PP 637: Outsource business processes to Uplevel with Nathan Hirsch
Quick Show Notes:
Nathan Hirsch it’s the owner of FreeUp, a platform in which you can outsource business processes. He became an entrepreneur in college when he opened a bookstore selling college textbooks. After receiving a cease and desist letter from his university due to his overwhelming success, he ventured into unknown territories where he experienced surprising results.
Listen as Nathan and Kim Sutton chat about outsourcing, finding creative solutions as entrepreneurs, the need for systems and processes in our businesses and more!
“Hiring is hard. You make some bad hires and you finally find someone you like and you have that tendency to just load that person up with everything. And they don’t realize how risky that makes your business.”
– Nathan Hirsch
Highlights:
02:49 Figuring out what to sell
03:45 When are you going to hire your first person?
06:36 Kim’s e-commerce disaster
08:43 The vacation he’ll never repeat
11:58 Kim hires a web designer
14:21 Vetting applicants on FreeeUp
16:02 Kim’s struggles with communication
19:41 Setting the market for VA services
20:56 Followers, doers and experts
23:39 Kim’s struggle with her international team
22:41 The roots of FreeeUp
32:20 A rate you’re happy with
34:19 Kim’s growth in 2019
35:35 The financial side
39:49 How Nathan walks his talk
40:33 Systems and processes
Welcome back to another episode of positive productivity. This is your host, Kim Sutton. And I’m so happy to have you here. And I’m thrilled to be introducing our guest today, Nathan Hirsch from FreeUp.com.
Now listeners, you have heard me share my story of entrepreneurship, how I was trying to do too much myself how I had sleep deprivation which led to severe anxiety and depression. And how I started to turn it around by realizing that there were things that I should not be doing. So I just want to remind you today that just because you can do something, doesn’t mean you should.
But with all that said, Nathan, I’m so happy to have you here!
Yeah, I’m excited to be here. I love talking just entrepreneur, entrepreneurship and hiring and scaling. It’s a lot of fun.
Mark’s history on outsourcing processes
How did you get into this?
So, I was a broke college kid and my parents were both teachers. So I kind of went to college with the mentality that I was going to get a real job and work for 30 years and retire. And when I got to college, I had gotten this internship at Firestone and I was working 40/50 hours a week, I was learning a lot about customer service, and sales and marketing. And I also learned how much I just hated working for other people.
I knew that this was going to be my life after college, I was going to be miserable. So, I started hustling in college, I took some of that summer money and I bought people’s textbooks and I competed against my school bookstore, I offered better pricing, I created a referral program. And before I knew it, I lined up a door of people trying to sell me their books, to the point where I got a cease and desist letter from my college telling me to knock it off.
So my parents were both teachers, I didn’t want to get kicked out of college. And I pivoted, I stopped selling books, I had sold a few books on amazon.com. This was back in 2008. No one really knew what Amazon was, it was kind of this, this big bookstore that was just getting into other products. And I just had to figure out what to sell. So, I started experimenting with products that I was really familiar with that sporting equipment, video games, computers, typical college guy stuff, right? And I just failed over, and over and over.
And it wasn’t until I branch out of my comfort zone and found the baby product industry that my business blew up. So, if you can imagine me as a single 20 year old college guy…
Yeah… Hold up a second baby product industry seriously?
Yeah, it was. And I wish I had some story about how I did market research and all that. But back then, I mean, no one really understood Amazon, it was just a ton of trial and error. And I just kept trying to sell things, sell things, sell things until I came across baby products, and those things started to sell out fast.
So, I’m selling these products, I’m making more money than any college kids should. And my parents telling me, I should probably start paying taxes. So I meet with an accountant. And the first question he asked me is, when are you going to hire your first person? And I kind of shrugged him off, like, “Why would I do that? That’s money out of my pocket, they’re gonna steal my ideas, they’re gonna hurt my business, they’re not going to do a good job as me…” Pretty standard entrepreneurial excuses, right?
Right.
And he just laughed in my face. And he said, “You’re gonna learn this lesson on your own.”
From outsourcing processes to a freelance marketplace
Well, sure enough, my first busy season comes around the fourth quarter, people are buying a lot of toys, a lot of baby products, and I just get destroyed. I’m doing everything. I’m filling every order. I’m responding to every email, I’m working 20 hours a day, my social life plummets, my grades go down, and I work my butt off for 8 weeks to keep his business afloat. And when I get to January, I think to myself, “Man, I can never let this happen again, I need to start hiring people.”
So, I know nothing about hiring. I post a job on Facebook. This guy in my business law class says “Hey, I don’t know what you do, but I need a job.” I hire him on the spot without interviewing him. Ends up being an amazing hire, he’s hard-working, he’s smart, he brings a lot to the table… My weaknesses are his strengths, and he’s been my business partner for 8 years.
He was for the Amazon business. He’s cone or FreeUp right now. And so there I am as pumped 20 YO thinking, “Man, this hiring thing is easy. You post a job on Facebook, someone shows up, you make more money, and your life becomes easier.” And I just proceed to make bad hire after bad hire, after bad hire… Quickly learning that college kids were very unreliable. Turning to the remote hire world, the Upwork some fibers, I got frustrated posting a job getting 50 people to apply interviewing them one by one. And if I found someone I liked, and they quit on me, I had to start that process all over again.
And I kept looking for a faster and faster way. And when I couldn’t find it, that’s when I had the idea of building my own marketplace free, of really taking everything that I liked about those platforms and changing everything I didn’t like, and I’m sure we’ll talk about that later. But that’s really how I went from a broke college kid to selling books, to selling baby products, to starting my own freelancer marketplace.
Wow.
So we had a previous guest, and I’m having a brain fart and can’t remember the guests name, sorry, previous guest. But this guest did the book, the college bookstore story like you did, I mean, had more business and actually got expelled from his college.
Haha, that’s what I was trying to avoid.
Yeah, well, he wouldn’t stop because he realized, “Oh my gosh, I’m making more money doing this than I’ll ever be able to make with whatever track he was going with.” He’s like, “I’m just gonna keep on doing it.” So yep, he ignored, the cease and desist and kept on going.
Kim’s history outsourcing
I love how you’re talking about… Well, I don’t love but I, I do love how you, you were doing the 20 hour days and thinking, “Yep, you got to do it all” because I was in that same thing. Or I was in that same track in 2008.
I had an E-commerce shop on eBay. And then I built my own site, so orders were coming in through there, too. Now, I must say I was doing a lot of things wrong… I had a distributor who could ship things to me within a day. So I had the brilliant idea of just going through their online inventory and listing everything that they had on my site. That’s a bad idea.
I was in the scrapbooking industry, so when I post that I have this style of paper and somebody buys one, I still had to buy the pack of 50. So not only was I working those 20 hour days, but I was also going majorly into debt.
So, did you face any serious fallout from that?
Well in the Amazon business, I was doing drop shipping, and I was doing drop shipping, before I even knew was called Drop Shipping, I just had that the idea that, “Hey, I don’t have a warehouse to store anything, I don’t really have a lot of money to buy stuff up front.” And none of these retailers at the time, manufacturers, knew anything about Amazon. So I would go to them and say, “Hey, I’ll give you another sales channel, all you have to do is package the product and ship it where I tell you to. You can keep my credit card on file and charge me for every order.” And I built up a lot of those relationships.
At one point I was working with over 200 manufacturers. But I’ll tell you that first year, it was about year 1.5… I had this brilliant idea to have a manager that day, where I hired one person and I taught him how to do everything. I taught him customer service and listing and at that point, I was super stressed out. And I thought “Hey, if I can get one person doing everything, I’d relax” and on the flip side, I had one manufacturer who was at 85% of my sales. So I say, “you know what? I don’t need these other manufacturers. Let’s focus just on that.”
So I get my business on autopilot, things are going great. I have one person handling everything. I have this manufacturer I’m crushing it with, now I’m sleeping better at night, I’m not as stressed out. And I think to myself, “Man, I deserve a vacation for setting all this up.” So I plan a trip to Myrtle Beach with a bunch of my buddies and I’ll never go back on the first day of my vacation I get 3 phone calls. The first from that manager of the day who I spent 6 months training telling me he was quitting on me.
Oh my gosh.
The second from the manufacturer telling me that they were dropping me, and they no longer want to do business with me. And then just to top it off, I got a phone call from my accountant telling me that someone had filed a big tax return in my name and stolen my identity, they’ve stolen $40,000 from the government and I was gonna have to deal with that mess when I got home. Haha.
So I went from this like unbelievable high to on this 21 year old killing it. I have a business on autopilot, I’m making a lot of money on paying off my student loans… To let’s just start all over again from scratch. And I learned a very valuable lesson about just diversifying when it comes to hiring. Not hiring one person to do everything, and hiring a team for customer service, a team for listing, a team for repricing. And same thing on the manufacturer side is, no matter how good that manufacturer is you can’t have that being your only supplier.
So I came back and I started contacting lots of different suppliers, at some point I was working with over 200/300 of them. And when it was time to hire again, I split it up, I built those teams out. And it wouldn’t be the last person that quit on me. But the next time it wasn’t that big of a deal. And and I think a lot of entrepreneurs do that, because hiring is hard. So you make some bad hires, and you finally find someone you like. And you have that tendency to just load that person up with everything, and they don’t realize how risky that makes your business.
Oh, I hear all of that…
The true value of outsourcing business processes
Several years ago, I was at a conference, and I had the opportunity to be in a mastermind with Dana Malstaff, the host of Boss Mom Podcast, and she’s the founder of Boss Mom Brand. And she was talking in the mastermind about how she had… I don’t even remember the number. It was like over 7, I think different team members who each had one specific job in the company. And at that point, I remember thinking, “That’s insane. That’s so much money.” like, how can you justify that. And keep in mind, that was only 2 years ago. In those 2 years, I have seen the value.
So now, I mean, I have my podcast production team. But even on that team, there’s different roles played by different people. And even aside from the podcast, I have the different roles. But I’ve been in that place where I was taking all of my overflow, and putting it all into one person, and it never worked. I mean, I remember this one guy who everything it felt… Like every other day had some personal emergency. And I’m not knocking personal emergencies, because that’s how it feels in my life sometimes; maybe that’s everybody’s life. But when I was handing it off, everything off, to one person. Like, seriously? Seriously, something else.
And I don’t think it wouldn’t have felt so bad. And so weighty… Is weighty a word?
Hehe! I’m not sure. But I totally get what you’re saying. I mean, I think certain VAs and freelancers get a bad rep just for that reason.
So I, I found a site, I’m not going to leave the name. And I just want to share this story with with the listeners. I hired a graphic designer, a web designer, and he was amazing. He performed his first couple jobs just phenom… Can you say that word for me? Phenomenally, there we go! Well, and then I decided, “Okay, you’re awesome. I’m gonna start having you design client websites for me.” So he got his first assignment, and then all of a sudden disappeared.
Yeah.
I had no files, no, nothing. Because these were, I mean, he designed them in Photoshop. And I didn’t, I didn’t require that you store those somewhere, like even a shared Dropbox would have been better than nothing. But there was no communication. I mean, I reached out for the next month. I mean, the client was getting upset. “Where’s my website? Where’s my website?” I can’t, it’s hard to go back and say, I don’t know. My guy disappeared. What am I going to do? You know, so I had to build it myself.
Well, the guy came back about a year later. “Hey, Kim, do you have any work for me?” And he had been a great graphic designers or he had been a great web designer. So I said, “Yeah, actually, I have a big project I need to do some work on for 2 days from now. Is there any chance that you have time available?” It was a Tuesday, I needed it by Thursday. Nathan, it was a landing page in LeadPages. LeadPages is not difficult, I didn’t need anything spectacular, I just didn’t have time. “Oh, yeah, Kim. I can do it, I can do it.” Okay, well, great. “If there’s anything that’s going to keep you from doing it, please let me know.”
Wednesday comes around. I asked him “Hey, how’s it going?” No response. Thursday, no response. Client’s asking like… Oh, boy. Friday, I didn’t even bother reaching out. Monday, I hear from him. “Hey, Kim I was at. I had a whole bunch of interviews last week. But I turned down all the jobs because I told them I was working with you.” … Uhm, no you’re not. “I told you I needed this on Thursday. This is the second time that you flaked on me. I can’t take a third shot again.”
Solving and creating protocols to facilitate communication
I mean, how would have you handled something like that? Do you have any protocols set up in your business to handle situations like that?
Yeah, I mean, I’m on the FreeUp marketplace, so we get 1000s of applicants every week, we vet them for skill, attitude and communication and communication is really the key to the platform. We understand that personal issues happen. I mean, we work with 3000 freelancers, chances are there’s going to be a personal issue every single month, right? If you look at it.
But we expect strong communication across the board and we do not work with freelancers, virtual assistants or agencies that don’t communicate. And it’s part of our Terms of Use that you need to respond within a business day at all times. And I mean, if a freelancer disappears if they go missing, we’re very quick to block them from getting clients or just removing them from our platform. So we’ve set that tone, that expectation.
And if you will get it from the Freelancer side, it’s just not worth it to go through our vigorous application process, get into our platform, we only let one out of every 100 applicants onto our platform, and then get removed, because you can’t communicate. So of course, it happens, people make bad decisions and stuff like that. But for the most part, you’ll get a much higher level of communication than other places. And I mean, on my internal team, and I only hire people from the FreeUp platform. I have 40 VAs in the Philippines that I got from FreeUp that do my customer service, they do my billing, they do my interviews, they run my social media, all that stuff. And it’s the same thing.
I mean, I set communication standards, and you either follow them or you don’t, there’s no in-between, it’s black and white, cut and dry. And, and I encourage people to have that same, that same philosophy: If someone burns you once on communication, you don’t do business with that person anymore. And there’s no skill set, there’s no attitude that can make up for poor communication.
We all struggle with communication at some point
So I need to admit that I have, I have personally struggled with communication. But let me just expand on that for a little, like, this won’t be long but… When I’ve been going through those rough parts, those rough times in my business when I’ve taken on too much, and I’m totally inundated with work, and I’ve committed 80 hours a week, and I can only work 20. You know, it’s just one of those weeks. And this hasn’t happened in a few years, but anxiety kicks in. And what I realized when I wasn’t prepared for that was that I would go into my bed and cover my head. And that is not the responsible way to go people. It nearly killed my business.
And what I’ll say about that is even a response of “I got your message. I’m there’s something going on today. But I’ll get back to you.” is better than just ignoring.
Yeah, I completely agree. I mean, I’ll give you a perfect example.
I have a friend mentor who is a virtual assistant that I’ve met in person. He does some… He’s really good at Excel, so he does some reports for me very, very part time. But he was hired by a VIP client, a personal friend of mine. And he was doing great for 5 months, and his sister unfortunately passed away. And I met his sister in person too. And, of course, he was devastated, I don’t think anyone that’s lost a family member that close can relate.
Throughout that entire time, his communication was at A+ level to the point where both me and the VIP client were like, “Hey, listen, man, like… We get it, go do your thing. Don’t check in with me in, like, 2 weeks. I know you got to put on with a funeral and all that.” And he kept communicating. And you actually just got back to working with the client today at 10am. And there was no issue like, we get it people understand that stuff happens. And what we don’t understand is if you just disappear or you say, “Hey, I had an issue, and then we have to chase you down, they get an update on that issue.” There’s the right way and the wrong way to handle communication.
Yes, agreed to all the above.
Outsource business processes from overseas, or closer to home?
Now I I shared with you. And just so listeners know, well, you and I are going to be talking about possible collaboration in the future. But I have a VA group of on Facebook. But I saw some resistance from American and Canadian, or let me just say North American VAs, who didn’t like when clients would come in and want an overseas VA. And I have my own opinions about that. But I will, before I ask you for your opinion, I will say that I have a strict no spam, no bullying policy in my group.
If somebody wants to hire a VA for $3 an hour, $5 an hour $10 An hour. By all means I think they should have the ability to do it. Because those little steps will take them to the next level.
What is your opinion? And should there be a minimum precedent for what VAs are charging?
Yeah, so I mean, I don’t set the market, you don’t set the market, no matter whether you and I offer VAs for 5 bucks an hour or whatever it is, there’s still going to be VAs out there. So there’s nothing that I can do. And we give people an option. I mean, we have freelance, we have people from 5 to 100+ an hour on our platform. We have freelancers and agencies that make $250,000 a year on our platform. So it’s really up to the client what they want to do.
I’ve had clients that are really against outsourcing. I’ve had clients that they have they outsource for 5 years and that actually allows them to get an office and hire people in person in the US and they wouldn’t have been able to do if they weren’t outsourcing. So I kind of see both sides.
So in terms of the minimum, on the FreeUp marketplace, we have an unofficial $5 an hour minimum. If you offer 4 and the Freelancer accepts the Freelancer set their own rates, we don’t stop that. But my my thought process is and this is based on a lot of experiences. Once you start hiring people in that 1 to $2 an hour range. It’s only a matter of time before they leave you for a higher paying task job. Whatever it is, and we don’t want to put our clients in that situation where they find someone they like, and that person is out the door when they get that offer for 4.
The other side of it is we’re a marketplace for pre vetted freelancers. Usually people who have a lot of experience freelancing, which is what we look for, tend to not be in that 1 to $2 an hour range. So that’s kind of why we have that unofficial minimum there. But you can agree to a fixed monthly prices and all that. I’m kind of in the stance that I’m not really here to help US people or non US people. I’m here to help just people in general and I’ve visited the Philippines. I’ve seen what living in a third world country looks like. I know that a lot of times that they’re living paycheck to paycheck that $5 An hour job changes their life. And it’s also not just about the money. I mean, they have families and it allows them to work from home, they traffic in the Philippines is brutal, the ability to not drive 45 minutes each way every day is a huge plus. So there’s other factors there.
And I guess my last thought is, I like to divide it between followers, doers, and experts. The followers, 5 to 10 bucks an hour non US they’re there to follow your systems, your processes. We do not provide us followers on our platform, we only provide us people $20. And up and I’ve kind of got news for you, if you’re if you’re a US follower, the industry is just going against you. I mean, whether it’s someone working for 5 or 10 bucks an hour in the Philippines, or it’s automation, computers, robots, whatever. I mean, those jobs are tough to come by and whether I offer them or don’t those jobs slowly get eliminated over time anyways.
But we do have the doers and the experts. We have the specialists, the graphic designers, the bookkeepers are writers and, and lots of us and non US freelancers and get projects there. And then the experts the higher level of 30 and up and marketing experts, consultants, that agencies, what a UI, UX. So if you’re someone that’s struggling to make ends meet in that $10 An hour range, if you up your skill set, those jobs become more and more available. So that’s kind of my stance on it.
Thank you for going so much into that.
A rate you’re happy with
And I experienced a little bit of grief this year, because I was standing up for overseas workers. And I just said, you know, this bullying needs to stop. And by grief, I mean, I actually got some death threats from the group.
Jeez.
Yet, what doesn’t kill you makes you stronger, and I’m still alive.
So one person who saw my post about what was going on, reached out to me through Facebook and said, “Kim, I want to thank you” and they’re in the Philippines, the person said “In my town, minimum wage is $1.50 an hour, and you allowing me to in a safe place, get jobs for $5 An hour completely changes our, our living here, so please don’t change.” you know, and that was enough for me to know that I was doing the right thing.
With that said, I do have an awesome team in the Philippines. But what I found was I refer them so much to other people who can also use their services that they run out of time for me. So now I’m going back and trying to recoup and actually get them on my team full time at a higher rate so that they don’t want to go anywhere, because what you said is so true when you hire them really low… I don’t want to say this because it’s so mean: Don’t refer them if you want to keep them. Hahaha.
Haha, yeah.
That’s not so bad though, isn’t it? I mean, I’m all about helping people as well. And if you’re not referring when I know there’s more work, I feel bad, but sometimes you just need to be selfish.
I actually have a really funny story.
So there’s this Facebook group of VA who very similarly just started bashing me. And I was blocked from the group, so I didn’t see the bashing but a lot of VAs on my platform were in the group and they started defending me on that post. They sent me screenshots.
I actually reached out to the owner just nicely just being like, “Hey, are we on our free app like I would love to talk and just clarify.” because a lot of the stuff they were saying just just wasn’t true. I have a thick I, haha… People insulting me doesn’t really get to me, but if someone’s giving wrong information about my platform, I at least want to fix that. So they were bashing me for similar reasons, that we provide VAs but we’re a high level marketplace. So I want to explain, hey, we got people from 5 to 100. The people at 5 are the best people at 5, the people at 50 are the best people at 50. And so that went on.
And I eventually just blocked that person and blocked a bunch of people in that group and moved on with my life. What else am I supposed to do? Well in… So I got a Twitter message from this freelancer who said, “Hey, Nate, like I was really excited about like signing up for FreeUp and offering services. I’ve been hearing good things about you. But I’m in this group, and they were ripping you apart. And now like, I don’t want to join anymore.” So I respond to that. And I said, “Hey, listen, like, all I can do is give you information. I’d love to hop on the phone and answer any questions you have.” And just be as honest and upfront as I can. That’s the only way that I know how to do business.
So I talked to her, I explained how FreeUp works, what we do, what we what was right and what wasn’t right. And she applied and she got onto the platform. Well, within 2 months of getting on the platform, she landed a $20,000 a month client on the platform.
Whaat?… Oh my gosh, goosebumps.
So it all kind of comes full circle, the same people that were bashing me led to a freelancer getting a huge client on our platform. So sometimes those things work out in ways that you can’t imagine.
Well, that just circles around the communication. If that person had not communicated with you and just started the conversation, then that wouldn’t have happened.
Yeah, absolutely.
And it also goes to show that what you see on the internet is not true. Often. Not all the time, but just take everything you see with a grain of salt and find your own truth.
FreeUp, a great place to outsource business processes
So how did FreeUp actually come to be like, how did you guys where did the idea come from?
Well, it came from my own hiring needs. I mean, I had tried all the other platforms I had hired some people that were with me, but it just took forever to vet through all these people. So what ended up happening was I built up this hiring process. It took me 5 years to, to not perfect because you never perfect your hiring process, but it was pretty good.
By the time people got out of our hiring process, we had a high percentage chance that they were going to be awesome. So we started building up his Rolodex of freelancers. Ecommerce is kind of up and down. You get towards the end of the year, you lose us a lot of people. And in the middle of summer, you’re not using people as much. So I was talking to other Amazon sellers. They had that same issue, it was just tough finding talent. If they needed someone to write a listing, they needed someone today, they didn’t want to wait 2 weeks to go through a lot of people, and figure out who the right fit was.
So I had the idea to start FreeUp and I started offering the people that were in my Rolodex, people I had used before and I spent $5,000 to build this minimum viable product. It was the crummiest software you could ever imagine. People could log in, log out, they could see their freelancers and the billing, and and that was it. All the billing was really manual, they couldn’t submit requests, they had to email me, Skype me, or call me if they wanted someone and that was it. That’s how we launched FreeUp.
So people started to really like the service, they would say, “Hey, Nate, I need a customer service rep”, boom! We would introduce them to someone within an hour, personally get started, we knew they would do a good job, they did. And we created a referral program where you get 50 cents for every hour that we build the people forever that you refer, which is probably one of my best business decisions. All of a sudden, people are talking about me at conferences, about around the world and I quickly run out of freelancers in my own Rolodex.
Meanwhile, Amazon’s getting tougher and tougher my $5 million a year Amazon business is kind of around 2 or 3, we’re not really going up. We’re not really going down. I’m not really… I’m not selling my own product, or anything that I’m passionate about. I’m selling baby products. So I’m not passionate about baby products. Now, I wasn’t passed about baby products back then. And meanwhile, this FreeUp is taking off. So I put more money into software. I started recruitment process taking that hiring process, I spent 5 years building and creating it for freelancers, and VAs to get more applicants to get more freelancers on the platform. And eventually Amazon sellers started telling Shopify sellers and other people in E commerce, so we expanded from Amazon e-commerce, FreeUp surpassed my Amazon sale.
So I moved my Amazon business over to a partner and decided to focus on FreeUp and eventually we got into marketing and hiring us freelancers, and I guess not hiring but letting them offer services on our platform. And that’s kind of the route that we took. So we really took an idea got the most minimum viable product out there, read the market, listen to feedback, slowly put more and more into it, created that referral program and grew it from there.
How FreeUp manages their fees
My mind is blown, because I have so many questions. And I already told you that I tend to ask a whole bunch of most at once. So I’m going to try to contain this. There’s another platform out there and I’m not going to name it but a lot of people are leaving because the fees to the VAs are just going up, and up and up. So it’s harder for clients to find help because the help doesn’t want to pay the fees. How does the pricing structure work for you?
And listeners? I just want you to know this is not you know, I’m not trying to be an infomercial. for free, yeah. But I’m just sort of curious how the structure works and how you came across that structure.
Yeah, so our fee is 15% with a $2, minimum per hour 15% on fixed prices. That’s been the fee since day one, we have no plans of increasing the fee in the future.
And the Freelancer said they’re alright. So then you can negotiate, you can agree on a fixed price day. I mean, like I said, we’ve got people from 5 to 100 plus per hour, we have fixed prices on our platform too. So within reason…
So the contractor pays the fee, though, right? Or does the client pay the fee?
Yeah, I mean, technically, I guess the client pays a fee. But I mean, doesn’t really matter who pays a fee, the difference between the freelance rate and a client rate is our fee. So we like to talk to clients in the total. So there’s no baiting and switching, there’s no “Oh, it’s 10 now, but it’s really 12.” So if we tell you someone’s 5 bucks an hour, you’re hiring someone at 5 bucks an hour, that’s it, there’s no other fee.
So that makes it super simple. And there’s no minimums, there’s no obligation, you can stop using us at any time.
So if I’m understanding correctly, sorry, to get down to the nitty gritty, but we do have quite a few VAs listening. So when the VA, let’s just use the $5 example, when they say it’s $5, the 15% going on top of that, or it’s coming out of the $5. Does that make sense?
If we tell the client $5, that’s the client rate. The freelancer, we get 3, it’s 15%, with the $2, minimum per hour, so… But the freedom, the way we work is a freelancer would say, hey, I want 3 and we would tell the client 5. So the Freelancer sets their own rate gives us what they want to make. Net, we add our fee until it will the client so that it’s clear on both sides, and there’s no confusion.
And if the client wants to offer 4, we’ll go back to the freelancer and say, “Hey, do you accept to”, and it’s up to them if they want to accept, reject or counter.
So I find this really interesting because I was having a conversation with somebody in my VA group last week, who was complaining about how the fees were just taking such a big chunk of money. And I said, “Well, why don’t you just raise your fees to accommodate for, for the 20% coming out?” And it was the light bulb moment? “Oh, I… can I do that?”… Well, yeah, you can do that, you know what your services are worth, you know what your time is worth. So charge, get what you want, if you can get what you want. And that 20% or 15%. And the FreeUp case doesn’t need to come out of what you want. It took me the longest time to figure that out.
Yeah, I mean, from our side, and we kind of take the stance that the Freelancers they’re running their own business, we try to control them as little as possible, while still keeping high quality assurance on our platform.
Our thing is, is we don’t want you to take a rate that you’re not going to be happy with later. If you agree to a 4 month project with someone don’t take a rate that you’re not gonna be happy with in 2 months. And we expect people to honor their commitments and unfinished projects. If you drop a client and another project for any reason, you’re banned from ever getting another client from us on our platform. So, make sure that you’re happy with the rate, we’re not forcing you to take a rate you’re more than welcome to turn down jobs to take jobs that you want to negotiate with clients to agree to a fixed price. Just make sure that if you give someone your word, that you want to honor your word.
The Freelance First Commandment
You just said something that’s so important. Well, a couple things: You have the right to turn it down. And I’ve Brainfart I forgot the other part… But oh, the part about you know, get what you want. I realized that I was undercharging. And it was so much harder for me to stay focused on the project. So that I I did not feel like I was getting paid adequately for.
But that was my fault. That was not the client’s fault. I allowed that. You know, even if I said my rate and the client came back and offered a lower rate, I could have said no. So the responsibility was mine to either say no. Or to say, you know, I would love to work with you. And this is my rate. Take it or leave it.
Yeah, I totally agree with you. I mean, he cut you off.
No, that’s okay. And it’s been, especially 2019… I mean, I started my VA or I started my business as VA in 2012. I don’t know if you realize that. But now, ever since I became an Infusionsoft certified partner in 2014, I’ve been focusing on marketing automation, not necessarily Infusionsoft anymore. And there’s been, 2019 has been a year of tremendous growth for me because I’ve realized that I wound up in that situation again, I was settling, and I had animosity.
I don’t know if that’s the right word or not. I was getting upset at the client with no due cause because… Like, not at them, they could they couldn’t feel it. But I was really feeling resistance to the work that I was doing, because I had accepted lower than I knew I was worth. And when I realized that I had no one to blame for it but myself, and I realized what I want to be paid and I started putting out there into, not just the universe, but onto the internet and to my network: This is what I’m doing now, this is my service… It’s amazing how little the resistance is when you just let people know, “This is what I do, this how much it costs. Take it or leave it.”
I mean, this year has been huge for that.
Solutions to some outsourcing obstacles you may find
I do have another question for you. And this is so technical. What maybe not so technical for you. I’ve been going through a challenge with Click Funnels, and watching a lot of videos with them, just because I always love to learn more.
And Russell Brunson in one of the videos is sharing how he had a number of credit card processors, shut them down or hold funds, because you know, the amount that he was bringing in on a single day was just alarming, and they would hold it for 6 months. Did you have any types of struggles like that, that you had to get through while you were building? I mean, handling finances? I do not want to be in your place, by the way. But I can’t. How do you handle all that?
Yeah, I’ve never had that situation where they were… They did that.
I did have a weird situation. Like, I think it was earlier this year, where PayPal messaged me and was like, “Hey, like this transaction was flagged, like, please provide more information on this transaction, your your accounts on hold.”, but I provided them the information and within 24 hours it was on hold. So that was nerve racking for a little bit, nothing ended up happening. I have no idea why that transaction was flagged like that, I think it was just paying a freelancer so I have no idea. But it’s definitely a horror story.
I mean, you’ve got to diversify. It’s one of the reasons why we have our main processors for ACH and credit card. And we also have a backup processor. And we have it attached to our software. So we spent money having our developers integrate with the API, just to have that backup just in case all hell breaks loose on a billing day that we have something else to go to. And I mean, it is one of the risks of using a PayPal, using someone that’s not really a bank that has the ability to hold your money for that long. And that’s why it’s a good idea to have emergency funds. I know I personally keep money in my personal PayPal just in case anything happens.
Let’s say on billing day. What we’ve seen is, let’s say there’s a holiday so our billing periods are Wednesday to Tuesday, we charge clients on Thursday, we pay freelancers, the next Thursday. So Thursday, we’re charging clients and paying freelancers. So just in case anything happens my partner Connor and I keep extra of our personal money around and sometimes a transfer gets delayed. Let’s say that we pay people via Payoneer, we transfer money from our bank account to Payoneer, before we pay them, there’s a holiday so it gets delayed for 24 hours, even though technically we have in our Terms of Use that we have 10 days to pay, freelancers, so if it does go past that Thursday, technically, we haven’t done anything wrong.
But we don’t want to do that to anyone, we want to pay people on time. So we have that money available, just in case and then the next day, once the transaction goes through because of the holiday, the accounting team will just send that personal money right back to us. So there’s a little bit of planning ahead that goes into it.
I so do not envy that. Just, just saying you can keep that job. Hahaha.
Hahaha.
The tools to outsource business processes
What are you most excited about in the next 90 days?
Man, I mean, right now we’re in busy season. So I’m really excited just to… it’s kind of where the all that hard work from the entire year just comes into play. We have all these clients that we’ve gotten from different places, referrals, podcast influencers, our own marketing and content efforts. And now we see how we can serve them in the time that is when they need it the most for their business. So that’s really what I’m focused on.
And then at the beginning of the year, usually before the end of the year, is our budget planning and figuring out what is the plan for next year. Because what happens in year 1, 2, and 3 or what works in your 1, 2, and 3 isn’t the same that’s what’s going to work in year 4. And we’re aware of that. So figuring out what changes we’re going to make, what new things we’re going to be trying and testing in the new year. That’s always exciting, especially when you come off a busy season where it’s not like we’re pushing huge upgrades in the middle of busy season, that would be a nightmare for everyone. So, you kind of take a step back from project based work maximize on what you have get through busy season. And then the fun begins to kind of executing and the beginning of the year where those projects kick up again.
Nathan, how do you walk your walk, walk your talk is talk your walk, you know what I’m trying to say? Like, what do you do in your business? I mean, we’re podcasting right now. So I know that you do marketing and you get out there and you share the story. But what else do you do? Like I’m not asking for a list… But let me think of a better way to say this.
Like what percentage of the business tasks would you say that you actually do and how much have you delegated out from the corporate team?
My team bills me about 1200 hours a week so I couldn’t work that much if I wanted to. But I yeah, I mean all the day to day operations are usually not done by me, if something’s escalated on there, usually things that are escalated don’t take very long to fix, because we’re kind of in the mentality that we want everyone to be happy. We’re not really interested in billing people for stuff they’re unhappy with. And we want to be fair to the clients and the freelancers. And usually, it’s not one size wrong and one size, right, it’s usually somewhere in the middle of some gray area. And we just have to figure out how to fix it.
So besides escalated issues, podcast marketing content, I spent a lot of my time on systems and processes. I mean, just this morning, you’re, we’re kind of in a business that’s always evolving. So new stuff will come in, and I’m creating canned responses, I’m creating training material for my virtual assistants so that the next time that situation comes in that it’s not, “Let’s remember what happened last time”, it’s a “There’s an actual system and process”. My SOP is, it’s got to be close to 100 pages long by now, and every little thing is in there. And not only is it in there, but we spent a lot of time making sure that it’s updated. Because we don’t want to in 6 months to have to revisit and write all over again. If we update something now we gotta update it in the SOP.
So I’m a big systems and process guy, I’ve obviously become the face of FreeUp. So I spend time there. And the other part of it is reaching out to influencers and potential partners, you and I talked before about partnering, we have a lot of targets, people that we want to work with in the commerce in the marketing space and building those relationships is a big part of what I’m doing.
But in terms of… If you think of 3 major parts of FreeUp the the billing component, so we have a bookkeeping team and a billing team, the success team, which is really our recruitment team and interviewing people for the platforms, and testing them. And then the customer service and filling request team, I do nothing on the billing team. Besides look at reports, I do nothing on the success team besides like your reports. And the customer service team and the tickets team, I kind of lead that team a little bit more involved. Even though I’m not doing every little thing, I kind of have a big picture overview of it, and I’m handling not only the higher level stuff, and then the rest of my time is on the marketing and the expansion efforts.
Love it. Thank you so much for all of that. And I have so many questions that I want to ask you off the air but…
How to outsource business processes with FreeUp
Nathan for people who want to know more possibly hire a VA or a team member through FreeUp. Where can people get in touch with you find FreeUp? I mean free app.com I would assume but where’s the best place to go and really just see FreeUp in action and on social media.
Yeah, so if you join my Facebook group OutsourcingMasters, we have a lot of great content there about hiring VAs, freelancers, it’s not a group for VAs and freelancers. It’s for people looking to hire. But then if you go to FreeUp.com With three E’s if you are a freelancer, you can apply to offer services on our platform. If you’re a client, my calendar, my assistants calendars right at the top, you can book a free meeting with us. We’d love to talk to you about your business. And you can create a free account.
I mentioned this podcast get a $25 credit to try us out and we’d love to help you with any hiring need that you have going forward.
I love that you said FreeUp with 3 E’s, I didn’t even think to say that.
Now listeners I would love to know what your biggest aha are from this episode. So I invite you to head over to the show notes which you can find at TheKimSutton.com/pp637, and leave your aha is down below the show notes.
Nathan, thank you so much for coming to join us today. I would love to know if you have a parting piece of advice or a golden nugget that you can offer to listeners.
Yeah: Don’t give up on hiring. Hiring is hard.
No one has a 100% Hiring record. It doesn’t exist. But the people that are doing it that 80% And up range compared to the 20 or 30%, those are the people that have success in business.
And focus on the stuff that you can control how you vet people, how you set expectations, how you decide not to work with people that are not following your communication guidelines. And if you focus on what you can control and making your process better and better over time, that’s what’s gonna lead you to success hiring.
Inspirational Quotes:
“Hiring is hard. You make some bad hires and you finally find someone you like and you have that tendency to just load that person up with everything. And they don’t realize how risky that makes your business.” ~Nathan Hirsch
“Anxiety kicks in, and what I realized, when I was prepared for that, was that I would go into my bed and cover my head. And that is not the responsible way to go, people. It nearly killed my business. Even a response of, “I got your message. There’s something going on today but I’ll get back to you.” is better than just ignoring.” ~Kim Sutton
“What doesn’t kill you makes you stronger, and I’m still alive.” ~Kim Sutton
“That also goes to show that what you see on the internet is not true, often. Not all the time, but take everything you see with a grain of salt and find your own truth.” ~Kim Sutton
“I realized that I was undercharging and it was so much harder for me to stay focused on the projects that I did not feel like I was getting paid adequately for. But that was my fault. That was not the clients fault. I allowed that.” ~Kim Sutton
“Don’t give up on hiring.” ~Nathan Hirsch
About Nathan Hirsch:
Nathan Hirsch is the Founder of Freeup.com, an outsourcing tool and freelance platform. You can know more about Nathan in Outsourceschool.com, where he and his partner, Connor Gillivan, help business owners to set up a perfect team by taking care of all the tasks involving outsourcing, from recruitment to training.
2022 update: Nathan Hirsch also founded Ecombalance.com a monthly bookkeeping service for Ecommerce Sellers and Agencies.
