Tax Strategies – Liz Steblay

Liz Steblay:
A lot of people want to be self employed as a solopreneur. Like, oh, I need to set up an llc. I am a firm believer that the very first thing you need to do is to be very clear as to your why. Why are you doing this? The more clear you can be, the better. Because it’s the hardest job you’ll ever have. By documenting why you’re doing this. When you have those hard days or weeks, because they will come, you need to pull out that North Star document and say, oh right, this is why I’m doing this. Again, it serves to reinspire you.

Liz Steblay:
I’m reminded of a woman I coached through the educational organization Pika by having it written down she was to recalibrate.

Dana Robinson:
Exit Plan is a podcast for business owners and those who want to be business owners. I’m always in search of the lesser known stories of entrepreneurship. In the Exit Plan podcast. You’ll hear stories from startup to sale and hear from the professionals who helped business owners achieve their exit. Hosted by me, author and private equity manager Dana Robinson, along with my co hosts and guests, you’ll hear real stories, tips and tools that will help you plan for the exit you want, whether you are still working at a day job or running a business. Let’s get started with this episode of the Exit Plan Podcast. Hey everybody, it’s Dana Robinson with the Exit Plan Podcast. Coming to you with an exciting episode with Liz St.

Dana Robinson:
Blais, a entrepreneur with a particular expertise around solopreneurship, also based in San Diego. So kind of exciting to have someone show up on my calendar who is in my time zone. Liz, thanks for coming on.

Liz Steblay:
My pleasure. Although my business is based in San Diego, I personally am in Reno, Nevada.

Dana Robinson:
Oh, excellent. That’s great. That’s a tax favorable place to live.

Liz Steblay:
That’s why I’m here. That’s exactly why I’m here. I’m one of those people who fled California for for the no income tax of Nevada.

Dana Robinson:
Yes, I have. I’ve given it thought and I’m not sure that I can make the back and forth and I’m not sure my wife would want to, but it feels like it’s an expat community. A California expat community up there.

Liz Steblay:
Yes, indeed.

Dana Robinson:
Well Liz, I know you’re the author of a new book and definitely can talk about your new book. It’s often why people come on the podcast as part of their tour and it’s great opportunity for you. Just kind of showcase your expertise. You have a lot to teach entrepreneurs and I think that’s probably, you know, a key to stuff we should talk about today. But to whatever extent you can talk about your own journey first, I’d love to hear how did you end up being where you are? What was your entrepreneur journey like?

Liz Steblay:
It was unexpected and unplanned, but in retrospect, not surprising. So I’m the only daughter of an entrepreneur. Three out of four of my brothers were entrepreneurs. And so I, it’s not surprised that I became an entrepreneur too. But I didn’t, I didn’t come out of grad school thinking that. I came out of grad school, went into consulting and then was five years with a global consulting firm. Then I got, I had my baby and realized that the global consulting firm model was not a good way to be a good mom. So I went internal to a Fortune 500 company and then I got laid off.

Liz Steblay:
So I fell into self employment quite by accident. That same day I got notified that I was laid off, I called a former PwC client and I said, hey, I just got laid off. Do you need any help? Got any projects? And he said, are you kidding? How soon can you get here? So I fell into self employment, literally didn’t, no conscious thought whatsoever. I had my first client before I even had a laptop. But that first year I worked fewer hours, made more money, lowered my effective tax rate, didn’t have to deal with the big firm BS and had more quality time with my kid. And I said, okay, I’m just going to do this. I’m not going back to a quote unquote real job because this is great, everybody should be doing it. But of course it’s not quite that easy.

Liz Steblay:
So that was back in 2004. I became a solopreneur by accident well before the word was ever invented. About five years into that, I realized an unmet need in the market. This is right about the time that companies were being sued for misclassification of contractors. And so I established my first company which is called the Proko Agency, which mitigates compliance risk between independent consultants and Fortune 500 companies. So as a result of growing Proco into a multimillion dollar national business, I got the reputation as the person to call if you have questions about being self employed. And I was getting asked out to coffee a lot. One week I had coffee with a guy on Tuesday and different person on Thursday and they asked me the same exact questions.

Liz Steblay:
And I thought to myself, there’s got to be a better way to help more people than drink a lot of coffee. So that’s When I reached out to two fellow solopreneurs and I said, hey, I’ve got this idea for an educational organization and community to help people set up, launch, and grow their own independent consulting businesses. What do you think? And my friend said, yeah, we should do it. And that’s when we created the organization called pica. Well, that’s the short acronym. The full name is Professional Independent Consultants of America, which is 17 syllables and way too long. So. So, yeah, I still.

Liz Steblay:
I’m still chairman of the board and CEO of the Proko Agency, which is actually how I make my money. But 90% of my time is spent coaching and mentoring solopreneurs through p. I love it.

Dana Robinson:
So that there’s a. Let me. Let me start. Because you might not have read my book before, before coming on my podcast. Most people haven’t. So I have this book. Mine’s called the King’s Fly Swatter. I’ve got a theory.

Dana Robinson:
It’s a. I guess I’ll just go straight to the. One of the key points that entrepreneurship, the path of least resistance is typically for someone to just do the thing that they’ve already acquired skills at. So your first step into entrepreneurship is not a shark tank big idea. You know, this is going to revolutionize the world. There’s. No one’s ever done it before. It’s actually the most pedestrian thing.

Dana Robinson:
You do the thing that you already have some skills at, and you get paid for that. Instead of doing it for W2, you do it for people as a contractor.

Liz Steblay:
Yes, that’s what I did.

Dana Robinson:
And for you, it was an accident because then you realized, oh, I’m in business now.

Liz Steblay:
Right, exactly.

Dana Robinson:
So you’re able to create an economy. Right. When you take this thing that you have an expertise in and you just say, I’m going to charge people for it, and if they value it, the more highly they value it, the more I get to make from it. Was there a point at which you woke up and were like, I got this economy. I get it. You said earlier that when you and I were talking that you’re from a family of entrepreneurs and you didn’t expect to be an entrepreneur because you went to school and grad school and worked in a big consulting firm and all that stuff. Talk about the sort of aha. And maybe, you know, did you resist and say, like, I got to go back and get a job pretty soon.

Dana Robinson:
This is. This. This consulting thing is not real.

Liz Steblay:
I didn’t. I didn’t resist. But there was definitely an ocean moment. And that was the first year I had to pay quarterly tax. The first time I had to pay quarterly tax. Yeah, that was. That was a big oh, my God, what have I done? Moment, because I didn’t have the money.

Dana Robinson:
You realize how much money you made, that you actually owe some taxes, that you realize this thing made more than I was making as an employee, and now I’ve got to pay my share.

Liz Steblay:
Yes, yes. I was completely caught off guard. I forget what that first quarterly tax payment was. I mean, because it was 20 years ago now, but let’s say it was, I don’t know, $12,000. And. And I, at that point, I was a single mom too, because I also got divorced that same year. And yes, it was a real. It was a real panic, but I don’t remember how I actually pulled the money together.

Liz Steblay:
I think I borrowed money from my brother or something. But from that point on, I said, I’m never letting this happen again. And then I forced myself to have the discipline of setting aside 50%, literally half of every invoice a client paid. I put it into a separate bank, not my normal bank, because if I log in and see I have $8,000 in savings, I’ll take my daughter to Hawaii or something, because I have no fiscal discipline whatsoever. So I’d put it in a separate bank. And then, sure enough, when it was time for quarterly taxes, I’d have the money, I transferred to my normal bank. And I’m always good. But the real magic came when it was time to do my annual tax return.

Liz Steblay:
I would have anywhere from 20 to 25k left over in the. What I call the secret bank. And that’s what went into my SEP IRA lowered my effective tax rate. I invested it and it grew. And that’s the goose that, like, laid the golden eggs.

Dana Robinson:
Yeah, absolutely. That. So. So I. I love that, you know, money is a. Is a very stern teacher. And. And the government is a very.

Dana Robinson:
Is part of that very stern lesson that we all. You know, I remember payroll taxes when you start hiring people. I remember having to go file that stuff in my first businesses in the 90s. And, you know, you file that manually and you’re sort of following the directions and then you go, no, I need thousands of dollars right away that I need to send off as a payment for the payroll taxes that I didn’t pay these employees that, you know that it’s very punitive when you make financial mistakes in business. And good for you for catching. Catching that early. So maybe that’s the first. Aha.

Dana Robinson:
Where you’re like, I’m in business and I’ve got to do business person things like withhold some taxes or set it aside so that I have it to pay. What are some of the other things that kind of as your evolution in that first year, your awakening, the sort of entrepreneur within?

Liz Steblay:
Yes, well, you know, I fell into it by accident. So it wasn’t nothing of it. No, part of this was consciously planned. I didn’t set up an llc. I didn’t have a name for the business. I mean, all of these things that I teach people to do now, I didn’t do. But it was a little bit simpler back then, too, that we didn’t. It was easy for me as an independent consultant to contract with a Fortune 500 company simply because the person who wanted to hire me said, let’s add Liz as a vendor.

Liz Steblay:
I didn’t. I didn’t have to go through a compliance process or have a business structure or carry insurance or any of those things. But the world’s dramatically changed in the last 20 years, so now you do need to have all of those things. One of the. Another. Boy, this is all about my weaknesses, isn’t it? I was going to say another life lesson was when I realized it was a business, was I was just doing my accounting using Quicken. Not even Quickbooks, just Quicken. So I had a separate category.

Liz Steblay:
I would tag everything so I could keep track of my expenses and the money coming in or whatever by client, whatever, which was fine. You know, you don’t need anything that fancy when just when you’re a solopreneur. But I’m so bad at bookkeeping, math, and anything money related that I would put the records into Quicken that I was transferring money to the secret bank account, or I was transferring money to the business bank account. But twice I forgot to actually pay myself. I did the transactions in Quicken, but I forgot to actually transfer the money to my personal bank account. And then I went to pay bills and I was like, wait a minute, I know I just transferred $10,000. What happened? Well, I did it in the. The accounting software, but I never actually did it at the bank.

Liz Steblay:
So the second time that happened, I said, okay, that’s it. I need to hire a bookkeeper. So it was a lot of stupid lessons that I learned that, you know, you need to hire somebody to do what you’re not good at. Don’t waste your valuable time trying to figure it out or learn to be good at something you really have no skill for. So that was My number one first business, I don’t know investment or hire. To this day my now, now she’s CFO of my business, but she’s still not full time. She still has other clients, but it’s, it was definitely money well invested to pay somebody to do these things for me.

Dana Robinson:
So the, that thanks for sharing. The weaknesses, the lessons learned are probably the only way you can now turn around and be a mentor to people is you have to have made those mistakes to be able to really tell people how to avoid them. As you’re, as you’re sort of entrepreneurial, this journey gets going. You fell into it, you didn’t try, it’s working. Did you hit a point where you, where you said, well I better call it a thing or I better do some marketing or what? You know, how did you evolve the solopreneur business from the accident to a thing?

Liz Steblay:
I think it was another aha moment actually. I mean I don’t remember the details of when I actually set up the LLC and all that sort of stuff because that part wasn’t important. But the other aha moment was after that first client was wrapping up. So the type of work, consulting work I did was very, was full time, hands on, anywhere from 40, 60 hours a week, supporting technology implementations for large global companies. Well, the first project I did was with a high tech company down in Silicon Valley. Pretty much full time work about nine months, so around month eight. And I see that I’m wrapping things up and that my contract’s going to end in 30 days or whatever. And I said, oh shoot, I have nothing else lined up.

Liz Steblay:
I have done nothing. I didn’t have named my business, I haven’t done any business development. I didn’t call it business development then, but I, I literally had, had nothing lined up. And like I said, now I’m a single mom living in San Francisco. So yeah, that was another panic moment. And I went and interviewed with a couple boutique consulting firms in the Bay Area and one of them mentioned, well, I asked her, I said okay, so what’s the business model here? And she said, oh, well, it’s pretty straightforward. You know, you, we help you find the, we find the work, we negotiate the contract, you do the work, you tell us how much time you worked, then we bill the client and we pay you 65% of what we collect from the client. And I said, oh, okay, well, because I can’t do any math in my head to save my life.

Liz Steblay:
I went home and I’m like, well what would that work out to and I pulled out an Excel spreadsheet and I started running some numbers backwards and forwards. And I realized, holy cow, they’re going to make $45,000 by simply helping me find a project. That’s insane. I’m not willing to give up $45,000 for them to introduce me to a client. And so I called the lady the next day and I said, you know, thanks, but no thanks. I realize I’m going to, I’m just going to need to find my own work. And she was so disappointed because she said, oh, we’ve got several projects that are right in your sweet spot. I know we could get you on them.

Liz Steblay:
And I said, nope, thank you, but no, because I wasn’t willing to give up that much money. And I don’t. Again, it was not a conscious thought. I just started reaching out to everybody I’d ever worked with before. And I said, hey, you know, about nine months ago, I left my internal full time job and now I’m available for independent consulting work. I specialize in abc. If you or anybody you know needs help, please let me know. And that’s how I started building my network and my pipeline.

Liz Steblay:
And the next project did come along, and the one after that, and the one after that, and the one after that. But the lesson I learned is you can’t be caught flat footed. You have to continuously be doing that outreach and business development. So my motto was one person in person once a week, where no matter how busy I was, I would at least have a conversation, live with somebody once a week. And when things were really intense on these projects, maybe it was, I would ask one of the client people or somebody from the large consulting firms. Do you want to walk down to Subway together and pick up our lunch today? Because since we didn’t have time to literally eat out and when, when we’d walk down there, I would be asking them about anything except work. Like, how did you get into this line of work? What do you do when you’re not working? Where’d you go on your last vacation? Who are your favorite sports teams? Do you have children? What are your favorite hobbies? I mean, all of these things just to establish relationships. To this day, I’m convinced that business development equals relationship development.

Liz Steblay:
And it’s always paid off in space.

Dana Robinson:
Absolutely. Yeah. That is, networking is not about getting another business card and somebody else’s hand or getting their business card really is about making a connection and understanding what their needs are. And I think a lot of times you’ll even find that you do them a solid before it ever turns into work for you. Right. You very often are like, oh, you need this. I know someone that does that here. I’ll make an introduction.

Liz Steblay:
Absolutely.

Dana Robinson:
The. Yep. The payday comes for you later when, when that person is thinking of you positively because you did something that didn’t expect reciprocity. It just happens organically.

Liz Steblay:
100 believe that. But it is a slow way to build a business. It does take a lot longer than if you do some of the more traditional things.

Dana Robinson:
Well, let’s talk about. So your, you know, your, your, your book is towards solopreneurs, your first, you know, sort of entree into entrepreneurship, a solopreneurship. This is, it’s a, it’s a great way. It’s a way that I think 80, 90% of non business owners become business owners. You do that thing that you already do well and then you begin this path. You might start it by accident as you did Liz, but that’s a place you could also kind of get stuck forever where your business is really, it’s a well paid job which might not be bad for a lot of people. What are the good, the bad, the ugly maybe of trying to turn that into a real thing. And maybe you haven’t with the consulting, but I know you have because you mentioned this other business that runs itself.

Dana Robinson:
So I know you’ve got some chops when it comes to a business where you’re not a solopreneur. So can you kind of compare maybe and contrast the solo to the operator?

Liz Steblay:
Yeah. The good, the bad and the ugly. So yes, I have done both solopreneur and entrepreneur. I, you know, have this other multimillion dollar business that I no longer am involved in on the day to day operations. It’s called the Proco Agency and it’s a matchmaker that mitigates compliance for these Fortune 500 companies and helps them find the consulting help they need. And I’m also, in addition to that, I’m, you know, I also coach and mentor thousands of solopreneurs over the years through my educational organization. And I’m reminded of this one situation where a guy left his job at Microsoft, stepped into being a solopreneur and within a year he was in my office hours and he said, I need to make a decision. Do I want to stay as a solopreneur and just make boatloads of money because all the money is coming to me or do I want to become an entrepreneur where I’m going to have to pay people to help support me and grow this into a bigger business, a business bigger than myself.

Liz Steblay:
And, and I remember going through that thinking myself right when I, when I started Proko. The first years that I started Proko, I called myself a slasher because I was an independent consultant slash entrepreneur. And then because I was still doing client service and client delivery in addition to growing the business. But then over time, the scales started to shift. The amount of time I spent as an independent consultant was getting smaller and smaller and smaller and smaller. And so then I was an entrepreneur slash independent consultant. And then eventually it was time to drop the independent consultant altogether because my CFO said, liz, we have enough revenue and cash flow, you can stop actually doing the consulting work. But again, it was sort of, I just sort of grew into being an entrepreneur.

Liz Steblay:
To me, I was still an independent consultant who was sort of building this business on the side.

Dana Robinson:
Yeah, well, like, what were the. Did you just realize you’re going to burn out if you don’t hire somebody? What were some of the things that went into making the decision, you know, and your Fortune 500 guy, you know, who, you know, that’s, that’s a threshold you have to have crossed. And, and what was that? I just want to know because I’m curious, what was the outcome for him? Did he grow a business or did he stay solo? Do you remember?

Liz Steblay:
He did decide to grow the business and it’s doing very well. He. Yeah. And, and he’ll, you know, and he’s, he, he’s made, he’s making, he’s still making a ton of money, but he’s also now has employees helping him build it. And the same thing with my, my business, it was sort of a, there was just so much demand for the service that we were providing that there was no way that the CFO and I could, and my assistant could do it on our own. Right. So it was about inventing ways to bring people into the business without, and this was the tricky part, without bringing getting out too far over our, too far ahead over our skis.

Dana Robinson:
Yeah.

Liz Steblay:
I was always resistant to bringing on a full time staff that we would have to support. And so to this day, now that, well, now the term is fractional executives. Right. The four people that run that business now are all fractional. None of them were ever full time employees. And they all still have other businesses and other things that they do or other consulting clients or whatever the heck it is they do. But I never went to full time staff.

Dana Robinson:
Interesting.

Liz Steblay:
Which helped make, which helped make it a lot Less stressful for me to, quote, make payroll. You mentioned doing payroll taxes. Yeah, all of that freaked me out. I’m like, I do not want the responsibility of these people’s livelihoods. So, yeah, we were using fractional executives before that term was even ever invented.

Dana Robinson:
Dana Robinson here. Quick plug for my book. The King’s Fly Swatter. You can see it here behind me. If you’re watching this, I’ve got it in my hand. It’s a beautiful hardcover book printed to make it giftable, something that you can share with a family member, buy as a gift. So this latest book, it’s a fable about a person who has a really crappy job. Let’s just start there.

Dana Robinson:
This is a book that most people can relate to because we’ve all had crappy jobs. This is the story of Ubar, a servant in the court of a Babylonian king who masters his boring, monotonous job and then learns to listen to the king, hearing him rule the kingdom while quietly swatting flies behind the king. Eventually, Ubar becomes the wisest and most successful man in the kingdom. The story is fun and it’s easy to read, but it’s not mythology. It’s my story. And as I shared the idea with colleagues and friends, I learned that it was their story. And guess what? It’s your story. If you’re at a job of any kind, one that you love, one that you hate, one that’s just enough to get by, this little book gives fresh perspective on how to leverage that job to get you something greater than a paycheck.

Dana Robinson:
The lessons in this parable are entrepreneurial lessons, but not what you might think from the current entrepreneurial zeitgeist. If you or someone you know are looking for a real pathway to entrepreneurship, here’s the secret. Your job is the way out of your job. It’s counterintuitive, but once you see how it works, you can’t unsee it. Learn the way of the Flyswatter from the Parable of Ubar and from the stories I share from my 30 year business journey. You can get a free copy of the King’s Fly Swap Water by going to danarobinson.com yeah, I’ve had a couple of guests on the podcast that have said that. One of the big lessons from one of the guests, she said that her first business failed. Not failed, but didn’t flourish because it was constrained by her ability to contribute.

Dana Robinson:
And so when she launched her second business, she hired, even if it was five hours a week, whatever the amount was, she needed to build an organization and figure out, here’s the roles that need to be filled, and then there will be somebody who will do that. That’s what I think a lot of people don’t realize. If you’re a solopreneur or even running a small business, you don’t have to hire someone who’s going to erode all of the profit that you’re living on right now. I mean, you do have to decide, am I going to invest some of this money that’s coming in that I could keep if I do all the work to people? But it is definitely the era of fractionalization and specialization. People probably add more value when they focus only on the piece of the business that they’re fractional at. Right. So you get really high talent that’s really focused only on the thing that they do well, and then that’s good for them because they’re, they feel like they have agency in their life. They’re in control of their time.

Dana Robinson:
They’re running their small business or their consulting firm by being fractional to you.

Liz Steblay:
Yes, yes. I’m a huge advocate for this type of work. Well, also because most fractional executives are solopreneurs. So it comes full circle since I’ve written a book on how to succeed as a solopreneur. And now, of course, I would be a fan of fractional executives, but like I said, I grew my, my first business into a multimillion dollar business with, without even knowing that that’s what I was doing was hiring fractional executives.

Dana Robinson:
Yeah, it’s brilliant that. Well, we’re on the things that you’ve written about and that you help entrepreneurs, solopreneurs. Like, I’ll let you, you take the lead here. I haven’t read your book. I’m sorry, but I should have when I got the invite for getting you on the podcast. So just like I had to tell you that I wrote a book that.

Liz Steblay:
You haven’t read, so we’re even. Yes.

Dana Robinson:
Okay.

Liz Steblay:
So I did things a little backwards. I mean, most people have, you know, decades of their work experience and are like, oh, well, I’m going to write a book. And then they figure out how they’re going to support that book through executive coaching or an organization or workshops or whatever the heck. Right. Whatever their platform is, they usually write the book and then develop the platform. I did it the other way around. I developed the educational organization, the Professional Independent Consultants of America. And then as a result of coaching and helping thousands of people through workshops and by boot, Camps and office hours, all that thing.

Liz Steblay:
All of those things. Not to mention blogging for seven years. My blog is called Successful Independent Consulting Dot com. I realized, oh, I probably have plenty of material for a book. And if I wrote a book, I could probably help a whole lot more people at 1995 than I can through any of these other ways. So that’s what I mean by I did it backwards. I developed the platform and then took all of that and turned it into the book. But the book is called Succeeding as a Solopreneur.

Liz Steblay:
Six keys for taking the Leap, Winning clients and building Wealth. And it’s literally based on all of my lessons learned. There’s a ton of my embarrassing stories in the book, like forgetting to pay myself. So yes, six keys. So it’s very easy to read in. The first key is be prepared to vanquish fud, which is fear, uncertainty and doubt. I refer to this as the FUD Monster because in my mind it’s a little gremlin that talks in your ear and, you know, often talks people out of becoming self employed because for sure. Right.

Liz Steblay:
It undermines your confidence in the one key attribute of all the thousands of successful solopreneurs I know is confidence. It takes an enormous amount of confidence to step out on, to step out on your own intentionally. If you fall into it like I did, you don’t necessarily need to have confidence. You just have to have good luck. But to be, to sustain it over time, it takes, it takes a lot of confidence. So the first key is know how to vanquish the FUD monster.

Dana Robinson:
How do you. Without. We don’t need to go through all the six steps of the book because I want people to buy the book.

Liz Steblay:
And you wouldn’t have time.

Dana Robinson:
Yeah, but, but this is a good one for people that haven’t done it before. And there’s so many people that are. I mean, I could think of four people that I know that are out of work in their 40s and 50s that are, you know, experts in their field who are paralyzed and can’t get a job because the job market’s just changing dramatically. The aging out turns out that, you know, it’s not like you’re. When you’re. In your. My dad was in his 60s, I think, when he was aging out of the workforce. What, what do you have for your tactics for fud? The, the, you have some tricks, hacks.

Dana Robinson:
What’s the. I mean, I, I feel like you could unload a whole bunch of psychology books on someone and say, come back in Three years. When you’ve worked through all this stuff, do you have some shortcuts, but you don’t.

Liz Steblay:
Yes, you don’t have time for that. Not three years. Actually, I have a new one that’s not in the book and two of them, actually, that are not in the book. One which I’ve nicknamed Name it and Tame It. So when you feel that, I mean, you have to pay attention to your body, you have to be a little bit aware of what’s going on. But if, or even if you’re aware of your thoughts and you say, you know, maybe I should, maybe I shouldn’t try to find a full time job. Maybe I should just become a independent consultant. But I don’t know.

Liz Steblay:
I don’t know how to do that. Okay, that’s doubt, right? That’s uncertainty and doubt. So if you hear yourself saying that, you can stop and say, okay, what, what was that? Oh, that was, that was doubt. What am I doubting? And then dig into it. Well, I’m doubting that I would know how to find clients. All right, well then the next thing is if, then, then you’ve named what the doubt is, then the next piece of that is, oh, well, how can I do research or find out more about finding and winning clients to make this less scary? And then you can go do that research. So I had a physical example of this summer. I was hiking up at Lake Tahoe, and it was where I was in North Tahoe, a beautiful day, but to the west were big storm clouds.

Liz Steblay:
And I saw that they were coming in, but still right above, all around me, blue sky. But then I was hearing thunder. And I’m up on my hike and I’m hiking, I’m hiking further and further away from the beach, up into the mountains. And I thought I felt a little bit of fear and I stopped and I thought, oh, this is fear. And I looked around and I’m like, yeah, but the clouds are way over there. You know, I’m not afraid of getting wet. What am I afraid of? And then I realized I’m afraid of a dry lightning strike and I can’t outrun a forest fire. And so I said, okay, this is a reasonable fear.

Liz Steblay:
And I turned around, I started back down the mountain. As I was going down the mountain on the fire trail, one of the National Park Service fire scout trucks was going up, which just validated that I wasn’t out of my mind to be afraid of a dry lightning strike. Yeah, but that’s when I came up with the idea of name it and tame it. Yeah, like, okay, that was an appropriate response. But if you don’t name it and tame it, it can literally just take over your soft dialog and you will be paralyzed and you won’t be able to strike out on your own. So that’s, that’s practice number one.

Dana Robinson:
I love it. The, the knowledge is usually the tool that you would use to figure out whether you can do something or not. But when you have an emotional, this sort of the fud, right? These are, these are powerful emotions. And so the naming it, identifying it, bringing it out gives you a thing, a tool that you can, you know, you can do something with. And that might be that that fear is justified. Right? You might, you might say, well, like I have been involved with businesses where a big fear is biz dev, how do we get customers? And when you do some research, you go, oh, this is a very hard business to break into. We might actually, this fear might be founded. Can we plan, do business planning around it? Or in other cases you just go, oh look, there’s, there’s lead gen services that’ll spin up and in a heartbeat that’ll start feeding us leads.

Dana Robinson:
And so knowledge, knowledge can definitely overcome those fears and feelings that, that can be really powerful in holding people back.

Liz Steblay:
Agree. I call it. Actually I was in a workshop this weekend. Not when I was leading, I was taking it personally. And the person referred to it as amygdala hijacking or you know, your amygdala hijacks your thinking and keeps you stuck in that, in that sort of fear, uncertainty and doubt and prevents you from taking whatever sort of action you want to do to improve your life. So, but the first thing is awareness. You need to be aware that, okay, this is what, this, this is what’s holding me back.

Dana Robinson:
Whether again, like not making you draw through the, the threat of, of your six bullets from your book, but in thinking of the, the things that keep people back, that hold people back or prevent them from getting to success as a solopreneur, certainly the, this, the fuds. Is that, is that right? Did you call it the fuds?

Liz Steblay:
Yeah, fuds.

Dana Robinson:
Whether it’s, you know, a common behavior or common sort of obstacle that people face, what else is going to hold somebody back from being able to succeed?

Liz Steblay:
A lot of times it’s people are just don’t know how to get started. What do I do first? Like, because there’s so much. Do I set up the LLC first? Do I come up with a name first? Do I build a website first? I don’t know what to do first. So that’s a little bit of overwhelm.

Dana Robinson:
Yeah.

Liz Steblay:
And a lot of people think that the very first thing they need to do is set up the llc. And I do run a workshop, which is now an asynchronous on demand course called Getting Started as a Solopreneur. And that’s not even one of the top three things.

Dana Robinson:
I agree with you. As a, you know, 20 years of practicing law, I’d set up entities and file trademarks and copyrights. And these are not the things you do on day one of starting a business. You don’t need to go file copyrights, trademarks, patents, and set up your entity, right?

Liz Steblay:
Yep. But a lot of people, when they’re going to be self, you know, self employed as a solopreneur, they’re like, oh, I need to set an llc. I am a firm believer that the very first thing you need to do, need to do is to be very clear as to your why. Why are you doing this? And you need. The more clear you can be, the better. I have a, I’ve written a blog and a worksheet on how to. How to determine your why because it’s the hardest job you’ll ever have. And by documenting why you’re doing this, when you have those hard days or weeks, because 100% guarantee they will come, you need to pull out that North Star document and say, oh, right, this is why I’m doing this again.

Liz Steblay:
And it serves to reinspire you. I’m reminded of a woman I coached through the educational organization Pica, and she’s had tremendous success since launching her business in 2023. And she came to office hours and she said, liz, am a little overwhelmed. I have a little bit too much work. And I just want to thank you because I pulled out my why document because I was so stressed. And I realized that why I’m self employed is that I wanted to have more time to spend with my family and help take care of my mom. But by taking on so many clients, I now I’m stressed out and I’m not fulfilling my why. I’m not living the life that I was trying to design for myself.

Liz Steblay:
And I said, so what’s the answer? She says, I’m going to turn down this next piece of business or see if I can do it at a later date because it was pulling me in the wrong direction. This woman’s always been a high achiever and an overachiever. Like, she’s a she. You know, she Has a law degree, she worked at Nike for years. She’s, she’s definitely one of those overachievers. But that, because that’s her wiring, she had to be so clear about why she was being self employed. And by having it written down, she was able to recalibrate back to why she decided this path in the first place.

Dana Robinson:
That’s great. I’m glad. I want to, I want to pick a bone with you just. And I’m glad I don’t have to argue with you. So the. I think, I think there’s a big difference between what you just said, which is super important to someone who’s going to be self employed to understand their motivation because you’re going to push through a lot of like hard feelings and hard tasks and you know, you’re going to work harder than you would at a job. So you know, having your personal, you know, vision for who, how that, what that, what that means to you, I think is really important. Even, even kind of the, the new age stuff of like a vision board.

Dana Robinson:
What do you want your life to look like? These are useful, these are useful tools because they really do help you begin to shape this. The thing that you need to come back to. That’s kind of your personal existential why. There’s a, there’s a, there’s the Simon Sinek why that I think it’s companies tripped up and you can agree or disagree, but I’ll at least give my opinion since it’s my podcast. The Simon Sinek says start with why.

Liz Steblay:
Yes.

Dana Robinson:
And it’s the business why. So you know, you’re trying to figure out the focus in terms of the brand and the value proposition and how consumers shape their belief about you and whatnot is all actually really important. But I actually don’t think it’s the first thing that most small businesses are failing on. And if they just go get mission, vision, purpose and create their why, I don’t know that it gives them the economy that they’re trying to create. You create an economy by knowing what, not why and pricing the what competitively but effectively so that you can generate the gross margin and the profit that you’re hopefully if you’ve done some planning, your business planning require. So I’ll give you an example. I was in H Vac and plumbing. You take over a business that’s been run by a person for 30 years and the what is whatever some technician sells, that business will never take off because you don’t have a what when you show up at the customer’s house.

Dana Robinson:
Doesn’t matter if you had a why. You need to sell them something and you need everyone to know what that is, what is it? And in today’s software technology stack, almost every business has a SaaS and ERP that allows us to establish what our what is, what’s my product, what do I not do, what do we do, what’s our upsells and how do we effectively price those and, you know, and create a sales system around and all the things that make a business work. But I feel like I’ve been to a lot of industry events in the home services space. I get a lot of people that are hung up with trying to figure out their mission, vision, purpose and figure out their why. And they haven’t stepped back and said, am I effectively selling a product that I can repeat? Is it priced properly? So here’s my bone to pick is don’t start with why. As Simon Sinek says, start with what? Now you’re a mentor of small businesses. You’ve probably seen over your thousands of touches. Prove me wrong.

Dana Robinson:
I’m happy to hear it.

Liz Steblay:
Well, Simon Sinek says people don’t buy what you do, they buy why you do it. So I believe in that. As a solopreneur in particular, I think that’s particularly important for solopreneurs. But when I say about one of the first steps of stepping out on your own is to know your why, because it’s going to get hard. That’s almost more of like a vision board, if you will. Or it’s what is my personal motivation for taking this unorthodox path?

Dana Robinson:
Yeah, yeah. You need to keep that fire fueled and you need to have something that is, that you need.

Liz Steblay:
You need to be clear. I mean, if you’re doing it because, well, because I’m not getting a job anywhere else, that’s not going to be enough fuel to, to get, to get you there, to get you to success. But what you’re talking about in terms of the what. Okay, now you’re getting into keys number two, three and four of my book. So I haven’t forgotten about that. But, but you know, in particular, as a solopreneur, you need to be, be known for something and be memorable. And that’s going to. Narrowing your, you need to narrow your niche in your, your services, your expertise.

Liz Steblay:
And is it something that the market needs or is willing to pay for? So that’s, that’s the hardest part for most solopreneurs because they want to go to market as a jack of all trades or a Jill of all skills. And the reverse is true. People with a. The more narrow your niche, the more you’re in demand. Because clients want to hire an expert, they very, very rarely want to hire a jack of all trades. So, yes, the what is very important. And you also touched on pricing, which is actually key number five, which is charge what you’re worth. The single biggest mistake I see people make is they undercharge for their services and goes back to being confident.

Liz Steblay:
Right. You have to have the confidence to say, to say what you’re worth and to charge for it and ask for it and get it. So I don’t disagree with, I don’t disagree with you with your point that the what is more important than the why. But as a solopreneur, I’d say you need to have both.

Dana Robinson:
Yeah. And maybe the being sure that your why is a piece of the what, really. I mean, the tying those two together, probably people connect with if they’re like, oh, like, for my law practice, Dana is a corporate and trademark guy. And so, you know, there’s a place for me in their lives. And it’s not everything. It’s, you know, there are lawyers that say they’re jack of all trades. And, and, you know, I’m a little bit broader by not just doing trademarks, by doing some corporate work, but, you know, that’s a niche enough to, to have, you know, for me to run a law practice that I ran for 20 years and then sold my junior partner five years ago. Now the.

Dana Robinson:
So, yeah, thanks. I, I let me get on my soapbox about Simon Sinek. I, I have nothing but good things to say about everything I’ve heard, read and believe. Simon Sinek’s spectacular speaker and all that. It’s just that for those entrepreneurs listening, you could spin your wheels a long time trying to figure out your why for the business. And it doesn’t matter unless you’re spinning a flywheel that makes you the money that you need to have an economy. And the thing that people fail on is product and pricing. And I think, Liz, when it comes to pricing, I tried not to do this, but, you know, even as a lawyer, I’d get, get around to the annual price increase and I’d be like, wow, you know, $300 an hour is pretty expensive.

Dana Robinson:
And, you know, I’m at 690 now. And luckily I don’t have to bill much anymore now that I don’t own the practice. But it’s, we’ve. My private equity group’s taken Over a bunch of landscape companies. And we have billing that hadn’t been upped in 20 years.

Liz Steblay:
Oh my gosh.

Dana Robinson:
This is, you know, the frog in a kettle that the business can never do what it needs to do. It can never do right by its employees. It can’t even do right by the customers that are paying that, can it? If you’re just not charging enough.

Liz Steblay:
Yeah, no, it’s, it’s so important. You have to grow the top line and not just watch the bottom line. Right. So that the, I said, you know, the six keys to finding, to taking the leap, winning clients and building wealth. Well, building wealth is great, but you have to grow the top line and get the money coming in the door. Right. And another mistake established people make is they continue to charge by the hour instead of switching to fixed price or hybrid pricing. And if you charge by the hour, you’re actually making less money per hour because you’re doing things so much more efficiently.

Liz Steblay:
Dana, what used to take you maybe 10 hours regarding, you know, some trademark thing now probably takes you three. So if you’re charging by now, you’re only billing for three hours when you should be charging for 10. So there’s, there’s. And your pricing will shift the longer you’re self employed when you’re just starting out. Yeah, it’s the safest to charge by the hour, but you need to track your time so that you can switch to either a hybrid model or a fixed fee as soon as possible so you can capture all that intellectual actual property and get paid for, for your tools and your accelerators and everything that you have on your hard drive and in your head. So people, people forget to do that too. But even when they start out charging by the hour, they don’t, they don’t charge enough.

Dana Robinson:
Well, like maybe flesh out the pricing models for me just a little bit because I, I did toward the end of my, my years in practice, toy with the idea of, of kind of a fit, getting 10 clients that pay three grand a month and just saying you’re paying, you like me, you like me enough. Then look at your bill. You spend about this much. Just put me on a recurring payment. And I know some lawyers that have done this really successfully. I was moving out of the practice, so I decided it wasn’t worth the friction of trying to recreate a, you know, kind of a pricing model. How have you seen it succeed? What are the, you know, what are things that people have done where it doesn’t succeed when you’re trying to move, make that move from consultant who’s like, it’s pretty easy for a small company to be like, oh, I’ll hire you and I’ll, you know, use you five hours a week, and I know what I’m paying. But as you say, at some point you can do that five hours in an hour or two, and you still want to make the same dollar amount on a month for, for the energy exerted.

Liz Steblay:
Yes. So that’s when people move either to retainers, fractional rolls, or fixed fee. And fixed fee is usually for. It’s the same thing as consulting by the hour. There’s a certain scope or problem that you’re trying to solve for in certain things that you’re going to do to solve for this problem or take advantage of this opportunity. But you’re doing instead of doing it saying, it’s going to take me 100 hours at $300 an hour, you’re doing it as a fixed fee. So fixed fee is, is, is. But that’s, that’s where the money is.

Liz Steblay:
Is it more in fixed fee as a consultant than by the hour for the reasons we just explained?

Dana Robinson:
Right.

Liz Steblay:
The retainer pricing is terrific, but the trick is it takes a lot of trust on the, on the client side that they’re going to get their money’s worth. And it’s. I don’t know of any consultants who have ever walked into a retainer relationship without first doing either fixed fee or hourly pricing beforehand because the client just does. It makes them too uncomfortable how we know we’re going to get our money’s worth, but then if they’ve been working with you for five years and they can look at all their invoices and see, Yep. You know, on average, we’re spending, you know, anywhere from three to six grand a month on Dana. So, yeah, this makes sense to go to a retainer because they trust you. So trust is the. Is the most important thing when you want to go to a retainer based.

Dana Robinson:
And then do you think there’s some psychology for the clients that then feel like they’re going to badger you just a little more to be sure they’re getting their money’s worth? Or do you think that if you’ve established that trust and you lock down a retainer, then you just trust that I’ll come to the client and say, hey, you’re overworking me for the price that we negotiated, or they’ll come to me and say, hey, we never hear from you and we keep sending a check. So what gives?

Liz Steblay:
Yeah, so it’s that’s why the trust is so important is because presumably if you have that degree of trust with the client, you also have the type of relationship where you can be proactive in managing that relationship. Right. Like, you know, okay, we’ve been under this arrangement for three months now. The first two months I was under budget, last month I was over budget. Seems like we’re about in sync. But I’ll do another check in in another three months to make sure that, you know, what we’ve estimated is really working out for both of us. That’s on the clients. I mean, sorry, that’s on the consultant’s shoulders to do that, to manage that expectations and set those up expectations.

Dana Robinson:
Are there some best practices for like managing that, do you think sending a report that sort of shows value or you know, is the.

Liz Steblay:
Depends on the nature of the relationship with the client. But usually a conversation is plenty. But the trick is to set it up as a recurring calendar reminder so that you’re like, oh, I’m six months into this retainer, it’s time for me to do a check in with them.

Dana Robinson:
Right. Well, the podcast they usually run about 45 to 55 minutes. And so I dominated our conversation list so that I don’t think so. Thanks. But. But because I talk over you and talk too much. The. Let me just pause because you’re an expert that imparts knowledge for a living.

Dana Robinson:
This is, you know, your, your thing. What have I missed that my audience might, might need to hear from you today?

Liz Steblay:
One of my favorite hash. Two things. One of my favorite hashtags is pay less tax when you’re self employed. This is the key to building wealth is paying less tax, keeping more of what you earn. So we talked about growing the top line, the revenue through your pricing and your pricing structures. But the important part, I don’t know if it’s as important or more important. Remember that we started this, this conversation with me saying that I put money into my SEP IRA and that’s the goods that lays the golden eggs. As much funnel as much as you can into that, particularly in the early years.

Liz Steblay:
And that’s how you lower your effective tax and build wealth over time. The second best thing is that health spending account. I am a humongous believer in this HSA thing. I think Fidelity. It’s Fidelity that puts out a report every year and they estimate the last one I saw that the average couple will spend $200,000 out of pocket expenses for healthcare after retirement. Wow, that means Medicare is not covering it. Your insurance isn’t covering whatever. Right.

Liz Steblay:
200K. So the more money you can put into that HSA, which is tax deductible when you put it in and tax free when you take it out, that’s, that’s another trick for paying less tax and building wealth. So there’s a lot more tips in the book about that. But, you know, you have to manage both sides of the equation, the top line and managing the bottom line too.

Dana Robinson:
Absolutely. Well, and the thing that a lot of people who have real jobs don’t realize is that there are a lot of things that entrepreneurs write off from the business that you don’t get to write off. Your cell phone and your, your Internet access when you’re a W2 employee.

Liz Steblay:
Exactly. So I was at the, I was at the post office, Dana, last week. I don’t know what, I was mailing cookies to my uncle and I don’t know, something else. It was a hundred dollars by the time I walked out of there. Granted, I bought some stamps too, but I thought, thank goodness the business is paying for this. Why would anybody not have a business where they could make all this sort of things. Tax deductible?

Dana Robinson:
Yes. Yeah. And well, and, and you know, the, the pick your travel around seminar, workshop, business networking event. So much travel that I’ve done over the years has been 50% or whatever, 44, whatever the marginal is on taxes. 40 something percent. If you live in California, California of that is basically paid for by tax savings. And I get to enjoy the thing that I’m doing. If it’s New York, I’m there for business.

Dana Robinson:
I get to do fun New York things and.

Liz Steblay:
Exactly.

Dana Robinson:
Yeah. So many ways for entrepreneurs to leverage the business tax, the game that regular working people don’t. And as you say, if you’re reducing your tax burden and then you’re plowing that tax savings into a SEP IRA or any kind of, you know, vehicle like that, you’re, you’re going to create wealth that you’re going to be able to extract at a discount from the tax standpoint.

Liz Steblay:
Yep. Yep. That’s my other favorite thing to talk about is how to pay less tax. So I mentioned there were two things. My first favorite hashtag is solopreneur success, probably because that’s the one I use on nearly everything I publish or post. But that also reminds me for the people listening, that the easiest way to find out more is to actually go to the landing page for the book because it’s the easiest thing to remember. I’m the first to admit that solopreneur is a difficult word to spell. So instead of searching for the title of the book, succeeding as a solopreneur, which is very difficult to spell, just remember to go to sixkeys.info so that’s www sixkeys.info not.com because that was too expensive and I’m all about keeping costs as low as possible.

Liz Steblay:
So six keys. That’s the landing page for the book. And from there you can find out more about me, more about the educational organization, and of course you can buy the book or audio book or ebook or whatever your preference is.

Dana Robinson:
Awesome, Liz. Thank you for coming on and sharing your experiences and lessons learned. If people want to connect with you, I’ll just say it again, sixkeys.info you’re also pretty active on LinkedIn. Liz Steblay s T E B L A Y thanks for coming on today.

Liz Steblay:
My pleasure.

Dana Robinson:
Dana, thanks for joining me on this episode of the Exit Plan podcast. I’d love to hear from you. Feel free to hit me up with questions or comments by emailing me at hello@danarobinson.com or leave comments and questions by calling 858-252-7785, call 858-252-7785 and leave a message.