I was inspired to write this post after reading Andrew Askins’ recent article. In the post, Andrew shares a detailed overview of his company’s financial data including revenue, expenses, salaries, and more.
As Andrew puts it, “People resonate with that kind of openness and realism… We wanted to inspire the next wave of entrepreneurs and just felt like it was the right thing to do.”
Money is this touchy subject that most people feel uncomfortable talking or asking about. But there’s power in demystifying financials and opening up about the one thing that’s on everyone’s mind.
When you look at a successful entrepreneur, it’s easy to wonder what goes on behind closed doors that you don’t know about. It’s easy to separate the unknown in their business from the known in your business, and put that unknown factor up on a pedestal. But when you reveal what’s behind those doors, you see that we’re all fighting our own version of that same ceaseless battle; trying to create more monthly income than monthly expenses. And sometimes we fail. And that’s OK.
Money is at the heart of every business. Revenue, profit, and cash flow are perhaps the most reliable measures of actual success in the marketplace. Maybe if we talked about money more, entrepreneurship would become more concrete and attainable.
In July 2017 I stepped into an entirely new industry with absolutely zero experience. In one year, I’ve booked more work than I can handle alone, planted the seeds of a half-decent portfolio, and created enough monthly income to survive and invest back into my business.
In this post, I’ll share my monthly revenue and expenses, and I’ll talk about a couple of the major lessons I’ve learned in Year One of this crazy adventure. I’m hoping that my transparency will show young creatives or entrepreneurs that with a little bit of time, persistence, and work, it is possible to start at zero and create something valuable. And maybe it will inspire someone to go for that thing they’ve been wanting to go for.
I’m a little nervous to share these numbers. As I write this sentence, I feel the urge to first qualify why they aren’t as large as they could be, how I plan to grow them, and how I need to keep more comprehensive/detailed financial data… But enough of that. Take a look:
The figures in the Revenue column represent money actually collected in that month. As you can see, the first 6 months were pretty rough. It was extremely difficult to sell jobs without a portfolio or experience. And when I did sell jobs, it was for a mere $100-$200. So I did a lot of cheap and free videos to practice, and I picked up a restaurant job on the side to cover my basic living expenses.
I barely stayed afloat for the first 6 months. I started out with over $50,000 in debt from student loans and my previously failed business, so I did anything I could to cut expenses. I actually rented out my apartment to save money and stayed on the couch for free for almost 2 months until I got kicked out (or, was asked to leave). After that, I bounced around from couch to couch for another couple months, driving around town with all my belongings packed into my car. It was miserable, uncomfortable, and embarrassing.
I also didn’t create an LLC until last week.
*Please don’t take legal advice from me because I am (clearly) not a lawyer. Although this is a nice little disclaimer, don’t you think?*
I know many will scoff at this. I’m a huge proponent of creating a business in real life before creating a business on paper. I’ve started my fair share of LLCs in the past that never saw a penny, like many would-be entrepreneurs, but this time I was determined to turn my “business” into a “business” before officially calling it a “business.”
I see so many young entrepreneurs spend time, money, and energy getting an LLC and other insignificant details in order before doing the only thing that matters in the beginning: generating cash flow. The legal details are easy. Making your very first sale is hard. Before you have your first sale, if you’re focusing on anything else but landing it, you’re avoiding the vital hard thing and pointing in the wrong direction. If you’re not careful, you’ll find yourself with nothing more but a neat little certificate to call yourself an “entrepreneur.”
It didn’t make financial sense for me to register an LLC that early either. It costs roughly $125 to register a business in South Carolina, and for the first year I immediately invested every single penny I earned strictly according to this hierarchy:
Basic living expenses (rent, food, gas, etc.)
Project costs that directly drive income (equipment or labor)
Better camera equipment
Filing for an LLC didn’t (and frankly still doesn’t) fall into any of those categories. Plus, it felt good to fly under the radar not pay the government for doing nothing (even though they’ll still take their cut in April. Bastards.)
This leads me to the first major lesson I learned:
Sell beyond your capabilities
You live on a line.
Below that line is a set of projects which are within your domain of experience.
Pursuing and completing these projects is comfortable and easy because you’ve already proven you can do them well.
Above that line is all of the projects outside your experience. These projects are difficult and confusing and create hesitation because there is a real possibility of failure.
Growing yourself and your business happens when you reach above that line and commit to doing more than you know you can handle. All the growth I’ve had in the past 12 months came from the moments where I was truly challenged and questioned my ability to make it out.
I don’t have data for the first six months because I didn’t keep track of it.
This data also doesn’t show the full picture because any additional income I made from my restaurant job is not reflected in the revenue. Plus, there isn’t any separation between personal and business expenses for this first year.
I believe keeping detailed financial records has massively contributed to the growth of my revenue. Rather than having a vague goal of “End the month with a positive balance in my bank account,” I can now accurately predict what I’ll make and spend each month which gives me the ability to set ambitious but realistic goals.
Now for the second major lesson:
The angels are in the details
“The devil is in the details,” as the saying goes. To me, this means something like: if you don’t pay attention to all of the minor details, you’re bound to miss something vital which will hurt you more than you expect.
The other side of this is just as true. If you start paying attention to all of the minor details, you’re bound to find little keys that will boost your progress more than you think.
Knowing the exact state of your financials is the first step towards molding them into what you want them to be.
This is a powerful principle that is true across more domains than just finance. It means that if you spend the time to organize some part life so that it can be clearly observed, underlying patterns will become apparent and you’ll find yourself with the power and the responsibility to put the pieces where you want them to go, one by one.
I struggle with details but I also realize it’s nothing you can’t train yourself to keep up with. There are useful software tools abound. You just have to commit and stick with one because the benefits are delayed.
My financial system currently consists of these tools:
Wave – For tracking actual expenses & income by linking to my bank account. I also use it to send invoices and collect payments online.
Google Sheets – For manually tracking high level numbers each month.
Build, don’t run
There’s a big difference between running a business and building a business. When you run your business, you’re operating inside of it. You’re creating proposals, making sales, finishing projects, and keeping the cash flow going. If you spend all your time working on things inside your business, you leave no time for building your business.
Each of these things require entirely different visions and skillsets. I don’t want to do the work in my business forever, so I need to build systems and processes for everything I do that somebody else could plug into without ruining the whole thing. It takes a lot of meta thinking, organization, and patience. As you push prospects through your sales funnel or push projects towards completion, it’s so important to document everything and keep track of the process from start to finish. It’s a messy process because those processes are always in need of improvement, so once you systematize your first thing, it’s immediately ready for improvement. Queue the patience.
This is something I’m new to exploring, and it’s rapidly changing the way I interact with my business. Here are two books I recommend on the subject:
I’ve spent the past half year “getting my name out there” as a video producer.
What does that look like?
You start with a cheap camera. A Rebel T6i. You begin to notice details and styles in movies and videos that were invisible to you before. You notice the cuts. You stop, rewind, and watch them again. You think about how they got that shot to look the way it looks and you wonder how many takes it took before they got it right. You wonder how many people are working behind the scenes. You discover what a Red Camera is.
You find content creators, filmmakers, and producers that you admire. You look at their portfolios, you watch their vlogs, and you consume their content. You dive deep and notice that each of them has a unique style.
You get sick of consuming and decide to start creating. The first video you make feels like a cheesy school project. So do the next 10. But you keep creating them. It’s fun. You learn about shooting, editing, cutting, and simple transitions.
Your videos aren’t good enough to display professionally, so you wonder what your still empty portfolio could become. You imagine professional videos, good lighting, crisp colors, and quality audio. You picture the projects you could do, the footage you could shoot, and the stories you could tell.
If only someone would give you a shot.
You start pitching. You ask all your friends if they need any videos. You pitch video ideas to every new person you meet. You find that everyone needs videos.
Weeks later, one person is interested in your pitch. She says:
Can you send me an email with some of your work?
Your stomach sinks. You swallow your pride and promptly follow up with some of recent cheesy school project videos.
You don’t hear back.
Later, another person is interested. She tells you she has a budget of a couple hundred dollars for the video. It’s not much, but you do it. You put a lot of effort into it. You prepare well, shoot with great attention detail, and edit for days. She doesn’t know what you’re doing and neither do you.
She likes the video! It’s better than what she could have created on her own. You make $200.
Six months go by. You’ve upgraded to a better camera, a better microphone, a couple tripods, and a lighting setup. You’ve done more projects than you can count, some for thousands of dollars. Your portfolio resembles the one you once imagined. There are interviews, testimonials, promo videos, and all sorts of projects that look professional. Your cheesy school project videos are hidden safely on your 2TB external hard drive.
You still pitch often. People sometimes reach out to you through a mutual connection to ask for video work. Your stomach sits firmly where it belongs as you send them your Vimeo profile. They ask you for promos, testimonials, commercials, real estate videos, and the like. They say:
That Five Loaves video you did is similar to what we are looking for.
By now, you understand your camera and your editing software on a deeper level, and you see how the two dance with each other in a way they never did before. You’ve been exposed to a wider breadth of your camera’s capabilities.
You’ve connected with mentors and industry professionals. You see their process, their creations, and the resources that go into making them happen. You look at their portfolios. You consume their content. You notice their unique styles.
You see that it is possible to create so much more than the professional promo videos you once dreamed of and have now created. You imagine the films you could create, the footage you could capture, and the stories you could tell.
This is the quandary of the aspiring filmmaker.
Like attracts like. A portfolio of nothing will attract nothing. A portfolio full of testimonial videos, promo videos, and real estate videos will attract testimonial videos, promo videos, and real estate videos.
How, then, can you create something new when you’ve boxed yourself into the style of your past?
The ideal portfolio in your head is like a carrot on a stick, extending itself beyond where you happen to be. Evolving into what you choose to be means deliberately extending that vision beyond your current capabilities.
Your portfolio follows what your vision drives you to create. The process of creating those professional-looking videos you imagined at the start is what gave you the experiences, perspectives, and tools which were the seeds of a more mature vision; one that extends yet farther beyond your current portfolio.
You’ve exposed yourself to people with unique creative styles, and you’ve explored and interacted with them on a deep level. You use this new knowledge to decide what you want to create. It’s bigger, better, more complicated, and more meaningful than what you’ve been creating. But it only exists in your mind, not in your portfolio, so nobody will believe in your ability to do it.
So you start pitching. Again. But this time you are more careful. You don’t want to add more promo videos and real estate videos to your portfolio. You don’t just take any work you can find. You’re more selective about taking on projects that allow you to express yourself creatively and fully — projects that will be the foundation of your new, more deliberately-created portfolio.
Now, when people ask you for work, it is mostly distracting. You do these jobs for income and practice, but you stop adding them to your portfolio. You begin the process of sacrificing the old to make room for the new.
Choose what you want to create. Then find and do those projects. People will want the old. To do the new, you might have to work for free or very little money again. It is not a step down; rather, it is a noble step upward.
Think and speak in terms of the projects you aspire to create, not of the ones you have created in the past. Tell potential clients your vision. At first they will mostly turn you down, just like they did before. But to keep pushing that vision is to be the driver of your own creative process, in the present and in the future. No man can creatively express himself completely if he is bending fit the will of another man.
“I don’t build in order to have clients. I have clients in order to build.”
I started doing freelance videography about 4 months ago. It’s been a wild ride so far, and I know I’m just getting started. I’ve failed more than I expected, learned more than I expected, and succeed a bit less than I expected.
The past 4 months have been demoralizing, humbling, inspiring, and uplifting, but most of all, useful. This is the first time in my life my income has been fully dependent on the sales and production of only myself. It’s hard.
I’ve boiled it down to the two primary lessons I’ve learned since I started on my own. I could make this list about 30 items long, but I’m sticking with the two top ones to keep this post focused. These two lessons are directing my macro focus as I step into 2018.
I hope you can relate with what I’ve learned and apply it to your own life and business.
1) The Core Matters Most
The other day, I was talking to a friend of mine about his business, Jyve.
Jyve is a platform that connects local musicians with bar managers, streamlining the booking process so bars can have live music and musicians can play gigs. This short video explains the app from the perspective of a bar manager.
“What’s the core of Jyve?” I asked him.
He talked about the value they provide to bar managers by helping them book gigs efficiently. He talked about the economic value, gave compelling statistics, and clearly explained the ROI (return on investment) for bar managers to use their platform.
Everything he said made sense, but it wasn’t the core. There was no emotion behind it.
I continued, “That’s not the core of it. Why do you care about all of this so much? Why does it matter to help the restaurant managers book musicians?”
After some more back and forth, it came out of him.
I couldn’t possibly say what he said as eloquently as he did, so I’ll summarize: His face lit up, he grinned, and said that music has been the constant in his life that pulls him through tough times, and he knows that local musicians playing local gigs feel the same way. To help them play more gigs means to help more people experience music.
In short, Jyve exists for people who f***ing love music. For people who yearn for that visceral feeling that comes when you sing your heart out in front of a crowd of people, and for people who will spend ungodly amounts of time and money just to see their favorite band play live (again and again and again). For musicians who will take the shittiest jobs, live on little to no money, and will do whatever it takes just to keep playing music.
As he explained this, I felt chills run down my spine. I knew that was it. That was the core. I wasn’t just listening to words anymore — I could feel the passion and meaning behind the words, giving them substance that wasn’t there before.
THAT is what is required to make a good video, or to truly help a customer in any way. You MUST understand WHY your customer does what they do. The skill to execute that and capture and display that story in a video also helps, but it all starts by understanding the core of your customer. It requires a lot of digging. It requires lots of time. You need to get to know the people you’re working with by studying them over time. You need to ask lots of hard questions that don’t have clear answers. You need to keep pushing them to articulate something when they’re not sure how to explain it. Keep digging. Keep asking questions. Keep asking why. When you discover the core, you’ll know it.
Simon Sinek wrote a pretty well-known book called Start With Whyin which he does a deep dive into this principle of “why.” He applies it to companies like Apple and Southwest, and paints a clear picture of how one can traverse from why to how to what rather than the opposite direction. I highly recommend reading it.
2) Provide a Full Solution, Not a Product/Service
The two sentences I’ve heard the most from potential clients over the past 4 months are:
“Video is the next big thing.”
“We need more video content.”
Video marketing is important, and EVERYBODY knows it. Therefore, it should be easy to sell a video to someone who already knows they need a video, right?
People don’t buy good videos. They buy solutions. Everyone knows they need videos, but nobody knows how to use a video in a way that will solve their problem.
When someone says “We need more video content,” what they really mean is, “We need more sales and we think videos will do that more efficiently than what we are currently doing.”
I’ve spent a lot of time trying to sell videos, and it hasn’t worked very well at all. The “starving artist” stigma is there because art, while it’s incredibly valuable in its own right, does not solve a specific problem.
When somebody asks me for a video, they don’t really want a video. They want something else, and they think the video will help them get it. So I should ask lots of questions to find out what they want, then build an entire marketing campaign that will solve their problem. This means creating a video, dipping into Facebook ads, making landing pages, handling email marketing, and putting all the pieces together into a full solution.
My job is to find out what they want, then work backwards.
The video is made with the entire marketing campaign in mind. The marketing campaign is made with the video in mind. There are more pieces to the puzzle than just a video if you want to create something that somebody is willing to pay for. This means a lot more work than just creating a video and being done with it. But that’s the point. That’s how you actually help somebody.
Selling people an answer you think you already have doesn’t work. Turn yourself into somebody who can work through their problem, and you’ll end up with a solution that they will actually pay you for.
“There is only one way to avoid criticism in life: do nothing, say nothing, and be nothing.”
Ever since I started vlogging regularly about a month ago, I haven’t gotten much public criticism. I’ve gotten a few “thumbs down” ratings on my videos, but not much more than that.
This lack-of-haters has concerned me. Throughout my life, every time I’ve made myself vulnerable, stood by an opinion, or put myself out there for anyone to see, I get a healthy dose of angry comments from people who disagree with me. Of course most responses are usually positive, but there’s always a handful of negative people who speak up. I’ve come to view the presence of haters in my life as an indication that I’m moving in the right direction. Any time you move forward, you will necessarily run into negativity trying to pull you back.
Why am I not getting any haters? Am I not being controversial enough? Are people just not watching my stuff? What am I doing wrong?
It’s not that I want people to hate me. In fact, I hate that people hate me. It’s incredibly uncomfortable and prods my sense of self-confidence. But it’s a necessary part of life that can be used to propel you forward OR to hold you back, depending on how you react.
Haters don’t just come in the form of thumbs down ratings on YouTube. They don’t just appear as angry Facebook comments. They aren’t just on the internet. Every hater is a real life person, and the more you create, try, test, do, and interact, the higher your chance of running into haters becomes. You might turn your own friends or customers into haters. You might turn a mentor into a hater. A potential customer might end up hating on you after you make the wrong move.
That’s exactly what happened to me today. A potential customer of mine told me I had a terrible attitude and that I have a lot to learn about business.
Well… at least I’m no longer worried about not having haters. Congrats, Simon.
That’s what the honest voice in my head told me after I read the message. I felt personally attacked. It gave me the same feeling I get when somebody calls me an idiot on Facebook or YouTube.
“He doesn’t know me!” I pleaded internally.
I know I have a great attitude, but this person is right about one thing. I have a lot to learn about business. I won’t dive into the details of this particular interaction, but of course in hindsight I could have avoided this. I’m testing out new business models and trying all sorts of things as I figure out what the hell I’m doing. I try new ideas and many of them don’t work out because I’m at the very beginning of carving my piece in the business world. If there aren’t mistakes and bumps along the way, then I’m not learning and improving as I go. Some potential customers will inevitably be the second-hand victims of my business decisions that end up not working out the way I had hoped.
But that won’t stop me from moving forward.
In an effort to squeeze value out of what seems like pure negativity, I decided to learn as much as I can from this experience and put it behind me.
This experience has taught me two things.
First, I need to be more clear about the services I’m providing. Going into a customer interaction without a crystal clear understanding of how I can help them is a great way to waste everyone’s time and set yourself up to be put down. I had to learn this at some point and now I know how I will improve for next time.
Second, I want to surround myself with people who view mistakes in the same way I do: positive progress. I will never push somebody down, even if they deserve it. Every mistake carries an immediate opportunity for growth. I will only push people to use their mistakes to become better. I refuse to work with people who use these opportunities to push people down instead of building them up.
Keep making mistakes and keep getting haters. It’s good for you.
P.S. Writing this post made me feel so much better about this experience. If people are hating on you, channel that negative energy to create something positive, whether it’s a video, blog post, podcast, a painting, or anything else.
I’m a fan of setting very large goals. If you set goals that are out of reach, you might fall short and still end up pretty far. But the problem with overly large goals is that it leaves a big blurry gap between you and the goal.
That’s where benchmarks come in. They provide tangible steps that are reverse-engineered to bring you closer to that goal, clarifying the middle ground bit by bit.
If I want to run a million dollar business and I’m starting from zero, I should first figure out how to earn $1,000. Then $10,000. Then $100,000. And eventually I’ll get up to $1,000,000.
A high school football star can and should have dreams of winning the super bowl, but without identifying the micro benchmarks that come each season in high school and college, he’ll just end up confused and disappointed when he finds him years away from his goal after years of solid effort.