Recap: Coffee Break Money Management Call

You might think that a session on money management would be boring, but that wasn't the case last Thursday when we hosted our second Marketing Mentor Coffee Break. We had a lively interview with Peleg Top of Top Design and Jonathan Cleveland of Cleveland Design. Here are just a few highlights of a conversation that many called "refreshing" and "worthwhile"...

1. Track your time and money. You may not consider yourself a "business person" but if you want to run a profitable business, you must keep track of your time and your money.  Jonathan and Peleg talked about "pulling reports" at any time of the day to help them know where they stand financially and make their decision-making rational and clear, rather than foggy. We recommend Function Fox's Time Fox to track time and Quickbooks to track your money.

2. Put some money in the bank. You should either have or be saving up to secure 4 months of overhead in the bank (for both personal and business) for that rainy day which will hopefully never come. If you do dip into it, that's an automatic trigger that something needs attention. Otherwise, it's really, really easy to ignore the warning signs.

3. Get a credit line. Say yes to your banker when he/she offers you a business credit line. You should have that in place, whether you use it or not. It usually costs only $100-200 for the year but it's an important safety net, just in case.

4. Get freelancers' estimates first. When writing proposals for projects that will require you to hire freelancers, be sure to get their prices before you submit your proposal. That way, you'll have accurate numbers as well as a resource in place and ready to start when you get the job.

5. Getting the most from pro bono work. Here is Peleg's strategy to ensure that your pro bono clients don't lose sight of the value of the work you contribute to their organization. First, bill them for the complete job.  So if it's the equivalent of a $10,000 project, you bill them the $10,000. Send them the invoice, they cut you a check for that $10,000. Then, you turn around and donate that $10,000 to the non-profit.  Even though at the end of the day it’s a wash, two things can happen:

• If they paid for it this year, that amount will probably end up as a line-item on their budget next year. And if you’re working with them again, there’s a very good chance that money will be there for them to afford it.

• Also, when you make a donation, you become a donor and you get treated like a donor, which doesn't usually happen when you do pro bono work. Even when you get a tiny credit, nobody knows that you donated the stuff.  If you really want to get involved in an organization and you want people to know that you are supporting that organization, what better way than to cut them the check and be one of the donors on their donor wall.  It’s a win/win for everybody, and at the end of the day it also shows the value of the work that you’re producing.

Our next Marketing Mentor Coffee Break will be on a marketing topic and will be held on Thursday, June 28 at 4 PM Eastern. If you want to be notified, send an email message to teleseminar@marketing-mentor.com.

Comments

[Jonathan Selikoff]

Number 5 regarding pro-bono work is pretty fascinating. I wonder if there's also a positive tax implication for the design firm.

I'm curious to know, though, what the upside for the non-profit is in this transaction. I see all the positives for the designer, but how does one sell this concept to the client?

[Mary Ann Sircely]

Key benefits of Peleg's strategy to a nonprofit are as follows:
1) Creating a line item in the budget for the design portion of a project (a necessary cost of doing business for the organization) places a value on the pro bono work and shows the nonprofit what would need to be paid if the service were not donated;
2) The process quantifies the in-kind design contribution - many nonprofits find it difficult to track the value of pro bono work;
3) The nonprofit is then able to account in its budget for the full value of services and donations received.

Following the Money Management call, I successfully pitched Peleg's idea to a nonprofit organization with which I'm involved - the Board was extremely receptive and appreciative, recognizing the win-win aspect of the strategy.