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09. Pricing Your Services and 9 Other Top Questions Answered · The Life-First Solopreneur

• 0:00
  Carly Ries: Absolutely bring in help if you need it. I cannot shout that enough.
• 0:05
  Intro: Bigger doesn't always mean better. Welcome to the One person business podcast where people who are flying solo in business come for specific tips and advice to find success as a company of 1. Here are your hosts, Joe Rando and Carly Ries.
• 0:24
  Carly Ries: Welcome to the One Person Business podcast. I'm one of your hosts, Carly Ries.
• 0:28
  Joe Rando: And I'm Joe Rando.
• 0:30
  Carly Ries: And we're doing something a little different with our "expert Monday". We've been getting some questions through our website about running a one person business, so we thought we'd answer a handful of them today. But before we do, let me just throw out a disclaimer that Joy and I are not experts on the topic. We work really hard at curating experts for you, but just know that our answers are from our personal experiences and our our opinions. So we just had to say that before we get started.
• 0:57
  And with that being said, Joe, is it okay if I just kick things off?
• 1:00
  Joe Rando: Please.
• 1:01
  Carly Ries: Alright. So the first question is, does being a solopreneur mean you need to do absolutely everything for your business, or can you bring in help? Absolutely bring in help if you need it. I cannot shout that enough.
• 1:16
  Joe Rando: Tell us how you really feel, Carly.
• 1:18
  Carly Ries: Right. This doesn't mean you need to build a team, but by all means, have a network of contractors that you can partner with for the areas of your business that you can't quite make work on your own. I mentioned this in a recent episode, but for me personally, I'm a marketer, but not a designer. So I have a go to gal I reach out to for all of my design work, and same thing with taxes.
• 1:39
  They make my brain hurt. So I work with an amazing CPA who really dumps it down for me and puts up with my ridiculous questions. Also, if you're just really overwhelmed in general with your business, bring in a virtual assistant. We're actually having a spectacular guest in a few weeks, Jess Tyson, who runs Don't Panic Management, which is a company that you can, that matches you with incredible and experienced virtual assistants. She'll be explaining the benefits that can provide for 1 person businesses.
• 2:09
  So moral of the story, you can run a 1 person business. You can certainly outsource and delegate to other contractors when needed.
• 2:17
  Joe Rando: So another question we got was, should I operate my one person business as a sole proprietorship, or should I incorporate? And there's a lot to this. Right? And you're gonna really you want to speak to a professional because it varies by state. So I'm gonna give you an overview, and I'm hoping not to melt anybody's brains, but there's a couple of takeaways here that I think are important.
• 2:42
  So let's start by defining sole proprietor. Basically, that means that you are the business. The business operates under your Social Security Number and you are personally responsible for everything and anything that happens. This means that if something goes wrong, you're on the hook. Period. If the business gets sued, you're getting sued. Therefore, it's very rare that I believe someone should operate as a sole proprietorship. Maybe, never. The other option though that that comes with fees. As you incorporate, there are fees from the state, blah blah blah, but they you will be protected from liability. And in our litigious society, I think that's a good idea for almost everyone. Beyond that, as I said, a lot of this is state dependent, so be sure to check with that, tax or legal counsel before doing anything. There are effectively 4 different structures you can use beyond sole proprietorship and we're gonna leave off partnerships because, that's not a one person business.
• 3:40
  So we've got corporations, then we've got subchapter s corporations, limited liability companies, also known as LLCs. There's also a thing called professional corporations for, like, regulated professions. I'm gonna leave that out as well. That's doctors, dentists, etcetera. So a standard corporation is called a c corp, and it limits your liability.
• 4:01
  But there's an issue there with what they call double taxation. So when you make a profit in the business, you pay income tax on that profit. And when you take a dividend or distribution of the profit to yourself personally, you also pay taxes. So c corp is probably not something you typically wanna consider when with respect to creating a one person business, unless you were somehow gonna scale this thing up and sell it to Google or something. So an s corp doesn't have the double taxation, but the taxes flow through to you personally.
• 4:35
  So there's no getting out of them if things go badly. If a c corp goes south and can't pay its taxes, well, the government goes after the c corp. If there's nothing there, there's nothing there. But with an s corp, if things go badly and you owe taxes, you owe the taxes.
• 4:48
  So it's important to keep that in mind that as you become an s corp, you avoid double taxation, but you increase your liability to some degree. An LLC, a limited liability company, is a business structure that protects liability and is taxed once as well. So the difference between an LLC and s corp is kinda weird. An s corp is a tax designation. An LLC is a business structure.
• 5:11
  So an LLC can also be an s corp. Again, talk to professionals. But for a lot of these businesses, I would say that, you know, you might want to think about becoming an LLC, But you have to then elect to be a corporation per the IRS by filing what they call form 8832. Again, see a professional. The bottom line, is don't be a sole proprietor and talk to a professional and figure out the right way to do this in your state.
• 5:39
  Carly Ries: So my brain hurts thinking about that too, along with taxes. So if I'm not alone, like Joe said, please, please, please talk to a professional about that. We're actually gonna have somebody on the show within the next couple of months, I think, that will be going into this further, but this is just a good overview. But good job, Joe, for understanding that because, yeah, I'm putting my brain back together as we speak. So next question.
• 6:07
  What are yours and Joe's favorite resources for solopreneurs? Okay. I'll go first. I feel like this list can go on for forever, so I'm just going to say a few books, a few tools, and a few education resources that have worked well for me personally. For books, the first one is The E Myth revisited, Why Most Small Businesses Don't Work and What to Do About It.
• 6:31
  This is by Michael e Gerber, and we have talked about this in a few other episodes. But it's so helpful, and it really helped me figure out figure out how, or what type of solopreneur I would be and where my strengths lie. And then the other is side hustle, from idea to income in 27 days by Chris Guillebeau. It's just really motivating. It's an easy read, and it can give you some really good ideas if you're looking to fly solo in business.
• 6:59
  So tools. Like I mentioned, design is not an a strong suit of mine, and I feel like that's the same for a lot of solopreneurs who are getting started, but you still have to present your business visually. So I'd really recommend Canva, because it makes you feel like you're a designer when you aren't one. And then Unsplash is a free stock photography site. So the 2 of these together can make you look great, can really represent you when you're on 0 budget and have 0 design skills.
• 7:32
  And then for education, Udemy is a library of video courses where you can literally learn how to do almost anything. It really is unreal. So if you have an idea of what you wanna do and want to learn more about it, that's a great place to start. And then if you have products and services you're trying to put out there, you obviously need to learn how to market to an extent as well as sell, and HubSpot Academy is a great resource for that even if you're not using the software.
• 7:58
  Joe Rando: Yeah. that's a great list, by the way. Couple I'll add to it. A book called A Company of 1 by Paul Jarvis. This is just a great perspective on being small, why to be small, why to stay small.
• 8:10
  I'm in the middle of it right now, but really loving it. And, I think anybody that's either, you know, a solopreneur, freelancer, or thinking about becoming 1 would benefit from reading this book. Another one, and this is a kind of a classic to me. It's something I come back to all the time as I need recharging is an older book called called The 7 Habits of Highly Effective People by Stephen Covey. And the the thing is the book is old, but it's it's kinda timeless because he studied 200 years of self improvement literature in the United States and basically, condensed it into a set of philosophies, these 7 Habits, he calls them.
• 8:51
  It's very inspirational. It's very powerful. The first time I read it, I was probably in my thirties, and I it really kind of changed my approach to life, and, I highly recommend that. From the tools perspective, I'm sorry. I have to go and do the shameless plug thing and say that if you're trying to run a one person business, the LifeStarr app, which is in beta now and hopefully won't be for too much longer, is really great. if you wanna beta test it or if it's released now, please check it out. Basically, task management for 1 person businesses, so not a team. And it organizes your tasks. It organizes your email into tasks, your meetings, and notes, and, you know
• 9:35
  Carly Ries: To do lists for your husband?
• 9:37
  Joe Rando: Exactly. Yes. that's the beauty of it. MOVE UP SPLIT PARAGRAPH you know, there's a lot to that that I'd like to recommend. And then going to beyond that, I would say, you know, your recommendation for Udemy is a really good one, so I think I'll stop there.
• 9:50
  Carly Ries: All good answers, and all these resources will be in our show notes. So be sure to check that out.
• 9:56
  Joe Rando: my turn again?
• 9:58
  Carly Ries: Your turn.
• 9:59
  Joe Rando: Okay. The next question that we've been hearing is, what aspects of running my business should I offload to a contractor, and which should I keep? So Carly has strongly recommended that you offload certain things to, other contractors. And I'm gonna talk a little bit about which ones you might wanna consider offloading, which ones you should keep. I use 4 questions when I look at this.
• 10:24
  I start with, how important is the actual job? How able are you to do it relative to a professional? How much time would it take you to do it? And how much would it cost for a pro versus the value you would place on the time it would take you? Those are 4 variables that go into making that decision, and there's some simple stuff at the edges. If the importance is high and your skill level's low, then you better hire a professional. The cost of messing up important things is too high. And if the cost of a pro to do it is lower than the value of the time it would take you, then hire the professional. You'll make more money if you're spending time doing what you're doing and what you're good at and what you can build. And if the time commitment is high and the costs are about equal, it's still probably a good idea to get a pro unless you enjoy doing whatever it is. So anything with a medium or high importance that you have more skill than someone you can hire is best done by you. And I just wanna mention, I built a little tool, just a little spreadsheet, that kind of looks at all the possibilities here and gives my recommendations for whether you should hire a pro or not or, you know, how you should think about it.
• 11:33
  So, there'll be a link to that in the show notes as well.
• 11:38
  Carly Ries: Yeah. I just took a look at that yesterday, and it is super helpful. So definitely be sure to be sure to download that. So the next question, I'm scared to take the leap and start a company of 1. Any ideas to get over that?
• 11:51
  I feel like we hear this all the time. So in my opinion, if it matters to you, you are not never not going to be scared. So see the fear as a positive and use it as a motivating tool. But with that, if it's acting like a roadblock, there are a few things I'd recommend. The first is just to start it as a side hustle so that you can dip your toes in the water, see what works, see what doesn't work.
• 12:14
  But if you do that, just make sure that there isn't anything in your current employment contract that would prevent you from doing that, and I can't say that enough. 2nd, talk to somebody who's doing what you wanna do or something similar and see what they've gone through so you can learn from their experiences. I found that as a solopreneur, I'm speaking with people in my field. They rarely view themselves as competition and see themselves more so as a network and help others, so it's very refreshing. And then lastly, have a little bit of a cash cushion before you take the leap.
• 12:46
  I think it's much more valuable than having a plan b because with that, you have an out. Whereas with savings, you don't wanna see that dwindle, so it acts as a huge motivator. Alright.
• 12:57
  Joe Rando: So here's something a little more driving than that. Should I get business insurance? And if so, what kinds? And the answer there is yes. You should.
• 13:09
  What kinds depends on your business. Right? And you'll need to talk to an insurance professional to determine what you need and what's available. So that said, I can still give you some some info and some tips that a pro may not be motivated to give you. It's important to understand with respect to insurance that the average insurance buyer loses money on the deal. That's the nature of insurance. Most people don't end up needing it and the ones that do get paid and the insurance company keeps the profit. So the bottom line is that you should never buy insurance to protect you from a loss that you can afford to weather. Typically, the higher the deductible, the better the deal for the insurance.
• 13:47
  So decide what you can afford to lose, plan for it, and spend money only for insurance that will protect you from financial disaster. Simple as that.
• 13:56
  Carly Ries: Easy enough. And I think that's something a lot of people don't think about, so that that's a good question to throw out there. Okay. Next question for me. Oh, it's actually is for me specifically.
• 14:07
  Carly, how did you go about pricing your services when you went solo? That was so nerve wracking. I don't know what it is, but that's, like, so stressful. There are a few things I'd still recommend, but one, I wouldn't. So first of all, I just researched.
• 14:22
  I googled the average salary for independent marketing consultants. I looked at sites like Upwork to see how people were pricing themselves. But if you do that, take it with a grain of salt because you will see some people in there that'll price for, like, a dollar an hour. So just have a a realistic ballpark in mind for you for when you go in. And then since I used to work for agencies, I knew what my hourly was.
• 14:43
  The agencies were charging for my work. And I factored in that percentage of what I would get of that and so on. So all those things kinda factored in. I also used to have location in mind for my prices. for example, I'm in Colorado.
• 14:58
  So somebody with my same skill set in the Bay Area may be able to charge more, and I used to factor that in. But now with the workforce being so remote, I don't anymore, and I consider myself on a level playing field as the marketers on the coasts as well. So, I changed that methodology.
• 15:18
  Joe Rando: Alright. So this is one that's near and dear to my heart. I feel overwhelmed. There's too much to do, and I don't have enough time to do what I'm good at. What should I do?
• 15:29
  I have been here many, many times. And the question I would ask first is how much time are you spending working on the business instead of in the business? And to explain that Stephen Covey from the 7 Habits book I talked about a minute ago, has a perspective that I think is really helpful in this situation. So he looked at 2 dimensions. He looked at important versus unimportant, and urgent versus non urgent.
• 16:00
  So if you do that as an x y graph, like almost like a plus sign, then you end up with 4 quadrants. Important and urgent, important but not urgent, unimportant and urgent, and unimportant and non urgent. And we spend most of our time in the first quadrant, important and urgent. So things that are really important and are really urgent, that's where we're spending most of our time working. And a lot of times, those quadrants represent putting out fires.
• 16:34
  Dealing with things that didn't go the way that they were supposed to go. And, hopefully, you know, we're avoiding quadrants 34, which are unimportant. But quadrant 2 is where the magic happens. Things that are important but not urgent. These are the kinds of things that make our business run more smoothly and efficiently.
• 16:53
  It can be fixing the things that cause the fires, automating a time consuming process, or some other thing that will give us more time to do what we make money in and or enjoy doing. But the thing is, without a conscious decision to work in that quadrant 2, it never happens because there's always things that are important and urgent. So plan some time in your week to work in quadrant 2, and you'll constantly be improving.
• 17:16
  Carly Ries: That is such great advice. And, actually, I'm on to my last question that I'll be talking about today. This is when I feel like when we first got started, we were also in the same boat, and now it's very clear to us. It's like trying to tell twins apart once you know them. They're so it's so obvious, but before you know the twins, you don't know the difference.
• 17:37
  So the question is, what is the difference between a solopreneur and a freelancer? So, honestly, with this one, it kinda depends who you ask. One definition is a freelancer thinks of himself as a professional, while a solopreneur sees himself as a one person team who runs an actual business. So, for example, a freelancer may say, I do design work for a bunch of businesses, whereas a solopreneur would say, I run a design shop and help my clients with their branding. And it's a subtle difference, but but hopefully you can see that.
• 18:09
  Also, freelancers often just trade time for money, but solopreneurs may build a product or course or whatever where they can get paid and not just in exchange for time. So that's a big difference that could result in really big results. So, honestly, a lot of it comes down to mindset. And with the way the workforce is going, Joe and I really think it's super important that you think of yourself as a solopreneur because it really can take your business to the next level.
• 18:34
  Joe Rando: Awesome. So last question. And this is, how do I know if I should move beyond a one person business model? And that's a great question that there's no magic answer for. But to me, it starts with you. The business should never define you. You should define the business. So you knew your reason to go away from being a one person business. Just as a side note, I let a business define me once, and it was probably the biggest mistake I ever made.
• 19:08
  Did not end well. So don't do that. You think about what you want. So the reasons that I can think of moving on, from a one person business to a a full blown business is there's 2 reasons I can think of. 1 is that there's an opportunity that excites you that you can't do as a one person business, and the other is that you can no longer sustain the business as a one person business due to a change in your circumstances or a change in the environment, and you still wanna continue to function.
• 19:37
  So those are the two reasons that I can think of that you should consider doing this. So there are a lot of things that can change when you cease to be a one person business, but the most immediate is obviously that you hire people. And it's important to understand that taking on employees is not for the faint of heart. Okay? To date, you've likely been working with contractors and consultants, and they are easy to fire.
• 20:00
  Employees are different. Managing employees is different since they have a specific amount of time allocated to working for you, so you need to keep them busy and be sure that they're producing, which means you are now a manager. With multiple employees comes the potential for conflicts. The more employees, the more potential for relationship issues. You can end up finding yourself playing counselor to people instead of working.
• 20:24
  If you let an employee go, you can get sued. You don't need to have done anything wrong. People can sue for invalid reasons, and even if you win in the end, it still costs time and legal fees. My advice with respect to hiring and managing employees is something I call the lazy manager approach. I invented this.
• 20:42
  And the idea is to hire people that don't need to be managed, and they have four characteristics. They know how to do their job. Number 2, they want to work. 3, they value being trusted to do the right thing. And 4, they're willing to be coached when needed.
• 21:02
  When you hire, look for these traits. If you find you were wrong, let the person go and keep looking. Eventually, you'll build a team of amazing people. There may still be conflicts, but they will likely be about the best way to get the work done instead of they're slacking off and making my life hard types of conflicts. And that's it for that one.
• 21:24
  So this is a wrap.
• 21:26
  Carly Ries: Interesting. Yeah. I had never really thought about those characteristics, but it makes a lot of sense. And I feel like we all know those people that would not meet all of those characteristics. Well, Joe, this is really fun.
• 21:37
  I'm so glad we did this. We were debating back and forth if we should. And if you guys like what you heard and and think we should do another round sometime soon, just let us know and go to LifeStarr.com/podcast, fill out the form, and tell us. But I really enjoyed it.
• 21:54
  Joe Rando: I did too. This was fun, and hopefully we'll get lots of good, new questions to do this again sometime.
• 22:01
  Carly Ries: Absolutely. Well, so there you have it. We hope you found this q and a helpful. If you like what you hear, please be sure to subscribe to the show on Apple Music and potentially other platforms very, very soon. See you next time.
• 22:14
  You may be going solo in business, but that doesn't mean you're alone. In fact, millions of people are in your shoes, writing a one person business and figuring it out as they go. So why not connect with them and learn from each other's successes and failures? At LifeStarr, we're creating a one person business community where you can go to meet and get advice from other solopreneurs. Be sure to join in on the conversation at community.lifestarr.com