PODCAST TRANSCRIPT - EPISODE 141

SETTING YOUR SALARY AS A SOLOPRENEUR

Please note: This transcript was created with the assistance of AI technology. While we strive for accuracy, the text may contain errors and should be verified against the original source for critical uses.

If you've taken either of my courses, either the simple sales blueprint or revenue on repeat, you know that one of the very first things that I like to do is walk you through a detailed calculator, so that you get totally clear on what you need to charge in order to be profitable. And I do that, because there is no way that I can make a recommendation to someone about what they should charge, without knowing a lot of different things about their business. There's lots of variables that go into profitability, I can create pricing for someone that will make them profitable. But in order to know what profit means to them, I have to know the kind of business that they run the expenses that they incur in their business, all those kinds of things.

Pricing is not a one size fits all, situation, and neither is profitability, you know, I might make $100,000 a year and be barely profitable, and you might make $50,000 a year and most of that is profit. It's totally, you know, it's dependent on every all kinds of different factors. And one of the biggest factors in that is how much you want to pay yourself as a salary. And this is something that kind of surprised me, too, it surprised me to learn that this was something that people had a really hard time answering. It's one of the first lines in the calculator, like, what's your desired salary? And I routinely get a fair amount of pushback about that, where people say, Well, you know, I don't know, what should I pay myself, or what do other photographers pay themselves or, and I get this more frequently than you think. I hear people say, I, you know, I don't really need to pay myself, I'm, I'm just happy for the business to pay for itself. And I'll I'll happily accept any extra money that comes in what you are better people than I or your trust fund is better than mine. That is a wonderful situation to be in.

But it is a it's strange to go through all the work of running a business, to not have any sort of goals for what money you're gonna make. And if I believed that those people were really just like swimming in money, and didn't need to make any money, then I guess I wouldn't be bothered by this. But the fact of the matter is, sometimes I see those same people who are, who feel unwilling to put $1 value on, you know what they'd like to earn, then they turn around a couple of months later, and they're complaining that no one's booking and they're stressed or somebody didn't, you know, pay them or whatever the case may be. So like money is clearly not a non issue for them.

And so today, on the podcast, I want to dive a little bit deeper. You know, we're here at the beginning of the year, a lot of people spend time at this time of year adjusting their systems, upping their pricing, all those kinds of things. So I figured this would be a really good time to have like, a deep heart to heart on this subject of how much should you be paying yourself.

03:47

Most of what I talk about when it comes to pricing is either the psychology of pricing and you know how you can make it easy for your clients to say yes to you, yes to hiring you, yes to paying you all those kinds of things, or the basic nuts and bolts of like knowing and applying the numbers that are applicable to your business, kind of like the calculator that I'm talking about, like just very practical pricing advice.

And even though I know that that's scary for a lot of people at first, most of the time I find that once we dive into it, it's not only is it more straightforward than they think it is. It's also it's empowering. You know, once you know those numbers and you say, look, in order to be profitable, I have to charge this amount of money. Yes, it's a leap. It can be hard and growing pains and all those kinds of things but but it is right there in black and white in front of you and that does make it easier. But this business of paying yourself and setting your salary is a little bit more nuanced, a little more complicated, right? Obviously there are the basic nuts and bolts to consider things like your household expenses, your tax rate, your insurance costs, all the stuff that you you know, need your salary to pay for But there's also this other component of setting your salary that has to do with assigning value to the time and energy you put toward your job. Which is where a lot of people get tripped up.

If you go apply for a job in an office somewhere, yes, you need to make a certain amount of money to afford your rent or your mortgage. But you generally don't go in hoping for the bare minimum to be offered, right? You want them to pay you more than that double that triple that whatever like the the more the better in terms of what a company is willing to pay yourself to pay you. But you are a company and you pay yourself. And so hopefully, you are willing to pay yourself more than just that bare minimum, right.

But somewhere just north of that, barely covering their costs number, a lot of photographers hit this mental block and don't want to ask for more or don't want to pay themselves more. I feel like they're somehow hoping that that money will just kind of fall into their laps. But what it really comes down to is that I think a lot of people feel conflicted about asking to be paid good money, doing something that they love. I don't know if that's an artist thing, or it's a woman thing or, you know, bigger cultural issue or what, but I am here to fight back against it, because what I see it leading to his frustration, burnout, shorter spans of time that people are willing to be photographers, people who are not saving money for retirement, things like that they're painting themselves into a dangerous corner. And you know, in the end, that results in fewer amazing artists out there doing their work and putting their beautiful stuff out into the world. And this is really a mental issue, right?

06:59

As if there aren't enough hurdles to overcome when you're running a business, your brain jumps in and tries to sabotage your success with this, like set of limiting beliefs about money. And I know that I talk a lot about knowing your numbers and your profit and money and all that sort of stuff. But the reality is, while monetary success is rooted in numbers, you really do have to go deeper than that you have to dig into your attitudes and your beliefs about those numbers.

So when I was thinking about talking about what you should pay yourself, I thought about, you know, walking you through the nuts and bolts of how to tally up your expenses and pay yourself enough to cover them. But that is really the easy part of creating a salary. Right, you all know how to do basic math, basic addition is really all that is. So I figured that the more valuable conversation here would be about those deep seated beliefs and feelings that you have about money that are probably stopping you from making more of it, I want you to be able to confidently set a salary number that is not the bare minimum, but that actually affords you a rich life. And the reason that it's valuable to talk about your money blocks is that how you feel about money and about yourself and about your business ultimately shows up in your decision making process.

The decisions you make in your business, you know, how much money to charge for your services, what to spend money on in your business, how to talk about money and prices, to your potential clients. All of those things play a huge role when it comes to your bottom line.

So before you decide what to pay yourself, where to set your salary, or if you're one of my students, before you decide what to put on the desired salary line of your pricing calculator, I have come up with a list of six statements that I want you to think about and make peace with. Seriously, like if you can work on getting yourself to be able to say all of these six statements confidently and honestly, you will absolutely see that reflected in your bottom line. So we're that's what we're going to talk about. We're going to talk about these six statements.

The first one, we're just gonna clear the decks and that is I forgive myself for my money issues. And I say that because it's like mom guilt, right? Like I feel guilty about feeling guilty. It's silly. We all have issues, it's part of being human. And most of us the vast majority I would wager have some amount of money issues. We have these beliefs that we learn from our parents or that we like you know, somehow absorbed from culture, whatever it is, and some of those are positive and some of them are negative they are causing us to to make bad choices, or they're, you know, they're limiting us from playing a bigger game. And there's no use, you know, beating ourselves or our parents or anyone else up about them. But there's also no reason to let those issues define us and our businesses going forward, we have the ability to overcome our money issues.

We are, you know, we're human, we're fallible, we're going to have them, but we do have to do the work, right, whatever your money issues are, you can move on from them. And instead of wasting time feeling guilty, or shaming yourself or any of that stuff, I want you to just forgive yourself, and kind of face the rest of these with a commitment to working through them.

Which leads me to number two, the second statement, and that is, I am committed to identifying and working on my money issues. So again, we're gonna get a little woo here, and we're gonna say that saying this out loud, or writing it down. And committing to it really is, does have that like powerful ability to help you get there.

Your money blocks are the thoughts and beliefs that you have about money that aren't serving you, we've all got them, a lot of them run really deep. Many of us, for instance, have the false belief that financial success and hard work are directly linked. And that leads a lot of us to burn ourselves out by working harder all the time, rather than taking a step back and trying to learn how to work smarter.

Another common money block is around greed. This is one I see a lot. You know, people who think that other people who want to earn more money are greedy, or if they want to earn more money, they are greedy. And that's what is causing them all this stress about putting a reasonable or a reasonably big number in that desired salary line. That is false. I mean, some people are greedy, sure, but plenty of people are not greedy. And it's okay to want to make more money. And that doesn't mean that you're greedy. You know, maybe you're making a bunch of extra money because you're going to put it toward charitable causes. Or maybe you're you've got like medical bills for your child that you need to pay for. It's not greedy to want money for that. It's also not greedy to want money to protect you. In a situation where a bill like that comes up. It's also not greedy to just want to have money in the bank so that you can retire and go travel and do whatever it is that lights you up. Our lives are short, we do not have to toil and live in poverty in order to make them meaningful.

Money is one of these things that is just just a tool, right? It can be amassed by good people, it can be amassed by bad people. And it can be used for good or for evil, no matter how high. The number is, what you pay yourself for your work does not make you greedy. However, if it's too low, it can certainly make you needy little mom joke here for you. The first step in removing your money blocks is just figuring out what they are right. So the way I like to do this is you just take a piece of paper or open up the Notes app on your computer. And at the top, I want you to write I believe that money dot dot dot. And then I want you to set a timer for like 10 or 15 minutes and just brain dump everything that comes to your mind when you think I believe that money. I believe that money grows on trees, I believe that money doesn't grow on trees.

13:53

You know, anything along the lines of when it comes to money. I believe that money is hard to make. I believe that you know, money requires hard work. finish that sentence in as many ways as you can that you think you know that are true to you. And then once you're done, look through them, find the patterns, find the negative statements that you've made, and figure out how you can transform those into something more positive. And then work on you know, repeating those things to yourself. Write down the ones that really stick in a place where you can see them so that you can make sure that you are not letting your subconscious dictate the like the tone of the conversation.

The third statement that I want you to embrace in your life is I don't have to do everything in my business. And this is tied to profit and salary and all that sort of stuff. I will talk about that in just a second. But this is one of those mindsets that's particularly hard As a solopreneur, and most of us are solopreneurs. Many of us most of us, I would say, initially at least tried to bootstrap our businesses entirely. Right? You kind of do it all yourself, you build your website, you run your, you know, you do all of your own bookkeeping, all that sort of stuff. And that's totally fine.

Photography is an unusual business in that the startup costs are relatively low. And so it can be bootstrapped. Very few people can just like, dump $100,000 on the counter and open a restaurant or whatever. $100,000 is probably on the low end of what would cost to open a restaurant. So they take loans, and you know, there's sort of debt built into it. But we as photographers can start a business that we is totally self funded. And that pays for itself as you grow. And that is fine. Except that it can quickly create this enduring belief that you can't, or you shouldn't afford to hire people to help you do things in your business, like bookkeeping, and editing and design work, the stuff that's not your zone of genius. It's also easy to believe that there's no reason to hire someone else to do something because you are technically able to do it yourself. You've been doing it for a year or two years, right? So why would you? Why would you pay somebody else to do it?

And the thing is, outsourcing frees you up to focus on the things in your business that only you can do. Like I said, that zone of genius, and that is the stuff that will ultimately move your business forward. If you are spending hours and hours each week, reconciling your books or backing up, you know files or sending hundreds of emails, you're not spending those hours improving your skills as a photographer, or educating yourself on better ways to serve your clients. That is a it's a sneaky one, because you think you're saving money. But in the end, you are spinning your wheels, you're wasting time and and you're also depriving someone else of the opportunity to make some extra money by doing what they do best. Whether they're a bookkeeper or graphic designer, or whatever else, this is a stressful one for people. And I always like to remind you, it doesn't always have to be a person, you know, people are a little bit tricky to hire, and train and all that sort of stuff.

I do understand that that can be a, a big, it can feel like a big step. So if you're anxious about that, I would suggest that you start practicing your outsourcing by finding software solutions, I got started with a CRM back in 2014. And it like changed my whole life, it certainly changed my whole business. But it really opened my eyes to just how much I was trying to do manually. And how much that was costing me. I think literally the first, I don't know, three days, within three days of having my CRM setup. I had an inquiry come in, and I was able to, you know, send her an invoice and we got on the phone, we talked, she was like, great, I want to hire you. I sent her a contract and invoice all that stuff with like the press of a button. And she had it returned to me within an hour and there was money hitting my bank account. And I was like, Oh my gosh, because at this point I at that point, I was sending people, you know, a contract that I wanted them to like sign and send back to me and they were mailing me checks and all this stuff. And it was it just changed everything.

18:49

So yeah, if you are if that if that's more your speed, go there. First, you do not have to do everything in your business. Once you are free to spend time on your business doing higher level things, but a lot of people push back on this and say, Well, I don't have that many photography clients anyway. So I do have extra time in my business to you know, do my bookkeeping or whatever the case may be.

And that leads me to state a number four, because I actually have something that I want you to be spending time on in your business that isn't photography. And that is that it is important to dedicate time to work on your business. I'm going to rephrase that the statement that I want you to say is it's important to dedicate time to work on my business. Now. scheduling time to work on your business means taking time to intentionally consider how things are going and how they can improve. So you might spend some time researching new software or systems or processes, right like the CRM thing that I was talking about. Does Finding and setting up a new CRM take time it does. But you will have more time once you have made time by offloading other items on your to do list.

Learning is always a good thing to be doing and spending time doing. And this dedicated time is a great time to, you know, take that online course or listen to this podcast. But I want to point out something that is a very important distinction. The fact that you're listening to this podcast right now means that you are obviously already dedicating some amount of time to, you know, trying to learn about your business or learn new things for your business, which is great. However, podcasts in particular, but like YouTube videos, all those kinds of things can be tricky. Because you feel like you're working on your business, when what you're really doing is you're just passively consuming information, right? Do you sit at your desk and listen to this podcast with a notebook and then like, turn, turn the headphones off and immediately take action. If you do that is awesome. But most of us probably don't, right, we're walking the dog, we're doing the dishes, whatever it is that you do while you are listening to podcasts, it's great that you're getting this passive in information.

But in order for it to really qualify as working on your business, you have to then do the work, you have to schedule an hour after each episode where you meditate on the lessons that you've learned. And you consider how they apply, or how they don't apply to your business. And then you take action on them running a successful business. And I mean that from both a financial perspective and also like the job satisfaction perspective. running a successful business means taking the time to invest in yourself and invest in your business.

You can hire a coach, you can attend conferences, you can take classes, hey, you could even sign up for one of my classes, you could sign up for the free simple sales masterclass where I teach you everything there is to know about the simple sales system, that is definitely a great way to work on your business. But whatever you do, you do have to set aside dedicated time. Even if you don't have anything specific that you are planning to work on during that time, if you commit to that time, you will be amazed at what that bit of whitespace on the calendar can yield. I am a big fan of, you know, listening to a podcast shortly before like, I'll go for a walk and listen to a podcast. And then immediately when I'm back, sit down at my desk and just sort of brain dump. The podcast might take me down a very specific path, or it may just kind of get my wheels turning in that direction. And those that it's sort of like capturing the little aha moments and putting them to work for you.

And I was joking, not joking about the simple sales masterclass, that is, if you don't if you're not familiar, simple sales is the essentially the result of the work that I did on my own mindset. And on my own business back in 2017. I was at this point in my life where I needed to make more money, I needed to do it in less time. And in order to do that I had to you know, flip a bunch of the ideas that I'd learned about how to run a photography business upside down. So now I teach that and, and I teach the whole thing for free in the masterclass. So if you're looking for a way to give your clients an amazing experience, but also make more money, not kill yourself with extra work, you can watch that on demand by going to thiscantbethathard.com/simple

So the fifth statement is I am only open to opportunities that serve me and my business. I'm sure that it seems silly to think that you wouldn't be open to opportunities that are beneficial to you and your business. But the truth is that some of us actually have a certain amount of fear of success, or maybe more accurately, like doubt that we deserve success. Sometimes we think, you know, it's too much work to take advantage of an opportunity or we're scared that other opportunities won't come our way. So we just latch on to the first thing, even if we feel like it's probably not really going to serve us. And that's how, you know we end up working with terrible clients or taking jobs that we don't really want or, you know, not taking the time to learn and implement good systems and strategies in our businesses.

Back when I first started in photography, I learned Photoshop and so for years, I was editing all of my images in Photoshop. And I think you know, bridge and Photoshop have gotten better and faster. But at the time, that was a super clunky system but I didn't I didn't know how clunky it was until I finally capitulated to all these people who were like, what you need to learn how to use Lightroom. And I was like, I'm good at Photoshop, and I'm too busy to take a Lightroom class. When I did, I was like, I, you know, was almost in tears at the end of this class being like, I have wasted so much of my life editing these photos in Photoshop. So, but it was that fear of like, you know, I'm, I'm stuck, or it's too much opportunity cost for me to take the time to take this class to learn a new process. Anyway, opening up your mind to the right opportunities, opening your self to the right opportunities, really does require patience, it requires understanding what you want, getting clear on your business values.

And all of those things are what your brain will deliver to you. When you go with step number four, and create whitespace that is dedicated to working on your business. Being open to opportunities that serve you also means that you're going to have to be okay saying yes to the scary stuff, right? And, and saying no to the stuff that doesn't serve you whether that's the wrong client, the wrong job the wrong time. You know, sometimes we take on a job that we have no time for, we're completely booked, but somebody calls us and we're like, I guess I'll make time. Passing that job on to another photographer, when you're too busy is part of making sure that you are serving yourself and your business.

This sixth statement, the last one, I really do want you to write this down. This is one of those that we could all benefit from like taping it to our bathroom mirror and repeating it to ourselves every day while we're brushing our teeth. And that is I am capable of running a business that serves my life goals. Running a photography business is so great for so many reasons, right? We get to make art for a living people love what we do, they appreciate what we do all those things. But the reason that we work, the reason that we run our businesses, the reason that we charge any money at all for our services, is in service of certain lifestyle goals.

Maybe your goals are to only work while your kids are in school. Maybe you want to be one of these like big charitable donors. And so your business is funding that. Or maybe you just want to you know, make a big pile of cash so you can retire early and travel the world. Whatever your lifestyle goals are, as we talked about in the beginning, it is okay to want them and your salary is the key to achieving those things, not just the salary that pays your you know, mortgage and allows you to buy groceries. That is that is a pittance that is like the minimum. I want you to think bigger as you decide what to pay yourself. Yes, obviously add up your expenses and cover them but reach higher! I want you to aim for the stars. Set your salary, like the amazing boss that you are, and then allow your business and your art to help you reach those goals.