If you feel you are constantly overdelivering to your clients and not getting paid what you're worth, you are certainly not alone. When small business owners get together, this topic inevitably comes up. A few common themes you may more than familiar with include:
- I work too hard, overdeliver, and wind up making $1 an hour when the project is completed.
- I waste a lot of time in unproductive meetings with clients that I don't feel I can charge for.
- My sub-contractors make more than I do on most of our work.
- The client has all these small requests that I don't feel I can charge for, but really add up.
- My contracts always seem to have gaping holes in them that I don't see that end up costing me money.
There's a common thread here – the fear that the client may fire us if we don't jump through endless, profit-killing hoops. We try to do our best by our clients and as a result often place our needs behind those of our clients, sub-contractors and vendors. Result: We're robbing ourselves in the deals we make.
The good news, however, is that the problems are fairly easy to rectify. Because the five concerns expressed above are so commonly heard, below are some suggestions for addressing each one.
I work too hard, overdeliver, and wind up making $1 an hour when the project is completed.
The key to this one is not the working too hard part; it's the overdelivering part. Overdelivering usually stems from trying to please someone from whom we seek approval and, in the work setting, the possibility of more money. Newly minted entrepreneurs are especially prone to overdelivering. But we need to remember why we launched our own business in the first place. We were tired of taking orders from someone else and we wanted to be our own boss. However the first thing we do when self-employed is immediately put our clients in the position the boss used to occupy. Now, we don’t have just one boss, we have multiple bosses who we are trying to please by going the extra mile.
Of course we're feeling abused–every client is getting a smokin’ hot deal that they did not ask for! If this is an issue you face, step back a moment and remember who the boss is: YOU! So learn to make yourself happy. Reread your contracts, stick to what the client asked for and what you said you'd do. Then review your work from that perspective with the client at the end of the project. Most of them are going to be quite happy with you actually delivering what you promised.
I waste a lot of time in unproductive meetings with clients that I don't feel I can charge for.
Tim Ferriss, author of the 4-Hour Work Week, has the answer for this one: If you can't bring yourself to bill for these meandering sessions, stop having so many meetings. It's all about who's the boss, and about training your clients to respect your work process. His strategy is to start with the ideal situation–no in-person meetings at all–and see how close you can come to achieving that while still keeping your clients happy.
Start by rigidly structuring your in-person client meetings ahead of time. Send them two or three dates and times to choose from so you are in charge of when you meet. Tell them you only have 90 minutes, and stick to it. Next, send them an agenda ahead of time with no more than 5 items on it. Tell them they can revise the agenda but can't expand it. Check in by phone or email the day before the meeting to make sure everyone will be there on time. Stick to the agenda and to the time allotted for it. Once you get the in-person meetings under your control (it may take a few meetings to do this), then you can begin replacing them with conference calls.
My subs make more than I do on most of our work.
This is one of those “Who owns the problem?” situations. It's your business and you are the one bringing in the work. You need to take care of yourself in order to continue to keep them busy. It's time to reexamine your relationship with your subs and do some managing. Sometimes when we have longstanding relationships with subcontractors, we get lazy. We stop reviewing their invoices, or worse, let them get away without detailing what they did. We pay them hourly, then let them go on wild goose chases at the client's request that run up their bill and don't really add much to the end product. We steer them work during lean times thinking that we should keep them busy.
But it's work that we could be doing, so instead now we're managing them for free. So, manage them, mark up their work, and do them the biggest favor you can: Be a financial success so you can keep paying them. Remind yourself every day that you are the one taking all the risks by running your own business, and that you should get paid extra for taking that risk.
The client has all these small requests that I don't feel I can charge for but that really add up.
Generally, these kinds of requests fall under two categories: The client's hair spontaneously combusted and they want you to put out the blaze, or the client has been fine-tuning your project in their head and came up with a few random ideas that might be helpful. So they call, or email you, wanting your immediate attention. The key to both of these situations is: do not immediately respond. Typically, for small issues most clients find a solution for themselves.
Try just ignoring them for a day. When you do respond, make sure it’s on your time – not eating up billable work time – and point out that the request is beyond the scope of work in your contract. Ideally, you can solve this issue in the beginning with an “additions to scope of work clause.” Agree before the project how additions or changes beyond the original scope of work will be handled. Then when the come up, you can reference the contract that everyone signed.
My contracts always seem to have gaping holes in them that I don't see that cost me money.
Contracts are not meant to cover every single variable of a working relationship. In fact most contracts won’t ever be enforced. They are meant to serve as a scope of work agreement that everyone approves. The bottom line is that you need to be clear with your clients up front about expectations. You want each contract to include a clear summary of what is being requested and what you will do to meet that request. And you want your scope of work to include extra charges for requests beyond the scope.
With creative services agencies, the “loopholes” often involve additional revisions requested by the client, or searches for just the right images for a website or brochure that go on endlessly and cost much more than the client anticipated or that you feel comfortable billing for. “Can't we just see one more draft?” opens a can of worms, as the client then begins to fine-tune with repeated requests for one more draft. Remember, we're no longer overdelivering. We are the boss, not the client. We want to please our clients, but we also want clients who please us. Clients who constantly bend contracts are not ideal clients. Fire them!
At the end of the day, situations like the ones above are best handled when there is a good relationship established from the beginning. Being self-employed is becoming more and more about creating good relationships with clients and customers. The better the relationship, the less tension you’ll have when something does come up.
How do you manage your client/work relationships? We’d love to hear your thoughts in the comments section below!