Freelancers’ Show

The Freelancers' Show discusses the challenges that freelancers face. The panel includes technology freelancers and entrepreneurs with many years of experience.

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221

221 FS Generating Short-Term Cash without Taking Crappy Projects or Bottom-Feeding on Upwork


1:00: Topic introduction: Making fast cash

2:45: Reach out to past clients

  • Might be a small project
  • Might lead to referrals

5:55: Ask for referrals

  • Give them the tools to know who to refer you to
  • Be specific about what your ideal client looks like
  • Use LinkedIn for second degree connection introductions

10:00 Use mental associations when making requests

  • Make specific requests; don’t think in broad terms
  • “Think like a fisherman, not like a fish.”
  • Use inbound and outbound approaches.
  • More Cheese and Less Whiskers

17:30: Cold outreach

  • Might feel awkward, but it works
  • Start close to home
  • Pick an industry where you’ve had previously success
  • Make sure you follow up
  • Cold outreach episode with Kai

23:40: Be creative

  • Kurt Elster blog post on handwritten notes
  • Birthday cakes

26:10: Use social media

  • Reach out to your email list, blog, YouTube subscribers
  • Use Twitter for searches
  • Use Hacker News

30:20: Offer a discount to current clients for prepayment

36:30: Create a microservice

Picks:

Million Dollar Referrals by Alan Weiss (Philip)

Duct Tape Marketing blog (Philip) cheese/whiskers

ReplyApp.io (Philip)

Blair Enn’s Prospecting Email (Philip)

The Hourly Trap (Jonathan)

Freelance Remote Conference (Charles)

Slack Hangouts (Charles)

This episode is sponsored by

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TRANSCRIPT

Charles:        Hey everybody and welcome to Episode 221 of The Freelancers Show. This week on our panel we have Jonathan Stark.

Jonathan:      Hello.

Charles:        Philip Morgan

Philip:           Howdy.

Charles:        I’m Charles Max Wood from devchat.tv. This week, we’re going to be talking about ideas for generating short term cash or recurring revenue without saying yes to crappy projects or bottom feeding on Upwork, etc.

Jonathan:      Well said.

Charles:        Did somebody get a question about this?

Philip:           I think this came up as like a side shoot of some previous conversation. We were having about like well, it was about cash flow if I recall correctly. If you don’t have cash flow, you start making decisions a lot of us end up regretting later. I think it came out of that.

Charles:        Gotcha.

Jonathan:      Yeah, I think it might have been something that’s happened in my coaching slack from an alumni. I’d keep all the one eye people in there. I think a lot of people are familiar with this sort of feast or famine cycle that seems to happen to everybody at some point or another. I don’t think that was his exact question but you hear it from a lot of people. It’s happened to me in the past. I figured it would be cool to bring up and maybe talk about some strategies to scare up some quick cash. If you don’t do that quickly, like Philip said, you can’t get out of that spiral. You can’t feel like the high priced option. It’s too scary to do value pricing, or could be too scary to do value pricing, it’s way too scary to say no to clients even if they’re throwing red flags.

There are a few things I’ve done or counseled people to do that gave worked in the past to quickly score a good amount of money, a month, or two months worth of money so that you can get back to being smart about your decisions.

The first one I think probably sound obvious but I find people forget to do it, which is to reach out to past clients and just check in with them. Say, “I’ve got an opening in my calendar. Something dropped out unexpectedly. I just wanted to see how you guys were doing, if there’s anything I could do for you.”

This has been very effective for me and for other students, people I’ve recommended to do this. They just do that and it turns out that people might have small pickup projects, or filling things, or they need a little bit of staff augmentation, something like that. It’s not going to be anything, probably not going to be anything to write home about a big project engagement that you can have a nice wide conversation with them and value price, and all of the stuff that I’d like to recommend the people do. It’s really just as a survival technique. You just take what you can get and get through while you’re waiting for more leads to come in through your normal pipeline where it’s high value tip stuff. You guys ever thought to do that? Ever had to do that or reached out to past clients to score a business?

Philip:           That used to be my go to move when my pipeline would get thin. What’s funny to me thinking about that is I would become aware that that was going to be a problem about three days before I needed the work. I’m joking about how short sighted I was. That’s how far I would look into the future, like a week ahead. I’d be like, “Oh gosh, this project wraps up.”

Actually I was billing hourly so I never really knew when projects would wrap up, which isn’t a buy product, billing hourly. It’s just you would see the revenue taper off. At a certain point you’d be like, “Oh, I really could use another client right now.” That’s one of the go to moves that I learned not through my own ingenuity, just somebody recommended it to me. It works. If people aren’t able to supply you with work directly, they might refer you to somebody else, because they’ve had a good experience working with you.

I personally use that and seen it work. I guess the other comment that I have about that, I’ve recently had a batch of mentoring students come through via Brennan Dunn’s DYFA Program. Part of what I did was had people tell me about how they’d get work right now. What I see is what I call the two Rs – repeat business and referrals. I see that a lot of people are already using this technique. Not to dismiss it or say it’s not useful, some of the people are already using this, they’re relying on this idea of just getting repeat work from previous clients. That’s a viable way to build at least part of your business. If you’re not using it, I think it’s a reminder to think if you could use that approach.

Charles:        Yeah, I’ve had it work out to where I’ve gone to a past client and said, “Hey,” I basically said what Jonathan said to say. From there, it turned out that, “Oh well, we don’t need you your right now but I have a friend.” That’s worked out.

Jonathan:      Yeah, that was going to be my next piece of advice is if that first approach doesn’t work, to ask for referrals through past clients or just to your network of colleagues. I think the trick with this is to give them the tools to know who to refer you to. You don’t want to just send out a blast email to everybody in your list and say, “Hey, does anybody know anybody who needs a web developer?” I feel like that’s way too vague. You want to say something more along the lines of, “Do you know anybody who has a WordPress site?” “Do you know anybody who has an e-commerce store?” Something that will trigger in the list an aha moment or a roll of decks moment, I usually call it. Like, “Oh yeah, I do you know somebody who has an online store, they have a Shopify store, or they have whatever,” or something.

It’s like positioning, it’s like a little tiny piece of positioning that you give them to trigger a thought of like, “Oh yeah, I could introduce this person I trust to this person I know who fits the category of people that they’re looking to work with.” Because if you don’t do that, then if I receive this email from you, this actually happened to me recently. Someone said, “Hey, I went solo, left my old job. Do you know anybody who needs, insert extremely broad general thing here?” I was like, “Yeah, you got to throw me a bone, everybody I know might need that. Who’s your ideal customer? Who’s your ideal client or buyer?” The person would say, “Oh, like a CTO of a SAAS.” I’m like boom, instantly, six people I know.

You got to give them some kind of trigger, whatever you want to call it, Philip probably has better words for this. You need to help them help you.

Philip:           Yeah. We talked about this a little in the last show we recorded, which you weren’t here Jonathan. I read this book, we get into specifics about the book but the guy introduces concept of asking people to go fetch, in a negative light. You gotta be careful about that. It’s easy to take your understanding of the world, which is like you have this picture of who could hire you, you understand how versatile your skills are, how many different situations they can apply to, you generalize that into this picture of who could hire you. If you use that in this type of context of asking people to refer you, it actually asks them to go fetch a lot of things. It asks them to interpret your general definition of who’s a good client. That’s asking them to do work, which lowers the chance that they’re actually going to do anything other than get back to you and say, “Sorry man, can’t think of anybody.”

There’s a couple of ways I think you cannot ask for people to go fetch and get a better results. Like Jonathan was saying, come up with some kind of trigger phrase that’s specific enough that like somebody with a WordPress website that sells products, or somebody with a Shopify store that’s complaining about their sales. Those are probably in the ballpark of accurate, specific enough trigger phrases.

The other thing you can do, I think a lot of people never think to do this. You can go to LinkedIn, do what’s called a second degree search and see who the people you’re connected to are connected to that might be good clients for you. You can ask for an introduction by name. You can say, “Can you introduce me to Joe Smith at this company?”

As an early stage freelancer, that never occurred to me. That seemed so just aggressive, and bold, and why would you do that? Part of why you would do that is cause you understand clearly who you can help. The other reason is just so you’re not asking that person to go fetch for you. You’re doing all the hard parts, all they have to do is agree to make the intro.

Jonathan:      Yeah, exactly. Make it easy.

Charles:        Yup, definitely.

Jonathan:      So much more likely to happen.

Charles:        I was just going to say, people’s minds work by association. They’re not making the association good client for Chuck, or good client for Jonathan. That’s why you have to give them these kinds of filters. It’s so that then it’s oh, use a Shopify. Works for a company that does XYZ, or has problem Y. That lines things up for them and it works along those same lines that their brain works on.

When I think about Jonathan, I think about other podcast hosts that I talk to every week, or I think about some of the other things that he’s told me about himself, about his kids, about his significant other, all of these things that I know about Jonathan, or that I know about his work. If somebody comes to me and says, “Do you have any podcast host who are experts in mobile stuff?” Then, I make the connection. If somebody comes to be and just says, “Do you have any co-host who are looking for contract work?” I’m like, “I don’t know who’s available.”

I get emails all the time from recruiters, “Do you know anyone who’s looking for a job?” It’s like, “Maybe?”

Philip:           Everybody is looking for a better job.

Charles:        Right. By making that connection, making it easy. Because, I don’t know. I guess I’m just reiterating the point that that’s how our mind works, is that we have all of these points and associations that we make between those points. Be it a concept of a job, or concept of family, or concept of different things. If somebody said, “Do you know anybody who has a dog?” I know Philip’s emailed us about his dog recently. Things like that.

If somebody was angling for an introduction to Philip and didn’t mention anything that I know about him, I probably wouldn’t make the connection myself.

Philip:           Yeah. I think you can’t really emphasize that point enough. In marketing terms, the phrase for this is thinking like a fisherman and not thinking like a fish. You need to think in terms of how the people you’re trying to reach see the world. I think the best example is saying, “Do you know any of these five people?” Or, “Would you be willing to introduce me to any of these five people?” You’ve already figured out that they know through their association on LinkedIn or whatever.

The other thing to think about is the fact that their inbox probably looks a lot like yours. It’s probably overwhelming. There’s a lot of stuff that they mean to get to that they haven’t. Maybe instead of asking for a bunch of stuff at once, break it up sequentially. Maybe your first email is just, “Hey, would you be willing to help me with an introduction.” If you get a yes to that, then you go to the next step.

Those are all example in my mind of thinking like a fish and not like a fisherman. Thinking how you can make it easy for people. It’s a very simple idea but I think when you take it to the extreme, you start doing things differently. Things start working more effectively.

Charles:        Yeah. It’s interesting too. This is essentially what I tell people when they start looking for a job, is basically to identify the companies they want to work for. Identify people in those companies that can help them get the job. By identifying specific people and then getting that warm introduction makes a huge difference.

Jonathan:      Yeah. Just think about if you’re going to hire someone to, I don’t know, clean your house or do landscaping, you’re immediately going to go look for recommendations. It’s like such a huge, or even a babysitter. You’re just going to ask around. That’s the sort of inbound approach, where I have a need so I ask around. You can do an outbound approach where you’re the babysitter. Instead of saying to everybody, “Hey, do you know anybody who needs a babysitter?” You say, “Hey, do you know anybody that has little kids under five.” It’s going to trigger so much faster for me cause I don’t know who needs a babysitter but I do know who has kids under five.

It sounds so silly when you put it like that. Because why wouldn’t I automatically think, well kids, people who have kids under five might need a babysitter. If the babysitter says it to me in that way, it’s too late. I already have five names in my head. Like, “Oh yeah. I can think of a few people I can introduce you to.”

Philip:           Yeah. It’s a bridge too far that try to fish for the need. You’re just fishing for the potential need.  

Jonathan:      Exactly.

Charles:        I was going to say, you set a bridge too far, I was going to say it’s an extra connection, it’s that second leap that is the barrier. It is more or less a bridge too far.

Jonathan:      Yeah. I saw a great sign the other day. It was actually a bad sign but I imagine what it could have been, which I think would’ve been a lot better. It was a store that fixed iPhones screens. The signs said something like, “You got a broken iPhone or whatever?” The obvious thing. What it should have said was, “Do you have teenagers?” Because they’re the ones that break the phones the most.

If I was driving by that sign, I don’t have a broken iPhone, or I don’t have teenagers, but I know my brother does, has teenagers that is. It might actually stick in my mind and have say, “Hey man, do you guys ever break phones?” He’d probably be like, “Yeah, all the time.” I’d be like, “There’s a store right by your house that fixes them. I don’t know if you looked at it.”

It’s such a dramatic difference to just flipping around the other way. This does not adjust to apply to scaring up work quickly, it applies to everything. It’s a technique that you can, I don’t know maybe Philip what do you think? It feels a lot less risky to do it in this situation because it’s not necessarily a huge identity changes, it’s just some emails you’re sending out.

Charles:        On that note, Jonathan, there’s a fantastic, two podcast episodes from this guy, I forget his name, I think it’s Dean Jackson, one half of the I Love Marketing Podcast Duo. He talks about when you approach people you need to have more cheese, less whiskers. You don’t want to look like a cat who’s looking ready, preparing to pounce. He gives this great example of a restaurant that was doing cold outreach. They were doing cold outreach, two restaurants to try to sell the marketing services. The normal approach would be do you need help with your marketing.

That’s the sign that you’re talking about, Jonathan, “Do you have a broken iPhone?” The approach he came up with was to reach out to these restaurants and say, “Could you accommodate a party of ten this weekend for a birthday?” What he found out by doing this was that everybody in an organization like a restaurant is authorized to make more sales. Got a lot more yeses to that first email. What followed from there was a sales pitch for marketing services that were around helping them get more birthday party customers coming in, which tend to be pretty profitable because it’s a big table when people are in a good mood. It was just a different initial approach. That’s what I’m reminded of, Jonathan, when you talked about that sign.

For some forms of outreach, I think absolutely you’re right on. It would be like, “Do you have teenagers who have phones and you wish that their phones lasted a bit longer?” Would be probably be a better approach than, “Do you have a broken iPhone?” For the sign maybe. Who knows what will work better for this street signage but for any outreach, I think you’re really onto something.

Jonathan:      Cool. I think that probably brings us to the next thing. Mentioned of a couple of times already, which is just straight up cold outreach which I used to be very much against when it came to selling consulting services. I’ve come around in the last year or two because if you believe in what you do, if you believe that what you do offers value to your customers, I think probably everyone who is taking money for their services probably does believe this if they think about it but they don’t think about it too often. If you believed that you are delivering a good ROI to your customers, it stand to reason that there are potential customers out there in the world who you’ve never met, who don’t know you, or don’t know about your services who are currently losing money they could be making by not working with you.

I draw the analogy of if you’re walking down the street and see someone with a broken leg, and you’re a doctor. You’re going to stop and say, “Hey, do you want some help with that broken leg?” They’re not going to be like, “Stop bothering me.” If someone’s in pain, they’re not going to ticked off that you emailed them to ask if they needed help.

I’m imagining a lot of people hear the idea of cold outreach and just think, “Oh I’m not a spammer, I’m not going to do that.” It’s really not spam if you’re not spamming. If you’re just sending an email to a person, an email that you wrote to a person, and you send it to that person, it’s not spam.

If you can pick some ideal clients, maybe through LinkedIn or wherever, or just walking around your neighborhood. Here’s a bunch of clients who can help. I’m a web designer, I noticed that this restaurant has a horrible website. I notice that’s it’s not that busy on Tuesday and Wednesday nights. Maybe I can shoot an email and say, “Hey, have you noticed that a lot of people use smartphones and that you’re not that busy. Maybe if we updated your site to be a bit more friendly on phones, it could have a positive effect on your business.” Whatever the pitch is.

I feel like so many people are afraid to just email, call, knock on a door of a stranger that they miss out on a huge potential market. If we’re talking about scaring up fast money, this approach works. It definitely works. It might feel super awkward but it definitely works.

Charles:        Want to dive in. I’ve been having a conversation with Philip five years ago. I want to tell you why he found that. He’s the guy who would have been like, “That sounds okay but no thanks, not for me.” Part of it is this feeling, if you’re a generalist which is what I was three, five years ago, you’re like I don’t know, who should I reach out to? To answer that first question, my advice would be, if you’re in major metro area, or even a mid-sized city, start geographically because that can create an affinity. Like, “Hey, we’re in the same city together.” That’s a way of artificially restricting the scope of what you do. If you don’t do that, it’ll be overwhelming. It’s like you could be anybody.

Maybe a sort of temporary artificial geographic limit to your search, or just pick an industry where you have some case study of previous success. Just temporary limit yourself to that, focusing on that industry when you do this kind of outreach that Jonathan’s talking about. Those would be two ways to make something that is totally overwhelming somewhat more manageable.

I guess the third tip would be just to use that LinkedIn second degree search. You’re looking for people that you have some connection with so that you could get an intro from them, which is kind of the previous technique that Jonathan was talking about. Sort of combining those two together.

Jonathan: I did one time do a hybrid. I don’t think it’s fair to call it completely cold outreach. I’m a web developer especially focused on mobile. I wonder if I went around, I have a whole bunch of colleagues, like hundreds, maybe thousands even. I’m connected to who I know, who I’ve worked with, who trust me for other reasons, for other things I’ve done in the past. Just communities that I’m in.

I went through their websites and found all the ones that were failing Google’s mobile friendliness test. I sent out a bunch of emails, I had tons of opportunities. None of them closed quickly, as quickly as I would’ve thought because I was reaching out to a group of developers who were all like, “Oh well, yeah, we know we need to that. We’re going to get around to it.” In that particular case, it didn’t scare quick cash but it did turn into a bunch of yeses. A bunch of people that were like, “Yeah, obviously we’re not going to get around to this.” Because six month later they’re still limping along with their desktop only website. They’re like, “Yeah, you know what, we’re going to take you up on that.”

It’s not really cold outreach because they know you but they’re not past clients either. If you’re member of communities like that, you can do it in a way that’s not infringing on the roles of the group like a lot of Facebook groups or whatever, very anti self-promotion on that kind of thing. This would probably be something you do over email and say, “Hey all you people, I’ve never worked with you but you know me and you trust me. I do this thing and I can see that you need this thing. Maybe we should jump on a phone call.”

Philip:           That really forces me to say it’s in my contracts, you’ve got to follow up too. If you’re going to do this at all, don’t just stop at one email. We had a whole episode about that last time. It was about cold outreach and follow up. You got to follow up. There’s tools to make that a lot easier.

Charles:        It is so true. Occasionally, I’ll have people that bite on the first email but most of the time it’s the fourth or fifth.

Jonathan:      Friend of the show Kurt Elster had a technique that he used to really bootstrap his business Ethercycle. When he first opened up shop, he wrote up, I’m going to say a hundred handwritten letters, put them in envelopes. Just totally handwritten, no stamp or anything, just went around and slid them under the doors of businesses that he wanted to have hire him, or potentially start a relationship with. He said it was wildly effective at getting people to call him and setting up appointments and actually landing some business very quickly. I think he has a post about that, perhaps we can link to on the show notes.

Charles:        I think that’s interesting because it’s something different. Most people are used to the either the flyers that come in the mail, depending on the business area, or getting the email. It’s really easy to just ignore them as junk. To have something slid under your door, or have something interesting to show up that’s not just a flyer. Something that’s at least going to stand out.

Jonathan:      Right. It’s another kind of cold outreach. I feel like it’s just so different that it’s going to raise somebody’s eyebrows.

Philip:           Again, referencing last week’s episode, we’re talking with Kyle and I joked about using a birthday cake as a way to do that that we recorded on Tuesday. Wednesday, I had for Dev Shop Marketing Briefing, I had Jake Jorgovan give a presentation to folks for my list about outbound marketing. I was like, “Jake, what are some other creative ways you’ve seen people do this?” He listed a couple things, he list birthday cake. I said, “No way, you’re kidding me.” He said, “Yeah.”

They did a campaign where they sent birthday cakes to some very tightly screened, potentially very awesome clients. A cake had a URL on it. That pointed them to a website, a landing page with a video, “Hey, I guess you got the cake. Here’s why we’re reaching out to you.” That kind of thing. He said it was quite effective in getting some meetings.

If you’re short on cash, that may be a little expensive way to do things. To me, just points out the power of it being clear about who could really benefit from your services. Physical mails, great. You can be very creative I think without being creepy and really make an impact on people in a way that Jonathan’s talking about.

Charles: One other way that I’ve done some of this is just on the podcasts. I’ve gotten up and said, “Hey, I’ve got some availability.” If you already have an email list or following in some other way, blog, YouTube, whatever. You have a way of just letting them know that you have availability. A lot of times, that works out well where they’re used to hearing from you, they consider you to be an expert. They’re willing to take a chance on you.

Jonathan:      My first, it was my first success for the use of online marketing was when I was transitioning into going solo. I put an ad on Reddit. When I say an ad, I don’t mean an ad I paid for. I just put a post on Reddit and kind of described what I can do, and my approach, and got some work out of it.

Hacker News has a, I guess we’re getting a little bit away from short term cash. Hacker News has a, you can post a job posting, or not a job posting, but you can post about yourself like one day a month. They allow that. There’s other online venues that may, I know we’re getting a little closer to something that’s potentially bottom feeding type stuff. I think there’s certain online venues that might be a little more specialized where you could post that you have availability. That might be something to consider.

Charles:        If you know where people congregate, then yeah definitely. If they are the people that you want to serve and you know that some of them are likely to have the pain to consult.

Jonathan:      I heard one, you sense for a sort of flirting with a bottom feeder thing, like I’m not going to all the all way down to Craigslist, or Upwork, or anything like that. I did a coaching session with someone the other day. I asked a similar question to Philip, how do you get your work now. He had a noble answer that he said was very effective for him at getting good work, not junk work, which was that he would do Twitter searches for people who are looking for developers who do what he does.

On Twitter, you do a search for, it was something like anybody know an R developer. I just test this. Yeah, I wonder how well this would work. Does anybody need a JavaScript developer? Sure enough, five or ten people looking for JavaScript developers popped up like right now. People looking right now, for JavaScript developers popped up.

You can click on their profile and see roughly the size of their business, or if it’s the kind of business you want to work with. It’s the only way I’ve ever come across that seems like an effective way to immediately find someone who’s in need of your horizontal specialty. There’s a problem with having a horizontal specialty like, “Yow, I’m a Node.js developer,” something like that. Is that you never know when someone needs you. There’s no obvious outreach signal until I heard this. This is fairly reasonable to imagine someone jumping on Twitter and asking their followers if they know a good developer that does this thing. If you find somebody’s looking for that, then boom. Bonus points if you have mutual connections in your followers.

Charles:        That’s kind of interesting.   

Philip:           Super interesting. I’m trying to think if I have ever, again, back three or five years ago, I tried a couple of times looking at job listings for FTE jobs and saying, “Hey, would you rather hire somebody who has more flexibility. It causes scales up and down based on your need for their services.” Basically trying to upsell them or side sell them on hiring a freelancer instead of an FTE. Never was able to get that to work. I don’t have a ton of data points, just tons of category of things that maybe seem good ideas that I’ve never been able to get work. That’s definitely one of them. Seems like if someone wants an FTE, they want an FTE. They don’t really, they’re not willing to think outside of the box for a freelancer.

Jonathan:      Or the person might not even have the authority to make that decision.

Philip:           That’s probably more likely it.

Charles:        We’ve been talking a lot about just finding that next client, or that next contract quickly when we absolutely need to. Are there other ways to make money that aren’t finding that next contract?

Jonathan:      I’m glad you asked. If you have existing clients but the cash flow, for whatever reason you’re not meeting your cash flow needs, you will not hear me utter these words very often. This is one of the few times I will utter these words, you could offer them a discount and say for prepayment. It’s pretty much the only thing I’ll ever offer discount for which is that, I’ve done this on a couple of occasions where I’ve got a real good long term client who’s been paying me well on a monthly basis, like clockwork. I’ll say, “Hey, I’ve got a big expense coming up. It would save me a lot of trouble if you guys could pay me in advance for the next six months. As an exchange for that, I’ll give you a healthy discount.”

It moves the payment way forward into my dead zone of cash flow or my too low zone of cash flow. Obviously, I make less money in the overall term but there’s the time value of money. You need the money when you need the money. It might be too late six months from now.

I find that it’s like when you’re having a famine cycle and you’re going through all the complexity that entails, it reminds me of a situation when you are running your car engine with no oil. It’s more expensive to run your car engine with no oil because it’s damaging the engine.

The same exact thing happens when you don’t have sort of lubricant in your business which is you’re racking a credit card debt which increases the amount of money, you’re paying an interest, you’re bouncing checks, you’re spending a lot of time moving money around between accounts to cover expenses that are coming up. Like, “Oh when’s my cellphone bill going to hit?” You end up spending all of this time. It reminds me of, I know I’ve got no oil in the car so I’m going to shut the engine off while I’m going downhill. You end up with all these strategies that help you run the car with no oil.

Charles:        It’s a whole lot more work.

Jonathan:      Ah, so much more work. It’s so much easier when you just have a pile of money sitting. You never have to worry about it. If you’ve got six month of runway in your bank accounts, it’s just so much cheaper. It’s literally cheaper in the long run, plus it’s so much easier. The stress and all of that stuff.

Even though in the situation where I say to a retainer client, “Hey, instead of monthly how about I give you give you 15% off if you pay for six months in advance.” They already trust me. They already know they’re going to keep me through the end of the year anyway. They’re like, “Yeah sure, let me run it up the flagpole and see if we’ve got the cash flow.” They’ve got the cash to do it. I’ve done that a number of occasions and like yup. Send you a check, it’s a lot of money. Of course they need to manage it carefully but at least you’ve got your oil. You don’t have to have those coasting the engine off strategies.

Philip:           Jonathan, have you ever had any success getting paid a little earlier or maybe significantly earlier to, oh you can book this is an expense this tax year versus next, or does that get a little bit too tricky to pull off?

Jonathan:      I’ve never done, I’ve seen people do that but I’ve never done it. I have had people approach me about it. Clients saying, “Hey, would it be okay if we paid on December 27th instead of on a normal like January 4th, or whatever supposed to be.” That’s fine, I haven’t done it as a strategy.

It just occurred to me that a lot of people listening are probably billing by the hour, what a shame. The way that you can pull of the same thing is to say, “Hey, how about I sell you a block of 80 hours. You know we’re going to be working on this project for the next three months at least. How about I sell you a block where you pay me in advance for 80 hours or whatever. I’ll give you 15% off the overall.”  You don’t need to have a retainer client to pull this off.

Charles:        Yeah, it’s funny, the strategy. I just barely did it with one of my sponsors. They basically said, “Yeah, we only have this much budget for this quarter.” I said, “Fine, done.” Worked that out. People will work with you if you bring it up and present to them in the right way.

Jonathan:      Yup, I don’t think devalues you. Using the word discount scares me. I don’t like it. It devalues the work. It makes people think about the wrong things. If you’ve got an ongoing relationship with somebody, it’s clearly beneficial to both parties, it’s understandable why. Then, I think it’s a decent strategy, decent tactic for situations when you find yourself out of oil.

Charles:        Besides getting prepayment, or finding new clients, does it make sense to try and create a product, and try and sell it? Anything like that? It seems like some of the ideas that are coming into my head for those take a little bit of time as far as it’s not something that I can probably launch today and make the money I need tomorrow.

Jonathan:      Yeah, you’d need to have an audience and an email list and all of that sort of thing. Do a pre-sale or pre order. If you have that, then great. I can think of a bunch people, including Kyle from last week. Just a lot of people that just say like just throw something on Gumroad and say, “Hey, I have price pre-sale. It’s going to be this, it’s going to be that. Once its launched, the price is going to double permanently.” That sort of thing. He just did this. He’s pre-selling a book. You could do that but no one’s going to buy it unless you already have some kind of sophisticated things in place.

Philip:           I’ve got something that might be a fit there. This comes up with my mentoring students who are typically doing quite a bit of deep market research to get to this point. It maybe that some people are at this point just because of their experience.

My mentoring program is quite small, so I’m talking about small numbers here. A fair portion of them develop what I have started to enforce to call them micro service, cause I don’t know any word for it. It’s something like similar to Brennan Dunn’s road mapping concept. Similar to just any kind of service that can be sold stand alone without incurring any long term obligation. It delivers substantial value with not alot of delivery cost on the freelancer side of thing.

We’re talking about things like audits. I’ll give some specific examples. If you had some expertise with say AWS, you could do a cost control audit. Come in and take a look at AWS installation. Make sure that they’re doing everything they can to control cost.

Something like that has a lot shorter lead time for selling it. It requires some trust to make the sale but it doesn’t require as much as, “Are we going to pay you $50,000 to develop a piece of software?” The profit can be high especially if you get better at delivering these things over time. That may be a product like thing that some of the folks listening could develop and use as a way to fill in those weak cash flows spots, some kind of micro service.

You sell it in one of the ways we’ve already discussed. Again, it might be a move away from just buy my time towards buy this thing that’s well defined, that has real value that also happens to be pretty profitable for me to deliver to you.

Jonathan:        Yup, that’s a great point. I can think of a number of people, students and otherwise, who have spun off a product type service and had sales within a first month using just standard, cold outreach and networking. The thing is so defined. It’s easy for people, potential customers, and word of mouth of people to identify quickly if it’s of any interest to them or someone they know.

Like you said, for it to work, you really need to know a little bit of sophistication. It’s a great thing to do.

Philip:           You do the one thing I can maybe recommend that doesn’t require some kind of research or the type of experience that means you probably you won’t be in this situation, of needing short term cash. One thing I can recommend is that most people are bundling something with their services that they can unbundle and sell separately. That tends to be usually an easy candidate for this micro service, product type service, road mapping, whatever you want to call it.

That’s the pattern I notice that tends to work the most reliably is unbundle something that has value but you’ve been essentially bundling it with something else, or giving it away for free. Maybe start there. Jonathan, what patterns have you seen with successful micro services, product type services, etc.

Jonathan:      Road maps are a big one. A marketing road map is one that I’ve seen worked very quickly where somebody is just overwhelmed with all of the marketing options they have for their business. The freelancer’s a marketer. Instead of saying, “Does your restaurant need marketing services?” You say something more along the lines of, “Are you unsure whether or not your marketing’s working, or are you losing money on your marketing, or are you wasting time on marketing activities that aren’t delivering any results? Maybe you just focus on a couple instead of being overwhelmed by the two dozen options that you have.”

Coming up for maybe $900, I’m going to sit down and talk with the owner. I’m going to go through your website, I’m going to go through all of the existing marketing materials. I’m going to ask you what your goals are, what your challenges are. I’ll come up with a marketing road map that will give you exactly, these are three things that you should focus on, these ten things are okay but they’re not going to be huge ones for you. Focus on these three things, you can do it like this and this, you can get as detailed as you want in the road map itself. Almost certainly, they’re going to say, “Okay, great. We like this.” They’re going to ask you for price for you to do it for them.

Another one that I’ve seen is setting up continuous integration for people. Another one I’ve seen is for start ups, or dev teams where they’re running so fast that they don’t have time to really set it up. Nobody really wants to do it. It’s not like you’re going to come in and do their iOS or web development for them. That’s the stuff they want to do. No one really wants to set up continuous integration servers and that sort of thing, it’s just not fun. It’s a thing you do once and pretty much forget about. It’s the thing that you could do as a service.

Another one is database performance check-ups, mobile slight tear down, so you could do slight tear down for what. Here are the ten things you should change about your site to make it more mobile friendly. That’s what I used to offer. You could it, these are things that your developers can do. One day, they’ll make your site drastically more friendly, finger friendly on mobile devices.

These little things like Philip said, these are things that people probably do as the first few steps of any implementation project. They sort of give them away for “free.” It’s not really free because you’re probably getting paid by the hour to do it, but they are much more high value than the implementation part. You can break them off and optimize the delivery of them so that your profits increase over time.

Anyway, it’s something you probably already have expertise at and something that you could break off and fixed price at, anywhere from $900 to $1,500. I guess it depends on the thing, it depends on the industry. It needs to be impulse purchase for your customers. You want a price at that sort of impulse purchase level, where they could just put them like a petty cash, credit card, something like that. They don’t need a lot of approval.

They get their answers and perhaps they move forward with you with the implementation. Or at least ask you for proposal. I didn’t mean to get to my product type service sales box, but I guess I did.

Charles:        Shame on you.

Philip:           I think that’s the bridge from I’m a generalist type bill hourly and holy crap I’m going to have to move in with my sister-in-law if this continues. It’s a really viable incremental step out of that situation into something where you’re more in-charge of your business. I think it’s super on topic.

Charles:        It also moves you out of the hourly billing into the product billing. It clears up a couple of things for you that make it hard sometimes.

Philip:           Yeah, absolutely.

Charles:        I just want to reiterate that a lot of these options that you have, you have much better options if you’ve been doing a lot of the right things beforehand. Most of the time when I run up on the situation is because I wasn’t marketing for a while. At the same time, because I’ve been involved in the programming community around here, I’ve been involved in some online communities, or because of the podcast, or some of the other things that I’ve been involved in. It makes it a whole lot easier to have more people to go to, to take advantage of some of these strategies.

I just want to put it out there that A) don’t let your marketing slack off. B) Make sure you’re going out and meeting people and keeping these options open and available so that when something does happen, you have the widest possible group of people to go to who actually know who you are and trust you to do what you need to get done. That way when you’re scrambling like this, it’s that much easier to actually find work.

Jonathan:      Yeah. Breaking out of the feast famine cycle is the real solution but how do you, when your ends do.

Charles:        Yup, sometimes you’re just there.

Jonathan:      Yeah.

Charles:        Alright, well. Should we do some picks then? Philip, what are your picks?

Philip:           I got some picks, three picks. We were talking a little bit up about referrals. I’ve got to recommend an Alan Weiss book here at this point called Million Dollar Referrals. I’m sure there are others out there, I just haven’t come across them. This one does, I think, a really good job of exploring. How is it that you move away from a referral being to something that happens to you and move towards actually encouraging referrals and having some kind of system for making them happen. It’s a good book. All of Alan’s books, it has some overlap with all of those other books, but it’s a good book.

I think that’s a good pick for people who are interested in getting more out of those two big R’s that I see so prevalently in freelancer businesses. I don’t say those any kind of negativity. I just mean, most people are so reliant on referrals and repeat business. That’s fine, I want to see people add a third leg to that stool which is something they control. But to an extent, that can be referrals.

The second pick is that podcast which I’ve seen show up. There’s like a short form form version that I’ll link people to on Duct Tape Marketing’s blog. A longer version on an episode of I Love Marketing. The idea is that when you reach out to people, you probably have a lot of whiskers in your outreach that you don’t realize are there. If you just think about it from the perspective of how can you take away the whiskers and add a little more cheese, your outreach will probably become a lot more effective. I’m just going to refer people to those two blog posts where that concept is explained really well.

The third pick is a SAAS called Reply App.io. It’s used to automate email outreach. If your back’s against the wall and you need some work, you probably need to be doing email outreach manually. But at a certain point, you may see that it’s so effective that you want a tool to automate it. There’s a whole family of tools that do this. They all have different strengths and weaknesses but Reply App is a good one to start with because it’s got a free playing that’s actually useful. For free, you can reach out to 50 contacts a month and Reply App will automate an outreach sequence. Beyond that, you have to pay, but it’s a nice way to test the waters in terms of doing something that I know is uncomfortable for a lot of people but can be super effective. That’s my third pick. That’s it for this week.

Charles:        Alright, Jonathan, what are your picks?

Jonathan:      I’ve got one which is Blair Enns Prospecting Email. Blair Enns from winwithoutpitching.com. He’s got a great prospecting email that you could use in Reply App to reach out to whoever you’re prospecting to, whether it’s people you know, people you’ve worked with, or people who have never even heard of you. I don’t know if it’s not worth really going through here but if you go to winwithoutpitching.com/prospecting-by-email/, put it in the show notes. It’s a great template to start out for that. If you don’t know what to write, it’s a great starting point for you.

I have one other pick. As we’re recording this, it’ll be tomorrow so I haven’t done it yet but at the time you hear this, I’ll have a new webcast called The Hourly Trap, which will speak to some of this migrating out of this feast famine cycle so you don’t have to be scrambling for short term cash. It’s in that video that you will see, I go into the mechanics of why value pricing works and why hourly billing really doesn’t work. It can be made to work but why it encourages bad things to happen. That might be of interest.

Charles:        Alright. I’ve got a couple of picks. The first one is Freelance Remote Conf, which was this last February. Videos are up. If you want to get them, go to devchat.tv/conferences, you can click on the link there. You can get an after the fact ticket. It was a really excellent conference, lot of great information. I’ll just put a link to the actual conference in the show notes where I’ve got the page up. You can just buy a ticket, watch them off of the devchat.tv website. I’m also putting on some other conferences, you can check those out.

Most of the other stuff is doing is focused around new programmers finding jobs, which is not really this market. But if you know somebody who’s a new programmer, boot camp grad, send him over to devchat.tv/webinar. Let’s see what I’ve got going on there.

I guess my final pick is I found a plug in for Slack that allows you to do hangouts. You just do a /hangout and then it opens up hangouts. Once you start to hangout, then it posts it to the channel that you’re in, or to the chat you’re in if it’s just you and one other person. It’s really handy. I’ve been doing some meetings and stuff that way. I’m digging it. The Google Hangouts plugin in for Slack is my other pick.

I guess we’re done. We’ll go ahead and wrap this up. We’ll catch you all next week.

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