Transcript 076 – Joey Lieber on Leveraging Resources for Growth

Transcript: 076 – Joey Lieber on Leveraging Resources for Growth

Transcript for 076 – Joey Lieber on Leveraging Resources for Growth

Intro

I will be presenting a session called “Let the Website Speak: Crafting More Effective Studio Websites” at the MTNA virtual conference this weekend. That session will go live on Sunday at 11am Eastern and I will be around to answer questions afterward. I hope to see you there!

Today I’m talking to a music teacher and virtual music school owner about how he’s made a shift from thinking about income goals to lifestyle goals and how that impacts the way he manages his personal budget and his time.

Here’s my conversation with Joey Lieber.

Transcript

[00:01:10]

Andrea: Hi Joey. Welcome to the podcast and thank you for being here today. Can you introduce yourself and tell us a bit about what you do.

Joey: Sure. My name is Joey Lieber. I am a musician, a teacher, an educator in general. I am a studio owner. I do a lot of materials on improvisation in jazz and also an owner of the group Online Music Teachers which has around 6,000 music teachers all trying to get better as online teachers. I have a dog named Dizzy. That’s me.

[00:01:39]

Andrea: There you go. And when we talked earlier you have sort of an interesting philosophy to work. You do a lot of different things but there’s sort of a guiding goal behind that. Can you talk to us about that?

Joey: Yeah, so I hate doing things on BadApp because I’m bad at them so with the projects I do I really minimize my expenses to the point where I have flexibility in how much money I need to make to pay my expenses. And then what that means is that if I have something that comes under my radar I can hire out people to do the things I’m really bad at or like I’m not passionate about because I think that there’s something really to be said for working with really incredible people who are really knowledgeable and having them work for their best ability. I’ve hired out graphics. I’ve hired out administrative stuff; help with working out with spreadsheets, things of that nature because it’s just not my thing. My thing is I’m good at jazz piano. I’m good at some of the online stuff. I’m good at big picture, more business stuff, but there are people who are wizards who could type up a full Excel workflow in two minutes and that’s not me. So I think that I’m happy, in the short term, to take a hit in cash though to pay someone who’s really good to do their job who hopefully will make me more money long-term to grow specific projects. And for me, the number one most valuable asset in my life, aside from my family, is time. Time is a non-renewable resource. So the more time I have, the more time I have to do things and explore things and have a good time. To give you kind of an extreme example, if you rewind back four years ago, I had over 65 online students and I was making really good money but I had no time. So what is the point? To share some things I did recently to change that, I literally sold my car and I started using discounted food delivery services that do like coupons and stuff like that to lower my food cost. I started buying in bulk. I started to reduce cost in a way where I had enough flexibility to live the life I want, and now I do that. 

So with my family, there’s two different types of money. There’s necessity money like I need to make this no matter what. I need to make this money. And then there’s growth money. Necessity money, I do teaching and other stuff, and then growth money is me enjoying being my creative musician myself. So necessity money, I had a conversation with my wife and I said “What do you want? What do you need? What do you envision for us?” And I work as hard as I need to make that money. And beyond that, I just have freedom and choice and expression. That’s my philosophy on how I kind of roll.

[00:04:32]

Andrea: Okay. So it sounds like you went through the bare minimum like what do you need to have the maintainable lifestyle, not something that’s so uncomfortable you can only manage it for a month.

Joey: Food, rent, like those types of things, yeah.

Andrea: Those types of things and then working to lower those expenses whether it’s buying in bulk or using discounted grocery services or whatever, and then also taking steps on the other side using that growth money to invest in things that get you more time back. Do you have a break down or do you mind sharing your target income or what percentage is–

Joey: I don’t really have a target income. I have a target lifestyle. The problem with revenue goals is that they don’t take into consideration us. It’s not the only piece of the puzzle. We have time, we have money and we have our health and in terms of our health, your health is the thing that fuels those few other things. In my group, on my Music Teachers, talking to people about health, people working full-time online are struggling right now. Many of them have headaches, neck pain, back pain and eye strain. These are real problems. Just seeing the example of the online income stream, not even getting into teaching in person, which is why it’s really kind of like taking the poisoned apple because our body can only do so much, which is why I learned at some point to really play the long game because that allows me to stay as sane and healthy as possible.

[00:06:12]

Andrea: That’s not managed if you can’t sustain anything else.

Joey: Yeah, that’s right.

Andrea: Yeah. Describe your ideal work week. What’s the kind of balance you’re working towards?

Joey: Sure. So right now I usually work from 8 to 8, Monday to Friday. I also work weekends. It’s really hard to answer that question. Because I’m not teaching as heavily as I used to, I’m just teaching as like just a few lovely students who we have a great process going but the way that my work life exist now could probably be more structured is I wake up in the morning and like what can I do to make a difference in my projects today? That’s it. That’s I operate. In there are a few lessons here or there just because I enjoy them, but it was like how can I make a difference? How can I make an impact today? Sometimes I get really inspired at night so I try to not book things before 10:30.

Andrea: In the morning?

Joey: Yeah. Because of my work situation, I’m really just into like wake up and do something mode.

[00:07:15]

Andrea: It sounds like you maybe have all your time available to you to do that from 8:00 AM to 8:00 PM but you’re not necessarily working in all those hours.

Joey: I have all my time available and I’m always working on something. Work is kind of a loose term because I don’t really think of it as I’m working, like I don’t work anymore. I just do stuff. I wake up each day that I live on this cloud of creative “what can I do.”

[00:07:39]

Andrea: Can you talk about some of your favorite strategies for leveraging your time? You mentioned hiring people.

Joey: Yes. So this is my main strategy for leveraging my time. First of all, it’s very important to keep your personal expenses down. So that’s number one. To give a clear process on how to leverage your time is look at your budget and get really honest with yourself, like really honest. Do I really need to get those meals out on Fridays? Weed out X amount per month from your budget. The way that I leverage my time is I have projects that I create. I myself work on them really hard so usually those work hard weeks would be like 80 to 100 hours of me working really hard when I build it. And then, once just like in our spot and there’s revenue happening, I hire out the different things. But the reason I can do that and I can afford that is because my expenses are so low. That’s key. 

 

Let’s say a teacher right now, for some weird reason got 60 students, and they themselves did all the sales and did all the marketing, and then they have this load and then they just hire their staff to cover the entire thing. The problem is if they need all those 60 students to pay their bills they can’t do that, right? And naturally, people struggle. A lot of teachers are living in a way where they need those students. So now you can see why during my “build” phase I’m working like 100 hours like I’m working crazy. Because I’m building enough revenue when I want to cut it is enough to cover stuff. That is how I do it. I just work crazy hours and then I just slash it and then I keep doing that over and over and over and over again. I have been doing that for a few years, so it takes time.

[00:09:46]

Andrea: What kinds of roles are you hiring out?

Joey: Mostly administrative.

Andrea: Do you hire contractors for that?

Joey: So the website that I suggest that people check out for that is Upwork.com.

Andrea: Do you have any hiring strategies for Upwork? I use it a lot too so I’m curious what you’ve learned about posting jobs, how to get good candidates, how to screen people?

Joey: Yeah, so that’s just where I started. I’ll say this about hiring someone. I always recommend when someone wants to hire someone that they should use Upwork but in general when I hire somebody, the number one thing I look for when I hire somebody is that they’re a good person. That is it because I’ve been burned when you hire based on the skillset and then put who they are next, you can get burned so badly. Skills can be learned but who we are rarely ever changes. So when I’m interviewing somebody, I’m trying to get to know if they will be a team player. Will they be part of this? Will they be easy to work with? Will they be coachable? Will I want to get up and work with that person in the morning because I’m excited to do so? Skills can be learned. Skills can be learned on the job and people are very capable learning very fast but it’s really who they are. That is what I’m looking for and that’s so hard to find. It’s so hard to find. You can go right now and find 10 million good performers or good pianists or skilled people, but like what really makes someone special is who they are and what they bring to that table and that is what I’m hiring. I think to hire someone special you had to find someone special so you’re going to ask questions like “How do you see yourself bring value to this position?” “What attracted you to apply for this job?” None of those are skill-based really. Those are people-based questions and I think that’s kind of how I go about it.

Andrea: Yeah. Questions like that into their thought process and how they will approach their work as opposed to being able to type 75 words per minute or something.

Joey: Yeah, because that’s where it can be make or break or where it can get really bad really fast.

[00:12:08]

Andrea: Yeah. And then, how do you balance on Upwork when you’ve got a range. You’ve got people charging $6/hour and then you’ve got people charging $60/hour, so how do you balance that or what do you think about when you’re hiring?

Joey: Good question. This is fun. When you pay someone money, the only reason someone pays someone money is because they can make them more money. So hiring someone is an investment. The fee that you pay that person is a representation of your investment to make a return, so it’s a mistake to view it on– it’s kind of like investing for your retirement, if you mistake to view it just based off like what the $500 that you contribute is going to grow. So when I hire somebody, is this hourly going to make a return and am I happy with that return? The way I judge that is by the person combined with their skillset. If someone charges $60 an hour but for every $60 you pay them they made you even just $80, that’s an okay return. 

Andrea: Yeah, almost 35%.

Joey: That’s amazing. Virtually, you’re crushing the stock market, so that’s amazing. So that simple math is what guides me to make an investment because I am not at all a greedy money person at all–zero. I’m not like that. I have an accountant who does our processes. I’m like “Listen. What can I do here?” So if the cash flow makes sense and you can afford it on the short term and makes you more money long-term, [00:13:45]. Hiring someone is amazing. It’s a deduction and it makes you money. Hello, it’s the most amazing thing ever. I love hiring people.

[00:13:53]

Andrea: Yeah, like you said it’s an investment. How about technology? People can help leverage your time and technology can help. Are there any tools that you use on the tech side, whether it’s scheduling students and streamlining that process?

Joey: Basically, I use Google Calendar. The reason I like Google Calendar is how it syncs up to like if you use a management software for teaching like Fons which I highly recommend, it integrates. I love having Google and my management software and I love having different calendars categorized by personal, my teaching, my family. I’m really big on my calendar. I’m not really techie as much as I am just practical to serve my purposes.

[00:14:49]

Andrea: How do you keep in touch with your contractors and just make sure things are moving along on your projects that they’re kind of managing day-to-day?

Joey: Email or phone call. I check in and ask how things are going and then I say “Cool. Great. See you next week.”

Andrea: Did they know like are you tracking specific numbers that they know you want an update on?

Joey: With contractors, because the contractors we have some goals that we have together and we try to get done. My goal with any contractors I worked with is just “How can I help you?” I find any time my contract work out it’s like they have a skillset and I exist to be any source of support systems that I can to them, like what do you need to make your job easier? How could I be of support to you? Do you have any questions? That’s it.

[00:15:39]

Andrea: Can you talk about some things that you’ve done or maybe decisions you’ve made to keep your music studio, as an example, just to keep it streamlined and easy to pass off that managerial responsibilities?

Joey: Write down all systems and processes as they have them. For example, a parent contests a policy thing. They contest your 24-hour policy so you send them an email to deal with it. The text of that email is a process that should be saved in a Google Doc. So to save yourself pain later, when you start your company and you’re building all these systems, what do I say here? What do I say here? How do I do it here? What is our policy for this? Write it all down–the processes. And that’s how you can scale a company because when you grow, grow, grow, it becomes guidelines for the person who’s next.

[00:16:36]

Andrea: That’s fantastic advice. And even for the business owner them self, even if they’re not passing it off, I actually started doing that. I’ve done some freelance web design over the years, just occasionally I’ll do a project, and I started doing it every time I build a website for someone. I just start a document, a Google doc that has the hex codes for their website colors and there’s fonts all documented in one place and as I create accounts for them, you know, the passwords go in there and it’s like the brain of your company on paper written out and all the insight you have and for my own business, have referenced it myself like, Oh, I’ve got someone who publishes my podcast, one week she was out so I needed to do it and I went back to my own checklist like how do I publish a podcast and yeah, just to be able to reference that, that checklist is so valuable and saving me so much time and kept me from making a mistake.

Joey: To go into it a little deeper, the reason it matters so much, one of the reasons is because of a very crazy thing that happened called a decision fatigue. So when we encounter a problem or a fire or a situation, we go into problem solving mode and that mode causes burnout. So when you have systems and processes, it removes you from that fight or flight kind of mode. It means that you just look at this piece of paper and you just do it. And so talk about leveraging your time, you can assist and help leverage time because it removes the mental liability of having to figure everything out all the time.

[00:18:11]

Andrea: Are there any tasks that you feel are important for you to maintain control of that you don’t think you should hire out?

Joey: So this is my big learning curve right now. I have hired things like health coaches or like diet coaches, things that require doing things for ourselves. Anything we need to do for ourselves we actually cannot delegate. It literally is impossible. Anything that we need to do for our own mind or for our own selves or for our own wellbeing we can’t delegate. You literally can’t delegate any of that out. Of course, I’m not talking about doctors or things like that. It’s a little bit different, but I’m talking about things like eating correctly. We can get a nutritionist to give us a plan but that’s not really delegation as much as it is seeking consults. I’d gone as far as to have a healthy meal chef to my house but still, the most important thing when it comes to getting results for our own self is showing up and no one can force us to show up. So it’s interesting I think it comes that way for business too. We get like business coaches and stuff like that.

[00:19:32]

Andrea: And ultimately, we’re responsible for ourselves.

Joey: Yeah, and actually let’s not add a really cool bookend on that and let’s talk about piano lessons. The way that I teach a piano lesson is I start every single piano lesson by saying “How was your week and what have you been working on?” And the reason I start it that way is because I live as a teacher in the complete world of the student’s ownership of their process. What have you been working on? What have you been exploring? What have you been checking out? Because the reality is when we as teachers garner that sense of exploration and ownership in a student, we are kind of, in a very sneaky way, coaching them to show up for themselves with just like anything else is where it really kind of the success culture.

[00:20:23]

Andrea: Yeah, I like that. I like that you bring up the idea of outsourcing in areas that aren’t just related to the business directly because there are a lot of things that can add complexity or stress to your life and you might not want to invest the time to become an expert in healthy eating but you can reduce the friction of you needing to eat the healthy food by hiring someone to cook the healthy food for you or having a meal delivery service or something.

Joey: We’re looking at the meal plan online. It could be free. Looking at the meal plan online we have some meals for the whole week. When it comes to showing up for ourselves, which is I’m in the middle of digging this out myself mostly for exercise, but I’m all about reducing friction and actually I reduce a lot of friction for a lot of different banks and I literally had wonderful world-class [00:21:14] delivered straight to my home just to match with us. But like it’s still not the same thing as you just waking up in the morning and say “I’m going to totally kick this thing’s butt.” It’s just not the same thing which is why as a piano teacher I don’t really teach as much as I empower. I don’t really teach songs. I teach students how to teach themselves songs.

So it’s the same thing with coaching. It’s the same thing with business. I’ve done a little bit of consulting and it’s kind of in the vein of when you give a person a fish or give them a fishing pole. And even with the contractors or with people who work for me or people who I mentor, I’m constantly giving out fishing poles all day long.

[00:22:00]

Andrea: Are there any books or resources, podcasts that have impacted you as you just try to work smarter, more efficiently?

Joey: Unfortunately not. Unfortunately, I’m a product of failure and so I’m a 3D example of what it means to work really hard and fail as often as possible and learn from it all, and the failure was absolutely brutal but the failure allows me to tell you all of these things I’m telling you right now. And actually, now, let’s try and travel through time for a second. This can be really cool.

I learned, I have been in business coaching and all those stuff, most of the things that I’m saying right now in this podcast, people are probably not going to learn by hearing them and they may not understand me the first time, what is going to happen is all of the things that I have shared to people, they’re going to listen to them and they’re just going to just sit there in the back of their head and then they’re going to go through life and they may try a few of them. But what’s really going to happen for the majority of people is they’re going to fail to learn them. And I think that when people know that that’s how it’s supposed to happen, then I think that it becomes a very easy process.

Even when I teach a piano lesson, my students get so used to failure and learning immediately, they always make certain amounts of progress because the best way to learn is through a little bit of coached failure which is what this conversation is. I’m getting all these tidbits, take them, fail with them, and then go to the moon.

[00:23:32]

Andrea: And what goals are you working towards right now? Are there any things on your radar for the next year?

Joey: Yeah, mostly my health because I’m really trying to drop corona weight. You know what? I’m really happy with all my work stuff. Right now, all my goals are where they need to be with my work. I’m really down in health and family right now so what that looks like is I’m trying to get my diet and my exercise dialed in. I’m trying to make that everything that my family needs to make sure that they have and just enjoy life. That’s it.

[00:24:11]

Andrea: And where can listeners get in touch with you or follow what you’re up to?

Joey: The easiest way to do that is to join my Facebook group Online Music Teachers.

[00:24:20]

Andrea: Alright, we’ll put the link. Okay Joey, well thank you so much for being here today.

Joey: Rock on.

[00:24:28] [End of Interview]

 

Recap

Joey has a two-part strategy to the way he manages his resources. There’s a money saving component and then a time leveraging component.

I think Joey’s really smart to focus his attention on lowering his monthly expenses. 

It’s easy to get caught up in short-term, one-time money-saving strategies. Sometimes these don’t take a lot of time but they also have tiny payoffs, like saving a $1 off soap by using a coupon. Other times the payoffs are more significant and also require a bit more time – we might spend several hours scouring the internet for a great deal on a new computer or cell phone and save a couple hundred dollars.

But these kinds of savings strategies only impact our finances when we’re actively pursuing them. I like Joey’s approach of putting his money-saving energy towards the recurring monthly expenses, because those pay off month after month, often with less effort.

Say we’re apartment- or house-shopping and we find two great options. The only notable difference is that one has an adequate, but slightly worn kitchen, while the other has a freshly-updated Instagram-ready home chef’s dream kitchen. And a price tag that’s $200/mo higher.

This decision impacts how much it costs on a monthly basis just to maintain our lifestyle and is going to have a much greater impact on our long-term financial picture.

If you’re in a season of life where you’re trying to START something – maybe a new new studio, or EXPAND something or maybe you want to QUIT something – like teaching on weekends or that unrelated part-time job, or the physically unsustainable teaching schedule – whatever the case may be…consider what it costs to maintain your lifestyle.

Maybe it’s worth giving up that nice kitchen, or the spare bedroom, or delay the new car, or even – don’t kill me for saying this – postpone getting a pet for a while longer to keep those monthly expenses low and make it possible to pursue some of these big dreams.

The more it costs to maintain our lifestyle, the more our money is spoken for. And the less flexibility we have to take on entrepreneurial opportunities.

 

Now this is only one side of the equation. The other part is leveraging time, and with that, money.

This side of the equation is usually more uncomfortable because there’s risk involved.

When we decide to rent the cheaper apartment, we know we’ll spend $200 less/month. But when we decide to put that $200 into outsourcing some work there’s not always a guarantee we’ll get a positive return.

Joey’s strategy is to focus his time on the things only he can do – setting up the business system or project – and then hire out the things that aren’t so aligned with his skillset or the things someone else could do more efficiently and, likely, generate a greater return for his money and time.

I think we all understand how this concept works in theory, but it can still be surprisingly difficult to let go of our hard-earned cash and pull the trigger on outsourced services, whether they’re business admin help, software to automate processes, lawn mowing, or meal delivery services.

 

I wanna do some quick math to explore this from another angle. Rather than looking at the cost of outsourcing, I’d like to look at the costs of doing the work ourselves.

Let’s take Joey’s example of the $60/hr contractor who does work that generates $80/hr in business income.

If we were to do that hour of work ourselves, we’d earn all $80 ourselves. But we would also be responsible for the associated taxes. 

For this example. let’s JUST consider the 15.3% SE taxes in the American tax system. That’s roughly $12 in SE taxes for the $80 of income.

So, we spent an hour doing work and, after taxes, earned $68 for that hour.

Now let’s say we outsource that work.

From the $80 we earned, $60 goes to the contractor. This is a tax-deductible business expense, so we’re left to pay taxes only on the $20 profit.

At 15.3%, that’s roughly $3 in taxes, leaving us with an after-tax profit of $17 for that hour of work.

We still have that hour available to us and we earned $17 for outsourcing that work.

 

If we value our time and our contractors’ time equally at $60/hr, there’s an only $8/hr return on our time, whereas there’s a $17/hr return on our contractor’s time.

To flip this scenario around – it costs $12 an hour in taxes for US to do the work, but it only costs $3/hr in taxes to hire the contractor.

How’s that for some trippy money mindset math?

 

Trying to balance the two sides of this money and time management equation can sometimes feel like we’re contradicting and competing against ourselves. We’re simultaneously trying to minimize expenses AND keep an open attitude toward spending money on outsourced services and labor.

You might find it easier to operate on one side of the equation than the other. For me, I notice that when I’m looking at my business from a high level, I can pretty easily see the payoff of outsourcing, but in times when I’m caught up in the weeds, I am more likely to question the value.

Conversations like this one with Joey are a great reminder to step back and take a look at the big picture and see where I might need to rebalance.

 

If you enjoyed this topic, we explored some related financial themes in Episode 071 with Ashwin Kotian about maximizing revenue per square foot for his music school and in Episode 057 with Lauren Bateman about how she leveraged loans to build her business.

Topics like these always challenge me to think more strategically about my finances in a way that I think is really fun.

I’ll link to all of those in the show notes for this episode at MusicStudioStartup.com/episode076

That’s all for today. Thanks for listening! I’ll be back next week.

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