Posts Tagged ‘how to’
According to the Federation of Small Business, the economy across Europe and the USA is continuing to ‘fail to improve’.
In a new year report just published, the FSB says that whilst more jobs are being created (which is keeping unemployment down), wage levels are declining and the amount of money that businesses and individuals have available to spend is declining every month – with no end in sight.
As a result, companies and individuals continue to tighten their belts and are on a constant lookout of ways to cut costs.
Whilst I am constantly reviewing all of my spending (both personal and within my Small Business), we as small business owners always need to be wary of cutting costs too far and on the wrong things, which can lead to damaging the cornerstones of our business.
Keeping our Business Cornerstones Intact
Regards of the type of business you run, the size, how successful your business is, or the services/products you offer, there are a few things which every company needs to do to stay viable; marketing, sales, invoicing, accounts, payroll and paying taxes. Without any one of these, a business will soon hit problems and start to die.
So whilst cutting costs are fine, trimming the fat in any of the cornerstone activities can lead to problems. Take marketing….
When times are tough and money short, it’s a very easy decision to cut back or kill any money spent on marketing – adwords can be cancelled, postage is saved by not sending out mailshots, transport costs reduced by no longer attending networking events. Or we may just decide to stop marketing to spend 100% of our time doing billable work. Cutting costs in marketing can see an instant win in terms of cash flow and reduced costs – but what will be the impact in the future?
You may have work at the moment, but what happens if one or more of your existing customers cancels work, goes under or cuts their own costs (with less work for you). Marketing effort takes time, and by the time you realise you need more work, the damage will be done and it may take months or years to start finding new customers again.
Taking advantage of the downturn and avoiding the future hits
One of the advantages of the continued down-turn is that with other companies cutting costs, competition is fierce. This competition produces a double win for a company willing to keep investing in their cornerstones.
Firstly, with less companies spending money, there is less demand for services so offers are on the table. If you use services such as Google Adwords (or the Bing/Facebook equivilants), this reduced competition means that advert placement is cheaper, which means you can now get more exposure for the same money (in my own adwords campaign, I am getting almost 13% more exposure for the same money as last year simply because there are less companies bidding on my key words).
In addition, the fact that people are spending less means that for the savvy shopper, there are plenty of deals to be snapped up should you need to invest in outside services, training, hardware, rental or finance arrangements. You just need to be wary of headline ‘discounts’ which are not quite as good as the advert pretends to be.
But the main concern in cutting costs on the key aspects of your business is that it could lead to more costs down the road. For instance, trying to save costs by putting off paying taxes (PAYE, VAT, corporation tax, etc.) will lead to all kinds of future pain including additional late payment penalties, interest charges and more detailed scrutiny in the future on top of the actual taxes which still need to be paid.
So by all means, continue to review your costs and outgoings and trim the fat where it makes sense to do so – but always have another eye on the cornerstones of your business, and the ability to take advantage of the downturn where your available cash allows.
Some of the assumptions have been just stupid. Some have been mean, but most are just plain wrong.
It doesn’t matter if you are a permie who is thinking about becoming a freelancer, or an existing freelancer – get these assumptions wrong, and you will soon be in financial trouble.
- You are your own boss- The number one assumption is of course you are your own boss. But EVERYBODY answers to somebody (even presidents and prime ministers of countries have a boss – the public that vote them in, and CEOs answer to the share holders). As a freelancer, your boss is your customer. At the end of the day, its they who dictate what you do and whether you get paid. However, admittedly you get to pick the roles you take, and therefore which boss you work for.
- You get to work in your pyjamas and watch TV all day - Now I admit that there are the odd occasions when I have worked in pyjamas – but they are far and few between. Most of the time, I am working on a customer site (so wearing suite and tie), or I am working in my home office so still dress for doing work. I find if you dress the part, you work the part. As for the TV watching, if you don’t work, you don’t get paid.
- You earn so much money compared to permanent staff – How many thousands of times do I hear this. Yes, if you look at my day rate, I get paid more than permanent staff. BUT, hang on – out of that money I have to pay personal tax, VAT, insurance, corporate tax, and a whole lot more. Plus, if I am ill, or on holiday, or it’s a public holiday I don’t get paid – a permie does. Factor that in, and the salaries won’t be too different.
- You can take holidays whenever you like – As can permanent staff – we both have to ask our current boss (customer) to check with their plans. And remember, permies get paid whilst they sit in the sun – I don’t.
- You get paid to do little to no work – I wish this was true. In fact, it’s the reverse. As customers are being charged £x a day for my services, you can be sure that they want a full detailed breakdown of what they are paying for, what I am working on, and what value they are getting. Plus, whilst earning money freelancing or contracting, I am also busy advertising, running my company, doing accounts etc.
- You can write everything off as a tax dodge - sure we can. I can order a nice plasma TV and mark it as a corporate expense. Or how about that new camera or even a holiday. It’s all good – right up to the moment when I have to justify it to the tax man. Contractors who write too much off will be looking at repaying it all the money PLUS some serious fines. One of the biggest mistakes I see other freelancers make is to spend all they earn – forgetting that out of that $100 earned, a large chunk will eventually have to be paid as one or more tax bills.
- It doesn’t matter if you make work mistakes – I actually heard this one just last week. As a freelancer – you are only as good as your last contract or assignment. Make mistakes, and it will hurt your reputation and will make landing more work difficult. At the end of the day, we all want to do a good job (and avoid being shouted at).
- You never worry about being made redundant – Now I admit I don’t worry about being made redundant (there are always other contracts and freelance gigs out there). However, you are always worried that the work will dry up, or that the contract will be cancelled with no notice (as a freelancer you get no real notice period).
- You are there just to make permanent people look foolish – I have heard this being said to other freelancers (and contractors) by permanent people who resent freelancers coming in to help on projects. Yes, there are freelancers who don’t take into account others feelings, but this would happen even if they were joining a company as a regular employee. Being a freelancer just makes it more likely this will be thrown in a freelancer’s direction by employees with an axe to grind. I generally overcome this by working with the permanent staff, and sharing knowledge with them.
- You get paid SOOOO MUCH MONEY – Finally, we come to the assumption that freelancers (or contractors) are rich beyond compare. We all drive flash cars, live in mansions, sleep on beds of cash and want for nothing. Well, whilst a skilled and clever freelancer can make a decent living, I can assure you that my bed is sprung loaded rather than cash-stuffed, and I can’t yet afford a new set of solid gold cutlery for each and every meal.
This may all seem very negative towards being a freelancer. It’s not meant to be. It’s just that even now, I know people who are considering freelancing as a new career and have a rose-tinted view of what it is like to work for yourself (see assumption #1).
Can it make you rich? Well, if you are skilled in what you do and are lucky in the work that you secure – it can be fruitful. Is it hard work? Yes, very hard – especially in the beginning.
Is it worth it? Oh yes – but it takes time for it to become so.
In my previous post, I talked about how I have started sending out regular newsletters to my old customers and future prospects. Today, I wanted to cover why, who and how.
Keeping In touch – The Why and Who
I have no doubt that when it comes to marketing, out of sight is also out of mind. Which is why I wanted to start sending out newsletters. But I am also a believer that its easier to win back old customers that it is to find new customers – you never know when that old customer will need some help on a new project, or some additional consultancy time or help on a new project.
With this in mind, I decided that the initial target of my newsletters would be my old customers. So a quick email went to each of them saying that I had been working recently on some exciting other projects and I thought that some of the things I had created whilst working on these other tasks could benefit them to (pretty much those exact words). I said that I was going to be sending out a regular update of some useful routines and tips, and also stressed that the updates would only come from me every 2 weeks or so – so it would not be overload. I also pointed out that if they were not relevant, they could unsubscribe at any time.
My feedback was good – I got 100% sign up on everybody I emailed (although it did help that I had worked with them in the past, therefore they knew what I did and how I liked to share useful information).
Of course, I then took the opportunity to contact my current handful of prospects and offered to sign them up in the same way. So far, the uptake from prospects has been 45% – which I am fairly happy about.
The newsletter – The How
From the beginning, I wanted my newsletter to be no effort for me. I also wanted to keep track of my subscribers, and see if anybody was actually reading the newsletters (no point in wasting time producing something that nobody was reading). After a quick bit of research, I decided that I would use the marketing email system – mailchimp.
Mailchimp is an internet based mass emailing system. It is really designed for sending out large numbers of emails as part of a marketing campaign (you know the ones, the ones we all get every day and curse (50% off sprockets in our Spring sale)). But it works just as well for sending out newsletters.
Mailchimp is not designed to be a free service, but it is free for the first 2000 subscribers with 12,000 emails a month (enough for everybody who could run a small business to keep in contact). If your newsletter gets more than 2000 subscribers or needs that number of emails, you are doing so well you can probably afford to may the $10 a month usage fee.
Setting up a newsletter is a snip – you can quickly design a sign-up form, manually add your subscribers if needed, and then design your newsletter (in terms of Mailchimp, each fortnightly email I want to send I setup as a campaign so I can track who is reading it).
One of the magical things about Mailchimp is that when you register, you give it your personal details including web site, and it does so much work for you – it goes to your web site and finds your web site style sheet and graphics – so straight away it sets up a template with your company logo, fonts and address. All I had to do was enter the text. Text editing is a breeze – you can change the look feel, fonts, colours and so much more within your text. you can also include graphics if required.
Once you have your first newsletter done, you can then duplicate it for the next week, and the next – and just have to paste in the text you need – for that weeks edition. The creation of a newsletter really just takes me 4 or 5 minutes (once I have the text from my Evernote files – see my previous entry).
Once defined, the mail can then be sent straight away, or (as I do) scheduled to be sent at a point in the future. I already have newsletters set up taking me into the summer.
When the emails are sent, MailChimp takes care of everything – the email is sent from your email address, and appears in both text and HTML format (depending on the recipients email client and preferences). Once sent, everything is tracked – for each weeks newsletter, MailChimp tells me how many emails it went out to, how many people it was sent to, how many opened the email , how many clicked embedded links in your mail, how many unsubscribed and how many people it was forwarded on to.
I am sure if I was a big company, I would be using MailChimp for sending offer and sales emails – but even for something as modest as my newsletter, it does everything I need.
So everybody’s happy. My old customers and prospects get some (hopefully) useful information, I get to be noticed by them every week (which should lead to more work), and I get to get on with my day job, leaving Mailchimp to track how well my newsletter is performing.
If you would like to take a look at my sign-up form or even read what I am sending out (my tips are about SQL Server databases tips and useful functions), my sign up form is here.
One of the things that has been playing on my mind for the last couple of years has been newsletters. I have read many books, read many blogs and heard many presenters talk about how a newsletter can keep you in a customers/prospects mind. Yes, it all sounds great, but why would anybody want to read a newsletter about my small insignificant company? I mean, ‘breaking news – we have a new pot plant’ just seemed so ridiculous. Yet people go on and on about having a newsletter.
Last week I had a breakthrough, thanks to a fellow freelancer who I met at a technical seminar. Over lunch we got chatting about freelancing, about the time drain that is ‘social media’ and then about newsletters. He said that newsletters had generated a lot of business for him – so I asked what he did.
Newsletters – Are not about News
The advice I received was that newsletters are not in fact about news. He agreed that nobody really cares about you, or your company or your products, or your services, or the new office pot plant. None of this does anything for them. In a word, it’s not useful.
What he did was to turn it into something which delivered value – but didn’t try to sell. Having your name. company name and company logo in front of people on a regular basis is enough to keep you in their mind. He let the constant contact keep his name in everybody’s in tray, but added value to make sure the emails were opened.
So what was his technique?
Share your knowledge on what you do
Its as simple as that. Don’t have a newsletter full of your latest projects – just have a newsletter full of your latest tips. Create from what you know and do.
If you create databases, have regular updates on new functions you have created, clever SQL scripts for doing calculations, or methods of moving databases. If you are a coder or web designer, have a newsletter with CSS examples, or useful subroutines or functions. Provide value to make sure your newsletter is opened every time – and maybe even shared with other people.
It’s a small piece of the Puzzle
Now it may seem that by having a newsletter with a subroutine or function or other bit of code may be giving stuff away for free – and your right, it is just that – free work. But, the bit you give away is a tiny, insignificant, but useful single part of the whole puzzle. That routine may be useful to an old customer or future prospect, but because it’s so small, they cannot complete the whole jigsaw with just that one piece – they still need somebody to create the whole thing and put it together.
A useful technique is to make sure that when you do send out useful stuff in your newsletters, you include comment lines in any example functions and procedures to show what it does, how it works, and make sure to include your name, company and contact details (web URL, email and phone number). That way, if it does add value, your details are always on hand should they look to expand their project and need your assistance (or your details are in the code at their office if they just cut and paste the code you send out).
After all, the whole point of a newsletter is to keep your name and contact details in front of your old contacts and future prospects.
How to get Four times the value
The other technique that I learned (from a 2nd freelancer who joined in our conversation) was to get multiple value from each entry – by reuse.
I have written in the past about my technique of storing useful new techniques and functions I create in Evernote so I can use them in future projects – well this reuse idea just expands for the newsletter.
When I am working on a customer project and I develop a new useful function (say a SQL function to turn a date into a financial month and/or year), I copy that to Evernote for future use. But now what I do is I also turn this into a quick newsletter for my contact list – it doesn’t have to be a long letter (in fact the shorter, the better) – I just explain what it is, how it works, and include the function. Another free newsletter is created.
Then what I do, is I take the exact same newsletter text, and post it on my company blog web site – so it adds value and search ability to my web site.
One bit of created script or function (for a customer project that I am already being paid for) is then used 4 times – on the project, into Evernote for future projects, into my newsletter, and then on my company blog. Maximum value for minimum effort. Perfect.
Next time, I am going to talk about how I get names on my newsletter list, and what software I use.
A few months ago I talked about the different emails I use for chasing late payers. Judging by the interest this post received, it seems that late payers are becoming more and more of a problem for freelancers and small business owners.
As regular readers will know, I am an advocate of using cloud based accounting software – and my choice for this type of service is FreeAgent.
As I received so much interest in the late payment email templates, and a few questions on how I set up automatic chasing of late payers, I thought I would today share how I set up Freeagent to do the escalation for me.
I am sure that many, if not all, of the other accounts systems out there have similar late payment escalation systems in place – so this will be just as relevant.
Setting up Late Payment Chase Escalation in FreeAgent
One of the things I love about freeagent is that in many aspects of the accounting process, you can set something up and forget about it. This is equally true for chasing late payers as it is for setting up standing orders or salary payments. In terms of setting up late payment chase emails, it’s just a matter of setting up the email templates, and letting FreeAgent get on with it.
Within the Freeagent system, under the main settings menu (at the top of the screen), there is an option of Invoices and Estimates, and under this, an option for Invoice Emails. This option allows the definition of all kinds of email templates – initial invoice cover email, thank you (for payment) email, and of course late payment chasing emails.
When I initially started using FreeAgent, I just set up a single email reminder template which sent a chase email 3 days after the invoice was due, and then sent the same email every 3 days until payment was made. This worked for a while, but if you got the same email over and over, would it persuade you to make payment? So I made it more sophisticated and gained better results.
Using the template emails defined in my late payers rules, I set up 9 different late payment rules – 2 emails for each stage (in case the first one was missed). For each stage of the chase process, I created a new chase email, and set the Reminder Rules for the days after payment is due to send the email. I have found that sending an email every 3 or 4 days seems to work best.
For each stage, the subject of the email changes to reflect what is about to happen – a warning, about to raise charges, on stop, debt recovery etc. The text of the email also changes as per my late payers email templates already discussed.
Note quite automatic
Now whilst this does all the late payment chasing for me, its note quite fully automatic. I do have to raise late payment invoices (with charges and interest) now and again – and even if FreeAgent was able to do this, I would still prefer to do this by hand (using the FreeAgent invoice creation screen) just to remain in control.
To allow me to keep track of what I need to do next (raise a late payment charge, put them on stop or pass them to a debt recovery company), the 2nd email of each stage in the sequence is marked to be copied back to me. That way, when the email arrives in my in tray, it acts as a trigger and reminder for my next action.
My sequence and dates of my chase emails in FreeAgent are then as follows: