Starting a business!

I’m often asked how I started in this business.

 

I’ll give you the brief version, then tie it in to what I experienced was the Simplified Process for Starting a Business. Or, the SPSB™ for short.  🙂

 

My mom bought me a Mac LC575 when I was in grade ten. Best. Gift. Ever.

(And I want to take this moment to apologize to my mom for the two weeks of mental and emotional torment I put her through while convincing her to buy it for me.)

Anyway. I loved it. I almost failed high school as a result of spending so much time tinkering.

After high school, when I was about 19, I worked as a salesperson in a Mac retail store.

I most enjoyed being a trusted resource for people. I was someone they could rely on for sound advice as a result of my nerdy passion.

They’d usually ask me a bunch of questions and I’d give them knowledge. Then they’d leave, have a think, and come back to buy from me.

It was good.

One time, a customer asked if they could pay me to go to their home to set up their new Mac.

I had never done that or even thought about it before. I said: “I’ve never done that or even thought about it before, but why not.”

(Note: I strongly recommend checking your employment contract before doing something like this.)

I had no idea what to charge or how it would work, so naturally I decided to just wing it and hope it all worked out. As I do.

(I would have been willing to do it for free… I think that’s an important point.)

I did a couple hours work, then when I was done and it was time to talk about payment I became super nervous.

Luckily, they opened with “so how much do I owe you?”

I replied with questions, and was impressed with my quick thinking. “Was everything setup the way you like? And how much would you normally pay for this?”

They said “It was great, but maybe go a bit slower next time and teach me as you go. How about $50/hr?”

I said “Awesome feedback! I’ll do $30/hr in thanks for the tip.”

Made myself a cool $60 cash in two hours.

Boom.

I did $30/hr for two months, then $40 for a few months, then $50 for a year. My favorite was the sweet spot of $60/hr for a couple years. That was a buck a minute, and I loved watching progress bars move slowly along while I counted the minutes.

I stayed at $75/hr for a few years, and now as an incorporated business we charge up to $150/hr.

Eleven amazing years, 1500+ clients, 5000 invoices, hundreds of awesome nerdy coworkers, thousands of small and medium failures, and 9 of my own various Macs later, here we are.

 

So. What’s the SPSB™?

 

Have a general passion

You gotta love the thing you’re about to do. Love the field, and love the idea of helping people in that field. Don’t worry about specifics yet.

* I loved everything about Mac and enjoyed helping people. Win!

Have a vague revenue model

It helps to have an idea of how you might make money with your idea.

* I got lucky. This came to me when the customer offered to pay me to go to their home to set it up for them.

Test it in the world

Go out and test it. Tell your prospective customer you’re new at this and want to give them cheap service in exchange for their feedback. I think it’s really important to be clear and honest about your lack of experience and your desire to learn.

* This was a bit of an accident for me as well, as I just told them I had never done that before then winged it.

Get and incorporate feedback

This is probably the most important part. This is the true evolution of a business model. This is the baby growing up into a teenager, then a young adult, then a charismatic 30-some who retires early. We cannot survive if we don’t adapt to reality.

* They asked me to go slower and teach them. This one piece of feedback shaped everything I’ve ever done, and raised revenues significantly… It takes more billable time to teach people!

Own and log your failures

Knowing specifically how you dropped the ball by not knowing or by making a mistake is huge. Own that and give the gracious client a discount for their help educating you. Call it tuition.  🙂

* I didn’t know they might want to be trained. I didn’t know to ask them if they would want that. Thus, I failed to really find out what they want and serve their needs in the specific way they wanted. Next time? Ask more questions.

Learn your value

Over time, as you get more experience and integrate more feedback, your prices should rise. You will see yourself and your services as more valuable. It’s okay if you feel your work should be cheap or free in the beginning, but you gotta start charging somewhere!

* I started at $30/hr, and as people told me I was charging too little, I slowly raised rates. As I could do more for them and solve more complex problems, I raised my rates some more.

Figure out the rest as you go

Enough said.

Important Extra Notes:

 

Surround yourself with good people

As you go, build relationships with anyone/everyone in your field. Go for coffee or lunch whenever possible. Consider ways of working with them or recruiting them… Even with your competition. Make friends with them! You never know if they might just close shop to move to Bali and give you all their clients someday. That has actually happened to me a few times now!

Finances and taxes

Immediately start separating your business and personal income. Track everything business related on a spreadsheet. This is important and should be done from the start!

Then, later, get an HST number and register your business either as a sole proprietorship or an incorporation. Laaaaater.

Business plan

Screw it. Deal with that later too.

 

Please feel free to post questions in the comments area.

Here’s a photo of me from 2005, where I am using all my limbs to work on computers… It should really be $60/hr per limb, no?