Running a Successful Small Creative Firm or Freelance Business

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This deck is from SVC's workshop on running a successful freelance practice or small creative services firm.

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Running a Successful Small Creative Firm or Freelance Business

  1. 1. Welcome to Running a Successful Small Firm or Freelance Business
  2. 2. Who to blame: Michael Courtney mike@michaelcourtneydesign.com Larry Asher larry@workerbees.com
  3. 3. Mike’s story Our Clients Health Care Higher Education Real Estate Hospitality & Lifestyle Technology Cultural © michael courtney design, Inc. p. 5
  4. 4. Larry’s old story
  5. 5. Larry’s new story
  6. 6. Thousands of babies have been born at Swedish. But only one went on to live there for 3 1/2 years. Every birth that takes place at Swedish — and there have been more than 200,000 of them — is a remarkable event. But the 1935 arrival of David Ishii is quite another story. Sadly, his mother died in childbirth, and David’s father was ill equipped to take care of a newborn. So, Mr. Ishii made arrangements with Swedish to care for his new son while he took his six other children to Japan where relatives could look after them. What was supposed to be a brief absence turned into 31/2 years. So David grew up at Swedish with a whole team of mothers — all dressed in starched white uniforms. To this day, David remembers accompanying Swedish’s founder, Dr. Nils Johanson, around the halls of the hospital. And he faintly recalls a birthday party the nurses threw for him. It was and is the Swedish way to do whatever it takes to make patients feel at home — even if it actually is your home. Watch 100 stories about Swedish’s 100 years at www.swedish.org/100years
  7. 7. And you are? Please deliver your neighbor’s 2 minute elevator speech.
  8. 8. You need to be an expert. Ted Leonhardt tedleonhardt.com David C. Baker recourses.com Blair Enns winwithoutpitching.com
  9. 9. Why be an expert?
  10. 10. Why be an expert? Orthopedics $413,000 Cardiology $351,000 Radiology $340,000 OB/Gyn $243,000 Internal Medicine $188,000 Pediatrics $181,000 Family Medicine $176,000 Medscape Physician Compensation Report, 2014
  11. 11. Why be an expert? $0.07 per ounce $1.19 per ounce
  12. 12. The advantages of being an expert. > Charge more > Win without pitching > Better solutions > Lower anxiety
  13. 13. Who are some experts? MCD Environmental graphics Worker Bees Health care CDK Cobalt Automotive retail Cognition Medical illustration Hammerquist Active sports Shaw+Scott Email marketing Hacker Grp. Direct marketing
  14. 14. Expert Project The Circle of Life
  15. 15. Share Expert Project The Circle of Life Blog Tweet Web Site Article Speech Teach Ad DM SEM SEO
  16. 16. Network Share Expert Project The Circle of Life Trade Show Association Mtg. Disc. Board Job Shifting Grapevine
  17. 17. RFP Response Network Share Expert Project The Circle of Life
  18. 18. RFP Response Network Share Expert Project The Circle of Life
  19. 19. RFP request from Providence Healthcare profs. follow competitors Featured on WB website Swedish Projects The Circle of Life
  20. 20. Awaiting word after pitch Chris refers to El Camino Connect with Chris Bevelo Healthcare Projects The Circle of Life
  21. 21. So what are you good at? Skills Interests Experience Mandatories Prospects
  22. 22. So what are you good at? Skills Interests Experience Mandatories Prospects What you’re good at professionally Stuff from your life that you like, not necessarily from your work Types of companies and industries you’ve worked on Must-haves for companies and clients you’d want to work for Some companies that would be a good fit
  23. 23. Larry’s personal inventory Skills Interests Experience Mandatories Prospects Brand strategy New-era marketing Healthcare Well-funded Ad concepts Mac computing Real Estate Oppty to travel Copywriting Baseball Transportation Good taste in creative work Project management Cycling Financial Svcs. Stable Creative direction Travel Bureaucracies Progressive Client relations History Presentations Photography
  24. 24. Larry’s personal inventory Skills Interests Experience Mandatories Prospects Brand strategy New-era marketing Healthcare Well-funded Ad concepts Mac computing Real Estate Oppty to travel Copywriting Baseball Transportation Good taste in creative work Project management Cycling Financial Svcs. Stable Creative direction Travel Bureaucracies Progressive Client relations History Presentations Photography
  25. 25. Larry’s personal inventory Skills Interests Experience Mandatories Prospects Brand strategy New-era marketing Healthcare Well-funded More Prov H&S Ad concepts Mac computing Real Estate Oppty to travel Proliance Copywriting Baseball Transportation Good taste in creative work Polyclinic Project management Cycling Financial Svcs. Stable Sutter Health Creative direction Travel Bureaucracies Progressive John Muir Health Client relations History Prime Health Care Presentations Photography St. Alphonsus Boise
  26. 26. Mike’s personal inventory Skills Interests Experience Mandatories Prospects Environmental Graphics Business of Design Hospitality & Lifestyle Good Budgets Design Concepts Outdoor sports Healthcare ‘Gets’ what we can do Brand Strategy Family & Friends Integrated Design Prog. Values User Experience Client Relations Baseball Culture and the Arts Forward looking Presentations Cooking Fortune 500 companies Senior Management Seeing NB connections Making & building Higher Ed Good taste in creative work Collaborations Travel Real Estate
  27. 27. Mike’s personal inventory Skills Interests Experience Mandatories Prospects Environmental Graphics Business of Design Hospitality & Lifestyle Good Budgets Design Concepts Outdoor sports Healthcare ‘Gets’ what we can do Brand Strategy Family & Friends Integrated Design Prog. Values User Experience Client Relations Baseball Culture and the Arts Forward looking Presentations Cooking Fortune 500 companies Senior Management Seeing NB connections Making & building Higher Ed Good taste in creative work Collaborations Travel Real Estate
  28. 28. Mike’s personal inventory Skills Interests Experience Mandatories Prospects Environmental Graphics Business of Design Hospitality & Lifestyle Good Budgets Park City, Snowbird Design Concepts Outdoor sports Healthcare ‘Gets’ what we can do University Hospital(s) Brand Strategy Family & Friends Integrated Design Prog. Values User Experience University Campuses Client Relations Baseball Culture and the Arts Forward looking Seattle Waterfront Presentations Cooking Fortune 500 companies Senior Management Starbucks Seeing NB connections Making & building Higher Ed Good taste in creative work M’s, Storm, Seahawks Collaborations Travel Real Estate Hyatt
  29. 29. Let’s do yours Skills Interests Experience Mandatories Prospects
  30. 30. Who wants to make money?
  31. 31. How much to charge per hour 52 weeks x 40 hours 2,080 Less 2 weeks vacation 2,000 Less 30% non-billable 1,400 Your salary target $_______ Divide by billable hours 1,400 Target hourly rate $____/hr.
  32. 32. Take your salary, divide by avail. hours 52 weeks x 40 hours 2,080 Less 2 weeks vacation 2,000 Less 30% non-billable 1,400 Your salary target $80,000 Divide by billable hours 1,400 Target hourly rate $57/hr.
  33. 33. Typical freelance expenses Expense Assumption Cost % of Total Salary 80,000 64.8% Payroll Taxes Typically 7% of salary 5,600 4.5% Office Rent $600/month Pioneer Square 12,000 9.7% Health Insurance Premera 35-39, $530/month 6,360 5.2% Cell Phone & Internet AT&T Wireless & Comcast 1,500 1.2% Promotion Expense Website, travel to 3 conferences 8,000 6.5% Professional Services Attorney and Accountant 4,000 3.2% Office Expenses Postage, supplies, toner, etc. 3,000 2.4% Travel & Entertainment Parking, client lunches, etc. 1,000 0.8% Taxes B&O and Federal payroll taxes 2,000 1.6% Total 123,460 100.0%
  34. 34. Salary + Expenses + Profit Your salary target $80,000 Plus other expenses 43,460 Total expenses $123,460 Plus 15% profit target $18,519 Total income target $141,979 Divide by billable hours 1,400 Target hourly rate $ 101/hr
  35. 35. Your expense profile Expense Assumption Cost % of Total Salary Payroll Taxes Office Rent Health Insurance Cell Phone & Internet Promotion Expense Professional Services Office Expenses Travel & Entertainment Taxes Other Other Total
  36. 36. Your income profile Expense Assumption Amount Target Salary $75,000 Total Available Hours Less 2 weeks vacation 2,000 Billable Percentage 65% billable, 35% chargeable 65% Total Billable Hours 1,300 Total Expense Bring forward from expense profile $115,000 Profit Target 20% is on the high side $23,000 Total Expense + Profit $138,000 Optimal Hourly Rate Expense + Profit divided by 1,300 $106/hr
  37. 37. Your income profile Expense Assumption Amount Target Salary Total Available Hours Billable Percentage Total Billable Hours Total Expense Profit Target Total Expense + Profit Optimal Hourly Rate
  38. 38. Where will $141,979 come from? That’s nearly $12,000 per month
  39. 39. The usual Hourly
  40. 40. The usual Unlikely Hourly Retainer
  41. 41. The usual Unlikely Hourly Project Retainer Best choice
  42. 42. The usual Unlikely Hourly Project Retainer Markups Best choice Yes, if you can
  43. 43. Sorry. You’re going to have to track time.
  44. 44. Other time-tracking options FastTrack Schedule 10 for Mac Function Fox ProWorkFlow Function Point Streamtime Workgroup 2011 Studiometry Intervals Timex + Ticonderoga No. 2
  45. 45. Let’s eat. Because you don’t want to do financial forecasting on an empty stomach.
  46. 46. Let’s recap the money stuff.
  47. 47. Your expense profile Expense Assumption Cost % of Total Salary Payroll Taxes Office Rent Health Insurance Cell Phone & Internet Promotion Expense Professional Services Office Expenses Travel & Entertainment Taxes Other Other Total
  48. 48. Your income profile Expense Assumption Amount Target Salary Total Available Hours Billable Percentage Total Billable Hours Total Expense Profit Target Total Expense + Profit Optimal Hourly Rate
  49. 49. Fill in the blanks. http://bit.ly/1xcMrOI
  50. 50. Essentials of Pricing & Negotiation 1. Seek clients who get it 2. Help them get it 3. Sell a skill, not a thing 4. Document fees
  51. 51. Educating your client
  52. 52. Educating your client
  53. 53. Clients who push back
  54. 54. Write a tight contract 1. Define exactly what you’re working on 2. Include the schedule 3. Define number of meetings and locations 4. How change orders will be handled
  55. 55. Write a tight contract
  56. 56. Write a tight contract
  57. 57. Keeping complex work in scope
  58. 58. What if the budget is inadequate? 1. Reduce the scope 2. Opt for time+materials 3. Phase the project
  59. 59. How to handle change orders
  60. 60. How to avoid getting stung
  61. 61. Good documentation makes money 1. A written contract 2. Before-the-fact estimates 3. Clear, regular invoices
  62. 62. D E V E L O P M E N T E S T I M A T E CLIENT: Swedish Medical Center DATE: July 19, 2010 v.1. JOB TITLE: Ballard OB Outdoor Boards JOB NUMBER: 6000-365 DESCRIPTION: Creative Services Creative development of outdoor boards promoting Ballard OB. Estimate does not include stock photography, media, or outside production costs. 875 1,050 TBD Concept Development Art Direction - Layout Art Direction - Production Phase Electronic Production/Digital Studio TBD Production Management - Development Phase 350 Production Management - Production Phase TBD 350 TBD Project Management - Development Phase Project Management - Production Phase Sub-Total Creative Services $2,625 Outside Services TBD Stock/Original Photography Prepress/Printing TBD Sub-Total Outside Services 0 TOTAL Estimate $2,625 Note: Prices quoted in this estimate are for budget purposes only and are as of the date given. Unless specifically noted, these prices are subject to revision based on cost increases from suppliers, substantial changes in the scope of the project or major client revisions. Concepts shall remain the property of Worker Bees, Inc. until charges are paid in full. Client Acceptance: Date: XXX XXX TBD TBD XXX TBD XXX TBD $ XXXX $ XXXX
  63. 63. P R O D U C T I O N E S T I M A T E CLIENT: Swedish Medical Center DATE: September 7, 2010 v3 JOB TITLE: Ballard OB Outdoor Boards JOB NUMBER: 6000-365 DESCRIPTION: Creative Services Creative development and production costs of 9 outdoor boards promoting Ballard OB. 875 1,050 2,450 Concept Development Art Direction - Layout Phase Art Direction - Production Phase Electronic Production/Digital Studio 1,215 Proofreading 100 Photo sourcing/Parent coordination 875 Production Management - Development Phase 350 Production Management - Production Phase 875 350 700 Project Management - Development Phase Project Management - Production Phase Sub-Total Creative Services $8,840 Outside Services 1,190 Printing and Posting Sub-Total Outside Services $1,190 TOTAL Estimate $10,030 Note: Prices quoted in this estimate are for budget purposes only and are as of the date given. Unless specifically noted, these prices are subject to revision based on cost increases from suppliers, substantial changes in the scope of the project or major client revisions. Concepts shall remain the property of Worker Bees, Inc. until charges are paid in full. Client Acceptance: Date: XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX $ XXXX $ XXXX $ XXXX XXX
  64. 64. B I L L T O Melissa Tizon Swedish Medical Center Marketing Communications 747 Broadway Seattle, WA 98122 D A T E 04/05/11 I N V O I C E 311008 D E S C R I P T I O N A M O U N T Art Direction/Production Phase 750.00 Electronic Production/Digital Studio 750.00 Production Management/Photo Phase 780.00 Project Management/Production Phase 800.00 Steve Schneider Photo, Photos, #69550, 3/7/11 941.20 Steve Schnieder Photo, Photo Shoot, #69575, 3/28/11 352.95 Total Reimbursable Expenses 1,294.15 Previously Billed $4,025.00 Total to Date $8,399.15 Estimated Amount $9,795.00 Over/(Under) Estimate ($1,395.85) J O B T I T L E 6000-425 Leapfrog Ad T O T A L I N V O I C E 500 Aurora Avenue North, Suite 105 ! Seattle, WA 98109 ! Tel 206.930.3417 ! Fax 888.930.3417 ! accounting@workerbees.com $4,374.15 Client Name Company Department Address City, State Zip XXXX-XXX Job Title
  65. 65. Q: What have you learned from failure? A: I had to stop going to auditions thinking, “Oh, I hope they like me.” I had to go in thinking I was the answer to their problem. You could feel the difference in the room immediately. The greatest lesson I learned was that sometimes you have to fake it. And you have to be willing to fail.
  66. 66. Marketing your business If you know how to market your clients’ products and services, you should be able to do your own.
  67. 67. What marketing will do for you: > Keep you booked > Give you options > Know the market’s price threshholds > Turn down unprofitable work > Know what’s coming > Develop new clients, reconnect with old ones > Turn cold calls into warm calls
  68. 68. Who is your audience? Peers vs. Prospects
  69. 69. Who is your audience? Peers vs. Prospects
  70. 70. What is your message? Remember 76 slides ago?
  71. 71. What’s the best way to reach prospects? If no obvious ones come to mind, you may have chosen a field that has no viable, vital network.
  72. 72. Remember: Marketing starts with your expertise
  73. 73. A model we could all stand to follow
  74. 74. Channel What’s Needed? Who Will Do? How Much? Due When? Website Facebook Twitter LinkedIn Blog Publications Speaking Associations DM/Ads Portfolio Getting the word out.
  75. 75. Getting the word out. Channel What’s Needed? Who Will Do? How Much? Due When? Website Launch new site Larry $0 Done Facebook Launch WB company page Larry $0 Jan. 1 Twitter Hit 300 followers Larry $0 Jan. 1 LinkedIn Blog Publications Speaking 1 Speaking Engmt. Per Quarter Larry $0 On-Going Associations -- -- -- -- Direct Mail/Ad -- -- -- -- Portfolio -- -- -- --
  76. 76. Do what you can do. > Don’t try to do everything > Keep it simple (so you’ll do it) > Consistency is king > Aim mostly at prospects, not peers
  77. 77. Channel What’s Needed? Who Will Do? How Much? Due When? Website Facebook Twitter LinkedIn Blog Publications Speaking Associations DM/Ads Portfolio Let’s try it
  78. 78. Some (hopefully) useful resources
  79. 79. Let’s evaluate
  80. 80. Thanks so much for coming Slide Deck: slideshare.net/svcseattle Email: mike@michaelcourtneydesign.com larrya@workerbees.com Twitter: @WorkerbeesMC @MCourtney1211 Facebook Discussion Group: facebook.com/groups/seattlecreativebusiness/

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