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CHUCK:
Hey everybody. We’re here! The notification when it started to call said that we could go for eight hours, so I hope no one needs a bathroom break.
ERIC:
I’m just going to walk away right now, then. [Laughter]
CHUCK:
Alright, so we do have a couple of questions here. Do we want to jump in on that or do we want to talk about where we’re at at this point really quick. What’ve you been up to, Eric?
ERIC:
Mostly client work; just full-time stuff about four weeks this month. This all gets [kids] delays, but I’m getting two solid weeks off which is nice. I’m going to do some family stuff and I think I’m going to go ziplining and stuff like that, too, so it’s really good. It’s a ‘work hard, play hard’ type thing which wasn’t intentional but it ended up that way.
CHUCK:
So you're doing Shopify stuff or have you completely made that transition?
ERIC:
Yeah, I’m in the progress of the transition. I’m doing Shopify client work right now, real estate application development level so it’s fun; it’s interesting. It’s a nice change of pace but I’m – got some – probably next month I’ll start showing up, some content marketing coming out and also work on some guys to do some hourly stuff. So basically, it’ll be a bug push probably starting September, marketing-wise.
The intention is it’s going to be enough system so it’s going to run not on its own hands off but it’s going to be very little touch on my part. We’ll see.
REUVEN:
Eric, when you're saying that you're doing Shopify stuff are you doing Rails app development that plugs into Shopify? I’m totally ignorant of how Shopify works?
ERIC:
Yeah, so Shopify has an API; Shopify’s in Rails but that doesn’t matter. And so Shopify’s an app store where you can build apps to do authentication and user API. So basically they can either run separately just like a whole SaaS or they can actually be embedded into either the front end like the store part or the backend like the admin panel. And so you can do stuff like when an order’s placed, send it to another system, do some integration – all that stuff.
And there’s – I don’t know how many but there’s about a hundred or so apps for there but you can also create private apps so you don’t have to actually have an app in the app store where you can actually have a ‘my company has an app or two’. It’s just custom automation so it’s pretty flexible. It can be in any language since it’s basically just adjacent API, REST API.
REUVEN:
Oh, that’s pretty great.
CHUCK:
Nice. What about you, Reuven?
REUVEN:
So, I was in China earlier this month for about a week and a half doing some training there. And then we took a close to a week-long vacation here in Israel last week, although in the evenings I was – I guess late at night I was doing some client work, just catching up.
I’ve got a client where we’re going to have to scale up really big over the next few weeks. This thing’s launched and their doing some advertising, so I’m learning about [inaudible] servers on a massive level because we’re really expecting huge push – huge numbers which it was not up before.
And separately, I basically come to the conclusion that I’m going to start doing some coaching for people; I’ve just been doing some technical training. I read this by you guys, I think, in the chat, maybe even a few months ago. I’ve been doing a lot of thinking and I’ve run it by two people who do training and both of them basically said, “Oh my God, yes. When can we start?” companies:
I’m going to help you to teach better, create better exercises, approach the business stuff better’ and everyone will bounce ideas off of each other and even review each other’s training. That’s the basic idea but I’m trying to refine it still.
CHUCK:
That’s very cool. I might actually be interested in that.
REUVEN:
Oh, great.
CHUCK:
Yup.
REUVEN:
Special price! [Laughter]
CHUCK:
Special price. You're such a –.
REUVEN:
Exactly.
CHUCK:
Actually pulled that. I’ve got two uncles that are both – they both think they're entrepreneurs and [laughter] he’s like, “I’ve got this idea for this app –,” he’s a commercial appraiser, so we wanted to build software for commercial appraisals. And yeah, he’s such a pain in the neck to deal with, just in family functions. He’s like, “So how much would it cost for you to build it?” And I just looked at him and – my regular rate at that time was like a hundred bucks an hour and I said, “200 bucks an hour.” And he’s like, “Well. Do I get a family discount?” And I said, “Yeah, 200 bucks an hour.” “Well, what’s your regular rate?” “A hundred bucks an hour.” [Laughter]
REUVEN:
You didn’t told him, oh boy!
CHUCK:
He quit talking to me for about a month. [Laughter] I just looked at him and I said, “You know, if anything goes sideways on this it’s just –.” But yeah. And there have been family fireworks with his wife –.
REUVEN:
Over this?
CHUCK:
No, over different things so.
REUVEN:
Oh God.
CHUCK:
So it turned out to be a good thing that I never worked for them. Anyway, should we jump on these questions? I guess I should talk about what I’ve got going on.
So I’ve been mostly working on promoting Angular Remote Conf. I have been looking for clients but not super hard just because things are kind of working out to where I don’t necessarily need the client income and so I’m trying to figure out some of these other areas of either doing in for some training or doing the conference or podcast sponsorships or what have you, and just experiment in the product and other consulting space. Mainly because it leaves me with a little bit of time to work on my own projects and explore new technologies and stuff and that’s what’s making me happy. So if I have one of the few apps land in my lap, then I’ll probably pick up some client work but otherwise I’m not really pushing too hard for it at this point.
REUVEN:
Right.
CHUCK:
It’s nice to not have to worry a ton about that stuff.
REUVEN:
Yeah, I just – basically, I just scheduled myself 50% from January to July of next year with training.
And then they came back to me and said, “So, how’d you also like to go to Europe?” And so it’s like – this is totally new. It’s been six months or so that I just haven’t had to look for clients and it’s a nice, nice, nice feeling.
CHUCK:
Yup.
REUVEN:
Totally changes as to what you’re perspective on things.
CHUCK:
Yup. And I also, over the last few months of launch of RailsClips, and so I’m actually looking at – because the first series is about building APIs on Ruby on Rails and so I’m actually looking at turning that into a course. So I won’t have all of the ‘here are the ten different ways you can make a view that does JSON or xml but it will go through and say, “Look, if you're going to create an API, this is the way that I would do it and these are the tools that I would use.
REUVEN:
Chuck, I went through the Devchat.tv site a few days ago, and what’s web security warriors? Is that a new show?
CHUCK:
That’s a new show. Yup.
REUVEN:
Because you don’t have enough on your plate.
CHUCK:
Yeah, my involvement with that has been – I was a guest on Episode 4.
REUVEN:
Got it. Okay.
CHUCK:
And I got the artwork done for it but AJ O’Neal’s spearheading that, so it’s a show that I don’t actually run; I just listen to it every week.
REUVEN:
That’s really great.
CHUCK:
Yeah. Alright, well should we do this question? It’s a billing question – let’s say you’ve been billing by the week on a large project. The project slows down meaning there’s less to do and requests are sporadic and unpredictable so weekly billing no longer makes sense to you or to the client.
What do you then switch to keeping in mind that it’s unpredictable work?
CHUCK:
I always just wait until they have a week’s worth of work and then put them in my schedule.
REUVEN:
But mine’s allowed for that. I’ve got a client error, I’ve been – I’m still billing by the hour for them because it’s very sporadic for me and it’s a few hours. Sometimes it would be a day, a week; sometimes it would be two days a week. Sometimes it would be an hour a week or even an hour a month.
This is exactly the situation I’m in so I’m billing by the hour and that’s okay with me, but obviously that’s profitable than doing it on a weekly basis. But I can’t imagine – I mean, we’ve tried sometimes to, say, let’s try to crunch everything into a week just for scheduling purposes. But sometimes it just can’t happen. I don’t know if there’s a good solution.
CHUCK:
Yeah, you’re right. It does depend a bit on where people are at. So yeah, if there’s not enough to even fill a week periodically then yeah, it’s kind of a different thing. What do you think, Eric?
ERIC:
Yeah, that’s kind of what I’m thinking; maybe try and clump it up if you can. The thing is if there’s not enough for a week, say every month or – I wouldn’t even go as far saying a week every three months, so four weeks in a year.
It might not be worth doing it; might be time [inaudible] kind of transitional way. It’s the idea that the cost of doing business with this client is higher than the actual revenue that you get from it so it’s not a good – it doesn’t make business sense to do it.
That said, I would kind of question if it doesn’t make sense for the client. I would actually – I would talk to them and ask them and have a dialogue about it because they might be thinking it makes sense for them, like you make sure they're not getting value out of it but they might actually be getting value out of it and having you there and available. Just in case something happens, that might be worth more than the actual time you're putting in.
If that’s the case, then it might makes sense to switch to a retainer where you’d give them a budget of hours or a week. You can set some kind of ‘I’ll do it to this amount of work, you're just going to pay a flat fee’. That way it’s still going to be sporadic-ish but you can book around it; you can basically tell them, “I’ll get some stuff in 24/48 hours –,” whatever so that you can fill most of your calendar and just leave a little bit of gaps here and there for this client. That way they might be able to get the penalty insurance, get the help from you that they’re wanting and then you get the income to the client. And later on when they have a larger project or they do groups up. You can actually come back to them and do a full solid week or something.
REUVEN:
I actually have that going with one of my clients where a company contact me to do some training and then consulting, and then they said, “We want to pay for a bank of hours with you. Help us out.” And they paid upfront for it so basically now I owe them another day and a half worth of work, and they gave me an assignment that will probably take me on a two or three hours to work on and that’s about it. So I’m just going to keep running down the hours and then when we run out and we close – we come close to running out, I’ll tell them we’re done.
But that assumes I have about free time my schedule and that assumes that they're willing to work around when I have time. They can’t call me and say – well, I don’t think it’ll be fair if they're going to call me and say, “You’ve got to do this today because we’re desperate and we paid you in advance.” There has to be some sort of agreement that their trading off immediacy for convenience on everyone’s part.
ERIC:
Yeah, and you can even – you have [inaudible] for that; you should probably should [inaudible]. If it’s just wants some of your time and it takes two or three days to get, you’ll charge them a thousand dollars a month. But if it’s like, “We want your bill; drop everything. Get on stuff and we want 24-hour result. Get on it right away, get it fixed.” You might charge $3,000 for the same amount of time. Basically, support contract [inaudible] idea; I bet you don’t have to go bad upstream.
But I would – if you can, I would try to not do a chunk of hours. I don’t sell them ‘you get ten hours whenever you use it’. The contract’s up; I would sell them ‘you get ten hours this month. If you don’t use them, they're gone. You’ll get ten hours next month.’ That’s the most classic retainer. The chunk of time still puts the value on, use it in their working out the actual knowledge they know.
CHUCK:
Yup. Holly – the person who asked the question – posted in the chat. I forgot to mention the – in that question that I’m trying to avoid hourly, they don’t know my hourly rate. And I think that’s kind of important in the sense that, yeah, you're trying to price differently, you're trying to get them to think about your time differently. You’re trying to get them to value your time in a different way and so you can definitely get away with that.
You can also let them know if you do a retainer deal though, because it’s recurring. You can rely on it and you're assuming that not every month they're going to have something that you absolutely have to get done. So basically, you're not giving them your hourly rate then, but you're saying ‘because this is recurring and I can count on the money coming my way, I’m going to do you so many hours for that amount of time,’ and just let them know that they're getting a discount on that based on the assumptions you're making as far as the value they're getting and the amount of work your actually going to have to do so that all evens out.
ERIC:
Yeah, there’s two other ways if you want to avoid hourly. One is to do – this is an IT [inaudible] incidence, if they report a bug, if they report a problem that counts as one incident.
CHUCK:
Uh-hm.
ERIC:
And you get them a budget of, we’ll say five a month. And when they run out they can buy more if they want or whatever. That can be my-side-your-side confrontational because I don’t know that I should be included in this other incident. So that’s – you can do that. It’s an easy way to factor hourlies above a little bit.
Another way – if they have the budget, you can just – you charge them a very good high level amount of money and say, “Basically, I’m on retainer for you; any advice – you need any help, you need – call me. We’ll do it.” Much as your time that you can give to them. You have to make it enough works worthwhile so if they do suck up all of your time or they do become your number one client at that point, make sure you [inaudible] it and make sure you survive and keep that up. But that’s another route you’d take and that’s more – “you’re hiring me as an adviser and I’m going to help you to do the best thing for your business and I’ll be here for you.”
CHUCK:
Anything else we want to add to that conversation as far as billing and –?
REUVEN:
Sometimes, when I talk to people about doing retainers, it’s often a pseudo-hourly. When we say they’re going to get a bank up 10 hours/20 hours a month – something like that. First amount of money and it’s kind of hourly but not exactly. And I say to them, “Look, we don’t know how many hours it’s going to be. I want you guys to succeed. And so let’s try it for two months/three months.” We’ll estimate and it’ll probably be like a sine wave – someone’s is going to be more, someone’s is going to be less. After three months/six months, let’s evaluate where we stand.”
Generally, everyone’s happy with where we started off. In my three years where I was doing 20 hours of hour a week for him – roughly. And there were some weeks when it was 10 and there were some weeks where it was 30. And I don’t think either of us really care that we were contracted because it was basically – he was happy with the work I was doing, I was happy with what he was paying me. So as long as everyone’s happy you don’t need to keep it down to the minute.
CHUCK:
Yeah, that’s true, too. Alright, should we go on to the next one?
REUVEN:
Sure.
CHUCK:
So this one is, “When other contractors on a client project go MIA off and on and the workplace are a vital role in the project, do you suggest replacement of the client?”
Yeah, if somebody is being somewhat unreliable on a project, it’s sometimes tricky because there are people involved and if a person keeps coming back – so they're in and out, in and out, off and on and whatever – then you have to feel things out because sometimes they come back aboard then the business doesn’t realize – your client doesn’t realize how inconvenient that is or how it’s affecting you. They may be their darling and so you coming in and saying, “John over there is –,” it’s making it really hard to get work done. They may go, “Oh, Suzy doesn’t like John,” instead of understanding that John is making Suzy’s job hard, right?
And so you have to feel things out. If you talk to them and you can communicate to them what it’s costing them, and then they are willing to entertain bringing another person in or evaluating whether or not they need somebody, then yeah, by all means suggest somebody that you can work with.
It usually works out in my experience; it’s better for them and better for you because it’s somebody that you work well with. It’s usually somebody that you’ve worked with before and so because of those things you get some synergy out of that, and you don’t have to learn how to communicate with each other or work together. And that saves them time and money and all kinds of other things.
REUVEN:
I had this – it want exactly this problem, but I assume the problem years ago. It was probably 15 years ago; I was working on a project where it was me and two people working for me. And we were the outsource staff, and it was the in-house staff that was completely unreliable.
CHUCK:
Uh-hm.
REUVEN:
And it was just maddening. Basically, the client returned to us and say, “So, why aren’t you done?” And basically to say ‘well, you're staff is a bunch of lazy do-nothings’ was not really an option.
So we came up with what I think is a fantastic solution. It worked beautifully. We setup a task tracker for everything that need to happen, and suddenly it was very obvious that we were – and then you have to assign things to different people, right? So we would – can we assign different tasks. And it suddenly became painfully, incredibly obvious that we were getting things done within a day or two and theirs actually was just sitting on things and doing nothing. And we needed to say zero, like we literally said nothing about this and someone noticed it and it changed overnight. And suddenly they began stepping up their game.
And so I would suggest, if you don’t already have a task tracker, use it and assign different tasks to people. And if these people are really unreliable, then hopefully the client will notice this because their job was just going to keep piling up and when you have regular meetings – and I hope you have regular meetings like one a week or once every two weeks to figure out who’s assigned to what. It’ll be obvious that they're not doing their thing.
And then your comments and your complaints would not seem like whining, you can say, “There are blockers; I can’t get my job done because they haven’t responded to me.”
CHUCK:
Yup. So Holly also pointed out in this situation that the clients are most upset about this, and she’s wound up playing the role of the therapist of the client because the other person is necessary bit disappears a lot.
So in that case [laughter] I agree. I would be suggesting somebody else come in you can also couch it in terms of, “Hey, we’re going to bring someone else in to help out because we need some help getting the rest of the work done.” And then once that person comes up to speed on what the other developer that’s not reliable, or the other contractor that isn’t reliable is doing, then you can go, “Okay, well. So long and thanks for all the fish.” It just basically explains to them, “We realized now that we have Joe here and he’s here every day and delivering value every day and blah, blah, blah – that we appreciate what you’ve done but we don’t need your help anymore.” And that you can face somebody out without them being torqued off for you firing them.
The other thing, though is that it may just be worth letting them go and then – what’s in the code is in the code; you just have to figure it out. Just depending on who the person is and what their personality is, and how that will all go down.
ERIC:
That was what I was going to say. There’s very few people that are very irreplaceable in a business. They all like to think that –. You could be fired, your job could be given to someone else that might not be exactly the same or as good or as sufficient or whatever but it can still get done.
We’re not all that unique.
CHUCK:
Yup. Definitely. [Chuckles] and if it’s Ru by on Rails – did I say that I am entertaining new contacts? Because I’m entertaining new contracts. [Laughter]
ERIC:
Now with the – you can have a task tracker and having visibility works really good. I did know a client where one personal team wasn’t pulling their way and it was an internal employee, and what we did is we were assigning stuff and we had daily meetings – little stand-ups where it’s like ‘what are you working on?’ He was able to hide the fact that he wasn’t getting a lot of progress done just by saying he’s throwing into his problems, and basically blowing up proportions. But then every week when we actually go back and let through [inaudible], you can see like he was getting a third of the work done.
And another thing that really worked good is in addition to that, I was burning through my stuff fast, like I was getting a lot of work done. And so I would go to the project manager and say, “Hey, John here has a lot of stuff on his plate; would it be helpful for him if I took some of these from him?” [Laughter]
I can let it – do his work for him. And so at the end of the week they’d be like, “John has made 20% progress on this thing whereas Eric has finished 10 other things,” and that actually made it pretty visible that something was wrong. It ended up – I think the project manager talked with him. They said that – they said that he has overcommitted himself to stuff that he didn’t know what to deal with. And so it resolved itself and it worked out. You can get fired, people are going to get all mad and all that, and the project got a lot better at that point.
So it’s another thing is if you assign such, you can also come back and offer to be helpful. And so you're in a positive light and it kind of – if people can see it, it might actually shine a light on where the weak link is.
REUVEN:
When I was in college, we had a course on software engineering. And for the final project that we had to work in groups – groups of three. In my group, there’s one person [inaudible] and she just basically did nothing. It was really incredibly frustrating for the other two of us; we went to the professor and we said, “What are we supposed to do?” And he said, “Folks, this is a course in real world software engineering. This will happen in your careers. Deal with it.” [Laughter]
And after that we had to deal with him a few months after I finished the course. He was in charge of giving credit for study abroad and I got abroad for a semester. And I said to him, “By the way, that course you taught I didn’t really appreciate it but it was a lot of great real world learning there,” not just after the whole lot of things that he taught us which were tough love. Maybe tough hate in his case in any of that. And he said, “Yeah, a lot of people come back and tell me this that I’m simulating the real world and maybe that’s not fair but that’s just the way the real world is.” Sad to say, but you're going to always have to deal with people even in the consulting world especially, who are just incompetent or uncommunicative or difficult.
CHUCK:
Yeah. I’ve actually hired some contractors and have that happen to me.
REUVEN:
Oh God.
CHUCK:
So I’d pull all-nighters for a couple of nights to figure out what they were doing and then I let them go. Sometimes, that’s what it takes. That’s another solution is just to say, “Look, if you're willing to pay me extra time, then I’m willing to go in and figure out what he’s doing and then we can find somebody else.” And it’s not essential.
ERIC:
Especially on this case, if the client’s unhappy and it’s a contractor [crosstalk] the client should get rid of them or fire them or basically tell them right away, be very upfront about it. The fact that the clients having to come to you and other consultant help out and – that’s like kid’s club – get on, fix a problem, fire them if they have to. Like Chuck said, [inaudible] take, do a couple of overnights to figure out what’s going on and all that.
People don’t fire fast enough; that’s the problem. I’ve seen that time and time again.
REUVEN:
People have also [inaudible] that works in HR; I’m sure you hear all sorts of stories about people who aren’t fired fast enough.
ERIC:
Yeah. [Laughter] As much as – whenever an organization gets deadwood, basically stuff that just holds you back – that’s why there are so many lay-offs when there’s a downturn in the economy because companies can finally fire people with a valid excuse that should’ve been fired years ago. That’s a tragedy because the company is suffering, they're not getting the good stuff, it’s hurting more alternative employees but it’s also the person there who is not working as good as they can. They probably know it. They probably know that they are a problem child and it’d be better for them to go work somewhere else that they could shine, they could put their skills to use.
CHUCK:
But coming in and providing that solution, you get to be the hero for a little bit. That goes over not just in that contract but when you go back and you want to give referrals or get a testimony or anything like that, they can come in and they can say, “Not only did she deliver what we expected, but she saved us all of this time trouble and money by stepping up and making this other problem go away.”
ERIC:
One more thing also since you’re a contractor also, if you fire them but if you fire them in a nice way, worse case you do is to hire them back. You could say, “Oh, we made a mistake.” There might be some hurt feelings and all that but if it’s a, “Hey, I think – I don’t think we need your help on this anymore. We’re done,” you always have that – so there’s not a lot of risk like burning bridges.
CHUCK:
Uh-hm. Right. Alright, I don’t see any other questions in there, so whoever’s watching feel free to jump in and suggest some but I have a situation I want to talk about.
I got a call from my accountant yesterday –.
ERIC:
[Inaudible] In your account and don’t know where it came from? [Laughter]
CHUCK:
That was from your mom. [Chuckles] But it turns out – I don’t know if I’ve talked about how my company is structured but basically, the way it works is the company is on 90% via family limited partnership and 10% by me. And then that family limited partnership is owned 90% by my wife and 10% by me. The way that it was working out was that when I paid myself, I would pay 90% in owner’s straw and 10% to myself as a salary.
And so it reduced the amount of social security and medic aid that we have to pay because it was only self-employment income for that 10%. Well, it turns out that the IRS figured out what this guy was doing and so they're auditing all of his clients but –.
REUVEN:
All your accounting clients?
CHUCK:
Yeah, but I locked out in the sense that my accountant brought on a partner a few years ago because he was planning on retiring; he’s actually serving a mission for the Church right now in France. And so we brought in this other accountant and this other accountant and I hit it off. And so all of his other clients were filed under his provider number and my taxes for the last three years have been filed under this new accountant’s provider number.
So since this new accountant isn’t on the IRS’s radar – at least not yet. I’m not getting audited but I am changing my corporate structure to an S-Corp.
ERIC:
So wait; you were using another accountant because he went into international stuff, is that what’s going on? [Laughter] You’re using a shell accountant that had some extra trust stuff set up to fund more money? [Laughter]
CHUCK:
Yeah, that’s a moral lesson –. [Crosstalk]
REUVEN:
[Inaudible] the IRS to this show. I understand the motivation behind this. Basically, it was to reduce social security and medic aid payments.
CHUCK:
Right.
REUVEN:
So, [inaudible] you get money to a client, it would go to the consulting company, and that would then – you would take that from the owning company because the owning company gets to take the profits.
CHUCK:
Right.
REUVEN:
And the consulting company had very little in terms of salary and other expenses.
CHUCK:
Right.
REUVEN:
And then you as the owners – or your wife is the owner of this holding company as it were.
CHUCK:
Uh-hm.
REUVEN:
Who take things but it is much less, and somehow that reduce the taxes a lot.
CHUCK:
Right. So 90% of my paycheck went to my wife and 10% went to me. And since I’m the one working in the business, I have to pay self-employment tax on what I get.
ERIC:
I see.
REUVEN:
Yeah, not that I know a lot about taxes and so forth, but that sound like a really transparent scheme that they should’ve figured out a long time ago.
CHUCK:
Yeah, but when he sold me on it he was saying, “Yeah, it stood up to audits and –,” I’ve got a whole bunch of clients that are doing it and it seems to [crosstalk]. And apparently, not so much anymore. [Crosstalk]
ERIC:
It’s a legitimate way; I’ve heard of that. It mostly – I've seen it in real estate where you are not actually [inaudible] a day.
CHUCK:
What is investment income anyway? And this is different.
ERIC:
If it’s investment income into a corporation then it’s considered normal in accounting. But the thing is this is – it gets into crazy, little stuff. Like you, the way that you're probably operating versus what you have set up probably doesn’t match and so they are surprising. If it walks like a dog, it talks like a dog. It’s not a bulldozer – whatever.
CHUCK:
Yup. [Laughter] My other thing is they came in and they said, “This family unlimited partnerships –,” because that’s a legal entity here in Utah. They aren’t conducting businesses, they aren’t really doing anything except passing money through them.
ERIC:
Yeah, it’s a front company.
CHUCK:
And so they said, “No, we can’t do that.” People would just have to pay more taxes; it’s what’s happening and nobody’s going to jail or anything. But yeah. [Crosstalk]
REUVEN:
A life’s worth or a decade’s worth of taxes.
CHUCK:
Yeah.
REUVEN:
Which could be really painful.
CHUCK:
Yup.
ERIC:
Another thing I think about is the IRS – if you're working on a company, the IRS wants you to be taking a salary that is about equal to market rates for your position and what you're doing.
CHUCK:
Yup. And that’s what my accountant told me.
ERIC:
So if you're taking 10% of your total income and that ends up being a lot less, the IRS might say, “No, no, no. you’re actually – you are basically doing the same thing as if you were – just had a simple corporation and we’re taking everything as a dividend.
CHUCK:
Uh-hm.
ERIC:
And that’s what’s at play here. So you have the two entities and different money flows.
CHUCK:
Yeah.
REUVEN:
Obviously, there’s a lot of different and I’m not super up on them. But I know that in Israel – my company we have a hundred shares because my company, it shares. And one is owned by my wife and 99 are owned by me. But it doesn’t really matter because we’re married.
Basically, if one person in the family has ownership – and I think ownership is defined, in Israel, being 20% or something, 25%. Then all the other people in their family are considered to be owners and are reliable. And the idea is like I can’t bend half of the company off to my kids, my wife. Even my kids getting married, I can’t give the company to them because they’re still part of my family. And it’s typical for people [inaudible] taxes, but I also know something like what Eric said in terms of the salary.
I have talked to my client about ‘can’t we just boost my wife’s salary because she has a lower tax bracket than I am. And he’s like, “No, you can’t do that because you can’t just arbitrarily change people’s salaries; it has to be reflect – it has to reflect market raise to some degree.”
CHUCK:
Yeah, and he actually went and looked and he’s like – yeah, so web developers on whatever system they look in make about this amount and he’s like, “So you have to pay yourself a salary of at least this amount,” and all of that stuff. So that’s exactly what we’re looking at and I’m going to get more details on Thursday, but I’m just like, “Yeah, so as long as I don’t get audited [chuckles] I’ll be happy.
ERIC:
And we talked about this on a past show of Accountancy, and I think I I’m off a lawyer. Words like ‘there isn’t one thing you can do to trigger an audit’.
CHUCK:
Nah.
ERIC:
I think the analogy was like a football field; you could be on side where you're probably not ever going to get audited very safe. And then the other side is like, yeah, you're going to be audited. It’s almost a guaranteed factored. Maybe not today or this year but sometime.
And so you got to find where you want to be on that, risk-profile wise. And for me I could just – I have an LLC but it’s a very simple LLC that I just passes all the income through.
So I need up paying extra on medic care, social security and all that but I don’t have to [inaudible] stuff; I don’t have to do other than sending checks to Oregon just to register my name and all that. Very simple entity. I don’t have to worry about salary [inaudible] all that.
And if I get audited, it’s by [inaudible] schedule to see but it’s one of the most simple forms for the IRS for business. But it’s like if I was doing consultancy, if I was making ten times what I was making now, then yeah, taking on a lot of that headache to save ten times whatever the better rate is on having to pay some of the taxes, it might make sense. But at the level I’m at I’m like, “Eh.” I
can just work an extra week and make it up so it’s really worth it.
CHUCK:
Yup.
REUVEN:
Chuck, you’ve mentioned that you’re going to be soon be an S-Corp. I seem to remember, from what I know about American companies, that’s a more complex and expensive situation that LLC.
Why would you do that?
CHUCK:
Well, so with an LLC you can file an S-Corp and you can setup your business in certain ways so that they’d behave like an S-Corp. That’s all I know. So I don’t have to change a lot of things, but I’m going to have to change a few things especially in the way I operate.
My understanding is that I have to pay myself – like I said before, I have to pay a payroll. I have to pay myself a salary of at least a certain amount of money. I think the number is around – was around $50,000 a year. And then it’s like, okay, now how do I manage the rest of it? Does it come through as regular income? Can we draw it as owner’s shares or things like that – I don’t know what the answers to that are. But yeah, it’s going to get a little more complicated in how I pay myself.
REUVEN:
Yeah, I actually have to talk to my client at some point in the near future also because now that I’m doing all these training directly with companies as opposed to through a training company, my income – my [inaudible] training is roughly doubled.
And so now we’re just in a lot of finish paining back PhD loans and so forth. But very soon, the income is going to go up and there’s a question of, “Do I take it as income? Do I take this as my wife’s income? Do we pay ourselves a dividend? Do we – I actually have no idea; that’s what I pay my accountant for and he does this with so many companies.
I can’t stress enough the importance of having an accountant whom you can trust and turn to. I don’t turn to mine very often but when I do and I need answers, he’s usually there to give them to me.
CHUCK:
Yeah, go find a good accountant if you have questions about any of these stuff. But yeah, I thought it was interesting that it came up and so I thought I’d bring it up.
REUVEN:
Yeah.
ERIC:
S-Corps are actually good but you can have an S-Corp and then dissolve the subchapter S part and make it a C-corporates for big business. And given that, you’re on a lot of different areas. You have potentially non-consulting businesses embedded in.
If you ever got to the point where you want to dissolve, let’s split it out. You’ll basically go public, share IPO shares, whatever, you have that flexibility. Whereas in LLC, you have to basically close down the LLC and start up a new corporation, transfer assets, which – it’s not hard. I did that one when I first started my LLC but –.
I recommend almost all people do LLC’s, but in your case I can see an S-Corp working good.
CHUCK:
Yeah, I’m also toying with the idea – I’ve been playing with it for a while; I just – I haven’t really had a strong motivation to do it but you know where I have my hands in consulting and the podcast sponsorships and a couple of other areas; the online conferences and things like that.
I thought about moving some of those over under their own company, to shield the overall company and the other assets form each other. But I haven’t seen too many cases where somebody gets sued over something they said on a podcast or anything like that, so I haven’t worried about it too much.
ERIC:
Yeah, and actually Jonathan Stark – I bet he talked of his attorney about some of these stuff; I think the past week or maybe two weeks ago. But yeah, there’s all a bunch of weird things that kind of come up even if you have separate corporations or [crosstalk] but you as a person are still doing work in them, like there’s liability concerned.
That basically comes down to you need to have a good attorney and a good lawyer, and probably a good tech accountant and all that to actually understand what’s going on, how’s the stuff moving.
One of my open tube risk-wise –.
CHUCK:
Yeah.
ERIC:
And I think at that stage it’s probably not worth it. Like I have one entity but I have different – I just call them ‘divisions’, like this is my products division and then my consulting division. But they're not superb, it’s just for me to keep track of stuff.
CHUCK:
Yeah, and I don’t want them to look, feel or taste like I’m playing a shell game for the IRS or anyone else.
But yeah, I think what I may do is just start consulting with an attorney, maybe once a year and just saying, “Okay, here’s what I got going on now.” How risky is this and do you have any recommendations on how I protect myself?
ERIC:
Yeah. And if you can do it, if you can get your attorney and your accountant and if you have this tax, get them all on one [inaudible]. You can get through a lot of stuff faster. Your attorney might save – legally you probably want to do this, but your tax kind of say, “Yah, but that’s going to cost you an extra four grand in taxes.”
CHUCK:
Right.
ERIC:
You can actually bounce the advice against each other.
CHUCK:
Uh-hm. Yeah, that makes sense. I need to talk to my accountant because more and more of my income is coming from the podcast and the conferences and less from consulting. I don’t know how that changes anything.
REUVEN:
One thing about starting another company, so I guess it was about seven/eight years ago, I tried to do a startup. And we almost got an investment, and then we didn’t. But we were so close and the initial investors said, “Well, you better start up a corporation.”
So I registered a corporation here in Israel. I never did anything with it other than just register. So basically just register with our justice ministry. But I have to pay an annual fee for it, about $300 or $400. And every year, it’s like this thing that my accountant says, “What is this that you're paying for?” I say, “Oh, it’s for this company that does nothing.” And I would always ask him, “Is it really worth just keeping it around?” And he says, “Ah, it’s so expensive.” And so I’m willing to close the company down.
So finally this year I said, “Look, this is ridiculous. I’m not ever going to use this company.” I just want to get rid of it. So turns out it’s like four times the annual registration fee to close it down. I’ve got to go to a nice attorney, I got to pay him for that, and so now I feel like a total idiot. Basically, I spent several thousand dollars on this company that did literally nothing ever. And so – I know in the US it’s a lot less expensive to do these sorts of things, but before you start up a company just for the sake of separating things, it’s worth considering – okay, and what if it doesn’t go anywhere?
What if you have to do something with it later on? Or why don’t just get rid of it?
CHUCK:
Yeah, I think it costs me 15 bucks a year to renew each of my business and the diesel.
REUVEN:
Ha, America. [Laughter]
CHUCK:
But that’s my state so I don’t know what it looks like in other states, and the initial registration was 80 or 100 dollars or something.
ERIC:
At the most, it’s maybe 500 to register and then a couple hundred even the most expensive states.
CHUCK:
Yeah. It cost me another 600 to have another attorney dropped all the documents you need to have the business. All the by-laws and org stuff and all that crap so it looks official. As long as you're doing, dotting all your I’s and crossing all your T’s then you maintain the protection that your LLC offers.
ERIC:
Yeah, in Oregon it’s 50 bucks a year for an LLC; and I’ll get another 50 for a DBA just because – that’s all. And I pay credit card online – January to December of time. That’s all it is.
I got to do my own meetings and all that stuff but that’s – have all the paper for that. I think I picked it a while ago so people’s looking for that. There’s a kit you can buy that has templates for all the meetings, has either shares or memberships like stocks, certificates, whatever. And I even got one that has a lot of cooler hole punch thing so I can do my official company seal. But that was like maybe a hundred bucks [inaudible].
CHUCK:
So why do you have a DBA?
ERIC:
Because I started as a sole proprietor, which is I recommend is probably best to start for most people. But I did a DBA so it’s not my name. And then when I made an LLC, I don’t want to have to do little stream software LLC, so I have a DBA to LLC software.
CHUCK:
Gotcha.
ERIC:
Probably not needed but it’s – I set it up, it’s there. I guess that’s 50 bucks a month or 50 bucks a year so it’s not really dropping to the bridge type thing. That’s actually less; I think it might be 50 bucks every two years. I don’t think it’s an annual renew.
CHUCK:
Nice.
REUVEN:
Wow.
CHUCK:
I’m thinking about getting a DBA for Devchat.tv just so people are going to write checks to Devchat.tv.
REUVEN:
So if someone gives you a check to Devchat.tv, and y9our bank log is right. In the US, banking is much less personal. Here, I het checks – I don’t give that many checks anymore. Most of it is just bank transfers. But if someone makes a check out to Reuven Lerner, I can still deposit it in my corporate account, you know – Reuven Lerner [inaudible] consulting and no one could care less.
CHUCK:
Yeah, I can do that. I just get a little tired sometimes of explaining to sponsors or people sending money for this or that. “Okay, so I’m sponsoring Devchat.tv and I’m writing the check to intentional excellent productions. We’ll see.”
REUVEN:
Right. The only people who really know or care about my official company name are the purchasing folks of various companies who pay me, otherwise, we just figure that they're paying me, personally.
CHUCK:
Yeah, but most people pay with credit cards; it’s not an issue, it just goes into my account but not everybody.
ERIC:
And I don’t think it’s really that big though. I get checks written to me personally from clients that I just say – I just put in my business card. I even go through the ATM, like completely non-personal.
I actually deposit a check into my LLC. The check was one of those early checks before there was anything printed on; it just has the account number. The check was written out to me and the person did not sign the check, and the bank took it. [Laughter]
REUVEN:
Wow. I had a check balance from a client. It was like a year ago. And I went to the bank and said, “Why did this deposit balance?” They said, “Oh, because you didn’t – when you endorsed the back of the check, you didn’t use your company stamp.” I was like, “Really? I haven’t done that much anyway.” And they were like, “Oh no; very important to use company stamp.” It just gives you an idea that anyone can go into any station or store in Israel, and within 15 minutes of a company stamp with that [inaudible] or company they want, so the actual security and volunteer is nil. It’s like a hold-over from the British mandate, and some people care about it.
The irony is, of course, on the same day as I deposit this check – that balance without the stamp, I deposited another check in the same bank, in the same machine also without a stamp and that one went through. So clearly, this is just complete inconsistency and I haven’t used the stamp since they haven’t mentioned anything since. So I’m mostly getting bank transfers now because it’s so cheap in Israel. With the number of checks I’m getting is pretty small.
CHUCK:
Yeah, I have a stamp but I just – if I can’t find it, I can just take it in and they’re like, “Oh, did you want me to stamp that for you?” [Laughter] I have a generic bank stamp that says ‘work stamp in this check’
REUVEN:
So ridiculous.
ERIC:
I’ve never stamped any business checks. I sign it. You could sign up at For Deposit Only, put your account number. Nowadays, my bank doesn’t because my bank sucks but they have the apps. You can take pictures of your check and it gets deposit. So it’s like – I think the banks just do spot checks on stuff and so like, “Oh, we’ll spot checking this one. There’s no stamp. We’re going to flag it,” versus the other 999 in that batch that goes through [inaudible] signed or if they're legible or who knows what.
REUVEN:
that’s true. I think I’ve mentioned in this podcast before; from my US account, I use LA Bank which is all online, and I have been super really happy with them. I talk to them once a year – once every six months or so. And they are over-friendly, but they have an app that does exactly what Eric says; I think a lot of banks do now. And it’s just like magic [inaudible] I’m concerned. Take a picture of the check and a day later, it’s in my account; it’s right there so it’s great.
CHUCK:
So another question I have for you guys – and this comes off of another area of issue. I may have talked about it on the show before; have I talked about cancelling my merchant account?
REUVEN:
No, I don’t think so.
CHUCK:
Maybe I set merchant accounts?
REUVEN:
I do not personally. I just get that from my clients.
CHUCK:
I switched to Stripe but –. So I had a merchant account; I set it up quite a while ago so that I could take credit card payments online. And then I hooked it up through authorize.net and I was using it with Harvest. And then I was also using it for Ontraport to manage form sign ups.
Anyway, somebody was going to Devchat.tv and going to the form sign up page, and they were entering fraudulent credit card number – numbers that they have stolen – to see if the payment would bounce or not, right? Because it’ll come back and say, “Your card is declined,” and then they just junk that number and go to the next one. [Crosstalk]
REUVEN:
So they were using you as a test bed for finding out if the stolen card could be used. [Laughter] Pardon me for laughing, but that’s really fake.
CHUCK:
No, it’s a pretty common thing. So they go find a low cost purchase. And then if it goes through, then they go over to Amazon and buy $5,000 worth of crap. And so anyway, I got this call from my merchant account and they were like, “Yeah, this is going on,” and whether they go through with it or not. You have to pay a fee every time it looks up the card and tries to charge you. [Chuckles] And so they’re like, “We’ve had clients that, once this really gets rolling, they wind up paying $35,000 in merchant fees.” And I’m like, “Yeah, I don’t want to do that.” She’s like, “Do I have your permission to block your account?” And I’m like, “Yeah,” because I figured they would just fix it within the day and then turn it back on.
So I went back to Ontraport because I was using the forms to manage the forms sign up. And they had – I’d set up those forms in their office’s autopilot and then they had migrated me to Ontraport that’s why I could modify the forms. What they were requiring from the merchant account was that I add a reCAPTCHA. And so I switched it; I was like, “Okay. Well if I have to re-jigger the forms anyway, I’m going to do it all programmatically and I’m just going to plug Stripe into them. And then I’ll just leave people on the other system.”
So I went and I put reCAPTCHAs on there and if you’ve seen reCAPTCHA’s version two, it’s actually checkboxes as I am not a robot. [Laughter] And then – images if they're not sure who you are, they’ll show you some images and then you have to pick the ones that have pizza in them or something.
REUVEN:
Oh, I just saw that recently for the first time and it was – I can’t decide if it was more or less annoying than other reCAPTCHAs.
CHUCK:
I like it a little bit better than typing in the world – the swirly word but anyway. So I got that on there and then I called the merchant account back and they said, “Okay, you can turn it back on now.” So they go on look at my website, they come back and they're like, “You can’t use those CAPTCHAs,” and I’m like, “Why not?” “Well, you have to have the word CATCHAs; you can’t use the checkbox CAPTCHAs because they have macros that would just check that box." And I'm like, “Yeah, but you don’t understand how the CAPTCHAs actually works, right?” So I’m trying to explain to this person on the other end of the line how the CAPTCHA works and why it’s secure. And she put her foot down, “No you can’t.”
And so finally, I got fed up because I figured out how to switch it over but it looked horrible. It didn’t work consistently so I switched it back. And I’m like, “Look, this is legitimate; it’s run by Google for Heaven’s sake,” and she just insisted, “No, we can’t unblock your account.” And I’m just like, “Well, if I had known this then I wouldn’t have blocked it in the first place.” And she’s like, “Yeah, but we can’t unblock it until you put the right kind of CAPTCHA on there.”
And so I emailed her back and said, “Okay, well then I’m thinking about cancelling my account.” I got an email back five minutes later saying, “As per your request, we cancelled your merchant account.” [Laughter]
REUVEN:
What a bunch of Idiots!
CHUCK:
I know right? And so I had switched everything over to Stripe. And so I got this snarky email saying, “You're going to have the same problem with whatever you switch to.” And yeah, it’s been so not a non-issue; and we had – just having that reCAPTCHA on there and making it work has just been – it’s worked fine.
REUVEN:
I have had to deal with any of that stuff. For something like e-books, I’m just using Gumroad and they take care of all the credit card stuff. And I talked to my bank about taking credit cards from clients and they asked me how many clients I have. And they asked me how many would be interested in paying by credit card, how much money it would be. I told them – they said, “You're nuts.” It is just not worth it [crosstalk]. If people are not going to do bank transfers, just have them send new checks. In your particular case, it’s just way better.
Now obviously for sign up for the forms, you need to take people’s credit cards; there’s no other way. I’ve heard Stripe is great.
CHUCK:
Yeah, Stripe works great. So I switched it over to Stripe. They’re probably thirty or forty people that were on Ontraport that aren’t renewing anymore because the merchant account is gone and you can’t switch them from merchant account to Stripe within Ontraport.
It uses authorize.net APIs but it was basically breaking even on Ontraport so I’m just going to cancel that service because I don’t need a – I’m going to switch to a much cheaper CRM. And then Harvest, I went in them and I’m like, “Ugh, I really hope this works.” So I went to look at their payment options and they had Stripe, and then authorize.net and PayPal and I already had PayPal set up.
So I clicked the radio button for Stripe, the other section for authorize.net just went away like that because you can only have one credit card processor in there at the time. So I just connected it to my account; it didn’t [inaudible] off. I got to pick which account it went into and that was it.
My message is unless you have a compelling reason to get one, don’t bother getting a merchant account just start out with something like Stripe or PayPal and you’ll be fine for 99% of your stuff.
REUVEN:
My clients are just a ton of e-commerce. Eric, you probably deal with this a lot also but it’s all done through Shopify and they probably handle this, I assume, for you. So you don’t have to worry about it.
ERIC:
Yeah, they can. My blanket recommendation is every consultant should have PayPal just because it’s used a lot. It’s sucky but it’s there. And if you need credit card stuff through Stripe, I feel like clients pay through what is called Stripe checkout; literally 40 lines of code that I CAPTCHA wrote just because I wanted to embed it in a Syn-app. But use Stripe – but when you hit the level where you’re literally looking at 2.7% transaction fee and wanting to get it down 0.1%, you have been – start shopping around for checkouts. Until you hit that level, it’s not worth it. It’s not worth the pain.
CHUCK:
Yup. I totally agree. It [crosstalk] to set up to.
REUVEN:
Sure. My client does a lot of e-commerce stuff. We just used Braintree and we were really happy with them. And we used them for both – I think we still use them for both transaction at the gateway and the merchant account. And [inaudible] expensive than if we would shop around but knowing that’s just there and they respond to our request. It’s worth a lot.
ERIC:
Yup, Braintree’s good, too. I actually use them on the SaaS I built. The only downside of them is it was – they have monthly fees for having accounts, and the SaaS just wasn’t making it so I cancelled it. If Stripe was not around and I had to do that sort of thing, I’d probably use Braintree.
And now it is how Stripe works – you don’t pay anything if you're not using it; it’s great especially for low volume transactions. Stripe, Braintree, PayPal – most of them are pretty comfortable in the amount you pay. And if you're charging clients, the fees are so minor compared to what you're actually billing for. It’s a better issue trying to go out and build another client than it is to get an actual percentage or not.
CHUCK:
Yeah, and the other issue I had with the merchant account was that they would give me the full amount of the charge. So if it was a $10,000 charge I would get $10,000 on my account. And then the next month at the most inconvenient time possible, they would come and debit the fee back out.
ERIC:
Right. Versus Stripe where Stripe takes it out, [crosstalk] transfer it through your merchant. Because what it is with Stripe, everyone has a merchant account but Stripe controls it so the credit card fees go into the merchant account, Stripe takes their cut out, and then Stripe transfers from the Stripe merchant account to whatever linked account, so you don’t even see it. I don’t even log in my accounting system anymore, how much I’m paying credit card bills because I don’t really care.
REUVEN:
I just say that what I got – I know we just talked about this at one getting – remember that people outside the US, Stripe and Braintree are basically not options. PayPal is the only game in town and so the fact [crosstalk].
ERIC:
Stripe is thoroughly expanding.
REUVEN:
They're not yet in Israel; I’d tell you that much. Neither of them is yet in Israel although both of them say, “Hopefully soon.” They both hate shekels but they don’t let you work with them if you’re an Israeli company. I think Canada and England and a few other EU countries are starting to be there which for me [crosstalk] fine.
CHUCK:
Alright, let’s tackle through this one question then we’ll wrap up. So the question is do you guys let clients text you about projects? I found that once you let that happen, they start texting about things that should be emailed or handled elsewhere; or texting expecting a faster response. Or texting at inconvenient times like when you're driving with your family.
I hadn’t had too much trouble with this so I, generally, if they want to text me, that’s fine but I text them back when I’m at work.
ERIC:
I don’t give my cellphone number to any clients with the exception of one. I gave it to them because I was basically running their service for them and it was like [inaudible] type of servers.
I do not have – I don’t even have a text messaging clan. I always use the iMessage but I know about it. I have a business phone number and it’s an 888; I also have a local one for international people. They call me, it actually calls my cellphone and then I get emails and voicemails and all that. So if it is a critical issue and they have to get hold of me, they can either email me, call me or leave me a voicemail which translates to an email.
I mostly don’t make myself available for instamessenger because the expectations I set for my client is, I may be giving the work; I’m not going to be on the clock for you. And think that’s an important thing is if they think you're available at any hour to do stuff, they're going to [inaudible] just like there are always with required work, any hours that they want. I do that; it’s kind of a power play but it works for me.
CHUCK:
The IM thing has bit me. I had a client that had me at the slack channel, and I would just leave the thing locked in and I would ignore it until it was time to check it. And they got frustrated because I was signed in and showing us online at 10:30 at night and I didn’t reply until the next morning at 8:00. And it was like, “Well, we were showing up as online so I just assumed you were there.” And I’m like, “Did you ever get on and noticed that I wasn’t online because I just leave the thing signed in.” Well – then I had to go through the mental hassle of, “Okay, did I set myself away before I got up to go to the bathroom?”
REUVEN:
Oh my God.
CHUCK:
Finally, it was just like, “Look, I’m leaving this signed in and if I respond right away it means I’m sitting in my computer and I saw it.
ERIC:
Yeah, same thing. If anyone knows me and sees me on Skype, I’m always as ‘Do Not Disturb’ and I’m always signed in into every Slack when I’m away. And that’s because I’m not going to sit there and manage if I’m basically there for you. You can try to talk to me and if I’m there I’ll reply almost right away, but if I’m not just think of it as a little personal answering machine because all these services won’t give you a notification or email about it so we’re not going to lose anything. And I tell them, “If you really want to make sure I see something, you [inaudible] it to me.
CHUCK:
Yup.
ERIC:
The Slack or whatever is just an extra service where we need to collaborate. It’s just like a phone call; we can schedule time just to time chat if it’s important.
REUVEN:
So just as a counterpoint to everything that you're saying, I can’t imagine, at least in Israel, not giving clients my cellphone number and not getting SMS text messages from them and not having – WhatsApp is very popular here. That said, people are typically pretty normal about it. I’ve never had anyone harass me. It’s usually, “Where are you? Where are we meeting?” It’s just setting things up. If someone were to constantly berate me on there or even on Skype, if someone were to take my time, A, I would tell them ‘please stop’ or I would ignore them or I some combination thereof, or I would stop working with them.
But here in Israel you assume everyone, not just me, but my kids and all their friends are assumed to be always on. I’m not sure this is necessarily healthy for society as a whole but everyone is always connected. And the phone number you get people is assumed to be your cellphone for personal stuff – personal, professional, whatever. But it doesn’t bother me because – especially as I’m trying to do more and more training, like what are they going to harass me about, right? The most it’ll be is that they send me an SMS saying, “Are you showing up? Class starts in 10 minutes.” And I say, “Yes, I’m at the parking lot. I’ll be there.”
ERIC:
It’s part of my brand because I’m very big on, I hate the word bounce but like bouncing stuff. I have a life outside of work; I’m not here 6-8 hours a day. I’m not a startup type mentality and so by having a bit of a disconnect between my cellphone, my personal life and my business life, it reinforces that. And so that’s what I mean – I tell my clients how I push things, set expectations early on so they know.
Like the one where I give one over two; that was like we had a retainer, we were going – I was not on call but they get a hold of me and I get their servers sun down. We have different expectations and not one that’s –.
CHUCK:
For me, the text have been very, very rare so it just haven’t been an issue. I haven’t minded giving it out because its – unless it’s critical stuff or somebody I already knew, [inaudible].
REUVEN:
I even put my cellphone number on my website and I’ve got new clients from that. People call me and say, “Hey, we see that you do X, Y and Z. We’d like to talk to you,” which I see is a good thing.
I also have the advantage that some of my clients who might potentially harass me more with the development stuff are typically in the US and I’m in Israel, and people in America don’t know how to dial internationally, it’s like dialing the moon or perhaps even harder.
CHUCK:
1-800-THE-MOON.
REUVEN:
[Laughter] Exactly. The feeling that all these things will kill you. God, this Skype number; I used this Skype number years ago and some of my old email and some on my website. And it’s as plain as plain can be. And the only [inaudible] and I have mentioned this in previous shows – the only person who calls it is my sister. Everyone else [chuckles] I literally never had a client call it ‘try to reach me there’ which makes it perhaps a question with business expense but a comedic shot to my sister. But it’s surprising how little people take advantage of that because they know I’m available via email.
By the way, just to answer one last thing that Holly’s thing, so she said ‘when you're driving or with family’, I’m completely not embarrassed at all that if a client calls me and I’m with my family, I say, “Listen, I’m with my family. Can you call be back tomorrow? Can you call me back the next day?” And perhaps not as admirable as Eric here in terms of making a separation between work and life, I do make it clear I’m with my family, I can’t talk to you about work right now, and they have 100% of the time have been very respectful of that.
CHUCK:
I just don’t answer it. If I’m with my family and I know it’s one of my clients and it’s not during a regular – a time that I would think they would regularly expect me to be with my family, I just won’t answer. So if it’s after five or if it’s before eight, I just won’t answer. And if it is during that time and I’m taking a day off to go to the water park or something with the kids, then in that case I’ll just pick it up and say, “Hey, I’m with my family. I’ll call you when I get home. It’ll probably be later in the evening.” And then they can deal with that or not deal with that. But I’ve never had an emergency where I actually had to go, “Okay, well, we’ll go fix that.”
ERIC:
Yeah, like I said that one that I had – one time it was on a weekend, my wife and I were shopping on Ikea, I had to stop, get on to my phone, login through SSH server, bring up all the servers because I think the server’s got rebooted or something. There’s very limited signal and I can’t do anything and that was like – with them I was fine, I understood the case but I never want to do this. I never want to take that time away and for me that reinforce my own policies about it. Haven’t done it since.
CHUCK:
Alright, well should we do some picks?
REUVEN:
Oh that? Huh. I don’t think I have any picks for this week. I think I’m [inaudible] out.
CHUCK:
That’s fine. We’re a little overtime; we can just skip it.
ERIC:
I got two finally, so I’ll do mine.
CHUCK:
Oh, go ahead.
ERIC:
I guess it is related. They're both really good about pricing and rates. One is by Naomi from IttyBiz. It’s How To Confidently Raise Your Rates, which is something that I think everyone should at least think about. Some good stuff, Naomi’s really good on the emotional side of business, of what you're going through as a business owner and not just the nuts-and-bolts stuff.
And then the second one is by Blaire Enns; it’s Seven Universal Truths About Money. A lot of stuff in this post – the big thing I think is in the last question. There is basically two paragraphs from the bottom basically about raising rates that’s kind of – instead of raising ‘oh, I’m going to increase my rate by $10 an hour or $100 a day’ or something small, jump it three or four things. Double your rate, triple your rate; doo something like that so that you can actually, with the next, actually make a significant amount more. It just kind of get over yourself and have the confidence to do it. I think that’s also a very key. And if you put these both together, I think over the next one is – this August – I think by the end of the next year you can probably do something significant with your rates which does a whole lot of transformational things for your business. I’ll put the links on the show notes or I don’t know how would [inaudible] chat but we’ll get that in there.
CHUCK:
Reuven, do you have a pick or should we wrap up.
REUVEN:
I think we can wrap up.
CHUCK:
Okay. Well, thank you all for viewing and watching. We’ll do this again next month.
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