Episode 3 - Setting Expectations As An Entrepreneur with Andrew Lees and Clint McPherson

Andrew Lees: Hey guys. I'm Andrew Lees and I've got Clint McPherson here, and we're going to come into from that entrepreneur life. This is episode three. Clint McPherson: Yeah man, three.

Andrew Lees: We made it. Clint McPherson: One, two, three. Uno, dos, tres. We got it.

My thing is today what we want to hit everybody with on today's episode is basically expectation management as an entrepreneur. Because- Andrew Lees: Wow, it's critical. Clint McPherson: ... it's very critical.

After our first two episodes this was something that I've really believe in and something we were discussing offline to that expectation management with not only one, yourself as an entrepreneur, but two with actual clients. That's even a bigger hurdle. That's what we want to dig in today, man. Andrew Lees: Yeah, definitely.

We were just talking offline a little bit about this and we were both... we both got pretty deep into a couple of situations that we're both dealing with so we're like, all right, let's hit record and start talking about it because it's really important to manage the... When you're talking about clients for sure, you have to make sure that you guys are, you're all are on the same page about what you're delivering to them, whether it's a product or service. Is it a one-time thing, is it an ongoing thing?

Are they paying a subscription for it? And do they expect some level of customer service on an ongoing basis? Andrew Lees: They should know exactly what you are delivering to them and you should communicate that clearly right from the beginning. I always think it's good to err on the side of under-promising and over-delivering.

You definitely have to strike a balance if you want to get more clients. But you don't want to do that for the sake of giving up all a whole bunch of your time or a bunch of free stuff. A bunch of perks that are going to end up biting you in the butt down the road. You want to make sure that it's...

that they have a really reasonable understanding and expectation of what they're getting. Andrew Lees: Then if you can do any better for them than what you're saying you'll deliver and it's efficient for you to do that by all means. Go for it. That's awesome.

They should just be that much more impressed and excited to continue to do business with you. Clint McPherson: Oh yeah, I agree. I think like you said, being clear, concise up front and letting them know there's a scope of work at hand. If a client comes to me and asks for website design, or they come to ask me to manage your social media account, or to set up a paper click campaign for them.

When you invoice them or when you have these conversations with it, it should be in black and white, to where this is what you're going to get for this price. But I think a lot of them, when you start over-delivering to a certain extent because I always try to over-deliver, I always try to add that additional value that when they think about my company, they're like, man he went above and beyond what he said he was going to do, but then that can come and bite you in the butt a lot. Clint McPherson: Because for instance, if you do something on a website, throwing one of the recent things I went through is I did a website for a client and then they notice a problem on something else on their Google My Business. I brought it up to them.

I cleared it up and then it was one of those things that it was an expectation because I did that one small thing for them that it turned into an expectation of me continuing to do stuff for free on a side to them, and I'm like, really dude. At the end of the day, we all run businesses and we always try to add value. I don't try to nickel and dime any of my clients. Clint McPherson: It's like you know what you're going to get typically when you paid.

It's going to be there, and if any scope creep comes in, if I'm going to charge you for anything, I'm not just going to go do it and then you're going to receive a bill. I'm going to let you know like, hey, this is going to cost this much to do a, b and c that you just requested because one, it's not within my 30-day window or whatever it is that we came up with initially, and it's actually outside of the scope of work. So setting those expectations at the beginning is very important where I failed early on in my business of not doing that. Of having a project that a client said I want a, b and c done, and then I do a, b, and c, but then I add d, e, and f just because.

Clint McPherson: Then now it's like, okay, can you also do this? And I'm like, okay, I'll do that too. I'm currently working on it. I'll go ahead and add that while I'm doing it.

And then he was like, I noticed this. Can you also add this because it'd be good to tie that in, and not thinking about I should be charging additional because this is outside of the scope of work? Then you get along with it and now you have a jumbled mess. You just completed a, b, and c, but you went all the way to letter z for free along the way, and now from then on, you just set the expectations from that client that there's just going to keep taking as much as they can.

Then it turns into frustration on their end by saying, you didn't charge me to do that last time [crosstalk 00:05:43]- Andrew Lees: Yeah. They get used to it and they- Clint McPherson: Exactly. Andrew Lees: Yeah, that's true. I understand how that can happen.

It's why it's so important to clearly set the expectations from the beginning and you and I both have a service-based business. With us, with the service-based business you really, you're going to be spending some time with people. It's not like I'm just going to sell you a product, you get what you get, and then if you don't like it, return it, whatever. Andrew Lees: You're working through a process with people and so you have to have an agreement set up.

At least to just not to say that anybody's going to court over anything. Hopefully, that never happens, but at least to just, this a document that has, this is what I'm going to deliver it to you. This is the project, this is what I'm going to deliver and this is what I expect from you. Part of it, it's not all about just payment.

Some of it is communication. A lot of it is communication too and I always tell my clients that the better that they can communicate with me or the more good healthy communication we have together, the more successful projects are going to be. Clint McPherson: No doubt. Andrew Lees: Because they're dragging their feet, getting back to me about something, then it's just going to drag things out.

I never thought that that could be... I really when I started my business I thought that's never going to be an issue, people are going to get right back to me. Well, I had one project where I charge a certain way and I don't charge the final 25% of my fee, my project fee until the project is completed. I never expected anybody to drag their feet so long that I would...

that I wouldn't get paid for a really long time. That happened with a project. Andrew Lees: It's really painful because I tried to push it up... push the project along as fast as I could, as efficiently as I could.

They wanted a particular solution, I designed it for them. They didn't like that. We went back and forth for like eight months, and then they said, "We wanted the thing that you sent in the beginning." It was so frustrating because- Clint McPherson: Exactly. Andrew Lees: ...

I was trying to tell them the whole time, what they wanted to be wasn't reasonable and it wasn't going to work, and I ended up doing all this extra time and drag the whole project out and drag me getting paid out. They were frustrated. I was frustrated, it's just you got to set expectations from the beginning and I did have to be pretty, we had an agreement, I had to be pretty strict about it and you just have to stick to that. Clint McPherson: I agree man.

When you look at it. And again, communication is key. Communication is key to one, for that expectation management, and two, they just continue to communicate because I've been in the same situation where a project, just a simple website, websites should not take a long time to build. Right?

Andrew Lees: Mm-hmm (affirmative). Clint McPherson: Especially small websites. Last year, for instance, in 2019 I had a project that I was okay with taking, it was a small website project. I try to steer away from websites if I can because again, the money's only there for a short period of time.

You want the recurring revenue, and unless the client signs up for a monthly maintenance package, you're not getting that recurring revenue, so one and done type thing if you do it right. Yeah, you might have to make some edits here and there but it's few and far between. Clint McPherson: That's not really where the money's at, but I took it, and so started doing it, and everything was just predicated on a video being done. Well, how I do it is I receive 50% of payment upfront so their skin is in the game, so they're committed.

Once they do that, then my process starts off saying, okay, I need this, this and that. I've already given him a client onboarding checklist, something they'd know like, here I need this filled out first. Once I get all this information, I continue over the estimate, quote, invoice, whatever stage we're at. Then that 50% payment comes then the process starts moving.

50% upon completion, so as long as they're happy with the product, I don't need to make any changes. We're good. I receive 50% of the payment. Clint McPherson: I did their whole entire website.

All I had to do was add a video that they said they were going to get done in a week. The video never happened. The video kept drawn out and they didn't... So they withdrew payment until that video was complete, and it took them to damn near seven months.

On a simple website, there were only like five, six pages, man. I committed all this time to do this and I added additional stuff for them because I'm like, this video's going to get made. No, basically it was like kept saying, I kept reaching out to them. Communication wasn't there.

They were ignoring me. I wasn't pestering them and saying, what the hell. [inaudible 00:11:19] Everyday [crosstalk 00:11:20] I was emailing, he was like, okay I will just check in once a week because you told me the video was going to be done in a week. Clint McPherson: Typically I would wait until the end of the week, or midweek and say, hey just wanted to follow up, check the status of the video.

And again the communication wasn't there. But the expectation, my thing is like the look, if this process goes over a certain period of time, I need to let the client know I'm going to have to receive payment. And I will upload your video after, even after you paid me, the project's complete, I'm not wiping my hands of your project because I still obligated to add a video because it's in black and white to your website. Right?

Andrew Lees: Yeah. Clint McPherson: And so that's my whole... You can't just pocket, keep... I earned the money already.

I was digging the ditch, I was doing the work, I was muddy. I'm ready to get paid. I got to go take a shower, bro. The game's over.

I'm finished with the job. Outside of, hey, I got out a simple video. I already had the section laid out for it. It's all good.

Give me the information I need and let's move on. But again, the expectations, on my end, I should have been more forceful with it and saying, look, something has to give eventually. But I didn't set that expectation so they took advantage of the situation. Clint McPherson: What you do have a lot of times if you're not clear about it.

No matter what service, no matter what business you own, clients are going to take advantage of it. That's just the simple nature of the beast. I just think if they have simple ethics and morals, you would understand this is not the right thing to do, but they do it, man. Andrew Lees: Oh yeah.

If they can, they will and that's a tricky situation because you've already done the work so you definitely need to get compensated for that. Even if it takes them a while to finish up whatever they needed, then that's okay. But it's so important that your customers know what they're getting, know what the process is and the expectations I think. We've talked about communication, I think expectations go hand in hand with communication.

If you're communicating what those expectations are in the beginning, that's huge. Andrew Lees: And as you go, if you have really good communication with your customer, everything's going to go... should go pretty smoothly. But definitely having a nonverbal agreement and understanding is definitely is very important.

I have an agreement with my projects and every, I don't know, every five to 10 projects, I probably add something to it. Because I'm like, I didn't even think that could happen. Clint McPherson: Because it just did. Andrew Lees: It just did and I just add that in just to be super clear.

Let's make sure we're all on the same page and we both sign it and they know what they're getting themselves into. And it also goes the other way too. I think it's important for clients and for customers to hold, or as a business owner to be held accountable for what we're doing too. Clint McPherson: Right.

[inaudible 00:15:01]. Andrew Lees: It's great because those agreements help to define that, and they make sure if I'm ever... if I ever question, did I really say I would do that? I just go back to the agreement and I'm like, oh yeah, I did say that.

I'm going to get it done. Or no, I didn't. I can definitely do it but now I have to go back and say, hey, that was out of scope. I can definitely do it but we'll have to just...

I'll just set the bill to that as a separate task and it's no problem. I just wanted to let you know. Clint McPherson: It's all about getting what you deserve at the end of the day. As an entrepreneur, we can cut ourselves short to a lot of things.

Doing a lot of free things, or getting to that, that mindset of, one adding additional value, but you're adding that value to the detriment of what you have going on outside of this current project. Right? Andrew Lees: Yeah. Clint McPherson: You start doing that and again they start realizing, oh man, I could ask him for this too.

It's flipping small. I'm sure he's going to do it. Then they get in a habit and it's just creating some bad habits. Then it starts creating undue stress sometimes for you.

You're like, I want to charge them but I shouldn't. Dude, I'm telling you, I was horrible at that when I first started my agency. I get in, I just wanted to work for somebody. I just wanted my first client.

Then it was like, okay, I got my first client, but then I was like, okay, I need five more. That was easy, let me do this. Clint McPherson: But it was never about setting expectations for anybody along the way. It was just like, oh, you need me to do this.

I'll do it. Then I was like, okay, I'll just do this too. You're paying me a set amount. I'll just throw this in and do it.

But it was like, realistically, my wife's like, "So what are you doing?" We sat down one time, she said, "What are you doing for a, b, and c?" You know my clients, right? Andrew Lees: Yeah. Clint McPherson: I'm like, okay, I'm doing this and this. She was like, "What are you charging them?" I was like, "I'm just charging them a flat fee of this." Which didn't make any sense?

But to me because I had a client, you know what I'm saying, like, dude, I'm on. I'm cruising [crosstalk 00:17:04] on my ship now. Dude, we're about to take it to the promised land. We've arrived.

And you're like, no. Andrew Lees: Got you. Clint McPherson: My wife looks at me like, what the hell are you doing. You got to break it out.

And if this is going to take you so long to do it, think about it. I'm huge. I don't like the hourly thing man. Because it's like I like to know a client's budget just for a simple fact, that it helps me paint a picture.

When I put the digital marketing package together and you need me to do something specific, I'm not always going to tap out your budget. If you say, I have $5,000 to do this, to build this out and build this out, I'm going to try to see how I can do it as efficiently as possible, to one, save you money, but deliver a good product at the end, right? Andrew Lees: Yeah. And maybe have a little wiggle room.

Clint McPherson: Exactly. Exactly. Andrew Lees: Because inevitably things do take longer than we expect. Clint McPherson: Or without a doubt, because you run into undo things that one, it might be something new.

And so again along the process you're like, I didn't know that can happen. But it happened and so you take a mental note or you have to add that later on, but you just got to correct that at the time. Then it's just like looking at it, it was very frustrating because I've cut myself short on a lot of things. My wife's like, "You got to get paid what you're worth.

You're not. You're doing all of this and like you're not bringing anything." Clint McPherson: My first year was just getting, it was a learning experience, and then there was a lot of red flags that I would just bypass and just [inaudible 00:18:35] if I really sat there and thought about it, it was like you start looking down the list and I'm like, I probably should have never done business with this person because... and I mean you can list all the way down to the literacy, right? Andrew Lees: Mm-hmm (affirmative).

Clint McPherson: But you were like money. [crosstalk 00:18:51] And so mine is like, I see green, I don't care about all the red that I'm potentially going to run into. Then you get into it and it's a living nightmare. I fought that battle with a customer one time and it was just like, it really became almost unhealthy.

Because I was like every day I was thinking about it. Andrew Lees: Yeah, you're stressing about it. Clint McPherson: And I'm like what the hell? I just created a monster.

Then it's like, how do you get out of that? But one, I take 100% responsibility for what I had control over now. I look back on it and I have to take 100% responsibility for me screwing that up because I created that atmosphere. I allowed all that to happen to create the crazy shit that I went through.

It was like, what is going on? What did I do? How can I get out of this? And I can't.

I was like jeez, time out. There are no timeouts or you can't... Like in a game playing football, you got three timeouts, a half you'd call time out and reset. Clint McPherson: There were no timeouts I can call.

I was just trying to re-figure out how to get around this. Again, I was sleeping in a bed that I made, so it was like I had to figure out a way to get out of that and it was like- Andrew Lees: And just getting through it and get [crosstalk 00:20:11]- Clint McPherson: Right and then wipe my hands clean of it and then say, look, red flags are a good thing to look at and say, hey, hell no. Not doing that. Not touching out with a stick.

Not even if you ask me and say I have $1 million, I'm good, man. I'll pass. I'll pass. Too many red flags for me to even want to get involved with.

Andrew Lees: Definitely. The red flags are very important to take note of and to pay attention to. Clint McPherson: Yes. Andrew Lees: Because at the beginning you're just like whatever, I just need business.

And there is some of that. There's definitely probably going to take some business in the beginning, and this is strictly talking about a service-based business. Could taking on some business at the beginning where it might not be ideal. But you got to get started somewhere and you'll learn the thing that you thought might not have been so ideal is fine and it's not big, but you definitely, when you see the red flags, you have to learn to identify them and learn to the best you can, not take those projects.

Not take that work because it's going to distract you from the core of your business, from the things that you do really well and the things that you do officially. Andrew Lees: I've had clients where from doing product development for them, it was effortless. It was like, wow, I can't believe that that happened almost. I believe in my ability to develop products but I was...

we got to the end of it. Everything, payment was perfect, the customer's expectations were perfect. We needed to change a couple of things but no big deal. We did that and the customer understood the process.

Then we made prototypes and they came out really well. We had to again, make a few changes because nothing comes out perfect in the beginning. But just like it was such a smooth process and it went exactly the way that it should, even with the imperfections of it, then that's amazing. Those are the clients that you just want, you're like, that's the ideal customer.

Clint McPherson: Exactly. Andrew Lees: That's one thing you got to figure out early on a business is what's your ideal customer and how do you find more of them? The ones that throw up red flags and they're really difficult, they might have money, they might be able to make money from them, but they might be such a distraction from the more efficient business and that's the name of the game. You want to grow and scale.

It's got to be efficient. You can't just take work for the sake of work. I've definitely, I've turned down a couple of big projects where it just, I wasn't comfortable with the way, with the expectations that were there from the customer. I wasn't sure if what needs to be designed could be, how easy it was going to be designed and he was like, "No, let's just do it and it'll be fine." Andrew Lees: Cool, but then what happens if it's not?

I don't know if I want to be at that point with some... I don't want to be at that point with some people. Because some people get there and they're like they handle it really well and other people just freak out. Clint McPherson: It's not good for anybody then.

Andrew Lees: Yeah, then it's not good. It's really important to see those red flags for sure. Clint McPherson: Yeah, man. And I knew, again, it's something I've been more cognizant of over the last several years since that time.

Because it's something you start paying attention to. You get burned or those red flags burn you one time, you're like, no bro. I don't even care. I'm not even touching that.

I'm not coming near it. It's like you have to, again, try to find the ideal customer, but you also have to know what questions to ask. Right? Andrew Lees: Yeah.

Clint McPherson: Really try to okay spend a little bit of time with them, get to know what their vision is, what they want, what are they trying to achieve from this, and see if that vision aligns with you. Because not everybody you come across, just because they have money is somebody that you're going to want to work with. And somebody that if again, if they're going to slow your progress from going to where you want to go, then you've got to look at it and sometimes it's better to just say, it's just not the right fit. Clint McPherson: There's a lot of customers out there that I look at and I've turned away recently to where it's just like it doesn't excite me.

It's not the right fit, and I couldn't go down that rabbit hole with you and get some money from you but then it's just, I don't think it's going to do any of us any good at the end of the day because one, I'm not excited about it. Two, I really don't understand where you're trying to go with this, and then three, it's just again, those red flags, there are red flags that I see you right now that I'm just not going to compromise on it. Clint McPherson: Then having that already in your mind and knowing that there are certain things, whether it's through ethics and morals that you have in place, that like I'm just not going to go there or allow myself to get there, to even be at a bad place because I remember, man, that just, it was several months of just undue stress where it was, I was taking stuff out on my family, I was never happy and content because I had that black cloud just lingering over my head. It was like I was in a thunderstorm that I couldn't get out of, and I'm just like, just when is this nightmare going to stop, and luckily it just went away on its own, but because I basically stopped focusing on it.

Clint McPherson: I think the more you allow yourself to get consumed over things again that you don't have control over. Again I created it, but it was like once I stopped focusing solely on that and I stopped talking about it. This is the first time I'm talking about it for a few years now, but it's something that I allowed myself to stop thinking about. Once you do that, the weight was lifted off my shoulders man.

I felt like, dude, I don't have that purple elephant just on my back just hugging me to where I can't get up and get off me, move. [crosstalk 00:26:43] But now again- Clint McPherson: Yeah, it was positivity and I was just thinking and it was like it worked itself out. Then I was like, thank whoever did it, thank you. I'm just glad [crosstalk 00:26:57] How would the universe let that happen and go away.

I'm so glad right now because now I'm not in a negative space now. And again, it was something that I was still able to grow my business slowly, but that slowed me down, man. The momentum was gone, lost completely. I was still making headway but I was like, that year again, it was my first year and it was just like I was not where I wanted to be.

Clint McPherson: Ever since then I've always committed myself to one, setting the expectations, communicating with the client and also looking at those red flags and just saying, look, no matter what, I can't allow myself to go there as much as enticing as your offer is right now. There's just going to be too many problems. You don't have to tell them that way but to me in my mind it's like, your offer is enticing. I appreciate it.

Thanks for thinking about me but it's just not the right fit. Just moving on from that and not allowing yourself to be tricked, and saying, bro, you got money. Let's do it. That's just not the right mindset you have to go with.

Right? Andrew Lees: Yeah, exactly. Even just knowing how maybe you could take on a similar project, but in the future, but make sure that maybe from a different... It sounds a lot of it does come down to the relationship between, and the communication between the business or yourself and your client.

My guess is that a lot of the issues really originated there, and probably with the client not understanding things and trying to put too much undue stress on it. I'm working through a project right now where I've got a similar thing. It was a black cloud over me for a couple of weeks, for sure. Not the best email one night, and I made the mistake of late at night before I went to bed reading it.

Andrew Lees: I read it and I was like, oh man, well I was going to sleep but now I'm not. Now I'm up. I'm sitting there in bed just racing, going through all the bad things that could happen if it didn't work out and it happens to be coordinating manufacturing for a client. Clint McPherson: Okay.

Andrew Lees: Then manufacturing is very very difficult. The product development process went so smoothly. I had such a great experience with them. I could tell that they knew what they wanted.

I could tell that they really knew what they wanted which is a good thing. But I could tell that they were strong and hard-nosed, and that came out and then some in the manufacturing process. It's not something like, I'm working with a factory, that I'm managing it and I'm trying to coordinate it. That's a process in and of itself, to get a new product from a prototype through manufacturing.

Andrew Lees: Because we had a prototype that worked perfectly. I created the design, made the prototype, we had to tweak some things. Went through that process, prototype work perfectly, and it's taken a while to get through the manufacturing process. Some of that is me needing to communicate to make sure that I'm communicating effectively with the factory, and making sure that they understand exactly what we expect.

But at the same time, I'm really managing expectations hard-on with my customer now. I got pretty upset about it for a while and it was like, man, how's this going to work? At the end of the day, all I want to do is deliver them an amazing product. Clint McPherson: Exactly.

Andrew Lees: That's then what I focus on. That's what I just start focusing on, I'm like, and they were really, really pushing things, rushing things to get done super quickly in an unrealistic timeframe, so I pushed for that and still pushing things to be done relatively quickly. But I've definitely... But if you put too much stress in the whole process, you're not going to get what you want anyway.

So it's better to be like, hey, this takes time. You really have to trust the process and understand that it's, even though you think you can manufacture a product and go from prototype to full production run in a couple of months, that's not how it works. Andrew Lees: So yeah, I've been managing expectations on both ends, but been sleeping a lot easier now that I'm just really taking control of it and being like, this is what we can do. That's it.

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