at times based on how I run my business. And while their support team is great and responsive, and improvements get made here and there, I’m in a position right now where I have to manually invoice every client every month. Which, when you think about the stats above, is kind of an arduous amount of work (particularly because that flow is very long for each person). If I’d anticipated having so many clients from the start, I would’ve perhaps thought differently about my requirements and picked different tools. Because the other thing to know is that once you’re all-in on a tool, the switching cost feels way high. So choose wisely!
It was a really crazy experience saying no to a potential client for the first time. In my entire career, even as a VP, I’ve never had that kind of control over my work life. I realized very quickly that if something felt wrong or off, I should trust that and disengage. The sad part is that this usually involves an individual who wants help not getting it because their company made the process of getting started so complicated that I finally chose to value my time (and sanity) over getting the work. Particularly when I’m trying to ensure my rates are affordable, it doesn’t make a ton of sense for me to go back and forth with finance, legal or someone’s manager for a few days ironing out minutia or trying to convince them. I’m slowly starting to evolve a structured approach for how much time I’m willing to spend for what amount of work, but it’s been a blessing to be able to think “This seems kind of crazy,” and realize I can give people that feedback and then walk away if nothing changes.
The Value of Time
Following on from above, for the first time in my life, I’m seeing my time (like, individual hours) as a currency that I spend. One of the big benefits of working for myself is that I not only control my own time (mostly), but I have gotten a lot of it back personally! It’s not uncommon in a week for one day to be packed with meetings and then for the very next day to be free after 12pm. It’s magical. But I think a lot more about what I’m doing with my free time than I did when I was working a full-time job. For instance, today I was finished with my meetings at 3pm, and chose to spend the next couple of hours writing this post and working through a couple of my other to dos. Tomorrow afternoon, I’m planning to run some errands and maybe go climbing. Whatever I’m doing in my free hours during the day, I’m trying to do so more intentionally than I have before and think through what I could be doing instead, how valuable that would be, etc.
Q&A from Twitter
I got a couple of questions from Twitter I thought I’d address directly here. If you have a question that isn’t covered in this post, hit me up on Twitter and I’ll try to answer it next time I write about the logistics of my job.
Would love to learn about where your leads come from, both at launch and over time. Is it mostly just Twitter and word of mouth?
I’ve told people over the years how important my writing has been when it comes to my career, and starting this company really highlighted that. Unsurprisingly maybe, I’m not sure how I would have started this business if I hadn’t spent the last 5–6 years blogging, speaking and sharing my experiences with people. It not only landed me my first handful of clients (and a somewhat continuous stream of folks), but it also resulted in people recommending me to others without having experienced my coaching or consulting firsthand! My leads so far have been entirely word-of-mouth, and the stories I’ve heard get pretty wild. One person saw someone else they follow congratulate me for starting Practical Works, looked into who I was and what I was doing, and hired me to give a talk at their company. Another person told me they’re in a Slack where someone else asked for coaching recs. My name came up and this person *who wasn’t even actively looking* clicked through and reached out. It’s all incredibly interesting and humbling to me. I feel very lucky that I work in an industry that encourages sharing, and also very glad that I started writing years ago and didn’t stop, since it means I get to do this!
How long did it take you before you were able to make money (that you didn’t have to invest back into the business) or did it take a while before the cash-flow/savings combination was worked out?
Like I mentioned in the first section, this month (after I invoice folks and receive payment) will be the first month I’m contributing back to my savings. So, four months! One note I did want to make on this topic: an unexpected consequence of my coaching rates being lower than normal professional coaches, is that my volume has to be much higher in order to make the math work out. Which sounds kind of like a bummer, but it’s turned out to be a blessing in disguise. Having to work with more clients means that my risk profile is much more spread out. I don’t have to worry so much if a single client decides to stop working with me (or if I say no to a client, like I mentioned before). The overall effect on my income any one client can have is greatly reduced compared to many consultancies, which lowers my stress and will also allow me to have more honest, candid conversations with people regarding how effective my work is for them. Basically, I’m able to focus purely on quality without worrying so much about losing that one giant client.
I’d love it if you could add some context about your situation when making the leap. A lot of these articles leave out circumstances that gave them a unique position to take the opportunity, such as low cost of living or having a lot saved up.
The honest truth is that my last two jobs, while not Google/Facebook/Big Co money, were the best-paying of my career. Additionally, my wife is a well-established designer in Tech, and we still live in the same one-bedroom apartment I moved into when I moved to NYC six years ago. So, between us we’ve been able to keep our actual living costs pretty reasonable, split them 50/50 and as a result I was able to put a non-trivial amount of money into my savings. When I was thinking about leaving BuzzFeed, I knew how many months of runway I had to figure out my next steps, but also knew that if it went super sideways, my partner was there to make sure we have health insurance, didn’t get evicted, could buy dog food for the doggo, etc.
Are you able to extract any common themes or questions you hear? I’d be super curious to see what commonalities there are across businesses…
Tons of common themes! To be honest, I should write a whole post on this (and I will!). At a high-level, the two biggest themes are people understanding themselves better, and learning how to work more effectively with people who aren’t like them. There are obviously more granular themes that come up consistently, and there are certainly folks who focus more on tangible artifacts at times (like career tracks, design crit structures, org design, etc.), but those two things are the forever topics. Will definitely follow up on this!
Do you pick an industry type that you can/want to specialize in.. so that later you can reap the rewards of focused work at high rates?
This might be obvious, but I’m primarily focused on folks working in Tech, though I don’t think that’s necessarily something I feel limited to. Instead of specializing, I’d honestly prefer to stretch out further. Currently, I’m coaching/consulting across disciplines. But I’d love to work with folks and teams in totally different industries and apply what I’ve learned in places that could benefit from a new way of approaching their work.
Also, no, I do not want to work at higher rates. :) I want to provide a service that’s accessible, even if that means I maybe don’t maximize my potential income.
Growth, I hope! While I anticipate December to be a down or flat month (winter vacations are upon us), I’m starting to think about new ways I can be helpful to teams and individuals, how I might MVP some of those new ideas, and then start trying them out early next year. I also have a few new teams I’m excited to work with in 2019, and am excited to keep growing the core of my business: coaching senior ICs (individual contributors), first-time managers and the folks managing managers. I’ve learned a ton so far, and can’t wait to share more as I change things up and evolve how Practical Works… works.
Interested in working together? Check out how I can help you, your team or your entire company at practicalworks.co