Archive for May, 2010

In a world where there is a lot of competition to be noticed, or where there are a lot of other companies or individuals doing similar work to you, it is very easy to be lost in the crush or be overlooked in favour of a competitor.  I have found that one of the most professional things that individuals or small business can do to elevate themselves above the crowd is through documentation.

Yes, we all have nice web sites, and yes, our skills and products are just what the potential customer needs, but who is telling this to the customer after we have walked away or they are busy deciding which way to go?   That’s where documentation comes in, and when selling yourself or your products/services, nothing does this better than a great brochure.

When you have a good story to tell, I am a firm believer that leaving a follow up story in the form of an impressive brochure is strong ammunition for a sale.  Documentation boosts your profile, is always handy for telling people what you do, and is a wonderful tool for networking.  Even if you are a contractor sent to interviews by agencies, leaving a small brochure with some more information (more references, a picture of yourself, more details of your skills) can land you that role.

It used to be that the thought of documentation conjured up images of wasted effort, large price tags, and stocks of paper floating around unused.  Now, it could not be easier to create a brochure without any outside assistance, and they can be printed on demand at home.

I am a great fan of Microsoft Publisher – if you have never used it, it comes with Microsoft office (professional edition, it will be there on the Office START menu in windows), and is the Microsoft Desktop Publishing solution.  But there are other good products on the Mac architecture (Swift Publisher) and lots of Freebie tools such as PagePlus SE or Scribus.

The reason I like Publisher so much, is because it comes crammed with templates for all kinds of nicely laid out documents which you can customise with your own graphics, text and logos.  In a matter of minutes, you will have sales collateral worth handing out.

In the 2^nd party of this two part post, I will share with you my brochure design.

When ever I go out with friends, family or to a party – there is always two questions/phrases that I hear more than any other.  The first starts “You know about computers, why…….???” followed by a complex technical situation they hope I can fix over a beer.   The other more interesting question is, “So, I am thinking of contracting/freelancing, but don’t know if I have the right skills”.

This is the easy one to answer, because the nice people who conduct surveys and market research compile all kinds of skills in demands tables which I can point people at.   If you are interested, for the UK, the site I recommend is http://www.itjobswatch.co.uk/

This shows the demand for different skill sets over a period of time (month, quarter or year) for either contract or permanent positions.  You can easily see if your skills are in demand, and more importantly, what the trend is and where you could be plugging your skills gaps.  For those with money on their minds, it also shows typical day/salary rates.

However, for freelancers and contractors in IT, using your small business to gain training through the company and making the expense tax deductible seems the obvious way to boost you skill set and thus to increase your potential future earnings.   

Most business owners and managers think that training costs aimed at improving skills or business profits automatically qualify for tax relief, but that is not necessarily the case. The complexities of the UK tax system mean that the availability of tax relief depends on who is paying for the training and what the training is designed to achieve.

For employees who pay for their own training, tax relief will not normally be given, even if the sole purpose of the training is to make them better able to do their job. If an employee needs training as a necessity to carry out their job (so that the training is ‘wholly, exclusively and necessarily incurred’) then tax relief will be given. The key word here is ‘necessarily’ as unless the training is necessary, its cost is not deductible. Any training designed merely to enable an employee to carry out a new job does not qualify for tax relief.

For the self-employed, the criteria for determining if training expenses are allowable are somewhat different. Here, training expenses will be deductible for tax purposes if they are incurred ‘wholly and exclusively’ for the purposes of the trade, which is a much more liberal definition than that which applies for employees. However, a further consideration must be taken into account, which is whether the training is of the nature of an expense or an investment. If the latter (for example, the acquisition of know-how to enable new products to be developed) then, strictly, the cost is a capital item and tax relief should be claimed by way of capital allowances.

If you have a need to incur substantial training expenses, it is sensible to take professional advice on how best to structure the expenditure.

I strongly believe that the recession is not over, and that the pain we all suffered is about to come back during the summer and take a big old bite out of small businesses again.  If I am right, all businesses, contractors and freelancers are once again going to have to tighten our belts, and use new ways to find new customers as work starts to dry up.

But finding new work, selling products and landing new contracts has two different stories that must be told.   Yes, there is the convincing ‘why you should buy’ argument where you sell your skills, your services and your products.  But I also believe there is another part of the sales process, the reason why ‘you can’t’.   Let me explain….

I have recently been on holiday, and coming back from a nice relaxing week of scuba diving, I checked into the airport for the return flight home, and because my scuba equipment was still a little damp, my baggage was over the weight allowance.  It was actually 5 pounds over.   This small 5 pounds cost me over 80 euros on this particular Thomas Cook flight.  Wow, that’s a lot.

But as I sat there arguing the cost of this extra baggage weight with the Thomas Cook rep, in the next counter over, a family of 6 checked in.  Every single member of the family was obese – I mean really morbidly obese.   So there was I, your average Joe trying to get my extra 5 pounds in without the extra cost, and here was a single family happily checking in a few extra hundred pounds of body fat at no extra cost.   Where was the fairness in that?

The problem I then had is that the check-in girl had limited training.  She had been trained that extra baggage had a charge, but had not been trained to answer why body fat did not carry an additional charge.  I actually suggested to her that it would be cheaper if I ate my wetsuit, whilst the transport weight would be the same.  She wasn’t trained to answer my questions and didn’t have the common sense to respond to my logic.

And that’s the problem we are all going to have to face.  As money gets tighter, there will be people who raise the questions – why cant it be cheaper, why cant they have a discount, why cant they have the same offer as somebody got last year, and why cant you do it for nothing.   Unlike the check-in girl and the Thomas Cook baggage policy, if we want to continue to get customers and sales, we will all need good answers.

As IT contractors or freelancers, one of the unhappy facts that we soon get used to is that we will always have one or two customers where they are never happy with the products or services we supply. That may sound a little unfair to customers, but as a rule of thumb, regardless of whether you provide IT services, write software, develop web sites, documentation or consultancy, everybody wants it to do more, something different, work in a different way, interface with something else, and with no impact to the timescales or cost.

Now with the exception of ordering a meal at a restaurant (where you may order a side dish, hold the veg or ask for a different sauce), I can’t think of anything else where customers expect that level of customisation and change during the development process.

You don’t see Joe Blogs walking into his local Ford dealership and saying, “yes, the 4×4 looks great, but can you make it a little taller, add two more wheels and allow it to be hooked up to my 28 inch plasma television”. Or how about Mrs Smith going to her local supermarket and saying “I want a packet of cornflakes, but I want them to be in a wooden box and to have the instructions in Russian”. So why do people expect so much from Computer Systems or expect to buy a standard system and then tweak it so much?

The reason customers expect this level of customisation or change is..… well, to be honest, I don’t know. But, the solution to this situation is clear contracts, clear specifications and most importantly, the customers/users signature on the paperwork. Now, this won’t get you over the really challenging person who insists the product be exact to meet all their needs, but at least it gives you a fighting chance. For software developers, a clear specification of what the software or service will do is a must. For writers and web designers, you really do need to have in writing, a number of reiterations that are allowed before changes become chargeable.

For my own peace of mind, everything I do gets a specification (which of course I charge to produce) which I insist is signed before any work starts. And I always include a standard item of text which I include in bold to make sure it is read at the end of the introduction which I offer for you to copy and paste into your own contracts/specs. This text has saved me from arguments and free changes a number of times….

It should be noted that the details provided in this specification, including any example screen displays, data held and methods of processing are a guide to the development of the solution. It should be noted that some screen layouts may vary from those shown in this specification due to coding restrictions, and some functionality may change very slightly during development. Where this occurs, every effort will be made to detail the changes back to the interested parties before the software is delivered.

This specification provides a guide to the functionality to be developed. It should not be assumed that if functionality is not listed in this specification, that it will be included in the final delivery.

When I was working on the ‘other side of the fence’, as the head of software development for a software company, one of my tasks was the recruitment and selection of contractors and freelancers.  Over the years, I have lost count of the number of contractors I have used.

During the selection process, I used to see dozens and dozens of CVs for each role, and I was shocked by how bad some CVs were.   The freelancer or contractor may have had the skills, they may have had the attitude, but their CV went straight into the rejected CV storage device (the bin) because they were using a CV with a style as if they were looking for a perminant job.

So here my top tips for producing a Killer contractor or freelancers CV for securing that killer contract:

1. Multiple CVs. If you have multiple skills and possible multiple jobs that you can be doing, you need a CV that highlights the skill set for each different position. Myself, I have one CV for Business Analyst roles, one for software development, and one for Business Intelligence (data warehouse) roles. The only difference between them is the order that my skills are listed (most relevant for each part at the top, the introduction (see step 2) and the experience highlighted for each type of job. Don’t go overboard – you don’t need more than 2 or 3 versions of your CV.
2. An introduction. At the top of your CV include a paragraph describing yourself, your skills, experience, work style and goals. Make this paragraph in the 3rd person such as “Fred Blogs offers over 16 years of IT experience, with skills ranging from SQL Server to juggling…” etc. The point is that it acts as an introduction to anybody reading the CV, and most agencies generate one if it’s not already there for prospective employers to read. But if you do it, it makes your CV easier to use for the agency (therefore more likely to be passed on) and you get to select the words used.
3. A summary of your experience. Now, when you first created your CV after leaving education, I bet you listed all the schools you attended, all your exam results etc such as “Maths O’Level B, English O’Level A, etc”. Well, unless this is your very 1st CV, employers are more concerned on your experience. Therefore your qualifications should be as short as possible (such as “8 o’levels (English, Maths, etc)”) and then create two other lists, one showing technical knowledge and level (SQL Server: Expert, Oracle:Expert, ASP.NET:Expert,  Javascript:Intermediate,  HTML:Novice) etc, and then another summary list of types of system/work you have worked on (so mine says “Systems worked On: Electronic Document Management, Health Systems, etc, etc, etc)
4. Detailed Experience – the bulk of your CV. For each previous job or contract (most recent first), show the company name, dates you worked for them, position held, and then a summary of the work/duties
5. References. Now, here I really recommend using LinkedIn.  If you have joined LinkedIn and have recommendations, you can cut and past the reference text from the Linkedin references and place the text with the name of the person, and date comments left at the end of your CV. For completeness, I also include the URL of my linkedin profile, so that if they want to see more detail on me, they can follow the link and read more references.
6. Don’t include the social stuff. Whenpeople are recruiting permanent staff, one of the things they look for is signs that you will fit in with the team on a social level.  For contractors and freelancers, all they care about is that you can do the job, your availability and your rate.  Therefore for your contracting and freelancing CV, you really don’t need sections detailing your marital status, if you drive,  your hobbies and interests etc – no one really cares.

Once you have these sections, triple check your CV for spelling and grammar, and make sure it does not go over 4 pages. If it does, remove some of the older jobs or summarise some of the text. The image on the top right is the front page of my CV, and shows the block of introduction text, my name, address, contact details, qualifications, experience summary, skills list – all on the first page.

Let me run some names past you……  Hoover – what do you think of?  Cleaning the floor?  What about Frisbee?  Are you thinking about playing catch in the park?  How about a nice Coke?  Ready for a drink?  Kleenex?  What do you think about?  If I was to ask you to Google it – what would you do?

All of these are classic examples of products which are or were brand leaders, which we now view as the name for the generic product – regardless of the manufacturer.   There are lots of Hoovers, even if they are manufactured by Dyson or Panasonic.  A pepsi is viewed as a Coke.  You can google things in Microsoft Bling, and Frisbee is no longer making Frisbees – a company in china is.

It’s important to be first – first is where the money is, where the recognition is, and where the returns of more sales over time are.  When the original hoover came out, there was no competition, so everybody bought their hoover from… Hoover.

Now what has this to do with the iPhone App store?  Well, when the app store was first introduced, lots of people reported making thousands and even millions from applications that people downloaded and paid for.  Why?  Well the app store was new, and the content was limited.  But now, the app store has thousands upon thousands of applications covering every possible handheld application use.  Think of a possible use, and there will be an application to cover it – and most of them are now free.

I know 5 or 6 people who are still gazing into the stars, and dreaming of the day when they place their iPhone app on the store, and it starts generating money for them.  Yes, it may happen, but the people who got there first have already got the downloads, so their apps appear at the top of the list, and the new products are right at the bottom, not selling or at least not selling sufficient numbers to cover the cost of the initial development.  The story is going to be the same with the iPAD – anybody thinking they will be developing the killer money making life changing app is going to be disappointed.

Being 1^st with a new product, service or benefit is so important.  But trying to do it via the iPhone app store is not the way to go.

So you have your products and services – check.  You know your price structure – check.  You have your web site in place – check.   Now who are your potential customers?  Who are you targeting?

There are any number of right answers for this, depending on your product, service, offering and competition.  But there are two very wrong answers to this question:

Everyone
Take a product we can all relate to – shoes.   Almost everyone needs shoes, but clearly, a target market place of Everyone is too vast to communicate to.  When you cast your net as wide as needed to capture everybody, you end up capturing very little, as your message is too dilated, distant and ends up relating to nobody.  Even shoe shops know this, which is why you have premium shoe shops, discount shoe shops, shops just for kids, etc.

A subset of a subset of a subset
On the other hand, another wrong answer is a sub-set of too many subsets.  Lets take an example where you develop a piece of software to track running distances for fitness, but because of technical knowledge, it only runs on Windows Mobile software, and has a fixed screen resolution of 480 x 300, and only works in English.  Well yes, you have a nice specific target market, but Windows Mobile devices are loosing a lot of ground to iPhone and Android devices, so the markets already small.  Now for users of these devices, you are only interested in runners (say 4% of Windows phone users), and they have to be in an English speaking country (say 10% of the 4%), and have a high resolution screen (say 20% of these).  The result is your target is now just 800 devices of every 1million windows mobile phones in the world.  Of this, you may hope to sell to 2% of the users, which is a sale quantity of 16 per 1million users.

A lot of very good marketing books talk about knowing your market, and when you start looking at target markets for a service, its can be a very complex task to find the right balance of finding the right segment to have potential customers, not too large so that you can target them effectively (through a web site or material that pulls them in), but leaves sufficient scope to make sales profitable.

As I type this, I am one week away from the first of my family holidays for 2010, although with the articles I already have scheduled, I will have been back a week by the time anybody reads this.   When I first started freelancing and contracting, I both hated and loved holidays.    I loved the break from all the coding and supporting of customers, I loved the relaxation, but at the same time I hated the fact that every day I was lying by the pool, I was loosing money.

Whilst friends and family who worked in regular jobs were paid to sit by the pool, all I could think about was how my day rate was being wasted, how unchangeable I was, and of course, whether I was missing out on support calls from customers and loosing business because sales calls were not being answered.

It’s taken me a good 4 or 5 years of contracting to change this view of holidays as lost revenue.   Whilst I still have occasional panics about support issues, missed sales calls, and the odd twinge about not earning, I take a more relaxed view thanks to some forward planning and mental shifts:

• When you work out you day rate, factor in 20 or so days of non-working time, then your day rate is already based around taking those holidays
• If you have live or active customers, let them know as soon as possible when you are away
• Try to have sales and support emails sent to your mobile phone, so you can check them whilst on holiday
• Only check your emails twice a day – after all, you are on holiday
• If you don’t use one already, invest in a call answering service for your phone line – then sales calls will be emailed to you, and you can call them back
• For bigger customers, find sub-contractors you can trust who can take care of urgent support issues
• Use the holiday to catch up on your business reading – an eBook is great for this as your partner does not need to know you are ‘still working’ whilst on holiday
• Use the holiday pool time to do some business planning – think about company direction, marketing, service and product development
• Take a pad of paper and a pen on holiday ready to jot down all your new business ideas
• When you tell customers your unavailable days, add 1 or 2 extra days to allow for catch up and to put out any fires which started whilst you were away

One of the themes I like to discuss is the creation of revenue generating assets – web sites, tools, products and services which can generate revenue without my involvement, that will generate revenue whilst I sleep, or whilst I am busy working on other projects.   Its one of the best ways to grow a contracting, consulting or freelance business.

Yesterday I covered the creation of assets through a plug and play technique using open source solutions.  However, this will only get you so far – technical development of some form will be required, and if you do not have the skills yourself, or the resource is cheaper elsewhere, then the following sites are great for finding other coders, writers, testers, graphic designers.

99designs.com
99 designs is a graphical resource site, with a difference. If you need any graphical work done, logos designed, web pages, etc, you post a contest with a prize (say $200) and people submit their entries. You pick from the graphics you like, the winner gets the prize, you get the artwork. With this, you get many, many choices of artwork to pick from. Most, of a very high standard of quality.

rentacoder
Where technical creation work is required (build a web site, create an application, build some java code, or whatever), rentacoder allows you to create an advert for the work and coders can bid for the work. All development, payment and communication is done via the site. Typically, your coder will be from India or Asia (where the rates are so cheap), so the quality can be a little so-so, but make your requirements as clear as possible (I use specs with clear screen shots, what the errors must say, etc) and you will get products developed dirt cheap.

utest.com
Works the same as rentacoder (see above), but this is for testers. It can be web testers, app testers, security testers, process testers etc. You can use both rentacoder for the development, and the testers to test the product, and the two can communicate to ensure a good product. Tends to be a little on the pricey side compared to the development, but still a lot cheaper than taking on a person full time.

Get A Freelancer
Again, as with rent a tester and rent a coder, this works for any other freelance work you may require to gain assistance or outsource work to. Useful for fidning people to create manuals, user guides, marketing material, etc.

People Per Hour
The same as Get a freelancer, allows you to advertise for assistance on projects, and receive bids. Covers anything and everything technical, from specifications, design, production, coding, testing and delivery.

Theme Forest
If you are looking to create a new web site (blog, application, control area), this is a good place to start, with thousands of pretty and functional web site templates from around $20USD. If there is one that you want tweaking, or one that you want created to meet your needs, these can be requested as well.

Do you know what you hourly or daily cost is?  By that, I mean have you calculated what you need to charge per hour or day so that come the time to invoice, you make a profit rather than a loss?  The calculation is fairly easy to do – add up all your freelancing or contracting expenses (including cash expenses, taxes, corporation taxes, PAYE taxes, national insurance, salaries etc) for a month or year, and divide by the number of workable days in the time period.  Don’t forget to remove weekends, bank holidays and personal holiday days.  That is your daily cost.  Divide this number by 7.5 or 8, and you get your hourly cost.

In the UK, the number of workable days should be around 232 days a year, calculated as 52 weeks multiplied by 5 days (equals 260) minus 8 public holidays minus 20 personal holidays.

Now this daily or hourly cost has two uses.

Firstly, it allows you to decide if you can afford to accept a contract or a freelance assignment.  If the rate is below your cost, you will lose money, although at a lot slower rate than if you are not working at all.

The other hidden advantage is to look at all the activities you do every day, and work out if it is worth you doing them.  For every task that you perform, whether it’s doing some cleaning, documentation, development, design, project management, accounting or so on, there will be somebody else who can do that task.   If you find yourself overworked, and there is somebody else who can do the task and they charge less than your cost rate (and you have other chargeable work to be getting on with), it actually makes more sense to pay that somebody else to do that task.

Clearly, you will want to vet that person, and ensure that the quality they produce is up to the quality that you would want; otherwise this can lead you to correcting the problem thus removing the benefit.

Let me give you a real world example.   I could clean my own house for a couple of hours every other day.  It would cost me nothing to do so.  But if my hourly rate works out at say £40 an hour, and it costs me £7 an hour for a cleaner, I actually make a £33 an hour saving to have the cleaner clean the house (plus they would probably do a better job).

So it’s time to have a look at your costs, and work out if you can boost profits by outsourcing the tasks which somebody else can do cheaper and better.