Starting a business and managing time effectively

Welcome to Building Better Developers, the Developer Nord podcast, where we work on getting better step by step professionally and personally. Let's get started. Well, hello and welcome back. We are continuing our season where we're doing interviews and we're speaking with Annalise Warren this time. We're going to talk a lot about starting an organization, starting a company, and for a reason that many people do, which is essentially to get some control over their time back. She's got a great story and we really get into some, I think some key things that are useful to any of you that may be considering a side hustle, particularly if you're getting to that point where you think about, well, what about a side hustle that replaces my day job? Or maybe I'm trying to get rid of my day job and how do I do that? What are some of the things to worry about? We're going to talk about some of the mistakes she's made, but also some of the things that she did right and why she wouldn't go back. So let's go ahead and dive right into our conversation with Annalise. Okay, today we're going to be speaking with Annalise Warren and I'm just going to, this is a little different, but I'm going to start with a little thing that attracted me to calling her in and saying, hey, this is a guest I think we need to hear. And I was just telling her about this. She's got an introductory little paragraph that says that, I will start out, she said, I made all the wrong moves when I started my business, hiring the wrong people, charging too little, spending tens of thousands on programs and on marketing. The list goes on and I found myself cash poor and on the brink of burnout. And I think a lot of us can, I think that resonates with a lot of us. And so that's why this is a perfect guest for her to have. And since I'm, other than that, you know, not very good at introductions, I want to, you know, welcome you to the show, Annalise, and why don't you tell us a little bit about yourself and your background. Thank you so much for having me. I haven't been introduced that way before, but that's cool. Lots to dive into because yes, I definitely took the long way. It's the like Greek stubbornness in me that I just wanted to figure out myself. So yes, my name's Annalise Wan. I am in Australia, as you can probably hear from my accent. It is currently 6am in the morning. So we're just waiting to, you know, wake up a little bit. No, I'm kidding. This is, this is what I do a lot of now. I work a lot with the US. So six years ago, I started my business because I was declined flexly time from my workplace. And I was moving from the city to the coast, which was going to be about two hours. And I had two children at the time. And I actually wanted to see them because it would have meant that I didn't see them. They would have been asleep when I left and asleep when I got back at that stage. And we knew that we wanted to have more kids. So I quit and decided that I knew how to start a business. And so I started a marketing agency. Marketing I knew. Business I quickly learned I did not. Even though I had a business degree, it doesn't actually, I think it sets you up to be a bit of a pawn in a company, not to be the CEO. So that was a whole new ball game. It took about two years to kind of crack that code and bring my husband home from work. And so then we were able to and we still do work in the business together. He, you know, different, definitely different strengths. And we homeschool our four children and we built our dream home by the beach and we both kind of work part time. So we finally got there. But it was a yeah, it was a bumpy ride. It sounds like it, but it's maybe it's not. At least you jumped ahead to the like the happy ending, you know, living in Africa, I think you're on a beach, you know, working when you feel like it, that kind of stuff, drinking, you know, drinks with little umbrellas and flowers in them and stuff like that. It's going to be back. It's winter here at the moment. Like, look at this full scarf and sweater today. Not quite. But, you know, life is still life, right? Like, yeah, we're living our version of what we wanted and then that changes and shifts and grows. And I've definitely found that along the way too. So I guess we'll start at the beginning a little bit is, which is actually, it's really fascinating that you said the one of the big reason or the reason that you quit was because they're like, no, you can't have any flex time that you're not going to be able to, you know, and this was, you know, I wonder if that company has changed a little bit since we've gone through all the last few years. Hilarious, right? Like, I wasn't allowed to work from home. That's why I was like, people were forced to work from home for a while. And now, but now they're going back. And that's, you know, it's interesting because there's a lot of people struggling with that because they got used to sort of like, you knew what you were looking for. You said, hey, I don't get to see my kids if I'm spending four hours a day commuting and I want to, I want to live a life. I don't want to just work. And I think some people didn't realize that until they worked from home and said, oh my gosh, I have a family. I have a house that I enjoy. I have things that I want to do besides work. And so it's interesting that you at that time said, you know, hey, I want to do that because I think people are, it's sort of coming back to that for some people is they're saying, do I stick with the company I'm at and maybe now go back to the office and give up some of this, we'll call it freedom that I've had, or do I go out on my own? And so I guess from that was, you know, you're, I think for what you said, you're married, you got a couple of kids at the time. So I guess the first one is how did your husband take it? Is that, is it one that you guys went together and said, we agree, let's dive into this and let's make this a company that we're going to work together on? How did that step, I guess, that initial couple of steps into building, creating your own business come about? Yeah, I'm smiling, Rob, because I have a good friend. We have a good friend who says that in our relationship, I'm the accelerator and he's the break. I've got all of these crazy hair, braids ideas that, no, he's wonderful. He's the most easygoing man on the planet. And yeah, he was supportive initially, Rob, back before I was the sole, you know, he didn't work for five years, except for a little bit in the business because he was the primary carer. But originally, our plan was for me to be a stay at home mum and I, I lasted six months and I was like, I need a job. And I really needed that balance. Like for me, I couldn't be full time mum and I knew I didn't want to be full time, you know, in the office. But yeah, he was, he was receptive of course, you know, there was convincing and running through of numbers and we just sold our house and moved in with his parents, like, well, in their old house with his brother. And so because of where we were financially, we had a little bit of a buffer to be like, okay, we've got like this much time to kind of bring some money in. So if we're going to do this, he was working and it just, it was like this magical moment where we had, you know, we could try it, we could test it because we weren't maxed out financially. Now, were you at that time, you said you're a full time mum, but were you also homeschooling at that time as well? Or did that come later? Yeah, that came later. We've only been homeschooling for about a year. Okay. Cause yeah, that's a, you know, that's a lot to be, you know, I don't know how many people are have had that, but when you've got a couple of kids running around and then if you're doing, you know, homeschooling, that's a, that's a lot going on to do that and say, oh, I'm still bored. I'm like, I've got to go work. They were little, they were little, they were like four and one. And then of course we added them every two years. You're like the layaway plan every time. Yeah. I have five of my own, so I know what that's like. Yeah. What was that? You said that you were sort of going crazy. You're like, I need to, I need to work. So what was the, the thing that you, that you needed from work? What was it that was that sort of that drive that said, okay, I've got to get, you know, I got to get out and work and actually not even get out and work. I've got to stay here, but I've got to do some work as well. Yeah. And it wasn't that I didn't like, I really did love my job actually. Like I, I was working in the city, which I love, like I love the city. We live at the beach, but I, you know, I liked the balance. I think for me, working's easier, Rob, you know, when you just, like, when you're at home, I mean, you've got five, so you know what it's like. It's just, you're always, you're always in that serving place. There's always someone that needs something that, you know, that you feel like an octopus kind of pulled in different directions and you kind of. Don't really get to choose what your day's like, because maybe there's tantrums, maybe it's like, Oh, now we've run out of milk and we need to go to the supermarket because you're going to like, whatever it is, I think it was just all of that all the time. It wasn't stimulating my brain. I am someone who has lots of ideas, who really likes structure and problem solving. And there wasn't enough of that for me to be my best as purely 24 seven. Mum. So then when you, when you stepped into this business, was it really just a continuation of what you had done before? Or was there something where you said, Oh, here's, I liked what I was doing, but here's what I'm, I think I'm going to like more. Yeah. So I went to university and I did marketing and business, business marketing and art. And when I finished, I continued on with my university admin job at a training company because it was the height of the GFC, like getting a junior marketing position was not going to be easy. And my, the training company that I was in, promoted me to be manager and manage the whole, the nation, the national, you know, to be that the whole manager of that national, whatever it's called. I can't remember. And so I just took that job and yes, I was doing marketing because I was, you know, effectively the head of this whole division, but I was doing lots of different things and, you know, hiring people and training and compliance and budgets and all of it. So I did have a bit of experience in a few of the pies, but it was in a, you know, a really big national company. So it was definitely on a different scale and I'd never had to get clients or figure out how to pay people or write job descriptions and all of that stuff. So. So then, you know, stepping into, once you, once you took that step in and you, you launched your business and so you get into that first, you know, six months or a year, I guess a little bit first of what was, what was that first, we'll say that first year like, what was it as far as, you know, like size and some of the things, maybe some of your big accomplishments, or if you want to share a couple of failures or something like that as well. Oh, so many failures. So many are falling flat on my face. Um, that first year was just me. My husband was doing the tech website kind of side of things and retraining in that area. So he was a carpenter by trade and we knew he, we wanted him to build a house because we knew the type of house we wanted. We probably weren't going to be able to afford to get someone to build it for us. So we thought, well, if you're building our house, you need to work at night because, you know, I was thinking really small, like, well, you're not going to be able to be on the tools for someone else and build a house at the same time. Cause you can't build a house at nighttime with all of the sound restrictions and all of that. So, um, so that's what he did. He retrained as a web developer and Google ads expert for probably maybe around that first year. Um, our clients, we only had a probably maybe three in the first year, I think, um, were the guinea pigs really? Because we were like, oh, like holding onto our seats going, can we, we've sold ourselves as digital marketers. Is it actually going to work because we had no experience. So it was just kind of get one at a time, see like how, how this works. The good thing was that, um, I, we were part of a training program, so we could tap into support for people who had been doing it for a lot longer than us. And we niche down a lot. So because he was a carpenter, we decided to only do marketing for trades. So construction home builders, like an industry we knew really well. And to be honest, that was a really good move because they can afford to pay decent, um, rates and they really don't want to do it themselves. And anything that you do therefore is kind of like amazing to them. And I know I'm generalizing, so I hope it's like, but my experience over six months is that compared to working with different industries of people who are tech savvy, and again, stereotypically, like just generalizing that, um, it's, it's easy to do a good job. It was easy to do a good job. So I think once they like you and you know the basics, you're always going to do it better than they do. And then you get to like any marketing, you play and you test and you optimize and you that we were good at. So then you, did you also in doing that and niching down, did you already have some of that networking then through your husband here and knew maybe some companies and had some contacts or was that something where you were, where you sort of fresh in that area and you had to go dig up the contacts yourself as well? Yeah, we had to start from scratch because he'd been in one role for seven years and primarily in an office. Um, and we moved two hours from where we were. So it, yeah, it started from scratch. Then when he was working locally and doing some construction work, actually out on site, we did pick up a few clients from that, that we still have. So, well, that works well. And that actually gets into, gets into one of your, one of the things you mentioned is that, uh, which is always, it comes up a lot and it's interesting to me how often it does is that you, you mentioned that you charge too little. And I would tell a little bit about how you, I guess, how it was that you came to maybe charge too little and how you came to find out that you were charging too little, maybe. Yeah, yes, I can definitely speak into this. And it's this really tricky one. When you come from a place of being, um, working for somebody else, it's probably likely that you get paid per hour. And so to break that mentality of I get, you know, $45 an hour or whatever the number is, is really hard. It was especially hard for my husband who had worked, you know, 15 years as a carpenter or whatever. He was like, but I can't charge, you know, $200. I don't need to, I can't charge this for that. Cause it only took me 15 minutes. I'm like, no, no, no, we have to like, it's about the value because we're already, we're paying for the software. We're paying to upscale. We're paying like, if something goes wrong, we've got to actually fix it. And that's not blocked because something went wrong. And so I learned pretty quickly that we had to base it more on what was the value to them. And so what if it took us, you know, two days to get them up a simple website, the value of that website is worth exponentially more to them. And it's fine when you have a service based business and you're freelancing or you're a side hustling and you're, you know, you're working from home and you don't have a lot of expenses. Maybe you can afford to charge little at the start, but once you start adding in optimization or automation and you want to outsource some things, you'd need to actually pay for them and still make a profit and pay tax and, you know, put into for us at superannuation, what is it 401k there? Like you have to be thinking about all of one of all of those things. And the fact that I couldn't afford to hire anyone higher than a junior. And when I grew eventually to a team of nine, and then I was realizing that I had to make tens of thousands of dollars every month and still not get any for myself, I was like, Oh, okay. Like this isn't something's wrong with the numbers here. Like, why do I have all of these clients and I'm working like 16 hours a day and I'm not getting paid very much. Like what something's wrong. And so I had to really rework it. So that actually, yeah, that was something I was, I was going to ask, but it said, you started to answer that question, I think a little bit. So you, you didn't immediately or early on realize that you were, you were charging too little. It was one of those where you felt that pain of, wait a minute, we're, yeah, we're working, burning the candle to both ends. I've got great people working for me and all of the things that should be in place. And yet still not making any money. And you said, okay, you know, let's step back and figure this out. Yeah. And what happened about four years in was I read the book profit first. You have, you read profit first, right? I haven't read it. I've, I've read it. I've just one of those. I've read. Oh, you really don't need to like the first kind of third of all we'll do it. But the concept is amazing and it blew my mind. And I couldn't believe that I had done a business degree and had a business for four years and not known these concepts. I was like, what is like, and the basic concept for people who haven't, who don't know what that is, is that you pay yourself profit first. And even if that's just 5% of total money that comes in, you pay yourself 5%. And you just, you don't touch that. But once every three months, you can spend half of it and you have, you spend it on something fun, like, you know, you go to dinner, you do a weekend away, you get a massage, whatever is going to work for you, right? But that's not actually the most exciting part for me. It was breaking down how much I should make in terms of saying, let me explain it. So 30% should go to operating expenses and then 15% to tax your 5% profit and then 50% should go to you. And so if I thought about it like that, I was totally charging backwards because it was like, oh yeah, my people get like 80% and there's 20% left and then I have to pay software and I'm just making up numbers. I can't remember the exact margins, but paying for, you know, all of the overheads, paying for bank accounts, there's the credit card fees, there's tax, like all of that was then dipping in and maybe I got 5% to live off, not like, I'm like, hang on, this isn't, this isn't okay. And I'm the one who has to take all the risk. I'm the CEO. So if my people stuff up, it's on me and I've got to fix that. And I'm the one who's doing 16 hour days. And basically working for nothing at times. And yeah, so that just having those percentages, whether you stick to them exactly or not was just a really helpful perspective to go, Oh, I need to charge it that much to, in order to make those margins. And that was, that was a really good starting point for us. Yeah. I think that's a common challenge that we all run into is that you, you get used to what you, especially from that, if you've come out of corporate or, you know, where you've salaried, like you said, as you're used to, I make X dollars an hour. And so the people I hire, okay, they're going to make X dollars an hour. So I need to make enough to cover them. And sometimes people will say, Oh yeah. And then there's some taxes and some other things I've got to do on top of it. But then you start expanding that out and you realize that, Oh wait, there's, they said, there's like, you know, there's licenses and there's benefits and there's sick days and there's all these different things that add up. And the next thing, you know, it's a, you know, you, you feel like you want to charge them what you would make, you know, on an hourly basis, but it's, you know, it's different because now it's, you know, you've got to, you do, you've got, the business has to get something out of it. You've got to get something out of it. You've got to actually be able to pay yourself at some point or else you're just, you know, I guess you're just, you know, being a charity or something to say, Hey, I'll give everybody a job, but we're not going to get anything out of it. Yeah. An expensive hobby. People would be very happy maybe, but except for yourself. And so you do, you end up, as you say, you're, you're basically cash for it. You've got tons of money coming in. You've got all this money you're handling, but none of it's yours because you're pushing through the business and then goes right back out to the employees. Now with that, you did mention that you spent a lot on, on programs and marketing. So how did, when did that, I guess, when did that challenge or those mistakes come into play, was that sort of, as you were trying to grow out of that, or was that from the start? So I started off being such a tight ass from, if I can say that on the show, every program that I used was free. I would like cobble together these, you know, 15 different pieces of software to try and, you know, and I would test things for weeks to try and figure out which one I could get on the free version and maybe we'd have to account. Like it was just totally the wrong mentality. So that was definitely a mistake when I realized that my time was money. Actually my time is more valuable than money because I can earn more money. I can't earn more time. And so thinking about what that would cost is, and then weighing it up from that perspective, so it's not then, you know, going out and getting the 20 different paid software, but being really discerning about the things that we actually needed that were going to save us time, that were going to make the client experience better. And as, as an agency, the biggest thing that we did was to automate the onboarding system. Like that was the most important piece because what would happen is people would sign a contract and they would agree. And then our policy was that we wouldn't start work until they had paid something because I learned early on that I would start and then maybe they'd drop out or they, you know, wouldn't pay the full amount. And not always, but enough for me to be like, I just didn't love that. Like two days of work and decided that they, you know, can't afford it now. And so we decided pretty early that we wouldn't start work until we had paid something. And so we decided pretty early that we wouldn't do any work without payment. So that meant between the contract signing and getting paid sometimes would be two weeks. And our process was that we would have a set up fee and we would have then like a monthly retainer. That's a great thing about, you know, about marketing is that they keep needing it. So again, like, you know, having that recurring revenue in business is really helpful, but it meant that it pushed everything out. It means that we couldn't start for two weeks. So instead of, you know, maybe that month, that cash being this month, it was next month, which meant I didn't start the retainer till, you know, after the set up was done. So I missed out on a whole month of, of retainer and I realized it was costing me literally thousands every, every month. And so by, on, by automating the onboarding and doing a system where they signed the contract, they got sent automatically to pay, like they had to deposit right then on the next page. And then they filled out their orientation form, like their onboarding form, and then the next screen was, they booked a call. And so literally within four screens, we had everything we needed. We'd been paid. We could start them, you know, as soon as we had that call. And that was a really big game changer that took me a little bit to kind of figure out. Did you see, cause sometimes people are hesitant about that. They're like, well, okay, I'll let you, you know, you can pay when you can get to it and I don't want to, I don't want to be too pushy, especially if you're not a, a salesperson, I think by nature, a lot of us are more like, Hey, you know, we just, we love to have you as a client. So get us the money, you know, we'll trust you or whatever. Did you find any difference in the, I guess, like for lack of a better term, your close rate when you, when you switched to, Hey, you need to, like, when you sign the contract, you need to pay now, or did you get any pushback? No, no, none. I mean, we made it 50% for most things like pay 50% of the setup fee and then pay 50% when it's done. Um, but no, we didn't experience anything because ultimately they're excited. Like you haven't made them like taken their hand and forced, forced them and sold them something that isn't good. You've, you've explained where you can take them. You can, Oh my gosh, I can, you know, make your business look this much better. Or I can make it this much easier. I can get you, you know, you've got some sort of, you're offering something like you've got the brownies and they, they want the, they want the brownies. So you just have to like offer them out. I like that analogy. Don't give you brownies for yourself people. And that will be what we pause this episode, but we're not done yet. We're going to come back. Hopefully you got some good information with that. I know I did in particular. I think there's a lot of the discussion around pricing and getting started and really that like what's your worth. And we're going to talk about that a little bit more and how to make sure that what you do is it makes sense that it is something that you value it properly. So that you get paid properly because we do deserve to get paid for our work. That being said, I'm going to let you go out into your day so you can do the work that you get paid for and we'll be back with the next episode and some more interviews after that we're getting close, but still got a couple others trickling in want to make sure that we cover these before we do that overarching summary of some of the things, sort of the, what have we learned with all of these great people that we've talked to. So go out there and have yourself a great day, a great week, and we will talk to you next time. Thank you for listening to building better developers, the developer podcast. You can subscribe on Apple podcasts, Stitcher, Amazon, anywhere that you can find podcasts. We are there. And remember just a little bit of effort every day ends up adding into great momentum and great success.