Lately, a lot of people have been asking me how I started this coworking business. Most times, I can’t string together a coherent timeline of events to keep an audience interested in the story (think extrovert/ADHD/too much coffee girl). “Err, intuition, um, googled coworking, uh, money, oh yeah, community building, erm people, freelancers and oh yeah, passion.” Not very compelling. But what I can do is answer very specific questions. Like the one I got asked today for an interview with the Northern Colorado Business Report.
You’ve talked a lot about passion…what do you mean?
The entrepreneur’s salvation and doom lies in the ability to get passionate about something. Really, really passionate. Picture yourself up at 2 am, then 2:30am, then 3:17am, then for the rest of the night crouched in the second floor bedroom pounding out notes by the dim light of your laptop wondering which of your friends would be most likely to take your phone call at this hour-type passion. This is what spurs entrepreneurs on. Having ideas, great ideas, and making them happen. This passion will sustain them during slow sales, working 22 days straight and epic public relations mishaps.
This passion also cripples some entrepreneurs when it comes to the day to day tedious tasks like tracking money-in/money-out with some lame accounting software that makes them feel like they’ve never used a computer before. Tasks like cleaning the toilet and sweeping the floor don’t possess the allure they once did when they decided NOT to hire a janitorial service. Entrepreneurs fail easily when tasks don’t provide immediate gratification toward the completion of the goal that relates directly to the passion. Unlike the 6 degrees of separation rule, entrepreneurs can only tolerate about 1 degree of separation between the task at hand and world domination.
Unfortunately, the day to day tasks tend to sustain the shiny and passion inducing ones. Alas, the paradox of passion.
What are you passionate about and how do you marry the passion with the day to day necessities?
Normally a superhero dons a cape and mask before saving someone. Today, Greg Fuhrman arrived at Cohere Coworking Community in relatively inconspicuous attire: a blazer. Greg is a “freelance Chief Financial Officer.” I’ve given him that title because he works p/t or interim for small and growing companies that need a little CFO love.
Greg helps the group understand rate setting
Greg taught us what a CFO’s role is, why we might want a CFO’s help, how to set and raise rates, adding employees and tips and tricks for securing venture capital! Yep, all that in just one hour at #frankfriday today.
Today’s financial focus will be on RATES. How much are you charging and is it enough?
- Never undersell yourself.
- Longer projects can be at a lower rate in return for the security of a long term contract.
- Urgent projects demand a premium rate, sometimes double what you normally charge. If a company expects you to drop everything for them, it’s going to cost ’em!
- Measure yourself against your peers. Your peers are people in the same industry with similar experience.
- What seems like a lot of money to you may not phase a company with deep pockets.
- You should not be charging less than $50-60 per hour. Yep, you read that right.
- Know what your minimum dollar amount to survive is and work backwards from that number factoring in how many billable hours/month or week you can tolerate as a creative. (Angel’s note: I’ve noticed that many technically creative people can only produce high quality work for about 5 hours/day. This 5 hours/day is in addition to the more functional parts of freelance like billing, writing proposals and catching up on twitter).
- When setting your rate, factor in taxes, retirement, insurance and the cost of doing business in your field. What software or equipment do you have to keep up to date?
- Get off on the right foot with a new client by telling them your normal rate and then discounting their project. “My normal rate is $120/hour but I can do $100/hour since this is a large project.”
In summary, you probably aren’t charging enough. What could you accomplish if you doubled your rates and worked half as many hours? Marinate on that and tune in later this week for Greg’s advice on how to raise your rates.
Contact Greg (gregory@fuhrmanconsulting [dot] com) if your business needs an interim CFO, business planning or a long-term strategy.