WORK LESS WEDNESDAY
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🏳️ 1. The $645,099 Business Pivot – Article by Khe Hy
Ok folks – you know I love a business deep dive.
If I find one online, you know I’m talking about it.
This article comes courtesy of Khe Hy & his company RadReads.
I’ve been reading Khe’s newsletter/blog for a while.
He writes at the intersection of productivity and philosophy and, just like me, also teaches a cohort-based course.
Khe’s company is in a rough patch.
He laid off half of his employees…
Just 55 days after offering them healthcare for the first time.
While earning $645,099 in that year.
So what went wrong?
Here are my 3 takeaways…
🚩 Red Flag #1 – Increasing Revenue, Stagnant Profit
Khe is running a lifestyle business.
He left the rat race on Wall Street.
He surfs daily.
He sells online courses.
He’s not trying to scale a startup.
He’s optimizing for profit and free time.
Take a look at 2020-2022 in the chart above.
Revenue increases by about $150-200k each year.
And yet the profit is exactly the same.
What that tells me?
Let’s look at his expenses…
🚩 Red Flag 2 – Hiring Full Time Instead of Contractors
Khe’s profit margins dipped to 35% in 2022.
For context, my two lifestyle business’ margins are:
🎨 80-90% for RMC, my design agency (depending on the project).
🏖 75% for Work Less LLC, my education business (with a team of 5 contractors).
Khe made WAY more money in 2022 than any other year…
But he didn’t keep it.
So what happened with Khe?
He fell into a common trap…
Know what it is? Here’s a clue:
“We had a 6-person team:
– Product manager (SYP)
– Course and community manager (SYP)
– Product manager (Consulting)
– Marketing lead
– Operations lead
– And Khe”
This is a big mistake that people coming from the corporate world make.
Hiring full time staff.
It seems like a good idea.
That’s what other companies do, right?
But here’s the thing, full times employees are a FIXED EXPENSE.
Once you hire them, it never gets cheaper.
And if things go downhill, you have to FIRE someone.
That messes with them, their families, and their livelihood.
That’s why I’ve always ONLY worked with contractors.
It allows me to scale up and down as revenue and projects fluctuate, maintaining profitability at all times.
If you’re running a lifestyle business, consider it.
🚩 Red Flag #3 – Too Many Shiny Objects
Once you get a taste of success, the world opens up.
Every new Twitter thread sounds like the next “big thing” you should try in your business.
You end up doing an OK job on a bunch of things…
Instead of ONE thing perfectly.
Khe’s revenue breakdown tells me he was overextended.
It’s probably why he needed 6 employees.
I believe Khe should have focused all of his energy on getting his course (or ONE other thing) to $1 million in revenue before he even CONSIDERED expanding to anything else.
This would keep his costs much lower and be more profitable.
You don’t need a team of 6 when you do one thing only.
Don’t get me wrong, diversification can be a smart strategy.
But I think Khe still had a lot of room to grow if he was 100% all in on one thing.
These are 3 of my takes based on the article alone.
Khe’s really smart – you don’t get to $645,0
99 in revenue just by luck.
I’m excited to see what’s next in his journey.
You can read the full article, which details Khe’s 8 year journey from burnt out Wall Street trader to surfing solopreneur by clicking here.
📬 2. New Inbox Tool That’s Got Me Dailed In – Inbox When Ready
This is what my email inbox looks like these days:
I’ve added some new to my inbox workflow recently.
All of these are put in place in order to STOP me from checking my email (except when I’m supposed to).
🪃 #1 – Boomerang For Gmail
My goal is to check my email just 1-2x a day, at set intervals.
I use Boomerang to Pause My Inbox so that no new messages come in until I’m ready to check and deal with them.
✉️ #2 – Inbox When Ready (New)
Inbox When Ready is my new addition.
In addition to running Boomerang, Inbox When Ready is the key.
It hides my inbox by default, so you can write messages or search your archive without getting distracted.
I often need to SEND a message or REVIEW an old message, but don’t want to get sucked down the rabbit hole.
Other features you can set up include:
- Set up a time budget for email each day
- Set up an Inbox lockout schedule so you can’t access at certain times
📵 #3 – Remove Gmail From My Phone
This has been a big one for me recently.
The Gmail app is off my phone.
I was worried that I would miss it for random things like deliveries and login codes.
But it turns out, it just doesn’t happen that often.
10/10 highly recommend.
👻 3. Getting Ghosted By A Client Is Usually Your Fault (99% Of The Time) – IG Post By Blank Space
A past student recently shared this IG post with me because they wanted my take…
Here’s what it says…
“Dear Clients, Ghosting Damages a Business”
“We work hard and spend a great deal of time and money getting to know the client, their business, and their needs. To have a client completely disappear after all of that (unpaid) work is incredibly frustrating and can negatively affect our business.”
This is not meant to put down the writers of the post, AT ALL.
They are super talented (way better than me).
But this is an issue that I hear coming up all the time.
(Which is why my client sent it to me).
There are some major business red flags and lessons here we need to talk about.
Here’s the hard truth…
If “ghosting” is happening to this company so often that they need to make an IG post about it, it’s probably (mostly) their fault.
Jerry Collona has this great quote: “How am I complicit in creating the things I say I don’t want?”
Here’s how to fix it (in 3 steps)…
🧠 Step 1 – Don’t give out your thinking for free.
In the post, they describe how when a new client reaches out, they have “several meetings and invest a great deal of time, energy, and resources into understanding the scope of work, developing a design plan, and writing a very thorough proposal.”
This is an INSANE amount of FREE work, with no guarantee of getting paid.
Now I understand why they’re so mad about getting ghosted.
Our thinking is what clients buy, we don’t give it away for free.
If they want do research upfront, this firm should consider a nonrefundable deposit in order to start with a client.
✍️ Step 2 – Don’t write proposals (for free).
You already know I don’t write proposals (you can read about it here).
But if you’re going to write a proposal, make it a paid proposal.
That way even when you lose, you win.
📜 3. Before work starts, get a contract and get paid.
One of the best ways to avoid getting ghosted is to make your clients put skin in the game.
As soon you have a verbal agreement, send over a contract with a deposit request.
Don’t start working until that deposit is paid.
These designers are mad because they are doing work for free and expecting to be compensated later by the client.
This common problem is best solved with policies, boundaries, and communication.
Bad clients will always be bad clients.
Clients that ghost will always ghost.
It’s on us to protect ourself.
📕 4. Audiobook I’m Listening To This Week – Can’t Hurt Me by David Goggins
This book has been recommended to me over 20 times at this point.
I finally understand why.
Can’t Hurt Me is the autobiography of David Goggins, former Navy SEAL and ultra-endurance athlete.
His story is crazy.
Goggins grew up in a seriously abusive household, then become 350 pounds, only to lose it all and become a NAVY Seal and later ultra-marathon athlete.
The behind the scenes stories of the Navy Seals “Hell Week” are worth the price of admission alone.
Goggins’ point throughout the book is that we all can do more.
We all have a hidden reserve of energy, motivation, and greatness inside us, that we don’t tap into unless we really need it.
My favorite lessons from the book is The 40% Rule:
Most of us give up when we’ve only given around 40 percent of our maximum effort. Even when we feel like we’ve reached our absolute limit, we still have 60 percent more to give! […] Once you know that to be true, it’s simply a matter of stretching your pain tolerance, letting go of your identity and all your self-limiting stories, so you can get to 60 percent, then 80 percent and beyond without giving up. I call this The 40% Rule, and the reason it’s so powerful is that if you follow it, you will unlock your mind to new levels of performance and excellence in sports and in life, and your rewards will run far deeper than mere material success.
If you want a good read that will get you pumped up, check it out.
🆓 5. My New FREE Course Drops Next Week!
I’m launching my new FREE course, 🛠️ Six-Figure Solopreneur Systems, early next week.
And since you already signed up for the waitlist, you will have access before anyone else.
I’m not going to lie, it’s the best FREE resource I’ve ever put out.
It’s 7 jam-packed lessons that cover how to:
🛠 Build systems that run your business for you.
💰 Learn the foundation of any profitable solo business.
🛑 And stop trading time for money.
I will send you an email with more details over the next few days, so stay tuned for that!