The Value Of Organically Growing Our Business
I've been working with business owners for over a decade in a variety of contexts, and one common denominator I've come across is the drive to artificially accelerate the growth of the business by skipping the planning phase, leveraging debt, and/or living off of comfortable income streams.
When business owners get ahead of themselves, they miss the beauty and important lessons that come with intentional organic growth.
Organic growth presents a pathway of what we need to do now, and what we need to do next. It fosters the ability for us to walk in the light we have and not get ahead of ourselves. Since visionary business owners tend to get ahead of themselves, it's the slow methodical organic process they usually need help refining.
During my freelancing journey, I've experienced how powerful this process of organic growth plays out. I shifted away from fixed pricing when I first started freelancing, and towards billing my clients on an hourly basis in batches of ten hours (the BAM system is a hit!). As a result of charging hourly, I have a finite amount of time I can offer to clients. I've got three goals every month.
- Less than 68 hours/month = Red, Surviving
- Between 68-93.5 hours = Yellow, Good
- More than 93.5 hours = Green, Great
130 hours is my super-green goal. It is my maximum normal capacity and the top of green.
While I started freelancing in 2014, It wasn't until a year later that I started tracking my hours in a way that would allow me to see my progress or regress over time. In the graph below, you'll see my freelancing starts on a low level. This was actually a drop from several fairly good months prior. It was during that valley that my water tower system (financial buffer) became our lifesaver during a challenging personal season. As I rolled into 2016, I hit a level of steadiness in middle green. As I launched into 2017, I hit a level of steady high green.
My Yearly Averages
- 2014 | Monthly average = 86 hours | Annual average = 1,032 (estimate)
- 2015 | Monthly average = 97 hours | Annual average = 1,160 (estimate)
- 2016 | Monthly average = 119 hours | Annual average = 1,425
- 2017 | Monthly average = 131 hours | Annual average = 1,050 (Through August 2017)
How Organic Growth Happened
My first goal towards organic growth was to steadily stay out of the red zone. In the first year, there were months when I was out of it and months when I was in the red. It was much more sporadic, but this roller coaster led me to the idea of creating a personal responsive budget that could adapt as our income did.
In 2015, I put the pedal to the metal to make steady green happen. It also resulted in my largest number of hours in one month ever, which helped pull my yearly averages above green. During this year, I had the opportunity to get more organized and structured with my freelancing business. I set up new accounting and time-tracking tools. I got more focused on reviewing my daily, weekly, monthly, and annual reports. Ultimately, I laid the foundation to succeed at a higher level.
In 2016, I launched from a well-grounded foundation towards continued steady growth in high green. In July 2016 I increased (for the first time) my hourly rate from $75/hour to $80/hour as I was close to hitting capacity. Funny enough, I was way over capacity in the month following my rate increase, but the subsequent months resulted in a decline.
During that extra time, I took the systems I created and began migrating them into better tools to do the job. As a result, I built an Airtable dashboard for my freelancing work. It tracks my hours, income, clients, projects, payroll, and a variety of other things. I also set up some small automation tasks to free up some of my time.
In 2017, my goal was/is to sustain 130 hours per month for the duration of the year. At the beginning of the year, I increased my rate again from $80/hour to $85/hour. Interestingly enough, while my first increase in pricing led to a downtick in the number of hours, the second increase led to an uptick in quantity.
With such a high volume of projects this year, I've had to learn new strategies and tactics to help me manage and execute well. It can be quite a struggle, but I've gotten good at operating under pressure. Another huge leap in 2017 was switching accounting systems to Harpoon. Their philosophy and approach to financial management for freelancers are closely aligned with mine. Switching over to their system removed additional friction.
Organically Moving Forward
In 2018, my goal will revolve around increasing my rate again with the intent to sustain the same income while also decreasing the number of hours I work per month. This will also involve a strategy of creating products that generate revenue without my time.
I now have a handle on how well I'm doing and my capacity. Knowing this motivates me to push forward but also throttles me to not push so far that I burn myself out. (Yeah, I still seem to do that!)
While this journey of freelancing is organically playing out and because I don't have a company I'm managing, I get the wonderful opportunity to watch the various little details that are usually ignored and passed over by business owners.
It reminds me of the childhood game, Jenga. Playing the game really fast and without care usually leads to an unbalanced tower and a quicker ending. This is easily how building a business can play out.
But, if instead I slowly and methodically remove bricks and place them higher, I can ensure a stronger, more stable, and extended game. (That's about where this metaphor ends and tragedy begins, haha )
Going slowly and deliberately provides the opportunity to always see the next strategic move. It allows us to test, practice, and master it. Doing so provides a stronger foundation to build from.
As a movie extra on American Made, I met a guy on set who said people fall as quickly as they rise to fame. He chose to take the long and steady road to acting success so when his sunset finally comes, it'll be a slow fade, not a trip off a cliff.
At this season of my life with the responsibilities I've got, I prefer to adopt this slow and steady approach toward my future. It's a lot slower than I'd prefer, but I recognize me and my family will be much better off because of it.
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