How Creators can Find Hidden Profit in Their Business with Nev Harris

Joe Casabona: What’s the difference between making money on the side and running a business? There’s probably a dozen ways to answer that. But if I had to give you my answer, I’d say it has to do with how you manage your money.

Early on in the WordPress space, people were learning they could make money with their work but were not managing it properly. I think we’re seeing something similar in the creator space. So I brought in profit expert, Nev Harris, to tell us the four ways to find hidden profit in your business and get your finances in order.

Hey, everybody, and welcome to Episode 277 of How I Built It. I’m really excited for you to hear my conversation with Nev Harris. And we do have an extended version of the conversation for members. So if you’d like to get ad-free extended versions of this and every episode of How I Built It, as well as access to my live stream archives where I build in public, and lots of other bonus content, you can sign up on the show notes page over at streamlined.fm/277.

There, you can sign up for 50 bucks a year. That’s less than five bucks a month. You’ll also get all of the show notes. Again, that link is streamlined.fm/277.

Thanks to this week’s sponsors Text Expander, Nexcess, and LearnDash. You’ll hear about them later on in the show. But for now, let’s get to the intro, and then the interview.

[00:01:31] <music>

Intro: Hey everybody, and welcome to How I Built It, the podcast that helps small business owners create engaging content that drives sales. Each week I talk about how you can build good content faster to increase revenue and establish yourself as an authority. I’m your host Joe Casabona. Now let’s get to it.

[00:01:55] <music>

Joe Casabona: All right, I am here with Nev Harris, profit expert, friend of the show, or maybe I’m a friend of his show [inaudible 00:02:03] podcast. We know each other from the WordPress space, but we’re not here to talk about WordPress. We’re here to talk about making you and your business more financially stable. Nev, how are you today?

Nev Harris: I am fantastic, my friend.

Joe Casabona: Awesome. Thanks so much for coming on the show. Let me tell you, I started the backup recording for this too late because I didn’t do a test and so I stopped it. And then I forgot to hit record again. We had just the most fantastic pre-show where Nev talks about backroom deals of certain industries and things like that. That’ll be on the B sides one day, the part of the conversation I captured, assuming Nev signed a release and is okay with it. Many years in the future.

But now I’m really excited to talk to you today because you are a profit expert. The show started pretty squarely in the WordPress space. But as I’ve moved beyond the WordPress space, I’ve made this targeted more towards small business owners, but especially creators, who I kind of feel are at a place now where WordPress was maybe 10 years ago, right, where now creating content has gotten more accessible for more people. And so people are just doing it.

And now they’re kind of starting to make money and they don’t really know best practices or they never thought this would be a business and now it kind of is a business. In your own words, why did you become a profit expert?

Nev Harris: Well, because exactly what you said. I saw friends struggling with the exact same thing. They got into a business because they were good at what the business did. But they didn’t realize that they had to be good at a couple other things and that maybe what the business did wasn’t one of the most important things they had to be good at.

And one of them that I knew very well was money. So I helped friends doing that. And then it took off from there, and I started helping more and more people understand how to manage their money so that they could be around. Because having a small business is tough.

And you know, if you give yourself an advantage by being more profitable in the beginning, you could be around longer and you have a chance of, you know, becoming much bigger and more profitable and doing bigger things with that money.

Joe Casabona: Yeah, that’s exactly. And again, the analogy or the analog in the WordPress space is a lot of those early plugins that had commercial success, had commercial success because they were kind of first movers, but they were developers who didn’t really know how to run a business. So when it became time to run a business, there were growing pains, or they got weeded out or some just completely disappeared.

And you’re right, running a small business is tough. I had the benefit of starting my small business in high school, so I had a lot of leeways to mess things up. But when I got out of school, I lost my first safety net. And then when my daughter was born, and I started doing this full time, I lost all safety nets. I had more risks and so I knew I had to do it right.

So let’s start here. Well, first of all, you said something in the pre-show that I just want to get out of the way. You’ve run a couple of businesses in the past, right? A direct mail magazine, which Nev just taught me is… In the northeast, we call those circulars or coupon books that get sent to you direct via mail.

You kind of parlayed that into, I guess, we’ll say web design agency. But really you create these marketing strategies that you would then implement. And one way was with WordPress, which is how you got involved in the WordPress space.

So you had a couple of businesses before this. The pandemic hit, and you had some things going on in your personal life where you had to put this business on hold. But I also noticed that you’ve done things like hire a PR person, hire a coach. So what’s it like having the mindset of knowing you need to invest in your business early on?

Nev Harris: I think it’s a luxury and it’s a benefit, and it’s definitely a leg up. So, what allows you to have that is managing money. Like I’ve had businesses for 20 years and I didn’t start my first business with saying, “Okay, I’m gonna have $15,000 a month in expenses and no income,” because that’s unrealistic.

But when you manage your money well over time, and then 20 years later when you’re like, “Hmm, I think I want to go whole hog on this business and put a stop on what’s making me money…” Because I didn’t have a choice. I mean, I had gotten really sick, like deathly ill for like 15 months, and I was out of it.

But being that, you know, I had amassed some savings and I had a business that could run without me being involved in the daily basis even though it took a hit, I mean, I was able to do that. But even back when I first started, I always knew that, you know, there’s a thing. And just coming from a finance person, you have to spend money to make money. But you have to spend smart money to make money not just spend money willy-nilly. And there’s ways to know which money is smart and which money’s not.

Joe Casabona: I love that. And Lexi Grant was on the show a couple of weeks ago, maybe a couple of months ago, by the time this comes out, and she kind of said the same thing, right? She started her business, theygotacquired.com and she was able to invest in that business because she sold her last business. And instead of just like blowing that money on some nonsense, she knew that she could invest it and spend money on content writers and a really well made, like highly produced podcast.

Listening to early episodes of your podcast, I could tell it was maybe more produced than mine. You had the intro, you had some fancy editing done. Mine’s really more of a linear type thing. At this point, it’s an artistic choice for me.

When I first started, it was like, “I can’t spend any money. I’m like paying an editor like 20 bucks to edit this.”

But, you know, having some money and some savings and some runway honestly in place allows you to make better decisions and do things like, I don’t know, not hire anybody who’s just willing to throw any amount of money at you, right?

Nev Harris: Yeah. So speaking of that, that was smart money I spent on the podcast intro. There as some dumb money too that I did a pre… that I did a… what is it? The teaser for the podcast. I spent a lot of money and wrote a script and I got people to say, you know, to make… It was really, really funny, but nobody heard it. Probably cost me a couple of thousand dollars to produce this. Complete waste of money. Stupid money spent.

Joe Casabona: That’s funny.

Nev Harris: But if you go back and listen to it, it’s pretty damn good.

Joe Casabona: I did listen to it and I think that is the impression. Because I’m like a narcissist, right? I knew I was gonna be early on in the show, and I was like, “Oh, I wonder if I made it into the trailer?” I did. Spoiler alert.

Nev Harris: You did. You did.

Joe Casabona: I did. But I remember thinking like, “Wow, did he hire a production company to do this? Is he like really good at audio editing?” And I had no idea. So yeah, I mean, there’s smart money, there’s stupid money. We’re all probably going to do it. But like, I mean, you’re aware of that. Right?

Oh, just circling back really quick, I think I touched on something that’s probably worth mentioning too, right, is when you spend your money the right way… I talked about this in a WordCamp talk, where I mentioned like being ready for the famine. Like there’s the feast and the famine.

If you hit the famine and you have no work, then you’re more likely to cut expenses that you probably need to run your business, putting more work on yourself. And then you’re just going to accept any client who’s like, “Yeah, I need a website for like 500 bucks. Can you do it?”

Nev Harris: Right.

Joe Casabona: And then in your mind it’s like, “Well, that’s 500 bucks I don’t have.” Right?

Nev Harris: Mm-hmm.

Joe Casabona: But I know in the pre-show you kind of mentioned something about that as well.

Nev Harris: Yeah. And we did this. And I found this out real quickly. You could sell a website for $500 or $1,000, whatever, and that person is going to be just as much work as building that $15,000 website. But that person is going to fight with you over $50, $100. And you’re like, “That’s 20% of what… You know, I can’t give you that. That’s my profit margin.”

But you sell a $15,000 website, that person… their time is so valuable. If they can afford a $15,000 website, they’re not going to hustle over $100 because it’s not worth it to them. Because even if they when they’ve lost because their time’s worth more than $100 an hour. That’s the difference.

But we don’t think we’re qualified enough in the beginning to sell that $15,000 website. Well, here’s the thing. You are, and you should. And because there are so many people fighting for that $1,000 website, and there’s so few people fighting for that $10,000 website, so you know, you have so much less competition and so much easier have a chance getting those bigger websites.

Joe Casabona: I love that. There’s so much more competition at the bottom. It’s like a race to the bottom. You want to avoid the race to the bottom. And I love that. I’ve been there too. I accepted a nightmare client in college for… It was like a $300 website, and then her down payment bounced. Like the check bounced and my account was overdrawn. It was the final payment maybe but I mean, I was in college and I had no money.

She’s like, “I told you not to cash that check until Thursday.” I’m like, “You also told me that you needed the site launched on Tuesday. So the site comes down and now you get to pay me and the overdraft fees.” I at least had the hutzpah to say that. But yeah, accepting nightmare clients is going to be definitely more work than it’s worth.

So you want to find the person who knows your worth. And side sidebar on that, somebody asked me to make them an eCommerce website that was going to have like 50,000 medical products that were being fed in from various API’s and stuff like that. And I said, “It’ll cost $25,000.” And they said, “That’s a lot of money.” And I said, “That’s 50 cents a product. Is your site not worth 50 cents a product?” And they’re like, “Well, when you put it that way, yeah.”

But in order for you to charge what you’re worth, to make clients believe what you’re worth, you need to know what you’re worth, right?

Nev Harris: Mm-hmm.

Joe Casabona: You can’t just be looking at the bottom and going, “I have no money, I need to take money.” So the main topic for this episode is helping business owners find profit hidden in their business. What kind of profit is hidden? Like how is there a hidden profit?

Nev Harris: Well, there’s a hidden profit in your business because you’re running your business in the dark without any insight into what’s going to happen in the future. So let me tell you a story real quick here. There’s something called the Stroop test. I find this to be really fascinating, and maybe you will. So I want you to try this but not during the podcast, after the podcast. Especially not if you’re driving because that would be really, really bad.

I want you to write down three words. I want you to write down blue, red and orange. Okay? And I want you to write down blue, but I want you to write in a green pen or on Google Docs or whatever. And then I want you to write red in a yellow pen, and then orange and a purple pen, okay?

And then I want you to pause for a second. And I want you to go back there, and I want you to pronounce blue, red, and orange. Now, what’s gonna happen… And they’ve done this test a million times in psychology and everything.

Joe Casabona: I have taken this test.

Nev Harris: So Joe knows. Joe knows. This is true. You will pause, you will have a problem saying blue if it’s written in green. So because, you know, your gut is telling you that that’s green, you need to say green, but your mind is saying that it’s the word blue. So that’s the problem there.

Then you have something called selection bias. Okay, now, selection bias, is say, I had a friend who was doing online courses, and if you guys are out there creating stuff, and you guys you have an audience and you ask your audience… You know, like if you’re good marketer, you ask your audience questions, and they respond.

I had a friend, 50,000 person Facebook group, and she asked a question about how many people like a workbook with their online course because she didn’t want to create workbooks anymore. 137 people replied to this. 32 of them, I went back and counted, 32 said that they didn’t want to workbook. She comes to me says, “Nev, I figured out the problem. I figured out the answer that question because I’m creating courses too. She’s like, “They don’t want to workbook.”

And I’m like, “That’s not what I thought.” So I went back and counted them. 102 people who said they didn’t care or wanted a workbook, only 35 or 32 said they wanted it.

So what all this says, and the biggest one, I think, and then I’m going to tell you why I’m telling you these stories, the biggest one is you go to the casino and there’s a roulette wheel, and they post the past numbers. Those past numbers mean nothing. It’s completely random.

But they post them because your gut feeling says, Nine came up three times already, it’s not going to be red nine for a long time. Red nine has just as much chance. I don’t even know if red is nine. But red nine has much chance of coming up as it always says, but our gut tells us something different. And we run our business based on our gut. And when we make decisions based on our gut, that’s how we spend damn money.

When we spend smart money, we’re using data. Because in the absence of clear and concise data, we subconsciously substitute our feelings, our gut feelings for facts. And the reason is we’re first-degree analytical thinkers. So that is a problem.

So think about running a business in the dark. You know, if you have a great pipeline of business coming in, but you don’t have any cash to pay your bills tomorrow, that is a problem. Because that pipeline, you can’t go to somebody and say, “Hey, we haven’t closed our deal yet, but pay me.”

Joe Casabona: Right. Right. I love that. It’s almost like the people who say, “I just need to find the perfect CRM. My whole business will fall in place if I buy the right CRM. Or yeah, I’m gonna buy this $5,000 online course and it’s gonna fix everything in my business. That could be smart money, right? It could accelerate you. But if you’re never gonna use anything, then it’s dumb money. Right? Then you bought it on a feeling.

Nev Harris: Yeah.

Joe Casabona: I really love that. They are definitely online Stroop tests that you could take so I’ll link to one in the show notes, because it’s really interesting. I was really proud of myself because I did pretty well on it, I think. I don’t know what that says about how I run the rest of my life.

Nev Harris: You’re a psychopath.

Joe Casabona: Yeah, exactly. Like, “Yeah, you’re a serial killer. Cool.” So hidden profit is basically like you’re not seeing the additional money that could be in your business. This reminds me a little bit of Profit First with Mike Michalowicz, where he says like, “Hey, take the profit out of your business first. Pay yourself first. Then look at the money you have for expenses.” Which seems like a really rudimentary thing. But it’s really easy to look at your bank account, see $10,000 and then be like, “Oh, I can’t afford that. $5,000 trip.” And then on payday, you’re like, “Where’s all my money?”

Nev Harris: Profit First is… There’s some good theory in that book. It’s really good in the beginning, but when your business gets going a little bit, it gets really complex to keep that system.

Joe Casabona: I mean, I had to abandon the method when I set up like a proper payroll for myself because then I couldn’t tell my accountant to like set up a payroll from my business account, and also take an extra 5% and put it in this account. So I still kind of run those numbers so that I know what my spendable amount is, but I don’t have four different bank accounts for my-

Nev Harris: Because you trained your brain.

Joe Casabona: Yeah, right.

Nev Harris: And that’s the key thing. That’s how the profits sit in in your business because your brain is trained to look into the future and look for those kinds of things where most people’s brain isn’t trained because we’re creative people who have been taught our whole life that we’re right-brained and we should understand money. And then money is talked about in an arcade kind of language. I think it’s just meant to confuse people to keep accountants and financial planners in a job.

Joe Casabona: Yeah.

[00:20:45] <music>

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[00:21:41] <music>

Joe Casabona: So let’s say you’ve now convinced me I don’t want to run my business in the dark. What’s my first step? What’s the flashlight to find the light switch?

Nev Harris: Well, I’ll tell you another story about this. Joe, you as a developer, like I don’t know anything about this. I have a friend who’s a developer that tells me about this. And I think it’s really neat. You might get this. But I think it relates to everybody.

There’s something called Agile development. And you know, I’m gonna say stuff, and Joe’s like, “That’s not Agile development.”

Joe Casabona: I will not do that live with you. I’ll make that correction-

Nev Harris: You’ll make fun of me when we’re done.

Joe Casabona: In the intro bumper, I’ll be like, “Listen, Nev said some things that were wrong, but the point was so good.”

Nev Harris: Thank you. Thank you. Thank you. So she’s explained this to me. In agile, it’s kind of cool. It’s like you have these sprints, these two-week sprints. And you break down a project into two weeks sprints. And you focus on getting something done in something workable that you’ve actually made progress on something in two weeks, and then you go over to something else in the project, and you work two weeks, work two weeks. And the overarching goal here is to finish on time and on budget.

Now, I don’t want you to be an agile developer. I’m not an agile developer. But what I want you to do is realize that what they’re doing is they’re focusing on one part, they’re seeing results, so they’re moving the project forward one chunk at a time.

Now, how this relates to running a business for a web agency or creator, like anybody is… Your overarching goal is you want more profit. So there’s three ways then to have more profit. You can have more sales, you can have more money per sale, or you can have lower costs.

But we could actually do better than that, because that’s kind of nebulous. You think, “Oh, Nev said something really smart.” And then you go back and you try to implement and you’re like, “Where the hell do I start with this?”

And this is where I’m going to tell you where this profit could be hiding and how we could do better. And if you believe you don’t want to run your business in a dark, this is what you do. You realize there’s four areas that you could focus on. Okay.

There’s revenue, which is going to say, what kind of sales am I getting in? And what am I paying to get those sales in?

There’s profit—how much money you’re taking home, how much money you’re taking, for all the blood, sweat, and tears you’re putting in.

There is looking at your costs. Because like you said, if you’re spending 5,000 on a course, and you’re spending money on a CRM, and you’re spending money on this, and you’re spending money on that, your cost is like death by a thousand cuts, you know.

And then there’s efficiency. How well are you running your business? How well are you using all the CRM you bought and everything you bought? So what you could do then is you realize you have these four areas. So every quarter work on one of those areas.

So say, you know, you’re going to work on cutting your costs. So for this one quarter, your goal is going to be cutting your costs. So it’s like agile finance. So then look at stuff. On my website, I have… Like you could get a free expense killer and you list all your subscriptions out and you fill out a form that says, “What do I use this subscription for? What else could I use it for? You know, what else do I have that I could use this for?” I have not found a single person who hasn’t saved themselves $1,000 as you’re downloading this form.

Joe Casabona: Wow. Strong value prop there, folks. I’ll link that in the show notes.

Nev Harris: And then you keep on doing that and you keep on looking at and then maybe come up with some KPIs that say where your costs are. You know, and then every week, you look at that KPI and say, “What progress have I made?” And by the end of the quarter, you know, you’ve saved yourself maybe $2,800. And then $2,800… Every quarter, you get $2,800 more in. So every year then what’s 2,800 times four? It’s like-

Joe Casabona: 56 times 2.

Nev Harris: It’s 11,200?

Joe Casabona: Yeah. Somewhere there.

Nev Harris: There you go.

Joe Casabona: 11,600.

Nev Harris: 11,600. Somewhere around there.

Joe Casabona: You are right. 11,200. Six by six is twelve.

Nev Harris: Always husband.

Joe Casabona: Always husband.

Nev Harris: So if you believe you don’t want to run your business in the dark, pick a quarter and do this. So there’s four of these, there’s four quarters in a year. So every year you’re becoming more efficient, you’re lowering your costs, you’re becoming more profitable, and you’re bringing in more sales at a cheaper cost.

Joe Casabona: God, I love that so much. Because just one of these in a vacuum isn’t going to help, right? You can only cut your expenses so much before you’re like running a ghost ship, right?

Nev Harris: Right.

Joe Casabona: But you do it once a year, every four quarters, now you’re like, “Well, what new expenses did I pick up that I really didn’t need to pick up?” I think that’s so great. I keep a Google sheet of all of my subscriptions. I think I got this from Justin Weise. I don’t know if you are familiar with him. He’s like a really smart and funny dude.

Nev Harris: I like smart.

Joe Casabona: When I first met him, I met him at CaboPress, which is our mutual friend Chris Lema’s event. And he called me Italian Joe and I called him Iowan Justin. But he kind of recommended something similar. I’m gonna recommend Nev’s resource because it’s already set up and you don’t have to do anything.

But I created a spreadsheet with kind of what I was paying, if it was monthly, or yearly, and then the total cost. And then I labeled each one like, need, nice to have, or cut. And I was probably about 1,000 bucks. I was able to save myself that way. So I think you see measurable progress pretty immediately, especially with that approach.

Nev Harris: And the other key thing is that you probably are duplicating services. Like we all want the best. Like your project management software probably has time tracking in it. So you probably don’t need to harvest. G Suite subscription will do a hell of a lot, you know?

Joe Casabona: Yeah.

Nev Harris: And there’s other programs that do better but maybe you don’t need. And I love that column you have. Maybe it’s a nice to have, but it’s not required. That you need some like ultra-special perfect, you know. Because we always convince ourselves we’re one product away from one SAS away from, you know, making so much more money. We’re one AppSumo away. We get that good business is buying AppSumo.

Joe Casabona: We’re one AppSumo way from making more money. I love that. And you’re right. I have a Setapp subscription. Are you familiar with Setapp?

Nev Harris: I am not.

Joe Casabona: Okay, so this is a $10 month subscription and you basically get access to a Mac and iOS app bundle.

Nev Harris: Oh, cool.

Joe Casabona: So there’s like a whole bunch of apps included. And then I guess whoever downloads the app, like each app developer gets a cut. I don’t think about that side of the business because it seems like a nightmare to run. But it makes sense for me because the number of apps I use would cost me more than 120 bucks a year, first of all.

But when I need a new app, that’s the first place I look. I’m not buying a new app if there’s already something available in Setapp, because I’m already paying for that.

Nev Harris: I will check it out.

Joe Casabona: Check it out. I have an affiliate link, so I’ll-

Nev Harris: Oh, cool. Send it to me.

Joe Casabona: …send it to you.

Nev Harris: Get yourself a cup of coffee.

[00:29:33] <music>

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[00:30:30] <music>

Nev Harris: Trying to make decisions, I always have a resource, I think it’s still on the website, called a Shiny Object or Needed Tool. Once you do the expense, once you go through that, now when you’re making decisions in the future, this helps you make better decisions.

And once you do it like three or four times you kind of… then you could do it subconsciously, you fill out the form a couple and then you’re just training your brain like you’ve done like Profit First now for a little bit. Now you don’t need to do it because you think through that stuff anyways. So yeah.

And this just helps you train how to think about making your decisions. Because we always fall. I mean, like even me who knows all this stuff, I mean, I fall victim of shiny object all the time, and I have to check myself.

Joe Casabona: Yeah, it’s absolutely true. Because we are all human, we fall victim to that decision bias, right? You wouldn’t believe how many new courses or new videos or whatever, like new learning resources I started because one person wrote in and asked. I was like, “People are asking for this.” Like, no, a person has asked for this.

Nev Harris: Like Chris would say, n equals one.

Joe Casabona: Yeah, yeah, exactly. So you’re absolutely right. I’m just gonna say, in the show notes, you’ll be able to find all of Nev’s free resources. That’s going to be over at streamlined.fm/277. So you can find more about Nev’s free resources.

We’re also going to talk about what it’s like hiring a publicist in Build Something more. So you can also become a member for 50 bucks a year. That-

Nev Harris: That passes the Shiny Object test.

Joe Casabona: Good, good. You’ll learn stuff. You will learn stuff. And that’s less than a cup of coffee a month. You can join again over at streamlined.fm/277.

So looking at costs, that one’s the most obvious to me because you make a list, check it twice, see what I’m using and where there’s overlap, and just cut those expenses.

I did that on January 1 this year and it’s just like the endorphin hit that you get from like, “Successfully canceled. Money just came back to me,” it was great. But what about the other three? Efficiency. How do I know if I’m running an efficient business?

Nev Harris: All right. Now, efficiency, I’ll tell you the golden ratio. This comes into the efficiency category. And it is your time or your team’s time if you have people working for you. It’s your total hours divided by your billable hours. And that’ll give you a ratio. Okay?

Now say, “Nev, what’s the word ratio?” Well, it really depends on your company, you know, and how your team is working, how you’re working. But what you’ll find over time is your developer trend. Now, most people we want to be around 70%. But if you’re at 40%, that might just be your business. If you’re at 90%, 70% might be bad. But just, you know, for ballpark, we’ll say 70.

So you’ll know if that number drops below 70, that means yourself or your team isn’t doing enough work that you could bill for. And the great part about that ratio is it affects all… that’s in the efficiency category, but it affects all four of them. Because if you dropped the 40, you might have a sales problem, because you’re just not providing the work for them, for your team to work on or for you to work on, so you can’t generate the billable hours.

Or maybe you have an underpricing problem, and so your team or yourself when you find out what your billable hours should be, what your rate should be, is you’re underpricing and you can’t make any money on it, because even though you’re billing the hell out of stuff, you can’t make any money because your price isn’t high enough.

Or, you know, you could say your costs. So again with the cost is like maybe you’re distracted, maybe you’re not focusing on the products maybe you’re off spending like weeks worth of time developing podcast teasers that nobody’s ever going to hear except you.

And then that shows in that number. So if you’re tracking that number constantly, it reflects on your whole business. I have a whole course on KPIs and just coming up with these key performance indicators, that you know, with five minutes, like it could tell you financial status of your business. I call it your financial fitness.

I have tons of free resources and I have all these courses. And all the courses are under $200. So you’re not going to go in to see something for $2,000. Because you know, my goal was I really want to help people. My stated goal is I want to help 10,000 agency owners, freelancers, creators use their finances as a tool to grow their business so they create more profit and impact in the world.

Joe Casabona: I think that’s great. And you know, you talk about efficiency. That really resonates with me as a creator because I think it’s hard for creators to figure out this ratio, right? We’re not necessarily doing billable hours most of the time, right, if you have a full content business, we’ll say.

But one of the first things I did for my podcast was hire an editor, because it was taking me two hours to edit a 40 minute episode. And I could instead pay $30 to $50 for someone else to do it.

Now coming from the freelance world, I knew my billable rate was $150 an hour. So would I rather spend 300 bucks of my own time or would I rather pay someone 50 bucks, and then I have those two hours back to work out brand deals or talk to sponsors, right? So now I’ve taken that time. For $50, I got back two hours, which I then turned into $5,000 by locking in a long-term sponsor, for example.

Nev Harris: So we have another ratio that I have. It’s your ratio. That is the exact same thing, but it’s how many hours are you spending on the work. Because you shouldn’t be… because there’s all sorts of things you could farm out, like you just said. Because if you’re spending too much time on the work, you’re chasing pennies and leaving the dollars laying on the floor. And you don’t want to do that.

So you want to be in there. As the CEO of your business, as a CEO of your one-person business, or two, you know, you need to be bringing in other people. You need to be outsourcing the cheap work. You know, even $50 you might be thinking, “$50 isn’t cheap work.”

But when Joe says he could create a $5,000 partnership, like when you could create sponsorships and sell sponsorships and be creating strategic partnerships with other people to get your message out there to increase your subscribers, you know, that is what the CEO of a business does.

Joe Casabona: Yeah, that’s exactly right. And yeah, totally. I get the bill from my editor sometimes and it’s… you know, sometimes close to $1,000. And I’m like, “What happened?” I bashed these episodes. I sent him a lot of episodes sometimes. But it does. It works out to about 50 bucks an episode. And 50 bucks an episode, if I have a full slate of sponsors, I’m making 900 bucks an episode. Super easy math, right?

So I love that. Your ratio, right? Because creators, we want to try to do everything. Edit, video edit. I was a video editor for hire for a long time. And then I was like, “God, I hate editing.” And now I have a video editor too. And you know what? I was the bottleneck in my own courses because I would shoot the stuff and then I’d have to edit the videos.

Now I shoot the stuff, I send the videos off to my editor, shout out to Fred, he edits them again away faster than I would do it. My virtual assistant creates the title cards, the thumbnails for the videos. And I can focus on making the marketing material, getting myself on podcasts, providing value for people, building my mailing list and then selling the course. That’s the stuff that…

I mean, honestly, I probably want to hire somebody to do some of that other stuff. But the biggest time sucks for me and the things I liked doing the least are the things I hired out for first.

Nev Harris: I’ll tell you a story. I’m going to look into right after this podcast is Riverside. The program that you use, because I had a podcast and my podcast is gone into a low because for me, it’s not that it takes so much time and I couldn’t hire somebody do this, but it’s I just don’t like doing and it’s a drag, it’s a hassle to record it in Camtasia, record it in GarageBand, and then a package that up, upload in the drive, send a link to my designer and have him…

So to me, that’s one of the reasons I’ve not liked it. If I was going to be completely honest, I’ve not really done podcasts lately because it was just such a hassle to all the work afterwards that I was just like, “Ah, I’ll get back to that.”

Like Riverside, you were explaining, I was like, “Oh, wow, this is amazing. I could just send a link to my guy and not have to worry about anything. So I’m in.”

Joe Casabona: My goal in life is to make podcasters as efficient as possible so that they can get sponsors and actually make money with their podcasts. That’s my whole thing now.

Nev Harris: You have a LinkedIn course on that? Do you have like 52 LinkedIn courses?

Joe Casabona: Funnily enough, all of my LinkedIn courses are development courses. So they’re all courses from my previous life, which I kind of like because now I have a very specific niche on LinkedIn. And I don’t have to worry about like stepping on LinkedIn content with my non-LinkedIn content, if that makes sense.

So it’s definitely nice. Like, there’s not a lot of cross-pollination of audiences. But it’s nice that like I don’t ever have to worry about, “Oh, I want to sell this course on my own but I kind of have a similar one on LinkedIn.” Also, I’ll just say, full disclosure, Riverside is a former sponsor of this podcast.

As far as I know, the discount code still works. So you can get three months for free if you use code JOE30 or 30% off something like that if you the code Joe30. But I love Riverside. It’s made my life so much easier. Because you’re right, we would do the dance, right? Get on Zoom, record in GarageBand. I would tell my guests how to record their side of the audio using QuickTime.

And then when I started doing this for hire for other people, you know, one of my clients was in her 60s. She would have guests who were in their 70s, and I’m like, “Do I really want to tell this like 70 year old person…?” not to be like ageist or whatever. But they didn’t come from the tech field. They came from the activist field or the law field.

And so like, “Am I really going to talk them through, open up QuickTime, now lower your volume all the way, now see that inscrutable icon, click on that.” Like, no way. I got Riverside, and I’m like, “Click on this link. It will do everything else.” Totally worth it. So yeah.

Just like I tell people “you need to make it as easy as possible for people to pay,” you need to make it as easy as possible for you to get paid. Whether that’s like reducing friction in the work you do or whatever.

Nev Harris: Oh, yeah. I’ll tell you. I’m using an interior designer to redo my house. And this woman she sends me a bill in the mail, where I have to write a check. And then it’s just not cheap. It’s a big bill every time. You have to write a check and then I have to have the money in my personal checking account to cover the check. I don’t have that much money in my personal checking account, because I only put money in it when I need to pay bills, and I pay bills once a month. It’s just the way I do things.

And I tell her, I said, “It’s gonna take me a couple of weeks to pay you,” and she gets kind of pissy about that. And I say, “You know, just take a damn credit card and it would be so much easier. I’d pay you in a second. She finally set up something like Zelle I think or something like that. But then I’m capped at $500 a week. So soon as she sends me the email, five seconds later, she gets $500 from Zelle.

You know, but it’s just like people say, “Oh, but credit card is gonna cost two and a half percent.” But your cash flow and getting the money from people, you know, when they have it, when they’re ready to pay, it’s so important. It’s so worth that two and a half percent. But people don’t want to give up that two and a half percent, but they’re giving up so much more, and so much more stress and hassle in their life.

Joe Casabona: I’ve seen people who are like, “Oh, if you use a credit card, they’re gonna charge you an extra 3% or whatever.” And I’m like, “Credit cards are… that’s a cost of doing business.”

Nev Harris: Yes!

Joe Casabona: But let’s look at revenue, right? Charge more. How do you get more per sale? This is something I think a lot of people are afraid of. Again, I think you work mostly with agencies but when we’re talking about brand deals, I get… Like half of my income comes from brand deals, from sponsorships or from people who pay for sponsored placement on my YouTube channel.

And I’ve been doing this a long time. One guy basically looked at my price for YouTube, he said, “That’s too high for the number of subscribers you have. What’s your bottom price?” And I was like, “You’re looking at it. You’re looking at it because I’m gonna make you a good video that you can point to.” If your game is just about like, paying for number of subscribers, you can sponsor any YouTube video for 99 bucks. But if you want a custom video review, then you got to pay more for that.

Nev Harris: So I’m going to withhold a comment.

Joe Casabona: All right.

Nev Harris: …because it has to do with the PR. We’re going to be talking about in the How I Build It. But it exactly addresses that point.

Joe Casabona: Howibuilt.it/277.

Nev Harris: Because I have some really interesting thoughts on what you just said there. And I’ve proven them you know, personally with my own money. So anyways, moving on.

Joe Casabona: Awesome.

Nev Harris: That’s enough of the tease.

Joe Casabona: I love it. I love it become a member of the Creator Crew. You get so much. You get so much good stuff for less than five bucks a month.

[00:46:13] <music>

Sponsor: This episode is brought to you by LearnDash. Look, I’ve been making courses for a long time, I’ve taught at the college level and I’ve created curriculums for several different organizations, including Udemy, Sessions College, and LinkedIn learning. When I create my own courses, there’s no better option than LearnDash.

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And now you can import Vimeo and YouTube playlists and have a course created automatically in seconds. I trust LearnDash to run my courses and membership. And you should too. Learn more at streamlined.fm/learndash.

[00:47:18] <music>

Joe Casabona: We looked at costs and efficiency. But what about revenue and profit? I mean, you mentioned like, you know, you can get more sales or you can get more per sale. We opened up the episode by saying like go after the people who are willing to pay more. How do you get to that? You know, I can’t just on my first day of being a web designer be like, “Yeah, give me $20,000 for this website.”

Nev Harris: Why?

Joe Casabona: Great question. Why can’t I? Why should I? How do I do it?

Nev Harris: You do it by saying, “I want to 20,000 for this website.” I mean, maybe you want to like they say in podcast, interview your neighbor or something like that. Maybe you want to build a couple websites for your neighbors and stuff like that, and you know, people. So when you price things… okay, we want to talk about pricing. The problem that people run into when they price too low is their costs kill them, and cost overruns and kill them.

People always say, there’s another thing that more sales solves all problems. My response to that is, if you have a cup, and that cup has a hole in it, okay, and you’re thirsty, putting more water in that cup is not going to help your thirst, it’s going to flood your house.

Joe Casabona: I love that.

Nev Harris: If you have a business where your pricing is off and your costs can get out of control sometimes if you’re following the greatest pricing model in the world, but you know, your costs run out of control, because it takes too long, you misquoted, you did this, you know, and you get 10 times more of those projects in, it’s going to kill your business because you’re going to get a lot more sales, you’re going to have a million dollars of sales and a million and a half in expenses.

So what you got to do first is really get a hold of your cost and then you raise your price. So the fact that you have your cost set as a foundation, and then you build your business on that. So, you know, I mean, you need authority and you need…

So a great way to do it is… I’ll give you another example of how to do this in the meantime. This goes back to what we’re talking about in the beginning too. So I had started the nevharris.com brand in 2018 on the side, you know, as a side project, not spending much time with it. But I built up this thing, I threw a blog there and everything like that.

Fast forward to march 2020. You know, the world was going to hell, they wanted somebody that could talk about money, and one to put their audience to sleep. That was me. And then they were able to go back and see that I had the website. I had blogs up that word had been up for a couple of years. I had all this stuff backfield.

Even though I hadn’t really had a sort of thing in that business, I just been doing that business as a passion project to throw some information out there to help some people, but I look super professional. So CBS… you name the major media outlet, wanted me. And it was because I had built up that authority.

Now, at that point, had I done a lot of this stuff? No. But was I able to then sell the stuff and was able to make people happy with this stuff? Yeah. You know why? Because I knew this stuff before I went into it.

And that’s the thing. We always discredit what we already know and we already can do because we don’t think we have space. It’s the same thing with education. I mean, I’m really well educated but I think it’s a bunch of crap, you know, most of the time, honestly.

Joe Casabona: Yeah. Absolutely. I mean, it really depends. But I feel like I learned more in two years of grad school than I did in four years of undergraduate. And I love my education, but I think… It really depends, I guess.

Nev Harris: I did sales consulting, and I would have salespeople and I’d run teams with salespeople. Everybody wanted a business card. I won’t give them a business card because I want them to go out and make a sale without a business card because the business card was a crutch.

And this is back in the time when business cards… I’m a little older. Back in time when business cards actually existed. And I wanted them to go out and see that they can make connections and make sales without a business card because they didn’t need that. They had it all inside of them. So I think that’s the biggest problem we have with pricing higher is we don’t believe in ourselves. Other people are going to believe in ourselves if we believe in ourselves.

Joe Casabona: I love that. And you’re right. It’s easy to say like, “Oh, I gave out 100 business cards. I don’t know what’s happening.” But like, you know, a business card is not a closed sale. Or it’s almost like, oh, I gave… I will do this in high school all the time. I was not good with women.

“Oh, I gave her my number.” I didn’t get her number, I gave her mine. I put the ball in her court. So now if she doesn’t call me, I guess she didn’t like me. But if I got her number, then I could try calling her and I could show her the wonderful guy. I mean, I guess that worked out because I’m married happily with three. But the point is putting the ball in someone else’s court is a little bit of a scapegoat.

Nev Harris: Yeah. Vanity metrics.

Joe Casabona: Yeah, it’s vanity metrics. Exactly. Just like revenue. I’ve heard people go like, “Oh, yeah, I’m making a million in revenue.” And I’m like, “What are your expenses?” Like, if your expenses are a million and one dollars, then you’re not running a good business. You’re operating at a loss.

Nev Harris: I had a friend that had grown her business like huge over four years. It was at half a million dollars. Her goal was to get to 750,000 that year. She got to a million. Her profit margin fell more than double.

Joe Casabona: Wow.

Nev Harris: So she actually made less money, but had four times the stress and headaches for less money.

Joe Casabona: Geez.

Nev Harris: And because I was helping her out along, I was helping her, then she was feeling herself. And I said, “We don’t want to scale that fast.” And she says, “You’re just a hater.” She’s a good, good, good friend of mine. One of my very best friends. But she came back she’s like, “Okay, could you help me?” I was like, “Yes.”

Joe Casabona: I can tell my son—he’s almost two—I can tell him as many times as I want, “Oh, don’t put your finger in the door. It’s gonna get hurt.” But until his finger actually gets hurt, he’s not gonna listen to me. When I use my two-year-old it sounds really callous. I should use my five-year-old.

Nev Harris: I’m not talking down to you.

Joe Casabona: Should have used my five-year-old.

Nev Harris: “Do I look like a five year old?”

Joe Casabona: So there’s two more things I want to touch on here because I think they’re really important, again, no matter what business you’re running. People say more sales solve all problems. I love that you debunk that, right? Because it’s really easy to think that in a digital business, right

Nev Harris: Mm-hmm.

Joe Casabona: Oh, if I just sell more courses, if I make more courses, if I sell more courses. Imagine you have a physical product with a fixed cost. Imagine it costs 99 cents to make that thing. The lowest you could absolutely sell it for without operating at a loss is 99 cents. So if you drop it to 98 cents just to get more sales, you’re losing a penny per sale.

And then the other thing is if you believe in yourself, you need to charge more. Here’s the thing about new projects. Those new potential clients or new potential brands, they don’t know how much your last client or brand paid you for your work.

Nev Harris: Right.

Joe Casabona: If you believe that your work is now worth more maybe because of that project, then you should charge them more. You shouldn’t be like, “Oh, well, this is how much I charge for the last project.” No. Especially if it’s worth more to that new client or that new brand.

Nev Harris: Right, right. I can tell you right now the pushback people are going to have to this. And it’s going to be like, “Well, that’s greedy capitalism.” But you know, what can you do with that money? You could give your team. Then if you’re not a greedy capitalist, then you could turn… If you’re a smart capitalist, what I would call compassionate capitalist, you could turn around and give your team raises. You could turn around and fund a little league team in your community. You could turn around in the WordPress community and give five for five.

You could do so much. You could create so much more impact when you’re making so much more money. And it’s the ugly truth of our society. But you know, it’s true that that… So you could take some of your time and donate it because you don’t have to be working your fingers to the bone to make a subsistence living.

Joe Casabona: I mean, it’s only greedy capitalism if you’re a greedy capitalist, right?

Nev Harris: Exactly.

Joe Casabona: I want to charge more, I want to make as much money as possible, because I want to make my family as comfortable as possible.

Nev Harris: Right. And that’s a good thing.

Joe Casabona: I donate money to certain causes every year. My friend Maddy Osman, who was on the show, she makes a donation every month to a different charity as a way to give back. When you make money, you can do whatever you want with it. And you can hoard it like Scrooge or whatever or you can take care of yourself, take care of your family, and then take care of the community.

Nev Harris: And your team is important. In there too you could grow bigger teams so that you could take on like bigger projects and get stuff done better for your clients. And then there all snowballs. Because then you have a better team, you have a more committed team that are taking care of the clients better. And then the clients are happier. So they’re referring you to more people, so you’re making more money.

Just especially if you kind of outsource some of the stuff… like I have a Filipino designer. What I pay him, he takes care of his whole extended family. So imagine the impact and the reach you have for that. And it doesn’t cost me that much more. So not to get into a rant about capitalism, so I’ll shut up now.

Joe Casabona: No. I mean, I totally get it. This is the benefit of running your own business, whether it’s an agency or whether you’re a creator. If you want to handcuff yourself to a fixed dollar amount that’s only the amount of money you need, you’d be better off getting a full-time job because you’re setting yourself to a fixed income and you’re not dealing with the stress of running a business.

But if you want to grow your business and create appreciable difference for you, for your family, for the people who work for you… I have a Filipino VA. I gave her a 50% raise recently because she’s… I mean, she’s totally worth it to me, and she really appreciates that. She saves me so much time every week. And so I wanted to make sure she doesn’t leave me for a better job or whatever.

Nev Harris: And then the impact she’s gonna be able to create with… Like I said, with me, with the money that I had made, you know, when I got really sick, you know, I wasn’t destitute. I didn’t miss a meal, I didn’t miss a mortgage payment, I didn’t miss a car payment, and I didn’t lose my business, you know. And I had to shut down one of my businesses, which I wasn’t too sad about because we are [inaudible 00:59:45]. It’s gotten a bonus.

Joe Casabona: I mean, this is the sort of thing that financial freedom can give you, right?

Nev Harris: Yeah.

Joe Casabona: So as we’re wrapping up here, Nev, this has been great. I haven’t asked you, you’ve given us so much great advice but do you have any trade secrets for us?

Nev Harris: The biggest trade secret I’ll have will be that so much about money and so much about life is around mindset. And that if you could get over your fear, your thinking of the complexity of the time it will take and realize that there are systems out there that will allow you to understand the stuff and apply the stuff in a short, easy way, then you’ll be able to use your money as a tool to grow your business. So I think that’s powerful.

Joe Casabona: I love that. Nev, if people want to learn more about you, where can they find you?

Nev Harris: Nevharris.com is my website. I’m @thenerveharris at most social media. So I’m primarily on Twitter, and we’re bringing up Instagram again. I’m getting back involved in social media. We have a blog at nevharris.com.

Joe Casabona: All right.

Nev Harris: So you’ll find me scattered about the interwebs.

Joe Casabona: Nice. You’re getting into TikTok? You’re TikTok-ing?

Nev Harris: See, with my ADD in TikTok, it doesn’t really work out well. I need stuff that can be planned out.

Joe Casabona: I hear you can get all the best financial advice on TikTok. Well, Nev, this was great. I really appreciate it. If you want to learn more about Nev, go to any of the things he mentioned, get those free resources he mentioned. I will link to that and everything we talked about in the show notes over at streamlined.fm/277.

Once again, if you want ad-free extended episodes of this podcast where you can hear Nev and I talk about what it’s like hiring a publicist and a story based on when I told the bottom price story, that’s how I’ll key you into that, you can go to streamlined.fm/277. There will be a link to join the Creator Crew right there for just 50 bucks a year. But that’s it. Nev thanks so much for spending some time with us today.

Nev Harris: Thanks for having me. It was fun.

Joe Casabona: And thanks to our sponsors and thanks to you of course for listening. I really appreciate it. And until next time, get out there and build something.