Entrepreneurs, by definition, try new things quite a lot. Taking a new path into an established market worked to get Sigler his first Big Five publishing contract with Crown/Random House, and taking a chance on publishing THE ROOKIE in hardcover was the first step towards what is now Empty Set.
Is there any way to gauge how risky the new things might be? I’m not sure, but I think it’s certainly worth considering before plunging right in.
I recently had this discussion with John Mierau, himself hardcore, never-say-die, how-many-ways-can-I-try kind of creator. He was game to let me share some of what we chatted about here.
Risk management could be endless task, but we considered a few basics:
First, figure out your end game.
What is the problem you were trying to solve for you with the task in question? If you’re thinking of writing a work for hire, creating a spec screenplay, or even building a better soundproof recording space, there’s a ton of work, and scheduling, or editing, and so on.
I’m not sassily asking “what were you thinking???” I’m genuinely asking what is making you consider the task at hand. Because you need/want something new? Because you see a bigger platform for your voice? Because you hope it will raise your profile somehow? Because something similar worked for someone you know? Figuring out what you’ll get out of it other than money (if there’s money on the table) will help you figure out your overall compensation per hour, and therefore what you need to make it work. Because sometimes you climb a mountain because it’s there, but sometimes you climb it for $150 per hour.
Second: what are the hours in your day are worth monetarily?
It’s a tough question, I know. But worth asking: do you have an hourly wage at the day job? (If you have a day job like I do.) Do you have any number of hours in the day that are priceless (perhaps between 6:00pm and when your kids go to bed?) If you don’t have a general figure for your hourly wage for a day job, then take the hours you sleep and the priceless hours, and take them away from your 24 hour total. You’ll end up with something around 12 or so hours a day you *could* work. Subtract any obligatory hours (your day job, your chores or errands, your personal work, etc.) That would leave you probably about 6 to 10 hours per week you *could* be doing the task you’re considering. What compensation makes it worth giving those hours up?
I know that I will do a lot of things I think are valuable for little or no money, but I also know that I will do almost anything work-related and ethical for $150 per hour. You want me to listen to six hours of teleconferences to make sure you’re not being unfairly represented or unknowingly assigned work (which is what I did today)? At $150 an hour, I would have happily done that. In reality, I did it for less than that because that client also commits to a minimum of 20 hours of work a week for me.
Last: How much can you process-ize this task?
Can you standardize pieces of it so you’re not re-inventing the wheel each time? If so, since time is money, you can make less money doing whatever your task is because you’ll spend less time doing it.
Assessing your situation
Once you have answers to all of those types of questions, your ball-park hourly rate might be somewhere between $25 USD and $75 USD, because for most tasks, some of the work administrative and some is higher level. So you could take the mean of $50 per hour.
Then you’ll need to consider non-cash compensation. Is there publicity, or strategic connections being built, or networking that would be immediately value adding for you? Those things could be beneficial for you, so are worth considering if an option.
Last, figure out if the cost of meeting your objective is worth the investment for you. So often, entrepreneurs want to try everything to get the word out about their stuff. Evaluating the cost of trying everything will help keep it in perspective.
Good luck out there!