Transitioning From Freelancer To Business Owner – with Beatriz Alemar

by Tim Jahn on March 22, 2011

Beatriz Alemar is the founder of Black Cat Strategy, a social media coaching firm for non-profits and small businesses.  She’s an accidental entrepreneur who determined she needed to transition from freelancing to running a business.

I invited Beatriz here today to explain why freelancing and owning a business are two separate things, to share some techniques she used to get her business off the ground on the right foot, and to share how she has transitioned from being a freelancer to a business owner.

Transcript

Tim Jahn: So my first question is what is BlackCat Strategy, the company that you formed?

Beatriz Alemar: BlackCat Strategy is a social media coaching company where I help non-profits and small businesses create social media strategies and then teach them how to implement them. And then train them so that they can do it themselves.

Tim Jahn: And you didn’t necessarily do this on purpose right? We were talking before and you said you were an accidental entrepreneur.

Beatriz Alemar: No.

Tim Jahn: What do you mean by that? What happened? How did this come about?

Beatriz Alemar: I, I had not intention of ever opening my own company. I, it just, it — like I said it accidentally happened. I had quit my job before to just take some time off and of course, you know you have to make money, so I started free lancing, helping companies either with their copy writing, with, you know social media, with general marketing.

You know a lot, a lot of my skills that was being used. Eventually I ended up get recurring clients. I had contracts out for three months, six months, and once I had about three or four of those, I started thinking you know what? It makes sense to at least protect myself legally and have some sort of entity making these contracts as opposed to me. Because well I knew I would, you know dissolve the contracts there were still you know —

Tim Jahn: Sure.

Beatriz Alemar: I wanted distance. I wanted distance at that point in time.

Tim Jahn: Yeah and you would want your own person you know, your car or your, you know whatever you own on the line God forbid something happen.

Beatriz Alemar: Exactly. Exactly, so I said you know what, now it makes sense to actually form, you know an LLC just to protect myself and give myself distance. But from there it just, it, I was still running it as a freelance operation for a few months. I didn’t really think of it as a business. It was really a cover for my freelancing work.

Tim Jahn: I like that, that, the way that you put it. “It was a cover for my freelancing work.”

Beatriz Alemar: It’s true.

Tim Jahn: Yeah, at what point did you say, you know what I have to start treating this freelancing as a business?

Beatriz Alemar: Well I started you know — there’s a huge difference between being a business owner and being a freelancer. Being a freelancer involves more of the technical stuff. You’re actually doing, you’re not really creating a strategy. There’s not real — you don’t have any goals. You don’t have a business plan for the most part. You know some freelancers might, but for the most part you’re just getting contracts and doing and there’s no, there’s no real security there.

I started thinking well, I want to build something. I really enjoy what I’m doing and I’m not, I’m not really giving my company a chance. I’m not putting the time and effort and investing in it like I should be. And I can’t call myself, you know a business owner without you know putting that time into building a strategy, making a business plan, figuring out where I want my company to be in five years, and start working now towards those goals.

Tim Jahn: What was the first thing you did when you decided that you wanted to really treat what you were doing as a business instead of just a cover, you know a freelancing gig? Was it making a business plan or was it something else?

Beatriz Alemar: It was definitely making a business plan, it was researching you know the best ways to run a business. You know, reading books like the E-Myth that really, it changes your mind set on thinking instead — you know your business is a separate entity. You have to start thinking in it, thinking of it that way. It’s separate for you. It’s no longer how are you going to make money?

It’s — that becomes secondary to how is this business going to make money and how can it help me get to where I want to be in life? Because your business should be able to run without you, you should be able to have, you know define it in such a way that if somebody saw it they would be able to come in, come right in with a little bit of training and take it over because at the end of the day you probably want to start doing the strategy work as opposed to the technical.

Because the strategy is what, for the most part, gives those creative entrepreneurs that, that kick, that high. Not the oh my God I have to go write copy again type of work.

Tim Jahn: You bring up a good point because I think a lot of real answers, whether you’re starting off, you know a freelance copywriter or a freelance web designer, they are so engrained in their work and it’s all about them. I mean when you’re a web designer, you live by your portfolio, you know. That’s how you separate the good from the other guys is how does your work come up?

So it’s entirely dependant on you. But like you said at some point if you turn it into a business you might hire other web designers and you have collective portfolio and now it’s not just about you. How do you — so for you, going from freelance to business, how did you change that mindset? Like what did you change in terms of, where you changing things you were doing? Where you changing just the way you, your outlook on it? How did you kind of try and separate yourself and start viewing your business as a, a separate entity?

Beatriz Alemar: Well it starts by — you know your business has to have some sort of skill. You know pick a skill that either you have or somebody that you want to hire has. I decided okay, I’m going to just focus on social media, you know coaching and consulting for businesses and non-profits. If it doesn’t fall into that category, I’m not going to do it. End of story, I’m going to say no, I’m going to refer them to somebody else.

I have to say this is what’s best for my business. This is what’s going to make it grow and not wastes my businesses time on something that isn’t their core competency. So, that involves saying no quite a bit to a few people. And it was very, very painful at first.

Tim Jahn: Have you had to say no a lot?

Beatriz Alemar: I’ve had to say no at least a few times where it just, it didn’t quite fit. It wouldn’t have made sense for my business. It would have taken a lot of time away from me coming up with strategy, coming up with you know — and going, going after those ideal clients, if you say yes to a client that you can do the work but you’re not, A you’re not very passionate about it and B it’s not something that your business really should be going after, that’s time you’re wasting on finding clients that will be able to, you know your ideal clients, the clients that actually will make an impact on your business.

You’re not going to get testimonials you know, yay you get a copy writing testimonial, that doesn’t do anything if you’re trying to get somebody to hire you for social media. It just, it doesn’t do much.

Tim Jahn: So it all kind of goes — excuse me, it all kind of goes back to what you were saying where you have to sit down and figure out what your goal is as a business, what your strategy is.

Beatriz Alemar: Yes.

Tim Jahn: And then everything is focused along those lines then.

Beatriz Alemar: Exactly. So once you, once you have the goal you, then have a better idea of what your business entails. What your — who your clients are going to be, who are you going to go after and then you know have an idea of where you want to grow into as well.

It, you don’t have to get there, but having that idea in the back of your head so that you know that are some, you know check points that, that you want to get to. Say okay by this point next year I want at least to have hired somebody else, hired an intern, something so that I can start focusing more on the strategy, more on you know getting more business, you know that type of work.

Tim Jahn: No, I like that. You know like you said, setting a place that you want to achieve or setting kind of the next step you want to reach in terms of your business. Excuse me. Were there any — so when you’re switching from the freelance mindset to the kind of, you know this is bigger than me mindset, this is a company that needs to survive on its own. It needs to operate on its own.

When you were making that transition, were their any mistakes you made that you can share right now that you look back and you say you know what I don’t even know why I did that?

Beatriz Alemar: What mistakes didn’t I make?

Tim Jahn: What?

Beatriz Alemar: What mistakes didn’t I make?

Tim Jahn: Can you give an example?

Beatriz Alemar: First and foremost having the business be a cover. That, that just — in theory it sounds great but it wastes a lot of time. You’re just kidding yourself at that point, you’re, you’re really just a freelancer.

Tim Jahn: What do you mean by having the business as a cover? What do you mean?

Beatriz Alemar: The, I you know a lot of freelancers create their own businesses but they’re really just store fronts. You know they’re not, they’re not really businesses they’re really, at least in my case it wasn’t, it was really just I’m still freelancing. There is no real central idea behind BlackCat. There’s, there’s nothing, nothing going on besides just me freelancing and that’s, that’s it.

Tim Jahn: Okay, I see what you’re saying. So most, yeah most freelancers make a name for themselves and then it’s just a way to make them look like a bigger company, but it’s still them in their basement you know building websites —

Beatriz Alemar: Exactly.

Tim Jahn: — or writing copy. Okay. And I don’t mean that in a bad way. I mean it’s a good way to get started but like you said —

Beatriz Alemar: No, it’s a great way to get started.

Tim Jahn: Yeah, but, but at some point — okay. So, so that was a mistake you made was just —

Beatriz Alemar: That was mistake number one.

Tim Jahn: Mistake number one was —

Beatriz Alemar: Thinking to myself.

Tim Jahn: — not thinking of it as a business right off the bat and instead —

Beatriz Alemar: Exactly.

Tim Jahn: — trying to build that store front. What was mistake number two?

Beatriz Alemar: Mistake number two not really — I definitely had a bank account for my business and for, and for my personal account. But not really looking into more, you know either A having an accountant write off or being more active in you know keeping track of finances. You know while I’m doing fine at the moment, I have to go get my taxes done next week and thank God I’m getting someone to do it because lord knows I’m going through the, all the bank statements trying to find, you know oh did I pay for this on my account?

Did I use the business account for this? And it just, it becomes a major hassle and it really wasn’t until maybe around two, two months after I actually formed the business and had the bank account that I actively used it, you know just for business, figured out exactly how much I was going to pay myself every month and have that be a constant instead of oh I need money, let me withdraw from, from my banking acc — you know, let me go pay myself a random amount.

Tim Jahn: So it took you awhile to kind of settle into a routine in terms of the business and figuring it all out?

Beatriz Alemar: Exactly.

Tim Jahn: That, that’s an important part because so many creative entrepreneurs I talk to like yourself who you know start a business or accidentally start themselves a business, they don’t — especially those who actually want to, you know who are saying I want to quit my job and want to start a business. I’m going to live my life doing what I love, you know whether it be, whatever.

They don’t realize about that stuff, the accounting, the marketing, the — you know I was just working on my accounting the other day and I forgot who I was talking to but I was like, oh it was my brother because he’s in college and he’s taking accounting and I was like I hate accounting. I wish I would of taken an accounting class like you did because you know now I have my own business and I don’t, I don’t want to do this. This isn’t what I signed up for.

Beatriz Alemar: It’s, it’s a pain.

Tim Jahn: It is, it is. And it’s even — it’s just like you said, you probably, especially when you come from the freelance world, you, you have a skill. You have something that you, you did this for a reason and it’s usually not accounting. I mean you, you usually did this because you love doing something else. So that’s a great point you bring up. Where there any other, any other big mistakes in terms of — it sounds like the mistakes, and it makes sense to me, are, that you were still with a freelancer mind.

Beatriz Alemar: Yes.

Tim Jahn: But you were trying to be a business. So you hadn’t quite left that mind behind. Where there any other mistakes where you were still, that freelancer mind was still creeping up on you?

Beatriz Alemar: It’s really — it was just the, the not thinking of it as a business from the go and the financial stuff. And really not having, not having a business plan. Not having goals, not knowing where I wanted to grow the company into. You know thinking oh it’s fine I can just, you know it’ll just be me. It’ll just be a way for me to make money, not a big deal.

Well you can still have that, but have a plan. But you’ll slowly realize that in order for you to have more freedom, at some point you do need to grow. You do need to at least either A outsource work, like you know getting someone else to do your taxes, getting a virtual assistant, you know having people take care of those things. Or start thinking well if you, you know maybe a year down the road I want to hire somebody else to start taking, you know being able to do the day to day, the technical stuff.

That might be the reason that you started the business, but that’s not the reason you’re going to be staying in business. That’s not what your job as a business owner is. Once you create a business it’s no longer about doing the technical work, somebody else can do that. It’s about creating the strategies that are really going to push your business forward and make money for everyone, not just yourself.

Tim Jahn: Yeah, and I think your reoccurring theme here, which is great is yeah, you have to stop thinking about yourself and start thinking about whether — I mean it could still just be yourself when you form the business, but —

Beatriz Alemar: Exactly.

Tim Jahn: — you have to think of it as, as everyone in that business. It’s now not just you. What would you say is your one piece of advice for someone, like yourself who we’ve accidentally realized wow, I have a lot of freelance work here, maybe this should be my business. Or they purposely did it, what’s your one piece of advise for the for going from freelancer to a business owner?

Beatriz Alemar: Getting organized. Definitely taking that drive that you have, that passion that you have and instead of, you know focusing on the technical work, start focusing on the strategy, how you want it to grow, how you know, what are the steps in your plan, figure out a time line, build that business plan so you know who you are. So when somebody asks you, you know in my case what is BlackCat?

I can right off the bat say I do social media strategy for non-profits and small businesses. You should be able to do that too. You should be able to know what your company is and not just say well I do this and that and you know that. That’s, that’s the difference between really having a business and knowing your business and being a freelancer and doing just about anything to, within your skill set to get paid.

Tim Jahn: I think right there you, you, yeah you just made the most important distinction is you’re, when you’re a freelancer you are kind of, whatever I can do to get paid or you know because you’re constantly wrestling with the clients who won’t pay and the, the clients who you know decide they don’t want to pay after you did all the work. I mean there’s plenty —

Beatriz Alemar: Yes.

Tim Jahn: — of websites full of horror stories. But like you said it’s about the business and the fact that it has to grow and it’s almost like you have a — it takes on a life of its own.

Beatriz Alemar: Yes.

Tim Jahn: That’s probably, yeah. I mean you, all of a sudden you have this, not child but you have this thing that actually has to keep living whether you’re there or not and you’re almost responsible for it, you know like kind of giving it water and watching it grow.

Beatriz Alemar: It’s, it’s like a child or a pet or an animal. It just, it needs nurturing. You, in order for it to grow into something great and — or in order for it to succeed, it really depends on you and you need to nurture it and help it get to where it needs to be.

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