Archive for April, 2011
Don’t you wish there was a BIG MANUAL called “Everything you ever need to know about running your freelance or small business”? It would be huge, but it would cover all the sections – from the first chapters on starting your business, through to growing the business, finding customers, through to eventual selling it off (taking the cash and running)? Of course there isn’t such a book – but there are numerous books which when combined, can cover much of what you need to know.
One such book is the 30 day MBA. Now I am not personally sold on the idea of an MBA courses as a concept. I am not sure you can attend a university, do an MBA course and come out ready to run any sort of business. BUT, MBAs are a really good foundation for business knowledge. The 30 Day MBA by Guy Cornwall takes what is covered in these university courses, and boils it down into bite sized chunks which anybody can understand.
It covers most of the topics you need to know to run any form of business. Whether you are a contractor, a freelancer or (like me) run a small business, this book will cover a lot of the subjects you need to know. Finance (how balance sheets work, what is a P&L report, how to use an aged debt report), sales, marketing (advertising, customer retention, etc), growth, legals – everything is given a good foundation.
Even for seasoned freelancers and small business owners/managers, this book is well worth a read as it refreshes ideas and knowledge which can help you grow your business. In fact, sometimes it makes sense to read chapters with your real business data to hand – it will help pull everything together.
If you want to get a handle on your business or want to get some ideas for driving it forward, this book is recommended.
Greed, for lack of a better word, is good. Greed is right. Greed works. Greed clarifies, cuts through, and captures, the essence of the evolutionary spirit. Greed, in all of its forms; greed for life, for money, for love, knowledge, has marked the upward surge of mankind and greed, you mark my words, will not only save Teldar Paper, but that other malfunctioning corporation called the U.S.A
Gordon Gecko, from the film Wall Street, 1987
Well Gordon Gecko may not have thought so, but Greed can be harmful. It can hurt you, it can hurt your family, your working relationships and your business. In my business mentoring group, one of the questions asked is ‘when is enough, enough?’. When are you earning enough? When do you have enough cash put by? When do you have enough customers, enough work, and enough revenue?
I want to suggest that Greed is not good. In fact, I would suggest it is far better for everybody not to be greedy, and to share the wealth. My personal anti-greedy tips are:
- If you need new or better tools to complete a job, don’t be afraid to spend the money. Better to have the right tools and make a little less money, than for the project to fail and not have any money at all.
- If you need help, hire help, and spread the wealth. Don’t be afraid of reduced revenue by having to employ others to help you out.
- Don’t take on too much work. Yes, it may be nice to be busy, but you need time out to relax, unwind, recharge and spend time with friends and family.
- Don’t be a mad cheap fool. If all your quotes are being accepted with no haggle, you are charging too little. Don’t be too greedy by accepting too much work and not being able to deliver.
- Don’t be a greedy Prima Donna – if you are too greedy with your rates, customers will go elsewhere. .
- Don’t be greedy with your praise – if people have helped you out, acknowledge their help with an email, a call or even a small gift. They will be twice as likely to help you on the next project
- Don’t be greedy with the tasks. You can’t do everything and shouldn’t be doing everything. Share the work with others to give you more time for what you need to concentrate on.
- Do review your situation whenever time allows and acknowledge any greedy impulses. Too much of anything (food, work or money) will lead to failure in one form or another
- Do enjoy the small things. Don’t be so greedy for work, customers and money that you don’t stop and enjoy your life – the thing you are ultimately working for.
Meetings – don’t we just hate them?!? The travel, the preparation, the setting up of projectors, the forgetting of the crucial cables. Meetings can seriously eat into a freelancer or small business schedule. But they are a necessity to good business and working as a team.
But why not try a virtual meeting? Yes, it may not have the tactile feel of a face to face chat or a huddle over a project plan, but it also means that that you can do it in the comfort of your own chair, or in your underwear, or even in the bath.
So here are two FREE ways of holding virtual meetings:
From its original version, the Skype system continues to add more and more functionality. In addition to the voice chat and text chat, Skype now allows free video conferencing and computer screen sharing. There is a downside in that to screen share, you do need to have everybody in a video call first, which relies on a web cam and a FAST internet connection, but once connected, screen sharing works very well. The other plus side is that with Skype, everything is included – voice, face to face and the screen share – so nothing else is needed for a great virtual meeting. Of course, everybody in the meeting needs to be a registered skype user. Skype provides a useful ‘how to share screens on skype’ tutorial for further information.
The alternative to skype that I would recommend is a FREE service called Mikogo. This is a web based screen sharing and virtual meeting system. The service does require the download of a small 1.6Mb application (as does most paid for virtual meeting products), but this adds a pop-of menu of features including whiteboard, annotations, freezing screen (so you can do stuff without others seeing), file transfer, participant pointers (you can see what your audience are talking about via hovering coloured dots) and a whole host of other features. To invite others to a meeting, you just email them a web URL (shortcut) to a Mikogo virtual meeting room, and they enter a room code, password and their name to participate in the meeting.
Mikogo also has a dial in number for voice communication (with non-premium numbers for most counties), so you can talk and show at the same time. Whilst it doesn’t offer the video chat that Skype offers, the fact that anybody with an internet connection can use it, with up to 10 participants makes it perfect for most virtual business meetings and discussions. There is also a premium (paid) version of Mikogo for more meeting participants (upto 25).
Which one am I using and Why
Out of the two free options, when doing formal group meetings, I generally opt for Mikogo. Skype is great for quick one to ones with distant workers, but Mikogo feels more professional. Plus the features offered such as the whiteboard are so useful – just highlight sections of the screen, draw boxes, lines, whatever – to illustrate what you are talking about. The final reason for selecting Mikogo is because not everybody uses Skype, and I don’t want to force anybody to register on any service to have a meeting with me.
We all want to make more money from our freelance or small business! Regardless of what your business or personal goals are, you will undoubtedly need money to archive them. And regardless of how you work it, there are only 5 ways to make more money from your business.
These are the principles to bear in mind when doing any form of planning around money generation or business growth.
Your only options are:
- Sell to new people – It’s all about new customers. More customers means more sales means more money.
- Sell more products to your existing clients – It doesn’t matter if you invent new products, new services or sell more of your time – if you cant get new customers, then sell your existing customers more.
- Sell more often to your existing clients – If you can’t create new products or services and cant up sale new services, have your customers buy from you more often – Turn monthly purchasers into weekly customers.
- Increase your prices and rates – If you can’t get customers to buy more from you, then the next option is to increase the money you get from your existing products and services. But be careful, increase the prices too much and the extra money will be offset by a reduction in orders.
- Reduce your costs – The fallback position is a reduction in your own costs. You are not actually generating any more revenue, but you can increase your profits by increasing your margins.
Of course, the final option is to do 2 or more at the same time.
The Tale of Three Monkeys
Once upon a time, evil scientists put a monkey in a cage. In this cage was a metal box and dangling above the box was a big bunch of bananas. But unknown to the monkey, the metal box had electricity running through it, and when the monkey climbed up on the box to reach the bananas, it got a nasty electric shock. Time and time again it tried to climb the box and time and time again it got shocked until eventually it gave up. Soon, the evil scientists introduced a 2nd monkey, and as this new monkey went to climb the box, the first monkey pushed him away to protect him from the electric shocks. Every time the 2nd monkey went for the bananas, the first would beat him and push him away. After a while, the first monkey was removed from the cage and a new third monkey was added. When this 3rd monkey went to climb the box and get the bananas, the 2nd monkey beat and pushed him away (even though he himself had never been shocked). This went on for some time, finally the 3rd monkey turned to the 2nd and enquired (in some sort of monkey sign language), why he was being stopped from getting the bananas? The first monkey turned to second and replied “I don’t know, it’s the way we have always done it around here”.
There is a point to this story. When you provide a service or game changing product into your customers company, there will be people who are the just like the 2nd monkey. They will be set in their ways of doing things, and so will dislike your service or your product because it’s a change to what they are used to. Some people are just scared of change.
A bigger problem is when the customer (your main contact, the person who makes the decisions and pays your bills) hates change. I have heard of a small service company who went into a customer site and created a fully automated sales, ordering and fulfilment system which could streamline customer order to shipment reducing the entire process to milliseconds – only to find that the customer insisted on a manual order validation process be put into the chain, a process which added hours or even days onto the cycle that the service company was looking to improve.
When we are working with people who are scared or hate change, there is no real solution. You can ask them to justify their concerns, but like monkey 2, they may not be able to. You can try to help them overcome their fears, but sometimes, they just want their ‘bit’ in the chain to be as it always has been.
You are left with two options – accept their request, or walk away from the project. But, the one thing you can’t do is argue with them. It doesn’t matter if they brought you to do a service because you know the most about your industry; if they have made their mind up, arguing will only make them dig their heals in further and they will end up hating you.
When you accept their illogical, silly, bad idea that they force upon you, it will hurt. It will make you feel bad, it will make it seem like you are doing a rubbish job – trust me, I have been there. All you can do is point out (in the most subtle way you can, but ALWAYS in writing) your concerns on their request, and remember that when it doesn’t work out, you can revisit the project in a few weeks and take out their request with the benefit to you of more chargeable work.
But remember, they are the customer, and the customer is always right!
Here’s a question for you. . . . What tools and skills will you be using in 10 years time? Ok, maybe that’s a long way off – how about 5 years time? Do you think they will be the same tools and skills that you use today?
Put it another way. . . . Once upon a time, there was a database system – a bit like Oracle or SQL Server. It was THE database. If you were into computer databases, it was really the only database you would use. Everybody who was anybody in computer databases was using the database. It was used in hundreds of thousands of computer centres around the world. 2 years later, nobody was using it. 3 years after that, nobody could even remember it. The name of the database was PICK (invented by Dick Pick for the US Government) and the demise of the database was caused by the first release of Oracle.
The point is, at some point in the future, Windows will vanish. Adobe Photoshop will be forgotten, SQL Server will be a distant memory, Oracle will gone, and an iPhone… what’s an iPhone?
Technology, tools and skills are always changing – faster and faster with every year that goes by. I am convinced old age is simply people giving up and saying “I cant be bothered to learn yet another new thing”. Maybe when you consider what skills you need, you need to keep an eye on the future, and try to keep score of what will be around in the future.
I imagine it won’t be what you or I are using now!
One of the problems with being in business is Business Travel. The first few times you travel away on business, the novelty factor makes it fun and exciting. But after a few trips, it turns into a pain. With multiple reservations for hotels, trains, restaurants, meetings, flights, shuttles – it becomes a logistical nightmare. Plus you end up carrying a pile of paper with all the details.
So for a recent trip, I looked for an ‘app’ to help me out. After a bit of trial and error, I have settled on TripIt – a Free cloud based travel management system.
Tripit keeps track of all your travel schedules – with the details available through the TripIt web site or mobile devices. There are client applications for most major systems including iPhone/iPad, Android, Windows and Symbian. The web site and the mobile devices have the exact same functionality regardless of how you want to plan your trips.
The real power of the application is in the email integration. When you create a (FREE) account, you supply all your email addresses you use – these can include people who organise trips on your behalf (such as PA’s, wives or husbands). Then, whenever you (or your ‘assistant’) receive email confirmation of reservations, simply forward the emails to tripit, and it works out all the details from the email – where you are staying, flight/train/channel numbers, dates, times, everything. They then appear in your Tripit travel inventory, broken down into Trips, with all the details of the trip detailed in the correct order.
Tripit also adds additional bits of information for you – maps of the areas you are staying in (for each area), directions, contact phone numbers, weather and a host of other useful information.
You can even have other people share your trips, connect to other peoples (if you are travelling in a group), get alerts when details change (such as flights move terminal, time, etc) and for the PRO (paid) version, it will even track you frequent flyer miles.
I have no idea how the email integration works – but it was like magic. Of course you can enter travel details manually, but in a recent trip to the USA, all my reservation emails went to TripIt (including things like USA ESTA confirmation) and it recorded it all perfectly. I have now sent all my holidays (both big and small) to TripIt, so they are all to hand when I travel.
Recommended for anybody who travels on business.
As a small business owner (or freelancer), I am sure you have noticed that any time wasted is also wasted money. Which is why when working on customer projects, it’s important to get the basics right to avoid mistakes in the project that could cause delays, gaps or things headed in the wrong direction.
Whilst I have attended Price2 project management courses, full project management can be overkill. After all, who needs a 600 step project management system for a small project which is going to take just a week to complete? Not me!!! What I have found that works for me, is that if I can cover 10 project guidelines, 99% of any possible project problem can be addressed without the risk of wasted time, effort or money:
- Have clear requirements from the start, in writing, and agreed by the customer – as detailed as possible – including what will and won’t be delivered, when, and how. In this statement, it’s also important to have a clear statement of what defines the project as complete (such as delivered to them, loaded on their computer, sent to their art department, whatever). This helps stop projects which never end, and drift on and on. Make sure this ‘completion action’ is something for you to do so your in control – don’t fall for the “customer signs it off” condition – you may be waiting months for them to carry out this action.
- Chunk up the work into manageable sizes – not too big, not too many chunks, then assign resources and responsibility. Don’t be afraid to assign some of them to your customer’s staff – generally they will be happy to get involved, provide information and resource that you need.
- Have a plan. Yes, I am talking a project plan – with the steps shown, resources and dates. When you have a plan, keep it up to date (as much as possible bearing in mind point 6 below), check it and review it to make sure you are on track. This way, if something slips, everybody knows what the impact will be.
- Add contingency to your time estimates. A tight project may mean it’s a good project for you as it means you can schedule more work at the end of the project, but add a risk margin for things that don’t go the way you plan. When you deliver early, everybody is happy.
- Assume customers will deliver their parts later than they promise, guarantee and cast in stone – I promise you that they will. Where possible, give them dates for their actions earlier than you need them. This gives you wiggle room, and a day or two for them to be late without it effecting your work.
- If you complete an action or stage early, hold it in reserve. If you have a task which is meant to take 5 days and it actually takes 3, this gives you 2 days of extra buffer at no cost. Use this to start work on later stages. Changing the project to pull all other tasks forward simply puts pressure on these stages.
- Communicate, communicate, communicate – the plan, reminders, the next stages, everything. Let everybody involved know what is going on, if there are problems, hold ups, what is complete, what is outstanding. If you communicate too much, they will let you know – but too much information is far better than not enough. See point 9 below.
- Have a backup plan – if something holds up the flow of work, what else can you do? Projects generally have a critical path – if one task on that line goes out then everything that follows goes wrong. But work out before hand, a plan B, so that if a major component of the plan fails you can move onto other tasks and come back to the main stuff later.
- Use a tool for recording status, documents and conversations – this allows team members to communicate between themselves. I recommend a cloud based tool like teamworkpm. This tool allows people to see the status whenever they want, get emailed daily status updates, view stages, provide feedback, sign off parts, and assist in the project. It has saved my bacon multiple times, and makes work so much easier for everybody. It also does a lot of the project management and communication work for you, saving you buckets of time (and therefore money).
- Halt scope creep. The death of most projects is when a customer asks for additions or changes during a project. The answer to this is to say a firm but friendly NO. Yes, you understand the requirement, but suggest (force) that the project continues as is, and once it’s fully delivered, the changes suggested are made into a separate project after final delivery. This way, it also becomes chargeable.
And now we play the waiting game….. Ahh, the waiting game sucks. Let’s play Hungry Hungry Hippos!
Homer Simpson: From the Episode “Mr. Plow”
The above has to be my favourite quote from the Simpsons. And I agree – the waiting game does indeed suck. Especially when you are waiting for a customer to give you an order, to sign a contract, to agree to a meeting, or any other action they need to perform in order for you to move forward and win the business. Now you could take Homers suggestion (and play a game of Hungry, Hungry Hippos), or you could use some subtle techniques to try and move things forward.
My top six of ways to move things forward are as follows:
- Highlight new risks – Whilst you don’t need to go overboard, highlighting a risk in a conversation or email can make things happen. An example may be to highlight that the delay in signing may mean that the delivery date slips beyond the customer deadline or you will no longer be able to meet the original agreed date. This is my own personal favourite way of moving things forward. This can even take the form of ‘other projects’ which will get slipped into the schedule if there is a delay in signing (after all, you can’t be expected to sit around twiddling your thumbs).
- Delay costs – If you are in the middle of a project with a customer, and they are taking their time completing one of their steps, highlight that this again could add delays and (subject to your T&C’s) additional cost for inactive time.
- Add incentives – Is there something you can do to get an agreement now through discounts, earlier delivery dates, or additional features? But be cautious, they may still want these once offered, even if it does not motivate them.
- Find out the reason for the delay and mitigate – Sometimes, the delay can be down to their own processes or even outside factors. In some of the work I do, my customers are waiting for their customers to raise purchase orders. If you can find the reason for the delays, you can mitigate these issues by offering no charges should their customer not sign.
- Find the decision makers – It could be that the person you are talking to does not have the power to make a decision or sign the contract. If you can, find out who is the decision maker, you can talk to them directly and move things forward.
- Start Anyway – This is the most risky of the options. If you know that time is going to be short and the pressure will be on you, you could start the work without cover. But, the risk is all yours, and this is a last option which should be avoided at all costs.
I have a number of customers; some are new customers and we are just starting to do business together, and some are customers I have had for many years. But there is one thing in common for all of my customers. NONE of them are my friends.
It’s something I sometimes struggle to remember. It’s very easy to treat them as friends because we know each other so well, spend so much time together and even do trips together where we share meals and drinks at night. But, they are not friends. At the end of the day, they are customers, and there are many good reasons for remembering to treat them as such:
- Friends you joke around with, but customers deserve respect and professionalism. At all times
- Friendship leads to familiarity, familiarity leads to contempt, and contempt leads to ex-customers
- It is much harder to negotiate terms, rates and situations with friends
- Friends can ask for favours – customers can’t (well they can, but it’s harder)
- With friends you share secrets – you may bad mouth people, but in front of customers every previous project, customer and even competitor deserves respect. Otherwise, what will they think you are saying about them?
- Friends can call you up at weekends – customers can also call you, but they get charged 7day support for doing so
- Customers pay you, friends don’t
I am not saying that you have to be stand-off-ish. You can be friendly, courteous, and can even share a joke over a drink. But at the end of the day, your customers are just that – customers – and should be treated as such.