Update on the business
I have been focusing on writing posts for spread betting a lot lately, so I thought it was time to update on my progress with turning my self employed business into an asset, and me into a business owner.
You may remember that I had decided to reduce the number of clients we had, in order to remove those that were not be financially viable when employing other people. These clients tended to pay us under the market rate and we were really working for them for historical reasons. We gave all our clients notification of our price increase (about 1.5 times our old rate). This is still not full market rate, and is less than we would charge new clients.
Only the very largest of our clients could deal with the increase to our new rate. We tried to help our clients wishing to find alternative providers to find someone new. However on all occasions everyone else in the market place is charging as much as our new price or more.
This has left our old clients in a bit of a quandary and they are trying to find other self employed people who will work for much less than market rates as we were doing, but is a great confidence builder for us as we now know we are well priced in the market and not under priced.
This has left us free to focus on our much larger clients who understand the need to charge competitive rates, can afford to pay us and who value our service regardless of the increase in cost.
Our remaining clients have at times been very helpful but as I detailed in an earlier post have had problems changing their perspectives of us as a freelance company to a proper business. It has taken time, but we have proved that we can manage bigger projects well (better in some cases) with contract staff instead of us doing all the work. They are still not completely confident and some big projects that they have had, they have given to less able companies, but more established, so I know we have a long way to go to convince them.
An example is where one of our clients asked us to scope a big project for them, we put together the plans for the project and got excited about the new challenge. They then took our plans and gave it to a less able company and gave them all the work! I asked why they had done this and they said they feel the other company is more established and if something goes wrong more liable. I felt this was extremely rude to us, and I declined to work on the project at all as a paid consultant as they had asked. They wanted my skills to guide the other company as they were not as able and pay me my day rate. Basically they could accept we were a viable company and only wanted me as a freelancer still, this was very frustrating in the short term.
However, not one to complain or make a scene, I quickly realised that the way forward is to find new clients who meet us for the first time as a business.
By freeing ourselves of all clients who have not been able to adapt either financially or psychologically has left us in the situation where we are earning less then we were for ourselves but have freed up an enormous amount of time for strategy, growth and winning new clients.
(I have made sure we are earning just enough to cover our basic outgoings to ensure we do not reduce our net worth or asset buying capabilities)
For the past month or so, we have been working on a brand new business plan and structure for our new web site. The site is nearly finished, but the textual content still needs writing as this will come in part from our business plan when it is finished.
The plan now is to finish the planning, update the new website, get our promotional items together, and possibly recruit a new business / sales director.
We will look to start getting our new clients after my first child is born in September.
As soon as the next phase is complete or if there are any more interesting steps along the way, I’ll write about them here.
