Archive for December, 2010
Its Christmas, and I will be taking a few days off to celebrate and relax with my family and friends. I hope you have a good and restful break, and I will see you in 2011. Until then, I leave you with 10 inspirational quotes for small business owners.
What are you good at? – Figure out which sort of process you’re world-class at and get even better at it. Then, learn the domain… that’s what the internet is for. One of the reasons that super-talented people become entrepreneurs is that they can put their process expertise to work in a world that often undervalues it.
– Seth Godin
Work smart not hard. If all you do is work hard making incremental improvements you are just like a hamster running in a wheel and never really getting anywhere… Far too many people think entrepreneurship is like an attendance award, where you can win just by showing up.
– Markus Frind
Unbeatable – Long ago we abandoned the idea of having a life’s work, a calling; those that still do their work from that sense of calling or vocation, will be unbeatable.
– David duChemin, world & humanitarian photographer, best-selling author
Quality – Poor quality is remembered long after low prices are forgotten.
– Seth Godin
Dreams and Goals – All our dreams can come true, if we have the courage to pursue them
– Walter Elias AKA ‘Walt Disney’
Perseverance – Timing, perseverance, and ten years of trying will eventually make you look like an overnight success
– Biz Stone, co-founder of twitter
Passion – One of the huge mistakes people make is that they try to force an interest on themselves. You don’t choose your passions; your passions choose you.
– Jeff Bezos, Amazon Chairman
Success – I’d rather be a failure at something I love than a success at something I hate
– George Burns
Crisis – When written in Chinese, the word “crisis” is composed of two characters.One represents danger, and the other represents opportunity
– John F. Kennedy
Business – Get Big, Get Niche, or Get Out
– Alex Dare, one of my ex-bosses
Over the last 2 or 3 years, there has been a massive change in what we (as information consumers and users) want. It used to be the mantra that information was king, it was the power of business, it was the currency of control. When in doubt, more information was good, more options, more control. But now… now keeping it simple rocks. The minimum is best. Chunky is choice.
Take web sites – web sites used to be complex – lots of information, lots of options, lots of buttons, lots of things to read and to click. But we as consumers have changed – we don’t like all the text, we don’t want all those options, all the confusing buttons with icons – we just don’t have the time. Now, we want it chunky, we want large colourful buttons with the words of what they do (Login, Logout, Checkout, Register), not buttons with pictures of disks, or doors, or tills. Web sites with small text and lots of options (like Amazon) are vanishing – replaced with groovy Ruby-on-Rails web apps with 4 or 5 words on the page and lots of pictures.
Gartner research recently published a paper saying that the typical information consumer now reads less that 30% of words available to them in printed form, and less than 25% of words on a web site. No doubt people will be skim reading this entry. Which is why it’s important to have section headings in your text (like the one above) to pull skimmers back in.
Make it work for your business
So what does this mean for freelancers and small business owners? Well, if you are in web or product design, the rule of thumb is now to make it all big, colourful, chunky with big buttons. For those of us that work with text (proposals, quotes, specifications and the like), it’s important that to have everything read and understood, we need to boil the words down, reduce them, and just get to the point.
Last week, I talked about trying out Basecamp for freelancing project management, and how disappointed I was with what it could do. Well, I continued my investigations, and I have found two alternatives – both stronger, cheaper and more usable than Basecamp. In fact, I tried out a dozen basecamp alternatives, and two rose to the top like cream over milk.
Now, I am a great fan of automation – I have my servers which deal with emails, document storage/access, customer support and a host of other things. Then I use Freeagent – the wonderful small business cloud based accounts system, which deals with all my accounting needs and automates the process of invoicing, doing Vat returns, year end figures, PAYE, time tracking, billing, expenses and even chases late payers. Both my servers and freeagent are really like having extra staff work for me – they both get on and do their things, keeping my company running whilst I am out generating revenue.
Well now, to add to my collection of indispensible tools, I have started using a cloud based project management application. After the shortcomings of Basecamp, I did a lot more investigation and narrowed the choice down to two products – TeamWorkPM and SkyLiteIT.
TeamworkPM is very much like Basecamp – it allows the setting up of projects, tasks, milestones, resources, and the sharing of documents. Customers can connect to your portal, see the progress, see overdue or upcoming tasks, read comments or documents, and can even subscribe to project feeds (RSS or via email).
Projects can track time, resources, people, statuses and current activities. If you want, it can even track costs (currently in beta testing), and conversations.
It is slicker than Basecamp, cheaper than basecamp, and the team behind the project have published a development roadmap which when complete, would blow Basecamp out of the water. If you are a basecamp user, it even has a direct import of all your basecamp data.
Now, it’s not a complete product – again, it has no direct integration with Microsoft project (would still love to upload a MPP project plan, and software to auto generate tasks or update task dates), and it does not do task level Gantt charts. However, both are listed on the roadmap, so it will become one of the best cloud based project management systems out there.
The other system which came out top of my investigations was SkyLiteIT. Again, compared to basecamp, a very strong player with a multitude of features. In terms of functionality, it has almost the exact same functionality as TeamWorkPM. However, SkyLiteIT also provides accounting functionality.
SkyLiteIT includes the ability to generate quotations, invoices, track profit and loss, do accounting reports on projects. It even has a limited CRM functionality included, allowing you to track activities with contacts.
As with TeamWorkPM – it provides functionality for the setting up of projects, tasks, milestones, resources, and the sharing of documents. Whilst TeamworkPM saves and shares documents of any type, SkyLiteIT is more geared around integration with google docs – so if Google is your thing, this may be the PM solution for you. Again, customers can connect to your portal, see the progress, see overdue or upcoming tasks, and read comments or documents.
Which one I chose… and why
So, after evaluating both products, it was actually a very difficult choice. They are both very good products, both will save a massive amount of time in terms of customer and project management, and will improve communication with customers. But in the end I have picked…. TeamWorkPM.
For me, I have all my invoices and quotations covered by Freeagent (which then does all the VAT and year end processing) so I don’t need SkyLiteIT to do this for me. Also, I use MS office more than GoogleDocs, and whilst SkyLiteIT can store office documents, TeamWorkPM works better with this type of document.
I liked the openness of TeamWorkPM and their product roadmap. Also, there were small things that TeamWorkPM did that SkyLiteIT didn’t (such as multiple resources on one task). I have also given their development team some ideas for further development, and they have come back to me with communication – and I like a company that takes its customers seriously (I am sure that SkyLiteIT would do the same giving a chance)
It was a personal choice, and TeamWorkPM fitted more with what I do, but for others (those that work with GoogleDocs more or need to track invoices/quotes), I am sure SkyLiteIT will be a better fit.
But, at the end of the day, both TeamWorkPM and SkyLiteIT are far better than Basecamp. Both products are recommended, and I suggest that if you do any form of project work with customers (and who doesn’t), then you give one or both of them a try.
So as days get marked off on the advent calendar, and we small business owners/freelancers try to avoid (or attend, depending on your view point) as many Christmas parties as possible with our clients, our thoughts move over to gifts. What to get Aunt Gilda, what would Uncle Bob like this year, and of course, what to get yourself.
If like me, you have been working hard on your business, then why not use the Christmas period to treat yourself with a nice little present from your company – tax free of course. Or if you are even more shrewd, why not pick a present now and get it in the new year sales.
So what presents could a freelancer or small business owner possibly want from their company?!?
Latest Wizz-Bang Device
Admit it, you have been toying with the thought all year of buying that expensive shimmering electric gadget, but have never been able to justify it. Whether it’s an iPAD, another tablet device (such as the Galaxy android tablet which I love the look of), an iPhone, or whatever else you are drawn to, maybe Christmas is the time to treat yourself. Think of a good tax reason why you must have it (research and development, office communication, doing a project for a customer, etc), and let the company treat you to your hearts desire.
An e-book Reader
I talked about ebook readers for small business about a year ago, and how they can help grow your business. Yes, Ok, iPADS and other tablets can be used for reading ebooks, but true ebooks (the Sony-505 or the kindle) are true ebooks, which means that the battery lasts forever (weeks or months so is good for all holidays) and can be read in full direct sunlight – try that on an iPAD. An ebook reader can be purchased both for research and education, and can be argued to be a valid business expense.
What about brushing up on your skills? There are plenty of on-line and off-line teaching groups out there (I can recommend LearningTree here in the UK) that can teach you the latest version of the design products you use, or can teach you new skills. Education is one of those slippery subjects in terms of taxable benefit, so before signing up and having the company pay, check with your accountant first.
Books and Material
A cheaper version of self improvement is through books. Again, there are plenty of books through sites like amazon that teach you new skills in 30 days (such as the Wrox series of books such as learn SQL Server Integration Studio 2010 in 30 days) – and all can be purchased through the company.
What about your computers. I have talked about the latest tablet fad, but what about your desktop, laptops, notebooks and servers – are they in line for an upgrade? With December being a very slow month for commercial sales in computing, there are some terrific deals to be had from Dell, Compaq and HP.
Bigger and Faster of what you have
And what about other items you use in your office or home office – can they be upgraded? As an example, you may have an A4 laser printer, but does it scan and fax?!? If it does, what about buying an additional A3 colour printer – very useful for printing colour brochures, A3 project plans and other large documents. What about storage, portable disk drives, DVD burners etc? What about new chairs, a new desk, an extra monitor?
A Christmas Party
And finally, don’t forget that as a small business you are still entitled to hold Christmas parties – even if you are a one man band.. and the company can pay up to a tax free limit of £150 per person. For me, this year my staff and I (there are not a lot of us) are having our Christmas party on new years eve, in London, at a murder mystery event with sleep over. It will be a good event – thank you my company.
I came to a decision last week that I really needed to get my project management under control. With a number of projects currently on the go at the same time, I found that I was spending more and more time doing project reports, project planning, checking tasks lists, and sending status emails, with less and less time spent on actually doing the work customers were paying for.
So earlier this week, I looked to implement a better Project Management system, and did some surfing and chatting (with other freelancers) to see what was on offer. I was actually surprised to find that there are a lot of products out there to do this, but a lot had to be rejected because either they were way too expensive (I am not paying $7,000 for a simple project control system), too simple (web based spreadsheets of tasks), or the home page was full of broken links when trying to get to the software.
My shopping list for a project control system was fairly simple (I thought)….
- Web based (or hosted by me) allowing people to connect from anywhere
- Project tasks including typical gantt charting, task flow, todo lists
- Document sharing – specifications, designs etc – linked to the project or project steps
- Alerts for new documents, overdue tasks, upcoming tasks etc
- Status updates – for people to update when tasks were complete, how far along etc
- Possible shared calendar – this was a ‘nice to have’ at this stage
In the end, it looked like there were four types of solution:
Microsoft sharepoint for Project Management – Now this was initially a good option for me. Being a Microsoft partner with my own server, I had the Sharepoint 2007 CD ready to go in my desk. I invested a few hours installing and setting up a sharepoint service. But oh boy, was I disappointed. OK, it had document sharing (I already have this) and a shared calendar – but that was it. Where was all the flashy charts, controls etc?!?! The answer was… in the tool box. Sharepoint is bloat ware to the extreme. If I wanted a sharepoint project control system, I had two options – write one or purchase a bolt on (for $2000). Both stopped sharepoint in its tracks.
Other cloud based Project control systems – There are lots of cloud based project management systems out there such as (Smartsheet, Clarizen or GoPlan – that is a small selection, there are hundreds). Now I don’t have a problem with any of these, I imagine a lot of very good, but there is just too many to look at – all have PRO’s and CON’s – how to you pick one? The really good ones also come with a very steep price tag – Liquid seems to do everything, but their price plan is per user per month, so the costs can rocket for more users (including customers). A lot of others seem, well half complete, in beta, or fly-by-night.
Opensource – There are one or two open source project management applications out there. The strongest of these is Redmine, which is a Ruby on Rails opensource PM application with gantt charting, tasks, issue control, etc. It all looks very good, BUT, you need to install this on a box, which means time learning new technology, which takes me away from doing chargeable work – not the point of this exercise. The other option is to use it with a hosting service (a free one is here). I may still look into this in the future, but for now, whilst RedMine is the best opensource out there, it is still not an option.
And so we move onto Basecamp. This is separated out from the other options because it has a very wide following in the freelancer/contractor/small business world. It claims to have over 2million users – but is it any good?!? In a nutshell…. not really.
The problem is – it’s just a web based document sharing and todo manager. All the clever parts of project management (critical paths, planning overruns, time tracking, cost management, impact of delays, etc) are missing. It doesn’t even produce structure to projects or things like gantt charts (an item discussed in much detail in detail by Mike Schinkel).
On the basecamp home page, it talks about a new approach to project management, and as Mike suggest, this new approach is to keep things so simple, as to make it unworkable. For me, it meant double entry of all tasks – once in a traditional project plan (uploaded and shared easily enough in basecamp), but then re-entered as trackable tasks.
I am going to use basecamp for a couple of small projects, just to see how I get on, but already 2 days into using it, I feel trapped in a box just too small for what I want. So as I continue to work, I will keep one eye of the 20 or so decent basecamp alternatives available.
If you were hoping basecamp would solve all your project management issues, sorry, it will help but it won’t be everything you need.
Yesterday I talked about sending quotations to customers in PDF format. Following this blog post, I received a couple of emails asking for a suggestion on how to generate PDF documents without the need to purchase the rather expensive Adobe Acrobat writer software (which costs between $500 and $1,500 depending on your intended use).
I am a big fan of the Cute range of products (including CuteFTP). One of their products is CutePDF, and is a FREE print to PDF driver for windows. If you use an application that can print, installing CutePDF will allow you to print directly to PDF documents – it’s how I generate all my quotations, specifications, etc.
CutePDF does have a paid version with more functionality (add watermark, protect documents, merge PDF documents etc). However, the free version provides all the functionality you need to generate good looking PDF documents.
Its Recommended, and its Free!!
Over the many years that I have worked in IT, both as an employee in a permanent traditional job, and then as a freelancer/self employed consultant, I have seen and used many different forms of quotations. Some are better than others, some have more success than others in winning business, and some are better at reducing problems when work is accepted.
Whilst creating the perfect quotation can be something of a black art (there are numerous books published on the subject), I have taken all the various forms of quotation I have seen and used in the past, and combined then into what I believe is the perfect form of quotation for winning and keeping business.
When you have finished the sales talk, sent all the emails, completed the demos and presentations, the sales quotation is the document that a customer will use to judge whether to give you the business. That’s why it could be the most important document you will produce in business, and why I like to build my quotation from the following parts:
The Cover Letter
Unless the project is very complex, I like to make my quotations 3 pages. The first page is a cover letter, with the company stationary (in soft format so it can be printed, sent as PDF etc). The cover letter gives the following details in 6 separate paragraphs (which ALWAYS fit to 1 page):
- Introduction, thanking them for the opportunity to quote for the business, and giving the quote number
- What I am quoting for – the topic, the project, the location (for multi office etc)
- What is included – what I will be providing in summary – is it a software app (if so, what does it do), consultancy (how many days, doing what), etc
- What is included in detail – how many revisions are provided, is there a beta and final delivery, when could it be delivered, does it include training, documentation, hand over, installation etc (saves confusion on what the quote covers)
- What is not included – detail what the customer needs to supply – information, hardware, software, databases, etc (again, saves confusion on what the quote covers)
- Request for a purchase order number to start work on the delivery
The 2nd page of my quotations is the breakdown. First of all, let’s cover quotation verses estimates. I prefer to send quotations – estimates are too flexible, and gives a sense of unease to customers. The term quotation suggests something more firm. Now for quotations, there are two schools of thought – the overview quotation and the detailed quotation. For an overview, you simply state the price (this project will cost £10,000). I generally prefer the breakdown quotation, with each item listed with the delivery, number of days and the day rate (i.e, Specification production, 6 days at £475 a day, programming, 20 days at £430, etc). Because of the type of services I offer, my quotations generally have between 6 and 8 line items on them, with of course the total price at the end. Using an on-line accounts system like freeagent makes the creation of such quotations a breeze.
The 3rd page is then divided into 2 half pages – the top half is my USP – why the customer should buy from me. In my case, my USP is my quality and service guarantee – which says why a customer should purchase from me, with no risk to them – it’s a very strong sales message, and its on the back of my quote – a good place for it to be seen.
The Terms and Conditions
The final half of the third page is my abridge Terms and Conditions of work. As I have said before, adding 12 pages of full terms and conditions will just scare people off, so the abridged version fits very well to complete my quotations.
And That’s it. That’s all that my quotations contains. Not too long, and not just a quick 1 page quote with no detail (which leads to confusion and problems later on as nobody is sure what you are quoting for, what is being delivered, when, what is included and what is not). If you want to add more, it would not hurt to include a relevant case study as further evidence on why your potential customer should pick you.
The final tip is to have somebody proof read your quotation (or read it three times if you are checking it yourself).
As I say, my 3 page format has been refined over time, and works for me. It’s the perfect balance of information, without becoming a major document for the customer to wade through. For me, it provides a 92% quote to order conversion success rate.
As a freelancer, contractor or small business owner, you have a product or service you sell – right? So how much will it cost me for you to provide the product or service????? No, really – think about it – how much will it cost me?!?
I imagine if you did stop to think about the question, the answer is ‘well depends what you need, how big the job is, what you want?’. Is this the case?!? But, you must have provided this product or service several times (or more) over the past few years – so what is the average cost? Or what about the minimum? The maximum?
The reason I ask about this is that we all suffer from the Tire Kicker enquiries. People who contact you, ask about your product or services, have no budget, no idea of what they want, and are there just to gather information for something which may never happen. These people are all fine and good if they eventually turn into customers, but they can be a great drain on resource and can distract from other enquiries that really have a need you can meet.
Which is where quoting a ballpark figure comes in. From the outset, don’t be scared to give a ballpark… “yes, typically for the creation of a website my customers pay on average around £2000”…. “well, depending on the scope of the project, data projects in the past have ranged between £5,000 and £30,000 – but let’s talk about your requirements and see what we can do….”
Giving a ballpark figure up front sets expectations. People looking for a cheap and cheerful quick fix will quickly go elsewhere (saving you the effort of producing quotations way out of their price league), whereas those with a real need have an idea of the size of typical projects, and can start working on their own finances to see if the project is worth progressing.
One of my pet peeves (when I am a customer) is getting to a price. If I am shopping for a service, it is so rare to see typical prices on web sites. Even when you say your requirements, getting that ballpark figure is like pulling teeth – which is why being happy to provide the ballpark figure early works so well for all concerned.
At the end of January, I carried out my companies year end. Using the small business accounting package (Freeagent), I was able to complete my year end accounts in less than an hour, and passed the figures to my accountant for sign off and submission. Job done! Then once everything was complete in my year end, I did some detailed year end analysis, looking for trends, costs which could be reduced, small profits which could be nurtured in the new financial year, and any other changes that I could make for the better.
Once my analysis was complete, I then did something which I have never done before – I fired 4 customers!
You see, by using the timesheet analysis in Freeagent and comparing the time spent on the customer against the revenue they had brought in, I worked out that these 4 customers were costing me money to support them. The effort of support, answering emails, quoting for new work (work which was never taken up) and other day to day maintenance did not meet the invoices I raised against them. Put it another way, each of these 4 customers was a drain on my company.
Worst than that though – not only were these 4 customers costing me money to support them, but they were actually taking up the most expensive commodity I had – time. Every moment that I spent on their maintenance, was hours and days which I could not spend on new or more profitable customers.
So one at a time, I called up the principle contact for each of the customers, and as I say, I fired them. In a nutshell, I said “Sorry to trouble you, but I have been going through our records and it appears we haven’t done any real business in the last year or so. It also appears we are spending a lot of time providing free maintenance for you in the way of emails and other support, so I regret that we have reached the point we need to terminate our relationship”. Yes, I know – fairly heartless right??
The effect of the conversations was as follows:
One customer got really upset. They was some name calling, they hung up on me, and I have never heard from them again.
The next two customers said they understood, they could see my point. They said that their finances did not allow for any new purchases, so there was nothing they could do. They asked for a hand over meeting (which I provided free of charge), and they were happy to call it a day.
The final customer of the four was shocked. He didn’t realise that his staff called on my company so much, and was very apologetic. He asked for a figure to provide the support to them for a year, and promptly raised a purchase order. They remain a customer – and I now get paid to answer their query emails, to raise quotes and attend meetings with them.
But the point is, by removing the non-profitable customers from my customer pool, my company has gained some 180 hours or so of extra time a year which can be directed to profitable customers and projects, with no impact on my balance sheet. Now you can say that maybe I should have held on to them until a new customer came along to replace them, but then where would the 180 hours come from to allow me to deal with the new customers?
I am also in the process of firing a pet personal project – a project which I spend a little time on yet doesn’t generate any revenue or return. It’s not easy because I have invested time, money and effort into this project, but it’s important not to get emotionally attached to customers or projects. If they are not working. Much better just to cut the ties and move onto something which is more fulfilling, responsive and ultimately profitable.
Don’t you think?