Category: Podcast Episodes

I attended an event organized by Startup Grind Baltimore. The topic was pitching competitions, and I learned so much. Aaron talked to us about the differences between the pitching competitions you’ll likely come across during research. 

He also talked to us about ways we can make winning more likely, which I thought was very insightful. He knows because he’s done it after all. Aaron Hsu is the founder of Clearmask, an innovative company that wants to bring a better surgical mask into the world. One that happens to be transparent. 

We strayed a bit into things like product development and market research as well. Overall, great presentation, and I’m looking forward to putting his recommendations into practice myself!

Here’s the podcast episode:

Or if you’d rather watch the video:

Important Tips for Pitch Competitions

In June, I attended a Startup Grind Baltimore event for companies that are growing and looking at investing, pitching, and things like that. Aaron Hsu was the speaker that night, and he gave us all lots of things to think about in terms of pitch competitions. 

Keep in mind that my understanding is pretty basic because I’m just starting to look at pitch competitions. Basically, you go and talk about your business for a predetermined amount of time.

You may be able to have slides and props, or you may not. You may have 5 minutes, or you may have one minute. That’s the competition. Usually, some pre-stated amount of money is also on the line. Depending on the organization, they may or may not require you to report heavily your activities. You really have to look at the individual organizations. 

Good Public Speaking

However, he gave us some tips that cross over into what you’d consider good public speaking. One of the first things he said is that you want to project confidence and be relatable during your pitch. He said that if you’re doing an impromptu pitch, 2-3 minutes is normally ideal. That’s because of the human attention span. You go on much longer than that, and people just stop paying attention. 

Pay Attention to Recurring Questions

He also mentioned something really good. You can pick up on what people didn’t understand or what you didn’t say by listening to the questions they direct you. If you consistently get the same questions, you can add that into your pitch. I thought that was a super awesome tip. 

Ask about Your Allotted Time

When you’re going to a competition, Aaron said that you always want to ask what the allotted time for your presentation and Q&A is. You don’t want to have your presentation and come up too short, in which case you might not be making the best use of the time given to you. 

Do Your Research

He mentioned researching the investors and then structuring your pitch accordingly. Some organizations are a bit more about social/world impact and what good things you’re doing. Then, some investors are all about the money. 

If you know you’re going to one that’s more about impact, spewing numbers and statistics at them about how you know how your product is going to do, would not be as beneficial as exploring statistics on the actual impact your product could have. So it’s not that the information you have is invaluable. It just may be that you may not have the right audience for it if you don’t do that research ahead of time. 

The Problem and the Solution

Aaron also says that you should pitch the problem and why anyone would care about the solution. People may not initially understand your product, but they’ll be able to understand the problem. 

Be Selective

Then, he mentioned knowing which competition to go to. Aaron, he used Google a lot, but then as he talked about his idea with people, he was able to leverage his network to be his eyes and ears. So whenever they heard of something, they would come and tell him. 

How great is that? It’s basically like the referral network you’re looking to build as a small-business owner anyway. Hearing about pitch competitions where your product/service would be of interest to investors is something you might miss, especially if it’s relatively small. 

He also mentioned foundations like Twitter. So if you’re looking to get into pitch competitions, you might want to check out Twitter and look for some relevant hashtags. 

He definitely said that a targeted approach is better than the spaghetti-at-the-wall approach. You throw a handful of spaghetti, see what sticks. A targeted approach helps because it keeps you from doing wasted work filling out applications. That’s why researching the foundations will help you not waste time. 

Relationship-Building

Aaron also recommended that you build relationships with the organizations that you’re looking to apply to. This means looking out some time ahead of the competition, but he’s said he’s even done some relationship-building at the competition. 

You might want to go chit chat with the judges/organizer and not ask about your pitches. You just talk about other things. Everybody’s got their own life, and showing interest can gain you some favor. 

Formulate a Master Deck

When you’re putting together your pitch deck, he recommends that you have a master deck and tailor it to the competition you’ve applied. Eventually, you’ll end up saving time and you’ll have a more targeted pitch deck. 

I do something similar with my content marketing proposals when we’re working on a big, long-term, or ongoing project. I try out proposals that I’ve used to structure new proposals. That is something I would definitely recommend. 

Remember to Reach out

Another thing Aaron said is to keep in mind that you’re competing as soon as you apply. So if you are interested in applying, it doesn’t hurt to reach out ahead of time to see whether or not you’d be a good fit. 

It also gives you an opportunity to start relationship-building by not wanting to waste their time. How many people just apply, and then never reach out? Reaching out shows that you take initiative, which is typically a good sign of someone who works hard.

Why It All Matters

One thing people often forget in their pitches is why it matters. Aaron said you can always work on completing your pitch in the most perfect way. but what about the why? This matters more than most people think, so it’s good to have an answer ready. Aaron also said that it’s best to be explicit. 

Do your homework, establish rapport, keep your master deck, and a structure including the problem and the solution. 

If you’re outsourcing any work, how much you should pay freelancers probably enters your mind a lot. As someone who takes on outsourced work (I’m a content marketer and writer), and someone who outsources, I have a perspective many small business owners don’t. 

Here’s the podcast episode:

Or if you’d rather watch the video:

I came across an interesting question on Quora and in addition to answering it, I decided to take it as a topic for the podcast today. The question was how much a freelance writer should charge for blog posts. This question comes up in a lot of different forms depending on who’s asking it: the client or the writer. 

The Short Answer…

To be honest with you, it depends. I know that that’s not the answer that people want to hear, but it’s a fact. There’s no standard rate list and writers have come up with rates based on a variety of factors. What are the variables when considering how much to pay freelancers?r

How You Can Better Ask This Question

When clients ask, it’s typically because they’ve never hired a freelance writer before. This covers freelancers in general. If you’re working with service professionals, their rates vary. I’m speaking from a writer’s perspective because I’m a writer, but this also applies to graphic and web designers. 

When a freelancer asks that question, it’s because they probably don’t know, which is a sign of inexperience. This doesn’t necessarily mean the writer themselves is inexperienced. It could be a new type of project. 

Whenever I take on a new project, I don’t ask how much freelancers charge. Typically, when I’m scoping for answers,I say “Can you share…?” For example, if I go on a Facebook group, I might say, “Can you share what your typical rate is for this?” By doing this, I get an idea of the market.  This is because the general rate may not be good for you, as a freelancer. 

Freelance services of almost any kind are not like picking from a menu. You can’t just say, “I’d like a blog post with the side of SEO. Thanks.” That’s not how it works. If it did, there are too many factors for that to be fair for the variety of freelancers that exist out there. 

The Deciding Factors

I mentioned that there are various factors that you have to consider when calculating a project rate. We’re going to go into some of those factors. 

I think knowing this is really important for clients because they can understand that freelancers can’t tell you exactly what it will be without any project details. 

So just saying, “I want a blog post,”, “I want a logo,” or “I want my website redesigned,” isn’t going to be able to let the freelancer quote you an accurate rate. 

For example, with a web design project, maybe the freelancer would want to know how many pages you want. Designing a 5-page website vs. a 20-page website includes different levels of effort, so the pay would be different. 

The Topic

In terms of writing, if the freelancer specializes in an industry, the first factor I have listed is the topic. 

So if you want a designer who also writes, then the topic becomes pretty relevant. The industry can be relevant depending on what the standard is. 

As you know from my business name, Defy The Status Quo, I like to know what the standard is and then flip it, but never to the detriment of anything. Flipping the standard can be a way of standing out. 

Still, if you want a good website, you want a good website, but you may flip the expectations of what your website will look like. 

Sorting by Difficulty

As it pertains to the topic, a blog post on gardening and a blog post on technology blockchain shouldn’t cost the same amount. So if I’m a writer and a client says, “How much is a blog post on gardening?” I can reply with, “That’ll be $75.” 

Then, the client may ask me “What about a blog post on the blockchain?” In that case, it wouldn’t make sense if I still quote them $75. I’m either going to have to do a lot more work for a blog post on technology, or I’ve got a lot of technology experience. The value doesn’t decrease either way.

There’s so much information on gardening out there, so it’s low-hanging fruit if you will. In my case, I also happen to garden, so I already know about the topic. But in terms of technology, even though there is a lot of information out there, it’s also more complex. 

Take Experience into Account

Moreover, if you want a writer who has experience in those industries, the rates may go up. A writer who specializes in technology is likely to have a higher rate because there’s just fewer people who specialize in something, especially a particular facet of technology. 

The Length of the Project 

Whether it’s writing or design, the length of a project also matters. If you asked me, “Ruthie, how much do you charge for blog posts?” I would ask you to specify how long you want it to be. 

If you don’t know, say so. Now I know that you don’t know, but don’t just pick a number out of thin air. 

For example, I haven’t written a 500-word blog post in a long time because they’re not particularly valuable for SEO and they’re not always long enough to cover an entire topic. 

Additional Time and Services 

Are topics such that the writer needs to interview your subject-matter experts? Does the website designer need to speak with other shareholders for this project? That’s additional time and so additional services. 

Are there any ancillary services that are going to be included? When I do blogging, I’ll find pictures and upload them onto their website, if the client wants me to. We take that off their hands. It’s not something they have to worry about, but it is an additional service. 

On the other hand, you always have to consider your freelancers’ experience levels. A new freelancer is going to be less expensive, but they’re probably going to make more mistakes. They may not know SEO writing very well, and there are other things they just won’t know. 

Consequently, their final project may not be as good as the more experienced, expensive writer’s. 

Why Experience Counts

I think something that’s key is that a less experienced freelancer typically reverts to order-taking. You tell me, “I want a blog post on this and I want it to be this long.” I say, “Alright,” and I do it exactly what you tell me to. I listened to you. 

But, an experienced writer might say, “First of all, that length isn’t good for SEO. Second of all, I did a little keyword research and that topic isn’t something your customers care about. So if we do this, you’re wasting resources.” 

You could choose to push it if you want, but now that I’ve given you this information, it’s pretty likely that you wouldn’t. My clients typically listen to me because I’m more experienced than them. 

Your Freelancer’s Location

Where your freelancer lives may come into play. You may need programming of some kind, and the freelancer may live in a country where the exchange rate is such that you can pay them a lot less, but it’s still a good rate for them. That’s always the key. 

I’m taking advantage of currency differences, but if the rate is still good for them, then it’s okay. 

Obviously, depending on these factors, a 500-word blog post could be anywhere from $10-$500, so just keep that in mind when you put out what you’re looking for. 

All right. This has been an episode of The Defiant Business Podcast, and I’m Ruthie, your host. I’ll see you next time. 

It seems a bit woowoo, but your business will not succeed if you don’t believe in it. In this podcast episode, I reference how Think and Grow Rich altered my perception of my successes and failures. 

Sometimes, I didn’t believe enough in a goal for it to succeed. 

Read today’s shownotes, and try to push that doubt aside. You’ve got this!

Here’s the podcast episode:

Or if you’d rather watch the video:

If you’re a small-business owner who’s having a tough time, or you know someone else who is, this is one of those episodes you might want to listen to. In this one, we’re talking about how your business needs your belief. 

Believe in Your Business

I know that if you didn’t believe in it, you wouldn’t have started it. I get it. But your business needs your belief the most when it’s hardest to believe in. 

So how do we typically start? Entrepreneurs typically start pretty high on hopes and dreams. You’ve got all these great ideas and you have a very set way of how you think things will go. 

And when they don’t go that way, it can be pretty rough. 

How do we normally start super happy, motivated, and excited, only to end up quitting? A lot of entrepreneurs do end up quitting, or putting their business on an indefinite pause. 

Low Points Are Tests of Your Determination

How do we typically quit? Well, usually it’s at a low point, which I’ll be talking about today. That’s the point where your business needs your belief. 

You have high points and low points, but when you quit, it kind of shows that you weren’t completely invested in the first place. I take that as not being completely invested in yourself. You’re not completely invested in your dream, excluding things like rent, kids, groceries, etc.

Most of the time, we don’t have to completely quit our businesses when things get rough. You may have to take side jobs or whatever, but that doesn’t mean you should quit all the way. 

Don’t Let Self-Doubt Prematurely Kill Your Dreams 

I was thinking about this while I was reading Think And Grow Rich, which is a fantastic book by Napoleon Hill. What made me think about it was how people can manifest their hopes and dreams. The problem is that we often let self-doubt cycle in our minds, and it impacts what we’re able to accomplish. 

In the book, there’s a story about a guy who was trying to mine a vein of gold. He was trying and trying for a long time. In the end, he said, “You know what? Forget it.” And then another set of entrepreneurs took it over, and it turned out that that guy had stopped 3 feet from the gold. 

So he was struggling, he was at a low point, and he gave up. 

He also continues that man’s story throughout the book to show that he learned his lesson. He didn’t quit the next time he had an endeavor. 

My Entrepreneurial Struggles

Your belief in your entrepreneurial dream is the first step, and you have to believe in it so much that it doesn’t leave room for the doubts that get in and poison your dream. The more you focus on the negative, the more you attract it to yourself. I can say that I would honestly not be here without that sort of fervent, fierce belief. 

I had a few people that I talked to about my plans and endeavors all the time. I would say “I’m going to do this. I’m going to do that. I just need to make this much by the time my maternity leave runs out, and if I can increase it, that would be even better. This is what I’m going for.” And that was how I did it. I talked about it a lot, and I was vocalizing my ideas. 

How am  I going to keep this from happening? How am I going to make enough? Who am I going to talk to? How am I going to start networking? I was so focused on it that I didn’t leave any room for doubts. 

Don’t get me wrong, the doubts came later on. And once I started reading Think And Grow Rich,  I realized why some of the things I had tried didn’t pan out. I wasn’t fully committed to them. When they didn’t initially work out, I knew that was it. 

When I was looking at how some of the other projects that I’ve tried to get off the ground since I started freelance writing, I realized that I didn’t focus and believe in them. I didn’t push past the possible failures and doubts. And that’s why those things didn’t work out. I’m not going to make the same mistake with future projects, and I advise you not to do it either. 

I started working as a part-time writer in July of 2017, and in January of 2018, I was able to do it full-time. January was my first monthly $1,000 from my business. In the next 4-5 months, I was able to double my income. So I’ve been a consistent four-figure writer on my way to five figures a month, which is going to happen before the end of the year. That’s what I’m manifesting. 

Belief, Focus, and a Strong Mindset

That’s, that’s where I started, here’s where I am now, and I’ve got my eyes on where I’m going. So don’t forget that your business needs your belief. You have to focus on that. While doubts are important because they help us with self-preservation, don’t focus on them to the exclusion of everything else. Your dream deserves your hope, and there’s nothing wrong with that. 

I know it was a bit more motivational than the last couple, but it was just something I felt moved to speak on. So if you enjoyed this, if you know somebody who needs it, if you’re in a group of businesspeople who need it, go ahead and share it on Facebook. I feel like this is a message that people need. Your business needs and deserves your belief. 

When you quit something, what has been the usual reason? 

Lack of ROI?

Need to spend your time elsewhere? 

….. what other reason? 

In this episode, I talk about what consistency instead of quitting can do for you. 

Consistency instead of quitting for blogging, social media, or any other business endeavor can be a huge difference between your glorious success and someone else taking the opportunity. 

Here’s the podcast episode:

Or if you’d rather watch the video:

Today, we’re going to talk about trying consistency instead of quitting. 

So why do I even have to bring this up to a group of entrepreneurs? It might seem counter-intuitive, but we’re all susceptible to it, without even realizing. I’m sure that after you read this you’re going to agree with me that you’ve done it at least once. Let me know! 

The Effort You Don’t See

Last night my family and I were watching an episode of America’s Got Talent. We watched a noise mimicker guy get to the next round. His name was Greg Morton. 

He got four yeses, which was pretty cool. It was a dream he had been working towards his entire life. 

The big thing I took away from his story is that he was 60 years old. I said to my husband, “Honey, isn’t that amazing? How many people would have quit by now ? I mean, pretty much everyone else”. 

When he finally got that big break, he seemed to become an overnight success, but his story tells you that that’s not the case. 

He didn’t wake up a few weeks ago and start doing it. He had been working as a DJ and had held numerous jobs that were related to what he did. 

He had been working towards this dream of being able to do it full time, and have his own show for a long time. He was the opposite of an overnight success. 

It’s like when you plant a seed in the ground and you can’t see what’s going on, but after a few weeks we see something break through the surface. 

We see the leaves. but that doesn’t mean that little seed wasn’t working hard the whole time. There’s so much happening that you don’t see. 

Winning the lottery is a big overnight break. Almost everything else requires effort. The seed is constantly working underneath the ground, creating the root system, and doing everything it needs to in order to succeed. 

If You’re Quitting, Who Else Is?

We quit many business endeavors that we attempt. Usually, we’ll try tackling a task from different angles, and when none of them work…well, you only have so much time. 

I get it. You can’t spend time doing everything. You have to determine what’s going to give you the best ROI. But the question that I have for you is, if you’re quitting, who else is? If you’re quitting, the majority of everyone else is quitting too. 

Blogging as a Commitment

For example, blogging is something I see many companies start, and then they quit after a few weeks. You can tell this is the case because if you happen to check out that blog for any particular reason, you’ll see that nothing new has been posted for the last 2 years. 

You say, “Well, that’s a shame” And then, as a customer, you move on. 

But as the business, how many customers have you lost because of that lackluster blog that you’ve neglected? How are you supposed to get good if you quit? 

If you’re thinking, “Oh, we started a blog, but it just hasn’t given us a good return on investment. That’s why we haven’t maintained it”. Well, I hate to break it to you, but blogging is definitely a long-term commitment. 

If you’re going to commit to writing once a month, your term of testing should be at least a year and a half, and two years for optimal results. 

If you’re going to post every week, I’d say your testing phase could be a year.

However, blogging is one of those things that you just have to do consistently. You have to try consistency instead of quitting. 

You aren’t going to get serious, visible results in the first few months, but you’re building your search engine optimized footprint through your blog. That takes time to do. 

Success comes by faster for some topics than others, but you have to do it consistently for quite some time to build your audience.

Is This Endeavor Worth It?

You have to decide whether this is a poor use of your time, or would commitment and consistency turn this into a success. You have to think about the business struggles that you’ve had. 

The Time I Got Scammed…

I got my start on Upwork, and there were stumbles, trips, and falls. I talk about many of them in my book, which I’m currently writing. 

One that immediately comes to mind is the time I got scammed. I was looking for a job to apply to, and one person said that he was writing a military, adventure, action book. 

I was like, “Cool. I’ve got military experience. I could totally edit this and make it better! No problem”. 

He wanted me to edit 500 words as a test project. I was fine with that, so he gave me the piece that he wanted me to edit. I did a really good job with it. I fixed his tone, edited some things that we wouldn’t say as army people, and straightened it up. 

I sent it back, and I eagerly awaited his response. What ended up happening was that I didn’t get a response at all. 

Turns out that’s a very common way for client scammers to get free work done. So he likely doled out 500-word segments to almost every single desperate writer who responded. 

That’s obviously not going to turn out into a good book, but he’s a scammer who’s trying to get free work. What does he care? 

I could’ve easily quit at that point. I could have decided that all online clients were like that. I could’ve decided that the only way to succeed as a freelance writer was by knowing people and working in industries that I knew, which wasn’t the way that I was going about it. 

Instead, I took it as a learning experience and I moved on. I decided that consistency and commitment would turn it into a success. 

I didn’t quit. And that’s what I’m telling you today. 

There’s Less Competition at the Top

The next time you’re thinking about social media, blogging, business opportunities or endeavors, I need you to consider that when you’ve decided it’s too hard, the vast majority of people have decided that too, which means that there is less competition. 

When they say there’s less competition at the top, it’s not necessarily because the top is such a great place to be. It’s because you had to hike to get up there when so many people quit and turned around. So if you don’t, then you make it to the top. But it can be grueling and it can be tough. 

So please, the next time you run into an obstacle in your path, ask yourself, “Is this a poor use of my time, or would consistency and commitment turn it into a success?” 

We were discussing the “employee mindset” during one of the networking meetings I go to, and it struck me as something many of us struggle with at various points in our entrepreneur development. It’s a real struggle for service professionals. 

Here’s the podcast episode:

Or if you’d rather watch the video:

Today’s topic is how the “employee mindset” is bringing down your business. I know you’re probably thinking, “Ruthie, wait. I’m not an employee. I’m an entrepreneur. What are you talking about?” 

Well, I was meeting with a group of creatives the other day for a meeting we call world domination. We ended up talking about the employee mindset, and how it impacts us even as entrepreneurs.

What Is the Employee Mindset?

Most entrepreneurs have spent at least some time as an employee, and many of us don’t have entrepreneurship in our families. Some people are the first business owners in generations. 

That being said, your time and your experiences as an employee impact the way you conduct business. 

This is particularly serious for businesses that have variable rates, typically service professionals. As a content writer, I make an assessment of a project based on what the client tells me they want, and then I give them a project fee. 

When you sell a product, as opposed to a service, it’s different. For example, this cup is $5. It doesn’t matter whether you buy it. It’s a $5 cup and we have to decide whether or not we’re going to pay $5 for that cup. When you’re shopping online, you don’t send a message to the seller and say, “Hey, I’ll give you $3 for it.” You buy the $5 cup, or you go find a $3 cup. 

However, with service professionals, there’s often a lot of negotiation. People may also negotiate on products, depending on your country and culture, but with eCommerce and online, you’re not sending messages to negotiate on price. 

So a service professional could be a professional content marketer or writer, a web designer, graphic designer, a digital marketer, a consultant of any kind, a business/lifestyle coach, a Google ad professional, etc. These are all people who provide services, not tangible products. 

The Bad Manifestations of the Employee Mindset. 

Settling for Much Less Than We’re Worth

The biggest bad manifestation I see, especially among writers, is that we let clients dictate rates. I’m not saying you shouldn’t work with people to come to a happy medium. 

However, what typically happens is that you give them a rate, and then they tell you they can’t afford it. And then you ask them, “Okay, well what can you afford?” They tell you a very unsatisfactory number, and you spend a lot of time trying to make things work for your client. 

This is something a lot of new consultants and freelancers puzzle over; How do I make this work for them? 

But you’re forgetting a key part of the equation here. How do you also make it work for you? 

Sometimes the gap is just too big. If you’re a writer or any service professional, and you charge $500 for a blog post, and the client says they can only pay you $100, the gap is definitely too big. 

If they come back and say, “Hey, we could do $400 for that.” Maybe I could puzzle over it, but even then, I’m not just going to give them $100 off for nothing. You have to make it work for yourself too. 

If they can afford $400, maybe you can lower the length of the blog post. That way, you’re making it work for both of you. You’re not supposed to lower your rate for anything. You should get something for lowering it, even if it’s not something monetary.

Oftentimes, we don’t do that. We just take what’s given to us. You might do that the first time, but you’re not going to continue to enjoy doing it for such a low rate. 

 That’s the employee mindset. When you interview for a job as an employee, you have already told them what your ideal pay is, and they tell you if they can match it. 

 Most of the time we end up accepting it because we feel compelled to take jobs because we’re scared we might not get another opportunity. As an entrepreneur, you have the power to say no and walk away. 

 Obviously, you have to make your own assessments. Sometimes, with a difference of $100, you may be less inclined to walk away because you’ve got bills. Though, a huge difference in rates is just not worth it for you. You’re better off taking that time and finding clients who will pay you the rates that you’re asking for. 

I spend somewhere between $300 -$400 every two weeks on groceries because we’ve got 4 kids. For me, that’s the difference of a grocery shopping trip. 

 But you can say no and walk away. That’s your powers and entrepreneur. A lot of entrepreneurs give up their power. Just because a client has engaged with you, doesn’t mean you have to continue engaging with them if the business relationship is not beneficial to you both. 

 Not Taking Any Risks

Another thing is that you might not take risks, especially on your business goals or dreams. Many companies’ cultures are about maintaining the status quo. 

You don’t rock the boat. You don’t do anything crazy. You don’t take risks. 

Now that we’re entrepreneurs, we carry that over into our businesses. So we consider things and we’re like, “Oh, that’s too risky. That’s never going to work.” 

 Arguably, I’m sure many of you had naysayers when you first started your business. Your business wasn’t supposed to work. So what do you have to lose? You have to get into the habit of taking risks. 

Prioritizing Pleasing Your Client Above All Else

Sometimes, you feel pressured to do what a client tells you to do, versus what needs to be done.

I actually broke off my relationship with a client last year because they wanted things to be done in a certain way. I tried to tell them that it shouldn’t be done that way, and they initially agreed. I did things my way, and they made me revert it back to the way that they wanted it done. I told them, “Hey, that’s not gonna work and Google isn’t going to like you for that.” And they said, “Well, this is the way we want it done. “ After that, I told them I didn’t think we were a good fit, and that I wasn’t going to do any more writing for them. 

 That was how the relationship ended. It was within my power because I was going to be unhappy doing that work. So I walked away. 

Remember Who You Are

You have to understand that you shouldn’t give up your power when you engage with clients. It’s really important that you hold onto that power and understand your position. 

You are not an order taker. You are not an employee. They can tell you what they want, but you always have to factor in what you want.

Nobody else is factoring in what you want, so if you don’t do it, no one will.

The book Profit First is by Michael Michalowicz is a great book that I used to transform my business money management at the start of the year. I recommend it to everyone. 

It will change the way you view your business finances, and it will help you keep your business healthy. Listen to this episode to hear about why this book is the key to transforming your business “from a cash-eating monster to a money-making machine!”

Here’s the podcast episode:

Or if you’d rather watch the video:

Today, we’re going to talk about why you should read the book Profit First by Mike Michalowicz. 

I have to imagine that sounds pretty good. Anything with the word profit in it sounds good to most entrepreneurs and entrepreneurial-minded people. 

I don’t feel like I’m taking away from your reading experience by sharing this, because there’s nothing I can say in 10 minutes that’s going to be as accurate as just reading the book. So I definitely recommend you read it! You can get it on Amazon. I’m not an Amazon affiliate or anything, but I know a lot of people get books from there. 

Transform Your Business

The tagline is probably one of my favorite parts about the book. It highlights exactly what you’re going to get when you crack open the cover. It says “Profit First”, and then it says “transform your business from a cash-eating monster to a money-making machine.” 

How Profit First Helped Me

Before I implemented Profit First in my own business, that’s exactly how I felt about my business. I felt like it was a cash-eating monster. It felt like I could keep giving it money and it would never be enough. You may be able to relate to that. 

The very first day I set it up, I immediately felt better about my business. I was able to see what amount of money needed to go where. 

The Profit First System

Set up a Series of Bank Accounts

Before I talk about that, I’ll go ahead and talk about what the Profit First system looks like. 

Personally, I was already doing this because I knew I needed to pay my quarterly taxes. I knew it would be easier for me to keep track of quarterly taxes if they weren’t just sitting in my main account because then I would think that I could spend that money. 

So I had my main account and I had a taxes account for my business. However, I still didn’t have a very good idea of where all my money needed to be and when.

Mike has you set up a series of bank accounts. This includes things like:

• Income (your main account where all your money comes in)
• Profit
• Taxes

You also have a couple of other accounts related to operational expenses and things like that. 

Plan for Profit

One of the things I really love about this book is that they plan for profit. 

One of the things I learned in the army is that if you don’t plan, you’re planning to fail. You have to plan for success. 

That little inclusion was just amazing to me, because what’s our inclination to do with the so-called extra money? We don’t use it as profit. We typically reinvest it back into the business, which causes the business to become that swelled-up, cash-eating monster. 

Now, this isn’t to say that you shouldn’t allocate any funds at all in investment and things that your business needs. But, he says you can even start very low.

I have about 20% that goes into my tax account. You need to make sure because every time you do your allocations you’re putting away profit money. 

For me, it lines up really well, even though I’m paying my estimated taxes. I’m also getting a quarterly profit distribution from my own business. 

So that’s what he has you do. Once per quarter, you get to take half of what’s in that account and spend it however you want to, just not on the business. The beauty of this is that because you take half, you don’t take the entire thing. That other half stays in there. 

So let’s say your first quarter is $500. You take $250, even if you earn the same amount for the following quarter. Even if you earn the same amount the following quarter, there is $250 already in there. 

Since you get another $50 later on, now you have $750, half of which is $375. 

At this point, you get to take that $375 out and leave the other $375. 

The number goes up for the next quarter, and you always take half.

It’s Beneficial to Your Family Life

Eventually, your quarterly profit distribution is going to be very sizable. You’d be able to afford a vacation or buy tickets for an awesome experience for you and your family.

I think that that’s what makes it so awesome; you get to take out that money and do something with it. 

If you have a family, they would see the benefits of your business as well. 

Don’t Let Your Business Deplete Your Resources

As entrepreneurs, oftentimes we go into business thinking we have more control over our time than we really do. But if we’re not careful with our money and time, our business will eat all of it. 

There’s never a moment where your business is like, “Okay, I’ve had enough. I don’t need any more of your time or money”. There are always things that need to be done. 

I think the allocation of the profit helps so much because it’s easier not to touch your account which is specifically made for profit. You’re stealing from yourself if you touch it. 

Assess Your Business’s Health

One of my favorite chapters in the book is Chapter 4, which assesses the health of your business. 

If you’ve listened to any of the other episodes of the podcast up until now, you know I’m all about healthy, consistent, and scalable business growth. 

In the chapter, there’s a formula and a chart for you to fill out. Once you’re done, it can be a bit of a shock how unhealthy your business is. 

My case wasn’t that bad, but the author also describes some scenarios that were pretty bad. That’s okay, you’re going to start fixing it instead of continuing on like you have been. 

Once you’re done with the assessment, you’ll see where your business is hemorrhaging money. Your business is a bucket with holes in it, which you didn’t realize were there. So the money is just coming out. 

Take Action!

That’s the whole point of Profit First; the creation of a healthy business. You don’t want to have to stress out over funds if you don’t have to, so that is why you should go read Profit First. It’s not a super long book, and you’ll be able to implement things as you go. 

He actually gives you that direction. Stop reading right now and go do this. 

Let me know if you read or implement the book. Go ahead and leave a comment, or contact me on any of the social media channels in which you find this episode.