‘The Boss of You’ in Seattle

Hey Seattleites! My Seal Press comrades Emira Mears and Lauren Bacon — authors of this fine book you see to the left — will be in town this weekend for a book reading. The scoop:

Where: Elliott Bay Book Co (map)

When: Saturday, May 17 @ 4:30 pm

What: Book reading and signing, prizes, and a lively Q&A

I’ll be there. Will you?

Add comment May 15th, 2008

Guest post: What’s the deal with business liability insurance?

Lauren and Emira, authors of The Boss of You (which is getting rave reviews, by the way), are back with another guest post. A couple weeks ago, I was struggling with the question of business liability insurance — what I needed for myself as a company of one, and what to say about it in my new book. I asked them for their thoughts on the matter, and the result is this post. If you have any questions about small business liability insurance, feel free to post ‘em in the comments. I’m sure Lauren and Emira would be happy to answer.

For the first few years of our business life, we weren’t that concerned with liability insurance. While it would have been nice to take a “better safe than sorry” route, we didn’t really relish the thought of putting our meager earnings into insurance. At the time were a small company, without any staff, and our contracts state that we have no responsibility for our clients’ data and that our liability doesn’t exceed the value of any individual contract.

It was actually when we moved into our office space that liability insurance came up — our building required that we carry a minimum amount, as well as Errors & Omissions (E&O) insurance. Shortly after that we also hired staff, and while we certainly trusted our staff implicitly, things began to get a little more removed from our control, while ultimately if anything went wrong we’d be the ones holding the bag. At that point in time, we were really happy that we already had liability insurance in place.

Over the last couple of years, we’ve encountered a new situation with liability insurance that we hadn’t really considered when we first started out: we’ve been working with larger clients (particularly with government organizations) that actually require us to have liability insurance in order to be a successful bidder on any contracts.

We didn’t start our business with a vision of working with these kinds of larger organizations, but we know some people go into freelancing with the plan to work primarily with bigger organizations — often they actually come from having worked for a larger organization and move from a paid staff position to consulting after some time away, a maternity leave, etc. The point is, if you think you’re going to work with these kinds of larger institutions or organizations, you definitely don’t want to be trying to figure out your insurance while you’re replying to a 20+ page Request for Proposal. So, if that describes your target client, we’d strongly recommend getting some insurance in place from the get-go.

When working with larger organizations that are likely to require that you to carry liability and E&O insurance, you should work that into your pricing. With additional overhead expenses like that, you will need to charge more, simply because your cost of doing business (as required by clients) is significantly higher. So make sure you feel very comfortable charging enough to cover those expenses.

In our case, we actually went from working with an organization that didn’t require business liability insurance to that organization changing their policy (requiring us to carry insurance). And after that change, when we submitted our next quote for work at a higher rate than we had charged in the past, we made sure to gently remind the client that our rates were going up to reflect the additional costs they required we incur.

When you’re seeking out quotes on liability and E&O insurance, be warned that many insurance providers don’t really understand how to sell this kind of insurance to smaller outfits. They often have predetermined categories that are actually for bigger businesses. So it’s worth pushing back on your initial quote and making sure they really understand what it is you do, and what your actual level of risk is so you’re not paying the same amount as a firm with hundreds of employees that can technically be slotted in your category.

This is especially true for freelancers. When we first started looking for liability and E&O insurance, the carriers wanted to slot us in like we were a hosting company (we’re a web site design company), which is a whole other kettle of fish (hosting companies are explicitly responsible for their customers’ data for example, where our contracts state we are not). So we had to make the carriers understand what it is we actually do in a day, and what the real risks we carry are. And the price difference was significant.

Another piece of advice we always give on pricing and insurance is to try to renegotiate your policy annually, especially after you’ve held it for a year or two. We have a great insurance agent and she prompted me on this one initially, by basically saying, “You know I can probably get you more coverage for this premium since you’ve had no claims/are in good standing” — and she did. Now typically they don’t want to actually lower your premiums, because of course that’s how they’re getting paid too, but they will go to bat for you on getting you more for your money and that’s better than nothing.

Add comment May 10th, 2008

Guest post: How do I know when it’s time to hire some outside help?

Are you a business of one who’s wondering whether it’s time to hire an extra pair of hands? Torn between whether you should hire an employee or a subcontractor? Fairly certain that if you don’t start delegating soon your head will implode, but not sure what tasks to farm out, let alone where to find a capable set of extra hands in the first place?

Not to worry. Lauren Bacon and Emira Mears are here to help. Lauren and Emira started Raised Eyebrow Web Studio, Inc. in 2000, so that they could be their own bosses and continue to work with the not-for-profit and small business clients they loved. They became so dang good at it they decided to write a book — The Boss of You: Everything a Woman Needs to Know to Start, Run, and Maintain Her Own Business. So without further adieu, here’s what Lauren and Emira have to say on hiring your first employee…

There comes a time in every successful self-employed gal’s life when the question arises: How do I know when it’s time to hire some help?

The first step is to look for the warning signs that going it alone is not working out. For most small enterprises, there’s a good long stretch where you (and your business partner, if you have one) are your only employee(s). Of course, if you’re successful, you’re likely to get busier and busier, up until the point where you stop being able to juggle all the work you’ve got coming in.

We hit this point in our business about three years in, but we didn’t see it for much, much longer. It’s our hope that our tale of woe will inspire others to act promptly when the time comes to bring in an extra pair of hands.

See, between client work and the administrivia of running our business (answering email and phone calls, managing our books, and so on), we found ourselves working longer and longer hours and feeling like we were getting no further ahead. We were losing our weekends at the office, and losing sleep over the prospect of missing deadlines if we slowed down. Our success was killing us — the more work we did, the more referrals our clients sent our way, and we couldn’t keep up with the demand.

So why didn’t we hire someone right then and there? Three big reasons:

1. Fear of financial risk. We were terrified that the moment we hired someone, our workload would drop off and we wouldn’t have enough work to keep everyone busy (and the business profitable). The thought of being responsible for another person’s salary on top of our own was just scary enough to make us hesitate.

2. Fear of change. We liked our little two-person, best-friends-and-business-partners-forever setup. And we knew that dynamic would change the moment we brought another person into the mix. We weren’t ready to step out of our roles as comfortable equals and into being the bosses of someone else.

3. Fear of losing control. Yeah, we were hardcore control freaks. (Or, as our hero Joss Whedon prefers to phrase it, “control enthusiasts.”) We were completely stressed out at the thought we might hire someone who wasn’t as perfectionistic as we were, and see the quality of our work deteriorate.

So where did that leave us? Stuck in overwork hell for another couple of years. Yeah, that’s right, I said years. It got pretty ugly; there were emotional breakdowns on both our parts on a fairly regular basis, due to too much work and not enough play, rest, and perspective. People kept telling us we needed to hire help and we kept arguing with them, telling them we didn’t want to grow, and that we’d find some other way to cope.

(Now, by the way, that’s a perfectly legitimate strategy, but only if you’re comfortable turning down work so that you can stay sane. We weren’t doing that.)

So how did we get over our fears? In short:

1. We discovered that not only will a hard-working employee pay for themselves (in our case, by working a reasonable number of billable hours per week), but will speed up production times (duh) and thereby quicken up the cashflow cycle (because when projects finish faster, the billing date comes sooner).

2. We hired someone we liked. A lot.

3. We peppered our job posting with phrases like “detail-oriented” and “meticulous,” and hired someone just as careful and quality-conscious as we are.

That’s the short version. There’s plenty more on the subject of hiring help in our book. But meanwhile, please feel free to post your questions about hiring here, and we’ll do our best to answer them.

5 comments May 5th, 2008