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Why Taking a Pay Cut Was The Best Thing I Ever Did For My Business

As solopreneurs (or even as business owners in a creative field), our goal is pretty simple: always make more money than you did the previous year.

On the surface, this is a pretty solid goal, for obvious reasons: more money is always good.

Right?

Well….mostly.

Let’s take an opportunity to go back through my self employment history a bit, shall we?

Grab a beer, get some popcorn (or just, you know, more beer), and get comfy for about 7 minutes or so.

A Long Time Ago In A Galaxy Far, Far Away…

(Did you hear the Star Wars theme song start playing as you read that? Good. My plan is working.)

I held a job as a geologist from about 2010 to 2014. Throughout that entire time, I did photo editing on the side to make extra income because like most people my age, I had a buttload of student debt but still wanted to afford the small joys in life.

You know, like buying a new pair of socks every once in a while and not being homeless.

As time went on (and I became increasingly unhappy with my job for reasons we won’t get into too much here), I realized that a) I was really good at editing, and b) I could make quite a bit more money working for myself editing than I could at my current job.

So I phased out my fulltime job from full-time to part time to as-needed, and during that time, continued to increase the amount of editing work I took on. 

Eventually I kicked the once-fulltime job altogether (sayonara, cubicle and horrendous fluorescent lights!) and was on my own running my own business.

After my first full year in business, I made enough money that I was able to pay off my student loan debt in one lump sum (at my old job, it would have taken me like 20 years or something ridiculous). 

I was what I considered to be the Successful Creative Solopreneur: I was making more money year after year.

Pretty great right?

Well…….sort of

The downside was that I was also working all the time. Because I was trading my time for money, the only way to make more money was to work more.

Now, let’s be clear: I grew up in the midwest where there’s a huge agricultural and farming background, and where working long, hard days is a hallmark of good character. 

But at the same time, I wasn’t seeing my friends and family at all. I was also sitting at a desk for 15+ hour days, and my back was really sore and I was getting tendinitis in my mouse hand. 

I also knew I wanted to move my business forward and take it to the next level, but had literally no time (or energy, let’s be real) to make it happen.

So if you’re following the plot so far, you’ve come to realize: something had to change.

But what?

As I’ve come to find out, there have been two critical parts to this equation that really helped me with this breakthrough.

(This is just another picture of me dressed as Han Solo. I had my buddy Dave from Abby + Dave do a few shots of me at a photography convention. I included it because it fits the Star Wars theme. And because I’m a dork. Obvi.)

First, Let’s Talk About Time Management.

In April of 2017 I spoke at a photo convention where my friend (and now client) Andy Stenz was also speaking (hhhheeeyyy Andy!).

His talk was about living your life with intentionality. About how you have to be intentional with everything you’re doing.

Otherwise, you end up spending your time on things that you don’t actually want to spend your time on.

About how easy it is to just do things without thinking about them, and reach the end of your life regretting all the time you spent doing things you didn’t actually really care about.

(Pretty sobering, huh? I won’t go too far into the idea of intentionality in this article, but it definitely struck a chord with me in a way it hadn’t previously.)

It was at this point that I realized I needed to practice what I preached.

I always told photographers they needed to outsource so they can spend less time in front of the computer and more time doing the things that were important to them, like spending time with friends and family.

So I needed to do the same.

But first, I needed to figure out where my time was going.

What was I actually spending time on in my business? What was I even DOING from about 8am to 8pm!?

I had to run the numbers.

I created a spreadsheet where I tracked what I worked on every day, how long it took me to work on it, and how much I got paid for doing it.

And I kept a running total for the whole day on what my average hourly pay rate was.

I did this for a few months and I became acutely aware of the tasks that made me the most money per hour and the ones that drastically decreased my average hourly rate.

After that, I revamped my business a bit.

I cut out all the services that drastically decreased my hourly rate so I could focus on the things that I made the most money per hour doing

Once I did that, my average hourly working rate more than doubled

And I was now working considerably less, but making the same amount of money.

This was a huge piece of the puzzle, but it was only half of the picture. 

I haven’t talked about taking a pay cut yet, which was another huge piece of the puzzle.

(Notice BB-8 just chillin’ in the background here.)

How Could I Create More Time?

At this point, I may be making more money per working hour, but I’m still trading my time for money. And with that, the only way I can make more money is to work more.

And as we know, time is finite. But at this point, I needed more of it.

How could I get the time I needed to a) have a life again, and 2) move my business forward?

Essentially, how could I create more time?

Since we live on planet earth and are bound by the laws of physics, I can’t create more time…per se.

But what I can do….is buy someone else’s time.

I realized that if I hired someone else, I could offload some of my own work to them, pay them for their time, and do something else with the time I’d normally spend doing whatever it was I was paying them to do.

So that’s exactly what I did next.

Now, this has come with a bit of a short-term drawback.

You can’t just hire someone and give them work and turn them free and be like, ‘Ok now do this now! Let me know when it’s done! Kthxbie!’

You have to take the time to train them so they do it right. And then you also have to pay them for that time.

So the stuff I was getting paid to do (i.e., editing and retouching), I was now paying them to do and training them on how to do it.

(Wait a second, he’s not from Star Wars…)

For example.

Let’s say that before I hired them I was making $500 a day to edit $1,500 images.

After hiring, I was now making $250 per day (after I accounted for what I was paying them) to train someone else on how to edit those same photos.

As you can see, I took a pay cut. I went from making a theoretical $500 per day to less than that (and the amount varied per day depending on how much editing had to be done). 

It also changed how I paid myself.

I went from paying myself 50% of my gross profits (the other 50% going towards taxes, business savings, and business expenses), to paying myself 30% of my gross profits after I accounted for the additional cost of paying my team members.

By now you’re probably thinking, “Wow that was a terrible idea! How the actual fuck is this sustainable?”

Easy. 

Because the training process for new team members is not indefinite. It is a finite period of time. 

I hired both the girls I have working for me now months ago, and it’s getting to the point now where I’m very hands-off with their training and their work.

I send them stuff, they edit it, they return it, I take a few minutes to do quality control, and I send it back to the photographer.

So now I make $250 a day (or whatever it happens to be based on how much editing there is) to do practically nothing.

And, I have a ton more time in my schedule.

Time I’ve used to learn new skills I can now add as purchasable services (like Facebook advertising for photographers). 

Time I’ve used to market my business and bring in more clients – both editing clients that my team members edit for and clients that I don’t even edit for but do things like Facebook ads or blogging and newsletter services.

And, if we’re being completely honest, time I’ve also shamelessly spent playing Fallout on Xbox because some days you just need to drink whiskey and play videogames. #KeepinItReal

I now even have evenings free. Instead of working until 8 or 9 at night, I’m done around 5 or 6pm and I can use the evening to do god-knows-what (i.e., play more videogames and drink more whiskey #RealTalk).

So How Do The Numbers Break Down?

Let’s say that before I hired my team members I was taking home, on average, $3,000 a month after taxes and business expenses

When I was going through the training process, that number dropped to around $1,500-$2,000 per month. 

But remember what I said earlier – the training period is finite.

Now that I’m mostly through the training process, my monthly take-home pay has started to increase to around $3,500 a month after taxes, business expenses, and paying my team members. 

Outsourcing Photography Editing

(The subliminal messaging is strong with this one…)

In the upcoming months, that should increase further to closer to $4,000 or $5,000 per month.

I’ve also made the most I’ve ever made in a month this year since hiring my team members.

Secondarily, this should also be my business’s highest grossing year ever. 

And, I have more time for marketing my business and creating more services I can offer to photographers.

Plus – I have more free time. I’m not stuck working all the damn time. My back doesn’t hurt at the end of the day, and my tendinitis has basically disappeared. 

I see my friends and family regularly, without stressing about the work that’s not getting done while I hang out with them.

I’ve gone back to the gym and started lifting weights again, which is something I didn’t have time (or energy) for when I was working 12+ hour days.

And finally, I’m not burnt out anymore.

Working 12+ hour days back to back to back burns you out preeeetttty damn quick.

Cutting that time drastically has helped me feel way more passionate about my business and what I do than I have in the last couple years.

So now we’ve reached the point of the article where I have to ask you…

What’s Holding You Back?

Why haven’t you hired someone or outsourced some of the work in your business yet? 

Are you worried about what it will cost and how you’ll make your money back?

(If you are, I wrote an article that talks about how to recoup the money for your photography business, and you can read it here.)

Are you worried about letting go of control because no one else can edit like you can?

If that’s your concern, trust me – in the almost-ten years I’ve been doing this, every photographer who has worked with me and ended up loving it has had the same concern.

That’s dozens of people, if not more.

I even wrote an article about how to train an editor on your style if you’re not sure how to do it. It’s the method I use with a lot of my clients and it’s extremely efficient and effective.

So whatever your hesitations are, I urge you to really take the time to scrutinize them.

You may actually be getting in your own way of having the business (and the life) you dreamed of having when you started your business.

Trust me. #BeenThere #DoneThat

Free Shit! Woohoo!

If you want to start using a time tracker you can use to start tracking your own time, you can download one here. There’s no opt-in required; just download it straight from Dropbox.

Track your hours, you must. Make more money, you shall. 

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Eau Claire, Wisconsin
captain@starboardediting.com
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