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EPISODE 93: STABLE: Build a Lucrative Writing Business

by Jul 5, 2022Copywriter Collaborative, Podcast

Why’d you start your writing business? We hope that one of the reasons was to provide for yourself while doing something you love. So is your business set up to be lucrative? For many writers, the answer is ‘no,’ so let’s dig in to turn this around, while remaining in integrity with our values.

 

In this episode Jessi will cover:

  • Set realistic goals that position you for financial success, while taking your current situation into account.
  • Consider your pricing model and how you can make it a win-win for you and your clients.
  • Determine your determined take-home pay, so you know what to shoot for.

This episode is Part 5 in a new 7-part series on Creating a STABLE Writing Business. STABLE stands for:

Strategic
Targeted
Appreciated
Boundaried
Lucrative
Energizing

Each episode in the series will talk about one aspect of STABLE, because you deserve a writing business that sets you up for sustainable success!

Plus, we invite you to join the STABLE Writing Business Challenge, a free challenge for freelancers and content creators kicking off on July 11, 2022. Within the challenge, you’ll identify your #1 biggest business challenge right now, so you can take strategic action to address it.

In this episode, Jessi discusses building a writing business that brings in enough money for you to have the lifestyle you want. The writing industry, in particular, can be pretty rough for this! Lots of writers charge pennies per word, or charge low hourly rates, or have low per-project prices because they’ve always been told that they’ll never make much money writing, and that writing isn’t valued.

But is that true? Think about how much copy you’re exposed to every single day. Every company under the sun relies on our skill set!

We are highly valued, so it’s a matter of developing relationships with the right clients, positioning your value well, pricing yourself to succeed, knowing your numbers and goals, and cultivating a healthy money mindset.

When we first started our business, we had no idea how to charge for our work. In fact, one of our early clients decided to pay us double our asking rate because she saw so much value in our work. (Of course, on the flip side, several other clients straight up refused to pay us at all, demanding we do all of our work on a volunteer basis… because “anyone can write” and they saw no value in our work, despite being happy to hand it off so they didn’t have to do it.)

So you can start to see that positioning, boundaries, and finding clients with a values alignment is key!

Assuming you can tackle all of that, you still have to decide on your pricing. The key to remember here is you have to be able to know and face your real numbers. Don’t be scared of your budget. Don’t be scared of your credit card statement. When you know (even if it’s not-so-cute), then you can make a plan.

Once you’ve decided to bravely face your money situation, whatever it looks like, you can set your prices so you can have a lucrative business that yields a significant enough profit margin that you can be flexible and adaptable — and so you can thrive!

In the episode, Jessi walks through the step-by-step process of determining your revenue goal for your writing business, and more!

 

Do you want support creating a lucrative writing business?

When you join the STABLE Writing Business Challenge, we’ll help you identify your #1 most important business challenge right now, so you can take the next best action. If your biggest challenge is finances, you’ll know it by the end of the challenge!

 

Homework: 

 

Services/Products/Offers/Freebies Referenced:

TRANSCRIPT

Jessi:
Welcome to the copywriter collaborative podcast, where we're digging into how you can build a sustainable writing business. We're your hosts, Jessi...

Marie:
...and Marie. We're the co-founders of North Star Messaging + Strategy. When we started our business in 2010, we had no idea what we were doing. We just knew we wanted to write. Since then, we've learned a lot and we've grown into a successful multi-six-figure copywriting agency with a talented staff of writers and project coordinators. We've served hundreds of clients and we've seen it all. We wish we could have had a resource like this way back then. So we created it for you.

Jessi:
We're here to share our stories and top tips to help you achieve personal and professional success in the copywriting industry. Every week, you'll get valuable insights from us, members of our team, and special guests. Whether you wanna write better copy, create a stronger copywriting business that can support you financially or both, grab your earbuds.
Hello, hello, and welcome to another episode. Today we are continuing to talk through the STABLE framework. You are hearing just from Jessi today. I'm excited to be with you to talk about the L in STABLE, which stands for lucrative. So today we're gonna talk about money, which I'm really excited about. We've done a few episodes in the past talking about money, and we'll make sure to link to those in the show notes. Today we're gonna talk about it in terms of what it means to have a lucrative writing business. And by lucrative, we mean not just a business that makes money, but a business that makes enough money to sustain you and the life that you want. To sustain the business. And to allow you the flexibility to make the decisions that you need to make in order to keep your business thriving.
And so I wanna kind caveat this episode with: personally, I am not a huge fan of the capitalist system that we all work within, but we do work within it. Whether you love or hate capitalism, whether you are someone who's like, yes, this is the best way to be, or you wanna burn it all to the ground. It is a system that we're working with and it is the system that will allow you to keep your business and life running. And so we are looking at this from the perspective of how can we build a business that allows us to do what we want to do, what we need to do, in order to feel like we are in a stable situation, which is really what the stable framework is all about. Before we dive in, the L and stable is the second to last letter, we'll have one more episode talking about the E, which is for energetic, but if you miss any of the previous episodes, please go back and give them a listen.
The S is for strategic, the T is for targeted, the a is for appreciated, and the B is for boundaried. So if any of those areas feel like you may need to take a look at them in your writing business, go back and give those episodes a listen. You don't have to listen to the stable framework episodes in any particular order. The nice thing about this framework is that it allows you to focus on the area where your business needs the most support. And we'll be providing a resource for you to figure out which area that is through a free challenge that will be running in early July. And that's July 2022, if you're listening to the archives. So we'll give you a little more information on how to join that at the end of the episode, but the link will be in the show notes.
But let's dive into this idea of lucrative. And I wanna start by just, you know, affirming that if you have no idea how to price your services or if you do, but you have no idea to know whether you've priced them well, you are absolutely not alone. When we first started our business, we had no idea how to charge. I think we've shared the story in the past where one of our early clients, we were writing resumes at the time, we charged them so low that they double paid us because they did not feel good about paying such a low price for our services. So they double paid us. And that was a real wake-up call for us because we were scared to ask for more. And it turns out that the client that we were working with felt kind of gross about paying us less than what they felt the service was worth. And that was one of the first and earliest moments when we started thinking about it from the perspective of, oh, this isn't just an exchange of labor for a product or good, this is actually an exchange of expertise. This is an exchange of ROI. This is an exchange of energy. It's not just, I'm going to do this for this amount of money. And that amount of money is something that comes out of a void. That money is going to support something.
So over the years, we've created more systems around how we price things. And to be completely honest, we still have conversations today sometimes, especially if we're creating a new product or service where we're like, okay, how do we price this? Because the industry has changed, because the world has changed, because the economy changes. It's a conversation we come back to. The difference between now and 12 years ago is that we now have some systems in place for figuring that out and for checking in and assessing whether we are building a lucrative writing business or not. And that system is not: check the bank account and either freak out or don't freak out. It's apply some systems to how you're charging for things. So that's what we're gonna talk about today.
We believe that in order to run a successful writing business, you have to know your numbers. You cannot hide from your money situation. You certainly can build a business through investing and taking out capital in various ways, whether it's a loan or through a line of credit or whatnot. But if you do those things, it needs to be intentional so you don't end up burying yourself in debt. You need to create a buffer for yourself, a profit margin that allows you to be flexible and adaptable within your business. And we believe that the more you know about your money situation, the better off you are.
Unfortunately, the way the copywriting and content creation industry is set up is inherently not helpful to writers. You have systems that are built on the lowest bidder wins, things like Upwork or Fiverr, where it's really putting the responsibility of naming the price in the hands of the client. Because they're the ones who pick the price that they think is right. And if you look at different industries, there's a wild variation in what is paid for writing. You look at the tech industry and someone who's hired as a copywriter or a content creator in the tech industry may be paid a lot higher than someone doing the exact same work in the publishing industry. And so there's not a lot of standardization here. There are systems like lowest bidder type platforms or even AI writing platforms that artificially lower the appearance of the value of the work, which is not true. The work that you do comes from years of experience, years of expertise. And even if you're brand new to this and you're building up your portfolio, yes, you may charge less as a result, but that doesn't mean that you don't deserve a living wage, something that allows you to be successful. So within the stable framework, what we wanna make sure you're doing is setting yourself up for that business that allows you to live. That allows you to sustain yourself through this business. It's not in our view, a side hustle that just exists as a hobby. It is something that is bringing in revenue because you are providing a valuable service. So even if it is a side hustle in your specific case, even if you do have another job, you wanna make sure that the time and energy you're putting into the writing actually is paying off in more ways than one, right? You wanna feel good about it, but you also want to get paid well for it.
So let's talk about how to do that. And we're gonna get into a little bit of math today and, big caveat, I am not a mathematician. I am a writer first. But that doesn't mean that numbers scare me. In fact, over the years, I've come to really grow fond of numbers and grow fond of what numbers can do to help give you peace of mind once you wrap your hands around them and can use them to make decisions. So today in this episode, we're gonna go over things at high level. I'm going to give you a couple of formulas to play with at home so that you can start thinking about what numbers might make sense for you in your business. And then of course, if feeling profitable, feeling like you have a lucrative business is something that you feel you really need to put some time and intention into, we will be first off helping you identify and confirm whether that's the area to focus on during our free challenge that is coming up. So please join that challenge so that we can help you identify whether paying attention to the lucrative part of your business is what makes sense to put your time and energy into right now. And then afterwards, we'll be talking about how you can continue to get support on that specific area.
So let's first talk about how do you do it? What are the different pieces that need to be in place in order to create a lucrative business? So the first thing you need to do is know your numbers. So if you've been avoiding them, if you've been like hiding for your bank account, please stop. Please open that bank account, please take your numbers down. And if you are mixing personal and business finances, now is a wonderful time to start separating those out. The more the two intermingle, the more difficult it is to figure out what works to create that lucrative business. So if you haven't created a separate bank account for your business, please do so. If you have, great. That means that all of your business income and outcome... income and expenses, there we go, that's the word, are separate from your personal expenses, which is really helpful for doing some of this math. And take a look at it. Instead of going straight to the hard number, start by just taking a look at what the reality is and how you feel about that. Do you feel good about it? Are things feeling like, okay, this is going in a good direction or does it kind of make your chest tighten and you feel like, oh God, I wanna close this right away?
No judgment does not matter whether you're on one side or the other, or somewhere in between. It's knowing those numbers that allow you to make decisions. So just get used to knowing those numbers, even set it on your calendar to open up your bank account once a week, something like that. We have a monthly budget meeting on the calendar, Marie and I. Even though we have an accountant and a bookkeeper who does all of the math for us, we still have a monthly budget meeting where we sit down and we go through it manually ourselves. Not because we have to because our accountant does it for us, but because it allows us to stay close to the numbers, it allows us to stay close to the data so that we can make better decisions. It allows us to feel as though we know where our money is going. And that's been a really big help for us when we do make decisions around things like how much do we pay ourselves? Or how much do we charge for a product or a service, or are we ready to hire someone?
So get comfortable with your numbers. That's sort of the first step here.
The next step is to actually back away from those numbers and look at yourself and your life and how much you personally need to bring home in order to have this business feel sustainable and feel lucrative in order to survive. What is your own desired income? If this were rather than your business, a W2 job that you were going to every morning, what would your salary requirements be? Think about that. Figure out what that number is. Look at your personal expenses. Look at your personal bank account. How much are you spending per month? Well, you should probably be bringing that amount in plus a slight buffer. You may have other sources of income in your family, like for example, a spouse or a partner, but keep all of that in mind. How much do you need to contribute to your household? Okay. So that's the number we're gonna start with today. Whatever number you want to bring home in a year, let's say a hundred thousand. I'm gonna use that for easy math, because again, not a mathematician. So once you know that number, let's say you wanna bring home a hundred thousand dollars a year. Now you're gonna multiply that number by two. That is the revenue goal for your business. Assuming that you have a small business, you're a solopreneur, or maybe you have like VA support, but not a big team. We're gonna start there. So you wanna bring home a hundred thousand. You gotta make about 200,000. That's the revenue goal. Just multiply that number times too.
Now caveat here, if you are running a larger business, so you have a team say you're making more than about $250,000 a year, your percentages will be a little different. And these percentages come from the book profit first by Mike Michalowicz, which I will link to in the show notes. They are guidelines. Every business is different and every business will look a little different, but this is what we're using as our starting point. So if you are not a solo entrepreneur, if you have a larger business, about 35% of that total revenue is going to be your what's called owner's comp or your salary. But just to keep things simple today, we're going to assume a smaller business and the sort of base percentages for that.
So step number one, figure out how much you wanna bring home. Let's say it's a hundred thousand. Step number two, multiply that number times two, that is your revenue goal. We have $200,000 as a revenue goal. Okay? Now that we know what the revenue goal is, we can work backwards to figure out how to price our services or our products. We're gonna talk primarily services today. And we're gonna talk primarily services in terms of your actual output first. So you have a decision to make, and we've talked about this in past episodes, and there's no right or wrong answer to this. But you need to know whether as a writer, you are charging by project or by hour. Are you charging a flat rate for, let's say a sales page, or are you charging a certain dollar amount per hour for the work? There are benefits and drawbacks to both. There's no wrong answer. I can link to some of the episodes where we talk about this in the show notes, but at the end of the day, it is your decision. Pick one and for the purpose of this exercise, stick with it, but know that you can always go back and change things. Nothing is static here. You're a business owner. You are flexible, you are adaptable. You can change things if it makes sense to change things. Okay?
So let's say that you decide that you want to work hourly. We'll start there. So the math is actually pretty simple here. First, you know you wanna bring home a hundred thousand dollars a year and you know, you have to work or, you know you want to work. That would be the next question is how much in a week do you want to work? So if you want to work about 30 hours a week and you only wanna work about let's say 50 weeks of the year. So now you just have a math equation. Now you're going to take the total number of dollars that you want in your business. So let's say that's 200,000 because we're using the simple math and you want to work 50 weeks out of the year. So that means you have to bring in about $4,000 a week. Obviously, that will ebb and flow based on the number of clients you have, the number of work you're doing, things like that. So let's say that during a given week, you wanna work 30 hours no more, no less, maybe less, less is okay. So you're gonna take that $4,000 in a week and divide it by the 30 hours that you wanna work. That means that if you are charging hourly, in order to make $200,000, and of which you can take home a hundred thousand. If you wanna work 30 hours a week for 50 weeks of the year with those revenue goals, then you're charging about $134 an hour. Okay? Simple math. So just took the 200,000, divided it by the number of weeks you wanna work, divided that by the number of hours. So that gives you the amount.
Let's say you wanted to work 40 hours a week. Now you're charging about a hundred dollars an hour. Let's say you only wanted to work 20 hours a week. Now you're charging about $200 an hour. So it will change based on your needs. This is a starting point to give you an idea of, okay, what is my hourly rate? Now, this is just based on the data of, this is how much money I want to make. There are other factors of course, as well. So things like ROI. This is one of the reasons why we tend to go towards project-based pricing instead of hourly because there isn't ROI inherent in writing work. And so we wanna make sure that that is reflected in the pricing. So you can grab a starting point based on how much you wanna bring home, but then you can add to it based on things like experience, based on things like ROI, based on the type of project it is. So this is just to give you a baseline, not necessarily, this is exactly what I'm going to charge, but what you do know is if you charge less than that, you are going to come in under your goal.
If it is project-based, your formula is going to look a little bit different. Because you are not necessarily looking at a specific number of hours. Instead, you're looking at a number of projects that you want to take on in a given year. So the first thing that you need to figure out is how many projects do you wanna take on in a year? What are the maximum number of projects that you as a business owner, as a writer can sustain? And so there's a formula for that, where essentially you're going to figure out, on average, how long your projects take. If you have figured out what your signature offer is, use that. If you don't have a signature offer if you do a little bit of everything, kind of figure out your average. On average, how long does it take to do a project and how many simultaneous projects can you manage at a time? Can you only manage maybe two client projects at a time? Or are they smaller projects? And so you can manage seven or eight of them at a time, no wrong answer. Again, just figuring out how many simultaneous projects can you manage. And that will allow you to figure out what are the maximum number of projects that you can handle in a year. Once you know the maximum number of projects that you can handle in a year, then you can figure out the minimum price of those projects, similar to how we did with the minimum hourly rate. You'll take your revenue. You'll divide it by the maximum number of projects per year. So 200,000 divided by let's say in a given year, you can handle 20 projects. So that means that on average, your projects would need to cost that 200,000 divided by 20 projects. On average, your projects would need to cost about $10,000. So let's say you can handle 40 projects a year. On average, your projects need to cost about $5,000 in total. So there can be payment plans. There might be some projects that are a little more expensive, a little that are more or less, but they would average out to about that. And again, this is the minimum price. So you can also add to that based on other factors. But what these formulas are doing are giving you a place to start so you make sure that you're not undercharging based on your goals. This can be your baseline and you can work from there.
Couple of reminders though, as you go into this, stay flexible, play around with things. If it feels like the numbers that you're coming up with are unattainable, ask yourself why. Is it because your projects are including too many bells and whistles, and you could actually get the same quality of work done with fewer bells and whistles? Is it because you do need to raise the prices? Is it because your revenue goal needs to change? How will your pricing change as you gain experience, as you build your portfolio, once you get data around the ROI of your projects? If you already have data around the ROI of your projects, how can you turn that into a pricing shift that makes sense for you and your business? And if you're growing a team, if you are building your business out from yourself and maybe some VA support, how are you making sure that your prices are reflecting that growth? So there are a lot of questions here that, once answered, will lead you towards a lucrative business that allows for stability. And these questions are never answered like one and done, never looking at it again. This is something that we're revisiting constantly in our business.
So what I would love to ask you to do, because I threw a lot of math at you today and I want you to know that this is stuff that you can do, that you can price yourself in a way that allows you to have a lucrative business, but you have to know your numbers and you have to know where to start. So your homework is to start with yourself. Decide how much money you want to bring home. And then step two is what would that be for a revenue goal? What is the revenue goal for that? If you wanna bring home a hundred thousand, your revenue goal is 200,000 figure out what your revenue goal is. And then from there, you can look at the more specific maths so you can get your minimum pricing, either hourly or per project.
If you want to dive into this deeper, if you want to make sure that this is the right place to focus on your business right now, and then get an opportunity to dive more specifically into how these formulas impact your business and can be applied to your business, go ahead and join the stable writer challenge. This is for business owners who are writers and content creators, who really want to make sure that they're focusing on the right area of growth within their business. We will be spending three days helping you identify exactly where to focus your time and energy so that you can grow sustainably and in a way that feels stable. It's three day challenge, it's completely free. The link is in the show notes, and we hope to see you there so that we can help you find out whether you wanna spend some time creating a more lucrative business first and foremost, or if one of the other areas that we've talked about in this framework actually makes more sense to focus on first. You will find that out during the challenge. And then from there, we can help you actually put something into play and into practice so that you can have a stable writing business.

Marie:
Thanks for joining us for this episode of the Copywriter Collaborative Podcast. Make sure to visit our website, northstarmessaging.com/podcast, where you can subscribe to the show on iTunes, Spotify, and more.

Jessi:
If you found value in this episode, we'd love for you to leave us a review on your favorite podcast app and share it with your friends. Thank you, and happy copywriting.

For additional content strategy and branding tips, check out northstarmessaging.com/blog. Also, please tag us on Instagram and let us know you’re out there! @northstarmessaging 

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