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MightyText's Web app is slick, and it lets you choose between a "classic view" and a "power view." The classic view uses a layout similar to Microsoft Outlook, where you see information about the sender in the first column and then message details in the next column. The power view, meanwhile, displays phone-sized fields on your computer screen that display recent text messages in conversation form. The power view lets you see more messages at once (it fit eight on my screen), while the classic view gives you more space for viewing message details. Switching between them is easy.

To send a message, you click the new message button, and a small window for composing it pops up in the lower right corner of the screen, reminiscent of how Google's Gmail works. And, much like Gmail, MightyText also puts a message composition window at the bottom of the conversations you view, making it easy to send a reply message.

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JHB – BUSINESS SOFTWARE THOUGHTS

Once again I turn the microphone over to Jeff Becker.  Take it away Jeff......

If you are reading this, then Frank may have run out of topics to apply his snarky humor too. That really sucks, because I enjoy his writing over mine. So here we go. Prepare to be bored!

Software, why do we still need so many different programs that ultimately hold our information hostage from other programs? There are many reasons, but there are three main reasons in my opinion. They are as follows:

1.       Any good piece of software started out small and had a great idea, only to be bought by a larger company and subsequently screwed up. You are left feeling like a hostage.

2.       No one was addressing a particular need until a big company showed up…..thought it was a growth area….over sold it….and then screwed it up. You are left feeling like a hostage.

3.       Who the hell can talk to a programmer, let alone want too!! I finally kicked the habit of communicating by grunts and clicks! There is no way I am stepping backwards and talking in 1’s and 0’s!

There are many other reasons, but it all boils down to what I believe is the mind set of all big software companies. They know…..once you have stuffed all that information in…..gone through the learning curve of how to effectively use it……they now have you hostage! The entire process of talking to the sales team and listening to how they were going to streamline my business….always left me frustrated. After I committed to the package…..went through the learning curve of using it….it ultimately didn’t work as advertised. Then I had to deal with product support or a consultant! Can you say extra cost? Now this happened over a period of 20 years, so I am definitely carrying some baggage.

I eventually came to understand that I was asking for something that the infrastructure of servers and available networking protocols, just really couldn’t handle it. Meanwhile I was sold that it could. If I had needed free health care at that time...I would have shot the reps and gone to prison. I didn’t think they would understand me there, so I set that idea aside until I got a bit older.

I say watch out software companies! Business owners are getting tired of being guinea pigs or hostages. I wish I had all the money back that I spent on computers and software, thinking that their solutions would simplify my life. They all did in some little way, but the fact that none of them talked to each other just made me feel like a hostage and created a new manual process. Just the act of having to import and export something is a process that takes time and attention.

One good thing came out of all those dollars wasted. It made me really think through and determine what my process needed to be, if such a piece of software existed. Let me tell you a bit about my learning curves and how I incrementally became paperless.

MANAGING CONTACTS

The first area I wanted to streamline were all the contacts I had. I owned a specialty construction company and I worked all over the world. I would subscribe to a bid service…..mine data and manually enter the contacts into a piece of software called Sharkware. It was one of those contact managers like Goldmine. Sharkware was later screwed up by a big corporation. Anyways, it was great. I could talk to a lot of contractors, keep current with all those conversations, make links to people that knew each other, and then I could pick up where we left off at any time. People were amazed with my memory, little did they know! This was in the 80’s.

Outlook eventually became the dominate contact manager, but by no means did they create the market. The problem with the solutions available on the market, to include Outlook is -- they don’t integrate easily into other programs. Outlook now provides some integration, however it still doesn’t play nice with other programs with ALL of its features. So, you are held hostage with some of your information if you leverage it for all its capabilities. Don’t even get me started on what it takes to share this information with other users. Outlook is now reducing the many great features it once had. It’s starting to look like a downward spiral into being broken up into more features that now have to be bought.

They do have some hooks for programmers to push and pull data, but ultimately you cannot leverage ALL of the information it has with other programs. You become a hostage and your systems are separate. We are still at a point where sharing the full power of Outlook or any other contact manager will still require this information to be manually placed into your other systems. Have you ever changed your address with a big company, only to still get your mail sent to the old address? This is why. They can’t just use one system either!! So I simply ask, “Why can’t we change contact information in one place and have it register in other systems?” It makes me start calculating the cost of ammo to accomplish my revenge on all the decision makers at Microsoft.

INVENTORY/PURCHASING/ESTIMATING

Every company has some form of inventory. If you buy something from a manufacturer…or a supplier….then go install it or sell it…you have inventory. All three of the above areas absolutely need to be pulling from the same database. This will tie together the purchasing component when it’s time to re-order.

The problem is that accounting packages don’t do it well and standalone inventory solutions hold some important part of your information hostage. Not to mention the inventory sitting on jobsites, riding in trucks, and the list goes on.

Estimating programs absolutely don’t like to work with other programs. Most employees that are out there creating estimates, are using spreadsheets full of information the way they want to use it. I think a bit differently on this subject. I think we should all go to our Vendors and ask for a spreadsheet of everything they sell. Then simply import this information into your software and have it all in one place for the company to draw from. Use each vendors naming and numbering conventions. This simple act makes talking to your vendor easier and purchasing a snap. The minute you call it something else, you have just made your process less efficient. Now all the estimator needs to do is break up the vendor’s items into the many different units they will need for bidding purposes. They will also need a more flexible calculator and the ability to bundle items up to address the many ways they have to bid cost and units. Easily programmed.  

The biggest mistake I have observed is that a common naming convention isn’t used. Therefore your supplier may sell you something called a “Widget”, everyone else in the company calls it a “Thing-a-ma-bob”, and you sell it to the customer as a “pet rock”. Inventory is the #1 contributor to most organizations digital nightmares. The office grind of disputing invoices, returning unused parts, and trying to get this tightened up into a “real time” report is virtually impossible with the solutions today, especially if you re-name what the vendor is selling you. This problem is as much approach as it is the program.

MOBILE COMPUTING

There has always been hope for putting a mobile device into the hands of your employees and having them record their day in “real time”. You can do it now, however anything available today simply doesn’t do everything you need it to….and/or….want to track. They all force you to use the data flow the way they think you need and getting the information to flow requires that you to sometimes enter the information in a format that just doesn’t allow recording the data the way you want. It usually requires you to create a new name for items in order for you to shove your information into how the program was designed.

Mobile platforms have a long way to go. If you consider what is available on a PC today…..after having been around for decades….it’s logical to expect the same from all of these mobile solutions. Why can’t we have some flexibility in creating fields that we need? It’s because all of these mobile solutions are simply an extension of the PC software that is already frustrating you! How many mobile apps did you buy when they first starting coming out? How many do you buy or even use today? I refuse to buy a single app now. They still don’t have what I need.

I once used a custom programmer and created a piece of software, back when Palm Pilots were the rage. It worked great! However we all know the story of Palm. I was not only a hostage, but I became an orphaned hostage. I wish I had that money back. Screwed again by a big corporation’s opinion of what I needed for a phone. I went back to locked down spread sheets in hopes for a better day. However, I did achieve real time reporting!!

I am really excited about the integration of mobile software into the operating systems and cloud computing finally being an option. It really makes the cost of custom programming enter back into the affordable range.

 

DIGITAL PAPER/IMAGE MANAGERS

A lot has happened here with PDF being the format winner. Making it feel like paper is where the image management software war is still going on. Many years later, they all still have problems. The big problem is….that it is still a piece of paper and still needs data to be entered by a person. I gave up all hope in OCR technology. It just doesn’t work.

I think a paperless office is the best hope for even the dis-organized of the world. However, there has to be a naming convention for it to succeed. At least link it to a transaction, so it even the disorganized can find it.

The other issue is marking up the document like you would a piece of paper. There are some good products for this, but it is critical to pick one that does it well. I have used two in particular. Paperport is the one I have used the longest, but it is getting screwed up by a large organization. I am almost exclusively using Bluebeam right now. But…..I just received news….they were bought by a large organization in Germany. Who knows what my fate will be. The important factor in picking your document manager is to make sure they don’t convert your PDF’s into some proprietary file format. Otherwise you will always need their program to mark it up and read the files. “Neat scanners” is one of those products you should definitely avoid.

I also required all of my vendors to send all paperwork, via email. This established a custody chain, and a secondary backup system just in case. Tell them that they won’t get paid until they do. It is your company requirement. I only received 2 or 3 vendors that griped about it. I allowed them to fax it to me because my faxes were automatically converted to PDF’s and emailed to me.

There is a solution available for PDF’s, however moving to a paperless office will require some changes in how you do things. It may also require you to change some personnel that are going to resist the change. This is the number one place you can reduce the workload your employees currently have or possibly reduce the number of employees. Remember….most employees won’t figure out how to make their job easier…they just chalk it up to what they hate about their job and slog through it each day. PDF’s paired with automated “real time data capture” is the key to a well-functioning paperless office. When done right, it will feel like paper. PDF’s should only be used as documentation…..software should be capturing the digital information ONE TIME…and then making it flow to the many places it needs to go, without entering it multiple times.

I would also like to add, that your office staff should have a second monitor. Since a PDF is still going to be a piece of paper, they will need to be able to view the PDF on one monitor, while reviewing, marking up, or entering the data on the other monitor. This is what makes a PDF feel like paper. Switching back and forth between a screens on a single monitor is what makes the process seem burdensome. I can go on forever about how I work with PDF’s, but this is the basics you have to have.

ACCOUNTING PACKAGES

This challenge was the subject of many nights of Jack Daniels fueled rants! However, it was one of my proudest moments when I finally discovered the solution and broke the code of accounting packages. When I was in a very large growth spurt, I invested in a $40,000 accounting package that was going to do it all. I learned once again, that throwing big money at something didn’t work either. The more expensive software options, still don’t get it right. They can be more confusing than the more basic solutions. They involve more screens and will most likely handle the data differently than you would. If you want to tweak the system, you have to pay a consultant to do it.

Anyways, it was my attempt to combine estimating, purchasing, asset management, and inventory. Then…..after I loaded the information…hired the local supporting consultant….I was still unhappy with it. I just wasn’t happy with how I had to enter the data and how limited it was on the flexibility to crunch the data many different ways. Yep, I had more spreadsheets to export to.

 I bought the program knowing that I had to make some changes so my business would fit into the program the way ithandled information and subsequently spit out its reports. BIG MISTAKE!! Never settle for a system that requires you to change the way you want to track your business…..or requires you to rely on a consultant to make customized changes. I eventually threw it out and went back to Peachtree!

So here is the hustle in my opinion. The software companies wrote their software and then made recommendations as to “what size” company needed “what solution”. This was all based on who could afford what price point of course. All a CPA had to do was parrot what the software companies advised about their product. This eliminated risk for the CPA. It then set the stage for the large companies to simply buy up any competing company that carved out too much market share from them. This is why we don’t have many options. CPA’s don’t want to buy a bunch of software in order to perform their tasks for clients. As long as any the big boys buy up the small guys who have a great idea, then they get the CPA as a free salesman. I can’t tell you how many business owners tell me that they use Quickbooks, because that is what their CPA said they needed. Ultimately I feel as though I fell prey to the big software company plan.

Now here is something you need to understand about software. In order for software to work its magic, they use a backend database. A simpler explanation would be to say that they create tables. It is the same as using an Excel spreadsheet. Think of your larger spreadsheets and think of each tab as a programmers table. As you create a new tab within the workbook, you have just created a table of information. When the different tabs need to be combined into a single sheet with totals information, then this is when programming along with backend database beats the flexibility of an Excel spread sheet.  They can do the same thing in less tabs and have greater flexibility in accessing the information.

So here is the secret…..wait for it….wait for it…..

Open up your accounting package and count the number of digits your chart of accounts will allow you to enter. I think Peachtree is 17 and QuickBooks is 25. That is a REALLY BIG number. Try typing that number into excel…excel will even choke on it. 2,500,000,000,000,000,000,000,000 ….. That’s a big number!

So what does that mean? It means that both processes need to know what you want to track and how…in order for them to work. It also means that programmers have over built their software and we are not leveraging the smaller programs to their full potential. I chalk this up to both sides miscommunicating. How information needs to be organized is a big deal. Programmers keep adding features, however it starts making the software very complicated as they do it. This is a problem for the mobile computing software integration. In most cases, a re-write is necessary for many solutions out there. Remember, you are a hostage and getting them to spend the money to do it will be a difficult. They will instead choose to slowly roll out new versions each year, that give you access to a few more areas you have been screaming for.

Back to that big number in your chart of accounts. If you count the number of customers, number of vendors, number of jobs, number of cost codes for each job, now add the number of items you might buy from each supplier…..add to it all the other GL#’s you put cost to……now come up with a safe number of new GL#’s you will need each year. You will quickly see, that after 4 years you still haven’t maxed out the chart of accounts. Remember that all business owners assign a number to everything we track. So if we have ONE table that can accommodate that many numbers….why not just use the one table and forget about the other modules and its features…..meaning you just eliminated a bunch of tables to inter-relate. Programming becomes easier when trying to integrate a mobile solution. Better yet….why not just write your own and get big business out of the hostage taking business!

The solution is putting all that you track into the 18 or 25 digit number. The software will spit out any report you want as long as you do this. You can actually use a smaller accounting package for a much larger company if you do this. The industry would like you to believe differently. Just roll up the items you want to hide for financial or other reporting purposes.

So another way to say it is you don’t need all of the modules these base accounting systems are selling you. Leverage the chart of accounts differently than an accountant would typically have you organized. Try it out once and you will see what I mean. You have to understand, the accountant is setting up your chart of accounts, so they get the information that theyneed! Why not design your own chart of accounts, so it is something you can make sense of.

Owners need to address this part of their business. They are paying too much for these larger systems and many are not getting as much out of the smaller ones. Accounting packages are a backend system. They only organize information for reporting. I say organize it yourself, but make sure your accountant has the accounts he will need.

THE SOLUTION TO BRINGING IT ALL TOGETHER

Real progress has been made in programming. It used to be, that a programmer had to write very large strings of code to accomplish a simple mouse click. Now those programming languages are large pre-written modules that are simply cut & pasted or dropped and dragged to where they belong. Since the operating system now incorporates all the basics, a simple programming tie is all that is needed. So what I am saying is this…..custom programming makes sense today!! I did just simplify the programmer’s job, however it has become a lot simpler than it was. If you leverage the potential of your chart of accounts, create a road map of how you want to track your business, then you just made the programmer’s job easier and less expensive.

The mobile infrastructure is now here as well. Operating systems now have all the features that were considered “custom” simply built into them. Things like GPS, Camera, touch screen, and Cloud computing are all part of the operating system. Moving data and networking is no longer an issue as well. This sets the stage for capturing “real time data” when the work happens or when sales are made. If paired with a backend accounting system that is simplified like I explained above…then the act of stuffing the data in automatically, really reduces the programming costs. You tie this in with PDF’s being able to be tied to a transaction and the storing and sharing of contact information…you have just simplified a large part of your business.

Now here is the catch. Programmers don’t understand your business needs any more than a CPA or lawyer. They don’t want to do your job, nor do they feel like it is their place to advise you on how to do it. They have a job, they do it well, and you probably won’t pay them to run your business.

Custom programming your perfect system is the way to go. You can do it in small steps…or you can take a few years and make the change all at once. You can even make the programs you have now, talk to each other. Then start designing your dream program.

You can even have the systems run in parallel until you are ready to make the switch. The bottom line…explore custom programming to solve the processes that make tasks require multiple people. You may eventually start to believe that your “get it done” employees…can really handle a digital world. The programmer’s job is to make it work before you ask them to use it.

IN CLOSING

If you read my previous post and are now reading this post, you can see the direction I am heading. Helping small business owners fix clunky processes is my future. I have partnered with a programmer that has been doing this for a few decades and we are like minded and know we can fix this issue. He has been listening to these complaints for years and has the bulk of these solutions already written. We just need to tailor them to a business owner’s needs. I am now confident that our business model can compete with the solutions that are out there with me interpreting the client’s needs. I think business owners are ready to really fix the problem.

This was not meant to be a sales pitch. I simply felt as though this was the biggest challenge as a business owner I ever had. I didn’t want an office full of paper pushers that didn’t earn revenue. Having wrestled everything from DOS to windows 8.0, figuring it out consumed too much time and a lot of money. The answer was always there, but I just didn’t know enough about the programmer’s side to see how to communicate my vision without it costing a bunch of money. This exposure to programming has given me the last piece of knowledge I needed to streamline the software problem we all face. I also love to talk business and Frank’s blog is a great place to pass on my experiences to those of you that have the same passion for efficiency.

I never did get to write my dream piece of software, but I did manage to organize my existing software to reduce the redundancy and automate the many processes that I had. It consumed a large part of my time, but I at least got close. I know exactly how my next company will be organized as it grows.

So I think it’s worth the time and money to write your own software. Eliminate or at least, better utilize the office staff you have. Quit paying for software that holds you hostage. At least take the first step and start making the software you already have start to talk to each other.

 

Good Luck in Business,

Jeff Becker

Jeff@jhbecker.com

Management Doggie Style

A couple weeks ago, our Jack Russell Terrier, Sidney, suffered a stroke and scared the hell out of us.  If I had the choice between saving Sidney’s life or say, Afghanistan, I’d take Sidney every time.   She’s a far better person than they are.  She’s stone cold deaf now, but up until a year ago, every day after work, she listened to my woes and provided a sympathetic ear.  She’s doing much better now, but her illness made me think about the lessons I have learned from her.  Here are three management lessons, we can learn from dogs.

First, the best managers don’t look like managers at all.  In fact, their staffs believe they are the real managers.  Dogs give us the illusion that we own them.  Nothing could be further from the truth.  Dogs manage us.  We don’t manage them.

Our dog, Sidney used to dine almost exclusively on steak, chicken, fish, or whatever we were having for dinner.  She scoffed at normal dog food.  She trained us to feed her what she wanted.  Every night, the following events happened.

My mother-in-law yelled, “Sidney, why are you always bothering me during dinner?  I never get to sit in peace and eat.  You’ll just have to wait until I’m done!”

Sidney stared at her and yipped happily.  Why happily?  Because she understood that after the yelling came food from our dinner table.  My mother-in-law dutifully stood and put some of whatever was on our dinner menu in Sidney’s dish.  Of course, she always cooked enough food so that Sidney got her share.  Pavlov was a moron – a well trained one.  So are we.

Second, dogs set priorities and enforce them.  When it’s time to rub Sidney’s belly, you had damn well better rub her belly or there’s hell to pay.  She might hold a shoe hostage, and make you play an exciting game of chase the doggie for half an hour.  Great managers set priorities and hold their staffs accountable.  Noncompliance has consequences.

Finally, training is essential.  With Sidney, 7:30PM is treat time.  No, we didn’t get to set the time.  She did by sitting at my feet and barking every night at 7:30.  Training is all about perseverance and repetition.  Sidney would bark for hours at my feet until I got up and fetched a delicious dried chicken treat.  Eventually, I got the message that 7:30 was treat time.  She only had to bark once, and I sprinted to the pantry to get her treat.

Perseverance and repetition work with employees as well.  Don’t expect lessons to take hold the first time.  Sidney spent nearly a week training me.

Thanks for reading!  As always for real tax and accounting advice, visit the main S&K web site at www.skcpas.com.  Also, please like the “How to Screw Up Your Small Business” Facebook page.  I post business tips there several times daily.  Some of the tips are even useful.

Until next time, let’s do it to them before they do it to us.

JHB Philosophy 101

This week, Jeff Becker steps up to the podium.  Jeff and I go back a lot of years.  In this post he shares his experiences running businesses.  Jeff is truly of the business owner mold.  Take it away Jeff...

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Frank had suggested that I write a piece for his blog a few years ago. However, I was still licking my wounds from having lost a 15 year old company that I had grown from 1.5 million per year into a 28 million dollar a year company. I simply hadn’t spent enough time reflecting on what I did wrong and what I did right. I now think it would be helpful to some to put my thoughts down in writing.

I started my construction company at the age of 28. My confidence came from having personal experience in actually doing the work and feeling as though I understood the technical side as well as the physical side of construction means and methods. So doing the work was the easy part. The piece of the puzzle I had to learn on the fly, was the business side.

MY APPROACH TO BUSINESS

My company travelled the entire United States as well as a few overseas jobs. I was always meeting other business owners in new places and those business owners were 60 year old men who were always happy to engage in conversations about business challenges and experiences. I think they found it interesting that I didn’t want to make small talk. I still don’t understand why so many people waste time by thinking their time is better spent talking about sports or the latest reality show when there is so much to glean from other owners when you get a brief moment of their time. Most business owners don’t want to be buddies, so trying to find “personal” common ground, is a waste of time more often than not. If there is common ground, it will happen without any effort. This approach really helped me tremendously as I tried to navigate and learn business. After all, work was the common ground that landed me in front of them in the first place. The rest happens or doesn’t happen. The relationship grows when working through challenges together. You will find this approach throughout this piece.

Another base belief I have, is that money is only made on the actual performance of the work. So if you believe that money is made by the office, this article is not for you. My entire 15 years was a constant struggle to create efficiencies that eliminated or reduce office personnel needed. I did this with as many as 6 and as few as 2 people. Other entities in my trade were using many more than I was. Becoming paperless is the key.

So after the first year, I realized I needed to know more about accounting. I felt powerless and the CPA I had was a specialist in filing IRS extensions. I was cash strapped and had no idea how to really budget my year when all I was getting each year, was what I called an end of the year “Oh Shit”! This is how I found Frank.

PICKING A CPA

I was really becoming a computer nerd. More on that later. I was using Peachtree at the time and so I felt it would be smart to find a CPA that actually knew my accounting package. Frank was on the Peachtree software support list. He was providing bookkeeper training and I didn’t see any other CPA at the time doing this.  Since I had a bookkeeper, I pulled the trigger and our relationship commenced. Frank and I later learned that we had common ground and that we both had visions concerning our two trades. Through that process, we continued to teach each other and pontificate about how we were trying to manage our businesses. Although Frank and I never just “went out to have a beer”, we did however have many personal conversations that I think pointed to the fact that we could. So, lesson 1, always find a competent CPA that you respect. How do you find that? Talk business first and make the conversation as much about your business as theirs. How the other party runs their business will tell you a lot about how they view yours. It also educates them about yours, so they can better help you organize yours. Make sure you know what you want to track, how you want to track it, and eventually how you want to see it on paper. Most CPA’s don’t care, and don’t know how to run your business. Don’t ask them! However they really can help you organize your information, so you can file taxes correctly. Over the years, Frank has only made one mistake and one joint mistake. Both times he did what was right and we both shared in our portions of the issues. The fact that Frank and I still do business, must mean he feels the same. Did I mention that I always felt that we “Could” go out and have a beer together? Make sure you are like minded.

PICKING A LAWYER

I was in a trade where it was more like the “Wild West” back in the 80’s. It was run by a generation that worked out more problems without the need for lawyers. Millions of dollars were worked out on a bar napkin or a simple hand shake. Of course lawyers were a part of forming a contract document, but law suits were really a last resort and marked the end of doing business with the other party. The moment you sued, the relationship was done forever and any friends they had, you lost as well. So it was always in everyone’s best interest to work things out, even if it cost you money in the short term. This was a very good learning exercise. I quickly became focused on developing a clear and concise bid document. Spelling out what items we would perform, really helped weed out the customers that really didn’t understand the job that they wanted built. Avoiding a customer that doesn’t understand what they want, will save you a lot of money, time, and energy by not working for them. I have only used a lawyer for litigation twice in 15 years. Once in Pittsburgh over $15,000….he was a crook and another against an insurance company that wouldn’t pay for a 1.5 million dollar machine that got dumped on a Tennessee interstate. 

What value does a lawyer have in a business? Well, they sort of do and they sort of don’t. The answer is about 50/50…LOL!! Those of you that own a business get that comment. How I used a lawyer, was as an advisor. Lawyers are very good at telling you both sides of the issue and how it plays out in the courts. Many things can be written, however, if there is no case law concerning the other parties issue, you will most likely win when going to court. I used my lawyer as a researcher. I wanted to hear what case law supported my position and what case law supported theirs. I would then use this new found knowledge in conversation with the other party and plant the seed, that their position wouldn’t exactly be a slam dunk for them. It always resulted in a compromise by both parties and a real savings in time and money. The lawyers always win and cost more money than a simple compromise. So how did pick a lawyer? I point you back to my “approach to business”.

BANKING

The most important lesson I learned was that you can’t just have one banking relationship. Although I did always want one, this is never good for the business. I was financing machines that cost about 1.5 million each and they were specialized. Meaning, there was only 5 companies in the USA that even really used these larger machines. This put my business model in a high risk category regardless of the profits. So the best way to say it is this. Eventually every bank is controlled by the Feds. They have to fit into a federally defined risk assessment model. If you get a “No” from your banker, it may not be you. You obviously have to be able to determine whether or not you need to improve some part of you balance sheet, but a lot of times the bank may not be looking to put YOUR RISK TYPE of business into their loan portfolio. I say move on and find one that is. I still have what I consider my go to banker and he played a very important role in helping me when I met my demise due to the depression. When I got a “No” from him when I was wanting to grow, he sent me to another loan officer that was looking for my type of company and could do a higher risk loan. That is the most important attribute you want in a loan officer. When he can’t help, does he care enough about you to recommend someone that will? Another must have attribute is whether or not they will spend a day and take a tour looking at how your business operates. They need to be asking a lot of “why do you do it that way” kind of questions. This shows interest. I can’t recommend anyone better than Pete Fuge with BB&T. The guy was a great teacher as I learned about banking. I still remember him showing up in a nice suit and wore out construction boots. This let me know that he has done this before and he really wanted to learn what I was up to and eventually needed. He also played a role in telling me “No” and advised that growth wasn’t a good idea, based on what he was seeing in the market. In the end, it was Pete that helped the bank officers realize that I was failing due to the economy and not that the business was being run improperly. I was simply written off and we both took our lumps as businesses that took risk together. Your loan officer has to be your best cheerleader. After all, when the doors shut and they consider your loan, you are not allowed in the room to speak your case directly. Educate your loan officer…dress him up and equip him with flashy pom pom’s….and send him in! Taking nothing personal when it comes to banking.

PICKING AN INSURANCE AGENT

I found this to be one of the funniest experiences. Every agent I ever had, drove up in an older model car and within a year, upgraded to some high end luxury or sports car. The insurance game is a racket. Especially when it comes to workers compensation. I had to fight with the insurance company every time I changed agencies. I never got confirmation of this, but it is my opinion that once you get an agent, the insurance company doesn’t want you to change. As a matter of fact, they won’t quote another agency for fear that the broker is pushing your rates up higher and they don’t want to expose that. They are hoping that the “relationship” can allow them to increase your rates every year and chalk it up to problems with your industry risk. I call bullshit! Every time I forced a change, I saved money! So what I am saying is….make a change. Make your agent be competitive and keep your rates the same. Even if you like the guy…..fire him one time….see if he comes back for your business next year.

PICKING EMPLOYEES

I love this topic. Much has been written about this topic since I have been in business. HR has really put a strangle hold on the industry. I still can’t get my head around this entity and why it is needed. I guess I can see it for mega large companies that are just selling a widget, but I think I can argue as much for itas I can against it . I have always liked a small business, so I naturally grew larger with a small business approach. Back in 2001 my father and I did a roll up of small engine businesses in Manassas. It was a retail business that I eventually became too busy to be a part of. My father took over that and eventually sold it.

I was very unconventional, because I really like the “Type A” personalities. I guess big businesses eventually run out of Type A’s but I still believe they are stifled more than they simply run out of them. HR is a big factor in my opinion. Anyways, here are my reasons why.

A type A person wants responsibility. They hate control and if they are capable, they will help you get there with little to no supervision. It really simplifies your business. However there are some pitfalls that you have to manage immediately until you determine you are like minded.

#1 Make sure they are not a prima donna. You want a type A that feels responsible for their mistakes. Once you have that, you got it made. If a Type A makes a mistake, they will move heaven and earth to correct that mistake and see it as a learning experience. A type B will most likely be afraid to approach the same issue twice and need a lot of babysitting when it happens again.

#2 Make sure they are the type that wants to find an easier way to perform the work. I am unfortunately prejudiced with the opinion that most people will bitch about a process within a company, but never take the steps to improve it. Even Type A’s. They simply show up every day and chalk it up to it being a part of the job they don’t like. This is where you HAVE to be there, so you can talk about the bad parts of the job and eventually come up with a way to make the bad part become a good part. That was always the leading topic when putting all the type A’s in the same room to brainstorm. This is how I opened the minds of my fellow cavemen and eventually became a paperless company.

#3 You have to make sure that the job you want done is clearly communicated. Otherwise you give the type A, wiggle room to point the finger back at you…..if something goes wrong. If you don’t clearly communicate…and it will happen…you have to take it on the chin and shift to fixing the problem WITH them. After all it is only costing you money if you don’t and you caused the problem by not doing your part.

#4 You ABSOLUTELY have to interface with them every day for a year to make sure you are comfortable that they perform the tasks required to your satisfaction. This is when you communicate how the company is going to interface with clients, other employees, and most importantly organize their work. I never really cared about how they did the work. I learned new ways to do the work from these type A’s sometimes. Having spent the time to discuss the process of doing the work netted us many efficiencies. There is nothing more productive than a bunch of type A people, driving towards the same goal, discussing how to improve what we do. We became a company of inventors as a result. Both sides felt very good about what they were doing because we all had a hand in solving a challenge. I even have a joint patent as a result. It is meaningless now, but I don’t want to get started down that road. It is another learning curve that has no place here.

#5 If you do all of the above correctly…..and you have a business that is growing…..you can now start focusing on having that type A groom a successor. Nine times out of ten, they will pick and groom their successor, much like you. I don’t recommend doing this until you have at least 5 years under your belt. If customers are wanting you to grow, resist it until repeat business demands it consistently. I have seen the 5 year rule play out in many businesses.

So I like Type A’s in leadership roles and from there, I try and find Type A’s that are in hiding amongst the type B’s. I had many that stayed with me for the entire ride. I hope this helps.

PICKING CLIENTS

Never forget that YOUpick your clients! If you work for a problem client, then you have forgotten how to say NO! Bad clients will always cost you time, money, and possibly employees. Make sure your client knows why they need you, how to use you, and appreciates the relationship and what you offer. If you have to have a bad client to make ends meet, start looking for another quickly. This challenge is what pushed me out of Northern VA. There are only so many “Good Clients” in any geographic area. Go find what you are looking for in other places. However, don’t discount what a so called “Bad Client” is telling you. They may be trying to help. So stay opened minded until you figure the relationship out.

 

FINAL THOUGHTS

So I now find myself looking for a new challenge. I have grown a business to a size few achieve. In Northern VA that isn’t so big, however nationally it is. I have purchased and run a retail business during that time, so I know what it is like to be “at Risk” and also how to manage and sell widgets…this I lovingly refer to as “Retail type” businesses. My latest passion/venture is going to market with processes and custom software that streamline and teach small companies how to grow and manage the office and “get it done” processes. Process challenges is what I really excel in. Predicting a depression was not.

Well, I hope this hasn’t been too long winded. If all of this is posted on Frank’s blog, then and only then, will I drop my insecurity of being too long winded. I am hoping Frank doesn’t edit this down to something simpler….like…..he had a great business….but failed!

Good Luck in business,

jeff@jhbecker.com

 

Lessons Learned from Leeches

Leeches killed Robin Williams.  I realized this watching a video of Robin Williams making a public service advertisement with a young cancer patient.  He was totally in the moment with her, completely dedicated to making her happy.  Here was Robin’s problem.  There were more cancer patients, personal assistants, managers, staff, and fans than he could ever make happy.  Not being able to meet the expectations of seven billion earth inhabitants killed him.  Ultimately, there just wasn’t enough blood to feed all the leeches.  Leeches kill business owners as well.

A leech is a thing that feels entitled to feed on your talents, efforts, and success.  If you’re successful, you’ll wade through ponds infested with leeches every day.  Leeches can be vendors, customers, staff, friends, and even blood relatives – especially blood relatives.

There are two types of leeches: time leeches and money leeches.  I often encounter time leeches, who want to market their services to my clients.  They don’t describe their requests that way.  They talk about joint marketing efforts.  However, I have two thousand clients to their twenty.  When a leech looks in the mirror, he doesn’t see a leech.

You may find money leeches in your immediate family.  She’s the sister, who only needs a few thousand dollars to make the mortgage payment this week.  She promises to pay you back by payday.  But payday never arrives.   Soon she and her spawn move in with you on a temporary basis.  Temporary means until the sun burns down to a white dwarf in a few million years.

I’m starting a support group called Leeches Anonymous.  As with Alcoholics Anonymous, the first step towards a cure is realizing you have a problem.  However, the second step, unlike AA, is realizing that the problem isn’t you.  It’s OK to kill leeches.  But Frank, won’t the leeches hate you as a result?  Yes.  The third step in our recovery is realizing that not everyone will love you, and that’s not only OK, but it needs to be that way for you to survive.

To kill leeches, you use the “N” word.  “No” kills leeches more effectively than fire, and killing one leech kills others as the word spreads throughout the leech community that you’re an asshole.  The key to being happy is being called an asshole by the right people.

I’ve had a couple of asshole moments lately when the leeches surrounded me and bled my spirit dry.  Leeches aren’t necessarily bad people.  I cut ties with a charity event, when my expected time commitment spiraled out of control.  That commitment, combined with a bunch of others, caused me panic attacks at night.  I chose sleep and mental health over a very worthy event.  Yes, I’m an asshole, but a better rested one now.  I couldn’t meet any commitments in an exhausted state.  Some leeches had to die for others to live.

Carefully choose the leeches you let live.  You don’t have to kill all the leeches, but put the ones you don’t kill on a paying basis.  I don’t kill all the joint marketing leeches, just the ones where there’s no money in it for me.

Sometimes customers can be leeches.  Evaluate which ones feed you back financially and emotionally to compensate for your effort.  Kill the rest.  And yes – the emotional payback matters as much as the financial.  We all have customers, who kill us emotionally despite the money.

Attracting leeches is a sign of success.  More leeches means more success.  So don’t feel bad about having leeches.  Feel bad about not killing them.

As always, thanks for reading!  For real tax and accounting advice, visit the main S&K web site at www.skcpas.com.  Until next time, let’s kill some leeches.

Secrets From a Productivity Rockstar

Entrepreneurs: How to Be a Productivity Rockstar

"I have way too much time on my hands!" said absolutely no businessperson anywhere.

All entrepreneurs must struggle with time constraints, and the global marketplace continues to squeeze every last drop out of us every single day. Whether you are in the startup stages or are running a mature company, I'm guessing that you need help improving your productivity.

Here are five secrets from an entrepreneur I spoke with who can be best described as a "Productivity Rockstar." She is juggling an established small business, a brand new startup, and three children under the age of five. Somehow she manages to do all that while also fitting in exercise and sleep. Seems crazy, but it's possible!

Plan It Out: The most simple way to accomplish more is to have a plan for doing so. Each week, entrepreneurs should roughly plan out their critical tasks. Then, because "stuff" always comes up, they need to revisit their plan every morning and at the end of each day. If you are juggling multiple companies and/or family obligations, include them in this planning process. Entrepreneurs never just work on one thing at once, and you don't have to do that as long as you are keeping the big picture in mind.

Ruthlessly Prioritize: Because something will always be competing for your attention, you must ruthlessly prioritize based on the plan you created. Of course you need to be flexible, but you simply can't be so flexible that critical actions don't get done. It's all to easy to drop a true priority, like developing a sales strategy for a new product, for a "fire" that demands attention right now. You have to ruthlessly evaluate each fire that comes your way, and be careful not to spend all of your time being a firefighter, which results in absolutely nothing getting done.

Delegate: Entrepreneurs are naturally wired to want to do everything themselves, but you can't scale yourself, so you have to figure out how to delegate tasks to others. The more you can get great people around you who you trust, the better your chances of success in business and in life.

Let It Go: One of the reasons the Disney movie "Frozen" hit it so big is because of its catchy theme song, "Let It Go." All of us can relate to the idea that we are held back by our personalities, gifts and circumstances. And all of us fantasize about letting go of those restrictions to find freedom. An entrepreneur, more than anyone else, must learn to "Let It Go" - let go of perfectionism, fear, failure, money, and everything else that is holding you back from achieving your dreams.

Move + Sleep: So many entrepreneurs fill their days to the brim with work. But when the future of the company rests on your shoulders, there is nothing more important than taking care of yourself. Make time to move your body every day and sleep at least 7 hours. Sure, there is a strong fantasy of the entrepreneur getting by on less than 3 hours of sleep per night, but that's really only sustainable for a short period of time, and is typically associated with severe mental illness and/or breakdowns. Don't be an idiot: take care of your body and it will work hard for you for the long-term.

Check out my Slideshare presentation on productivity if you want to learn more:

Why Long term Unemployment Persists

With the economy improving, why does long term unemployment still afflict a large portion of the workforce?  The Who (classic rock old guy group, now known as "Who's Left?") sang a song with the lyrics, "I hope I die before I get old."  You may not die before you get old, but your career almost certainly will.

Some personal disclosure is in order.  I am fifty-five years old.  I'm not a young whippersnapper / buck / punk (pick your old guy euphemism) lecturing you on how you just won't change with the times.  I am eligible for the super cheap IHOP breakfast special.  The waiters know me at Bob Evans.  I take enough prescription drugs that I'm considering one of those plastic old people pill caddies while I still have the mental capacity to use it.  I've got street cred as an old guy.

To prove my point about unemployment, let's do a virtual experiment together.  Get our your checkbook - jeesh I am an old guy.  Login into your e-banking software and schedule a payment for $250K.  You are going to place a bet.  You are going to pretend to be a business owner hiring a new employee for a tech job.  You are betting $250K on the person you hire from two potential candidates.  Pick the better candidate and get your $250K back plus more.  Pick the wrong one and lose your $250K.  So you don't have $250K to bet? That makes you just like most business owners.  We don't have it to lose either.  Welcome to the gamble business owners take every day hiring new employees.

You have two candidates, who appear equally qualified.  Neither is a perfect fit for your job, but from their resumes, either seems able to grow into the position.  Now you interview them and learn that one candidate is thirty-five years old and the other is fifty-five.  On whom shall you bet that $250K that you don't have?  Which one seems most adaptable to new skills?  You will hire the younger person one hundred times out of one hundred.  The economy does the same.

This doesn't seem fair?  Fair won't matter to you when $250K of your personal savings is at risk.

I like to think of myself as tech savvy and willing to learn new technologies and methods.  Maybe I even really do possess those traits.  However, I am one data point in an economy of hundreds of millions of data points.  My individual traits matter little in a job search.  I carry the statistical baggage of all fifty-five year olds.  I am a walking compendium of old guy characteristics that would eliminate me from most jobs without even an interview.

Maybe, we need a federal program to eliminate discrimination against old guys to make the job search game fair.  Before chasing the "fair" concept off a cliff, consider the following example from my wife's career.

She works with a man in his fifties, who has tens of years of computer experience.  I believe he was a programmer earlier in his career and then went on to teaching computer science in high school.  Now he is back as a programmer on a government contract.

He regales his younger colleagues with opinions of how EDLIN is far better than the current crop of of text editors.  Remember EDLIN?  If you do, you probably carry an AARP card.  EDLIN was the original (I think) text editor in MS-DOS - back about 1984.  With EDLIN, you edited text files one line at a time.  Yes, I'm that old that I used it.  It sucks compared to anything you might use in the 21st century.  The EDLIN turd was flushed about 1986 in favor of the MS-DOS text editor, imaginatively named EDIT, with which you could edit whole text files at one time.  What a technology miracle!

The qualities of EDLIN versus anything else really don't matter.  What really matters is the message this guy is broadcasting to his younger colleagues, which is, "I'm old and I can't change."  Maybe they mentally insert the word "won't", for "can't."

This guy's contract will surely end as do all government contracts. As the employee of a government contractor, your employment is contract to contract.  When one ends, you look for another one.  If your company doesn't have a position for you, you move on to another company.

Most people find new jobs by networking with colleagues from prior contracts.  What will happen when he goes out job hunting?  All of his current colleagues think of him as old and not adaptable.  Do you think they'll recommend his hire for new positions?  He is one more lead bar, that I get to carry around in my old guy career baggage.  He's a datapoint equal to mine.  Another brick in the wall we old guys can no longer hurdle in the job market.

Do we really need a federal regulation to get this guy his next job?  He's likely not productive in his current job.  Shall we curse another employer with his employment?  The economy is giving us the answer in the form of the economic reality of long term unemployment.   The economy doesn't value and won't pay for experience not relevant to today.  A really great EDLIN professional isn't in much demand.  Thus, we have persistent long term unemployment for people over fifty.

Sure, this is crappy news for us old people, but you can't solve a problem before defining it.  The problem is that our experience from twenty-five years ago has little value and probably is even a negative factor today on a resume.  Employees get paid for what they bring to a business now, not what they brought twenty-five years ago.  Old people like me may find this hard to believe, but the tech knowledge from twenty-five years ago has next to no value today.  Yessiree sonny, we know that a hard drive has platters that spin beneath read / write heads.  That doesn't matter in a world moving to solid state storage.

Here are some old guy job search tips.  First, don't talk about the good ole mainframe days and how cloud computing is really just a return to the mainframe model.  That's largely true, but your resume will go to the shredder anyway.  You think you're exuding understanding and perspective.  Your younger potential boss pictures giving you CPR in the lobby.

Second, get everything that happened pre 21st century off your resume.  No one cares that you were the senior director of DOS application development.  What can you do now?  Do you have today's important certifications?

Third, talk little (very little) about what you've done and a lot about what you can do for an employer today.  The words "extensive experience" should never pass your lips.  Those words scream out "past" not "future."

Last, and this is a great interviewing tip for all ages, use my favorite NFL employment metaphor.  Tell a potential boss that you are a great left tackle.  A left tackle is the protector of the quarterback.   The boss sees himself as the quarterback.  You are telling a potential boss that you have his back.  You aren't looking to sack him.  OK, this might not work with female bosses.  I don't have a good female boss metaphor.  I don't think the term, BFF, works in an employment setting, but maybe my still normal testosterone is getting the best of me here.

Thanks for reading!  I promise to be back more often after this most recent and challenging tax season.  For real tax and accounting advice, please visit the main S&K web site at www.skcpas.com.  Also like the "How to Screw Up Your Small Business" page on Facebook.  I solve all the world's business problems there daily.

Until next time, let's do it to them before they do it to us.  Damn - another old guy cliche.  Time for my Geritol and a nap.

How Customer Selection Affects Your Work Life Balance

I'm tired of the grade school girlie gossip war between Dan Snyder, owner of the team soon formerly to be known as the Redskins, and Mike Shanahan, soon to be former coach of said team.  Their moron minions battle each other through leaks to the Washington Post and local sports radio stations.  Here's a succinct summary of the battle.

Shanahan's minions, "RGIII is my boyfriend.  If I can't have him, you can't either.  I'll bench him."

Snyder's minions, "RGIII is my boyfriend.  He likes me better than you.  He told me so when we went on a date to the Tom Cruise movie premier in Hollywood."

I began to solve the work life balance equation when I realized that my choice of clients largely determined the hours I must work.  I also realized that the clients, who wanted to meet after hours, aren't my best clients.  My best clients are business owners, who consider accounting and tax matters to be part of their normal business day.  They no more want to schlep across town at eight P.M. to meet with me any more than I wanted to meet with them at that hour.  They value their down time as I do.  Unless we're meeting for beer, then count me in.

The potential clients, who want to meet in the evenings, have a number of bad characteristics, not the least of which is cutting into my time off.  They are typically lower income than my best business owner clients.  So they care more about price and less about value.  They are great clients for H&R Block, Jackson Hewitt, and Liberty Tax.  Their bosses are my great clients.

I began the transition to a saner life by preventing our admin staff from scheduling new client meetings after four P.M. after tax season.  Yes, people go elsewhere.  The ones I want to go elsewhere.

I once had a potential client call me at eleven P.M. on a Saturday night to see if he should lease or buy a car.  No thank you, not this boy.  I told him to buy the car and then park it up his ass.  Alcohol might have been involved at that hour.

There are some businesses, like retail and restaurants, where business hours are basically all day.  God have mercy on your soul if one of these is your business.   You'll likely never have a decent work life balance.  Better you than me.  These businesses are also typically unprofitable.  So if you own one, you'd probably feel less pain from a sharp stick in the eye.

If you own a business that should allow for a sane life, ask which customers cause you to work long hours.  I'll bet they're the price sensitive ones, whom you can never satisfy.  Fire one of these miscreant customers and see how it makes you feel.  I'm betting the feeling isn't quite as good as sex, but it's probably a close second.  Masters and Johnson should have studied this.  Of course, they were too busy studying each other naked.

As I did with my clients, determine the characteristics of your best customers.  Determine which twenty percent create eighty percent of your profits.  Then market just to them and accept only the best.  Satisfy these customers and they'll refer more great customers to you.  Great customers associate with other great customers the way great musicians play with other great musicians.  Soon you'll have a critical mass of profitable customers, who respect your time and great service. 

Then your life will begin to make sense again.  You wife and kids will recognize your face again.  Of course, spending more time with them may make you want to spent less time with them.  But that's your problem.  I'm not a damn social worker.

Thanks for reading!  As always, for real tax and accounting advice, please visit the main S&K web site at www.skcpas.com.  Also, please like my Facebook page, "How to Screw Up Your Small Business."  I post snarky advice there three or four times daily.

Until next time, let's do it to them before they do it to us.

Screw Up Your Schedule

Get President Obama on the phone.  I have a solution to the diplomatic crisis with Russia over Edward Snowden.  We give Pussy Riot asylum.  They can keep Snowden, and we'll give them three other commie pussies to make it even.

If you can't manage your time effectively, you have one of two problems.  Either, you aren't using the time you have efficiently, or you just plain don't have enough time to get your tasks done.  These two problems have different solutions.  If you don't know your problem, you'll get the wrong solution.

To determine which problem you have, step one is to track what you currently are doing with your time.  In my case, this is easy since we have time tracking software in our CPA firm.  At the beginning of a task, I start a software timer.  At the end of the task, I stop the timer and record the time against a project.

At the end of the day, I have a record of my day.  If I only have four hours of billable time, I know a lot of hours leaked out of my day.  I then immediately determine where the rest of the day went.  Sometimes, the time that leaked resulted in something worthwhile.  Some days, I got interrupted a few million times and got nothing accomplished.  The key is that I know immediately what happened to a day.  Over the course of a week, I can determine if I'm simply running out of time or have too many unscheduled nuisances crowding out productive work.

Tracking your time can be easy.  To start, keep a daily schedule.  This is your time budget.  Outlook is great for this.   At the beginning of each day, schedule times for the tasks you hope to complete.  At the end of the day, determine what tasks got done and why some tasks weren't completed.  Were you interrupted too often to get anything done?  Or, did you just run out of time to get everything done?

When you get interrupted, you don't just lose the time spent disposing of the interrupter, you lose another ten minutes getting back your focus.  Guard your schedule like a pit bull guards a drug dealer.  Shred your open door policy.  Batch your phone calls and e-mail responses.  Turn off the new mail indicator that shows up in your system tray.  Snarl every time someone appears at your office door.  Buy a gun.

Do what works for you.  Your schedule is your schedule not somebody's opportunity to transfer their unpleasantness to you.  You may become known as an asshole, but a you'll be a productive one.

If you guard your schedule like Fort Knox for a week and still can't get everything done, you simply have too many tasks.  The solution to too many tasks is delegation.  I am a master delegator, which is better than being a masturbater and pays better as well.

I was not always so good at delegation.  Desperation taught me well.  You can always come up with reasons why only you can complete a task.  I thought that I was the world's best tax return reviewer.  No one else had my experience, competence, and drive to keep garbage from going out our door.  Last year, my unwillingness to delegate tax return reviews became a major bottleneck in getting returns done.  That bottleneck was costing me money.  I had no choice but to try letting someone else do the detailed number by number reviews.

It didn't work perfectly, but it worked well enough.  I had let perfection become the enemy of pretty good.  Given time and training, pretty good becomes pretty great.  I gave up the time consuming detailed tax return reviews, and the world didn't come to an end.  Our client service actually got better.

Delegation will work for you too.  First, change your attitude.  If you believe delegation will fail, it will.  Next, write down how you complete the task.  This is your procedure manual.  Use your manual, and invest time training your staff.  Finally, you need a process to monitor quality control.

For tax return reviews, I perform a less detailed final review.  I review the initial reviewer's compliance with our review procedures.  If a review hasn't been correctly completed, it goes back and gets done again.  Training is continual and should be.

Fixing your problems with time management is critical to business success.  I once had a staff member who kept telling me, "If I can just get organized..."

I told him, "Don't get organized.  Be organized."  Organization isn't a destination.  It's a process, a battle sometimes.

Thanks for reading!  as always, please visit our main S&K web site www.skcpas.com for real tax and accounting advice.  Also please like the "How to Screw Up Your Small Business"  Facebook page.

Until next time, let's do it to them before they do it to us.

Create an Advisory Board

I hope you don't live in the Washington DC area and listen to sports talk radio.  All day, every day, the air waves buzz with RGIII rehab news.  Is he ahead of schedule?  Is he behind schedule?  Will he be ready for the first game of the season?  Is he dissing Coach Shanahan for leaving him in a playoff game to get injured?  RGIII's words are more closely parsed for hidden meaning than the pope's.  Of course, RGIII's words make more sense.

If you could create an advisory board for your business, whom would you select?  Wouldn't it be nice to get advice from your CPA and attorney for just the cost of maybe a meal instead of hundreds of dollars hour?  Let's add a banker and maybe our marketing person.  I'm sure they'd love to work in the evening for free as well.  Here is my experience with advisory boards for small businesses.  They don't work, and you may already see why.

What do your advisory board members get for their time?  Oh, you say, they get your continued patronage.  Well, bully for you.  If your business reputation draws free work from attorneys, you don't need an advisory board.  You should be on several.  Here's my experience serving on one client advisory board.  I have been on several over the years.

Joe owned a small manufacturing company that had been in business for fifteen years.  Over that time, he had some success, but he spent a lot of time drifting sideways.  He reached a few million dollars in revenue, but didn't earn any more profit at that level than at lower sales levels.  Joe needed to make some major decisions on direction, and he needed help.  So he recruited an advisory board.

Four people served on the original board, which met quarterly at Joe's office in a run down section of town.  Of course, I was the CPA on the board.  Another person was an employee at a commercial real estate developer.  The third was Joe's brother, who also did something in real estate development.  I don't remember the fourth person, as I don't think he ever showed up at a meeting.

You should be asking right now, "What??????? Two real estate guys and a CPA?  Doesn't Joe run a manufacturing business?"  There was some reason to have at least one real estate person involved.  Joe owned the building and rented out the majority of it to other businesses.  His first issue for the board was refinancing the real estate to raise some capital.  He wasn't totally crazy, but yes, the composition of the board was his first mistake.  He really needed some other areas of expertise, but we were the only fools available.

Here's lesson number one about advisory boards as if this isn't already obvious.  Most small business advisory boards are comprised largely of two types of members, fools (like me) and sycophants.  The fools bring you no value (guilty as charged), and the sycophants echo what you already intend to do.
Let's assume you are luckier than Joe with the composition of your board.  Here's lesson number two about advisory boards.  Members, who get nothing in exchange for their time, will drift away in about a year.  Your lawyer may attend a couple of meetings, but soon, you'll find that he just can't seem to make the meetings work in his schedule.  At first, he'll conference in.  Then, he'll stop participating at all.

Can you really blame him?  Put yourself in his place.  He gets to deal with twelve hours worth of schmucks every day.  Then he gets to spend an evening with you giving free advice.  Sounds attractive to me.  I would mistrust the competence of any lawyer willing to do this.

How can you make an advisory board work?  Put very simply, pay them.  You can't afford that, because you're just a struggling small business?  Then waste your time putting together a group of advisors, who would rather spend time with their spouse and kids.  They will eventually find creative ways to avoid you.  Sorry, your continued patronage just won't cut it for in-demand professionals.  Show me the money.

There is an advisory board concept that I like, peer to peer advisory groups.  You pay to play here, and it isn't all about you.  Not only do you get an advisory board, you are on the advisory boards of the other members.  This isn't coaching, where you are "taught" by someone, who has never run a business.  You help other business owners, and they help you.  Everybody benefits.

I like this concept so much, I've invested some of my hard earned nickels in a business that organizes these boards, Inner Circle.  I need some business advice too.  So I'm participating myself.

Thanks for reading!  Please catch up with me daily on Facebook by liking the "How to Screw Up Your Small Business" page.  3,400+ people can't be wrong.  Well, actually they can, but these people aren't.  This week, we are building a business model for a handyman business.

Until next time, let's do it to them, before they do it to us.

Keeping the Right Customers

I would like to thank the old people, with diminished faculties, driving behemoth RV's dragging passenger cars behind, for making my trek up I95 from Richmond such a harrowing journey.  I would especially like to thank them for pulling into the middle lane at 55 mph to pass another RV doing 54 mph.  They have given me the solution to two major national problems I can solve with one prescription.  People, who own RV's, should be ineligible for Social Security and Medicare.  With one law, we can get amateur, recreational RV drivers off the road and fix the solvency of two major federal entitlement programs.  My name is Frank Stitely, and I approved this message.

In my last post, I wrote about the danger of spending time satisfying difficult customers at the expense of good customers.  This time, let's talk about keeping the right customers for your business.  To do this, I'll use the example of Pawan, the amazing IHOP waiter.  Here's how my day starts out two or three times a week.

At 6 AM sharp, the alarm jolts me out of my a passionate lovemaking session with Jennifer Aniston.  I only hope it's as good for her.  In my dreams, it is.  I won't bore you with my morning routine.  I did that in a post a couple years ago.  Sometimes when I go downstairs, I am disappointed to find other human beings in the kitchen.  Anthropologists call these people family.  I call them obstacles to my getting to work and billing somebody.  When I find these primates, I flee the house and drive to IHOP for breakfast instead of dining on a fine banana with a glass of orange juice, hold the vodka, most mornings.

I battle the usual group of idiot drivers heading down 28 South from Sterling to Chantilly and pull into my normal parking space along the side of the Chantilly IHOP.  As I enter the front door, I see a booth with two diet cokes waiting for me.  More importantly, I see Pawan, the amazing IHOP waiter smiling at me, menu in hand.

I have known Pawan for four years.  He works at two IHOP's in Northern Virginia, Chantilly and Gainesville.  I have also seen him working out at Lifetime Fitness in Centreville.  One of us is a stalker.  I'm not sure whom.

Pawan always smiles.  He never seems to be having anything other than an amazing day.  As you know from previous posts, I play a spy when I visit restaurants.  I listen for employees bitching about customers and bosses.  At the Chantilly IHOP, I sometimes hear this sniping, but never from Pawan.  I feel like Pawan is a trusted friend, who gets me in a good frame of mind to do battle with my work day.

Then one day, while finishing my Rooty Tooty Fresh and Fruity pancakes, I learned that Pawan was cheating on me.  He greeted another IHOP regular with the same cheerful attitude with which he greets me.  I sadly understood that I wasn't special to him at all.  He was just using me.  I felt so cheap.  No, not really.  I'll feel cheap when Jen Aniston dumps me.

Pawan treats me the way Pavlov treated his dogs.  Pawan gives me friendly excellent service, and I salivate.  Actually, I do better than that, I tip him well.  I see lots of people leave buck fifty tips on ten dollar checks.  Yes, that's fifteen percent (I had my staff check my math).  But the effort required of an IHOP waiter is no less than for a waiter on a fifty dollar check.  The tip shouldn't be solely defined by the size of the check.  It should be defined by the waiter's effort to make my morning bearable.  I won't tell you what I tip Pawan each time.  That's proprietary information.  Get your own Pawan.  But, you can assume it's better than a buck fifty.

Pawan, like any good psychologist, knows that positive reinforcement is the key to encouraging repetitive behavior.  He makes me feel special, and I, therefore, repeat my tipping behavior.  I wish Pawan were an accountant.  I would hire him first thing tomorrow morning.  He gets customer service.  Reward the good behavior of your best customers, and they will repeat that good customer behavior that we crave as business owners.

Between this post and my last, you have the two keys to customer service.  Rid your business of crazy customers and reward your good customers.  It's the stick and the carrot.  Beat your bad customers over the head with a stick, and feed your good customers your absolute best efforts.  Of course this is exactly the opposite of what most business owners do.  They prostrate themselves in front of customers, who will be forever lousy, and take their best customers for granted.  Pawan knows better.  So should you.

Thanks for reading!  As always you can find me on the How To Screw Up Your Small Business page on Facebook.  I promise to be snarky two to three times a day.  For real tax and accounting advice, please visit the main S&K web site at www.skcpas.com.

Until next time, let's do it to them before they do it to us.