Category Archive

I always enjoy my meetings with my business coach (see me in the picture to the left after a recent meeting - however, I don’t remember those clouds).  I’m always challenged because he keeps asking “why?”  It gets hard always answering that question, but I truly need it.

He mentioned a talk he did recently for some financial nerds somewhere and told them about Three Entrepreneurial Phases of Growth: (1) Lead Generation, (2) Lead Conversion, and (3) a Client “Wow” Process.

The first phase finds them, the second one gets them, and the third one keeps them.  I identified that we don’t do enough to keep our clients.  He scared me when he said other CPAs are out there looking for your clients.  And now YOU (yes, YOU dang it) can take that to heart - there are other industries and businesses hunting down your clients right now - what are you doing about it?

Here is what I’m going to do to keep my clients:

1  Everytime I sign up a new client, we are going to mail them a thank you letter with a piece of firm collateral.  The firm collateral will tell them everything we do, will highlight our theories of operating and serving our clients, and will remind them of why they chose us in the first place.

2  We will break all of our clients down into one of three categories: Gold, Silver or Bronze.   Depending on which clients provide the most income to our firm, the most referrals, the most blah blah blah, will be in the Gold category.  The ones whom we serve periodically will be Silver, while the ones we see only annually will be Bronze.  “Why don’t you just serve everyone as if they are a Gold client?” you may say.  To that I say, “what a stupid question” (just kidding).  Actually, that’s a good question.  The reason is because as you grow YOU WILL NOT be able to serve everyone like a Gold, and when you have started serving everyone as a Gold client, then you must continue or they will notice and get ticked off.  So, serve your clients according to the value that they add to your firm, or you’ll load yourself down providing Customer Service you can’t continue to support (and stop asking stupid questions).

3  We will implement a more proactive Customer Service Program that focuses on our Gold, Silver and Bronze clients.  I already know who my Gold clients are, and they will probably start receiving Customer Service calls from someone in my firm (not me) to see how we are doing, and to ask them what else they need.  Gold clients will also receive small gifts every now and then.  Our Silver clients will probably receive a call quarterly and a note from me every now and then just to say “thanks”.  And our Bronze clients will probably receive a call once a year just to say “thanks”. 

4  We will probably start sending “Thanksgiving” cards to every client in the firm.  This seems like an innovative way to say “Thank You” since no one else sends “Thanksgiving” cards.

What are you going to do to KEEP your clients?  (because I’m trying hard to take them).

Thanks, Jason M. Blumer

This article so eloquently summarizes how I feel about the ”big bad economy”.  Though it’s funny, it really has a lot of truth in it.  “The economy” tends to make us afraid to expand our businesses and operate efficiently and profitability. 

And that fear keeps us from providing value to our clients and charging for it.  Which is the main beef of this post - good quality businesses that don’t charge for what they do.

My dad said it best when he shared this quote in one of our recent THRIVEal business classes that we teach to our clients:

Good work is not cheap!  Cheap work is not good!

I want my clients to be the experts that charge more than anyone and deliver high-end value and quality that can’t be found anywhere else.  Don’t lower your fees for fear of the “economic downturn”.  The “economic downturn” exists due to fear in the media, and it can’t make the small businesses in this country fail.  Scared business owners can make a small business fail, but not the “economic downturn”.

So don’t be afraid to expand during this “economic downturn” (whatever the heck that is).  Add value in ways no one else is, and CHARGE FOR IT!  Now is the time to gain ground and take over market share that is not currently being protected very well.  Your clients may not be able to reiterate it, but they are familiar with the phrase:

Good work is not cheap!  Cheap work is not good!

Thanks, Jason M. Blumer

It seems that entrepreneurial education has been catching on lately, according to a recent article from the New York Times.  This subject is now being taught at universities across America.  A subject typically reserved to the “School of Hard Knocks” and experience has a formal curriculum now.

With this move to more traditional eduction in Entrepreneurial Studies, I wonder if the up and coming generations will be more apt to survive the difficulties of starting and running a small business?  Not sure, but the article did make a good point.  As stated by Marjorie Smelstor, the Kauffman Foundation’s VP for the Kauffman Campuses Initiative and Higher Education Program (which spends $50 million to finance entrepreneurial programs at various universities around the country):

If it [entrepreneurial studies] is taught purely in a traditional classroom with lectures and talking heads with an emphasis on a theoretical approach, then no, it won’t be taught or learned.

But, she goes on to say, real-life experiences will truly make this teaching more real world, thus making the students better and more successful entrepreneurs.  What a welcome change to current higher education - a focus on doing business rather than simply learning about it.

I welcome the focus on a younger level of entrepreneurs.  Here’s to our future.

Thanks, Jason M. Blumer

More on entrepreneuriship: Entrepreneurship Week USA, Entrepreneur, the magazine, the Entrepreneurial Mind blog (where we learned about this article), Small Biz Labs blog, Forbes

Following is a guest blog by my wife, Jennifer Blumer.  We’ve gone through some stuff as she has learned to live with an entrepreneur, and I’ve learned to accommodate her needs while in the process of growing my businesses.  Her wisdom is unmatched in the business world, and I value her comments greatly.  Some of my clients would do well to heed her advice…  here it is.

Are you an entrepreneur who happens to be married to a non-entrepreneur?  That would be Jason.  As the saying goes, opposites attract.  This is true for us.  If your spouse is less than enthusiastic about your wonderful business ideas, perhaps I can shed a little light into his or her way of thinking.  Let me share a few tips for helping your nervous partner be excited about your business pursuits.

-Avoid debt and build a cash reserve.  I put this first because this has been the biggie for us.  I don’t mind Jason’s new ideas and pursuits as long as I know we won’t be paying for them later…as in, long after the newness has worn off and he has moved on to the next adventure.  If there is cash in the bank that can be used to pursue a new endeavor, then why not?  Debt is not your friend.

-Be careful about your timing if you want your spouse to be excited.  Jason came home for lunch one day and let it out that he wanted to open a new office in another town.  The kids were running around as I was making lunches after a morning of teaching one to read, one to multiply, and keeping one from climbing the walls.  All I heard from Jason was that this would cost a lot of money and he would be even busier.  Of course he said nothing like that, but his timing could have been a bit better.  If you want your spouse on your side with new ideas, you have to sell that idea to him or her just like you would to a customer!  Timing is everything!

-Listen.  Even if it is your business, your spouse does live with you and lives with the consequences of your business decisions…for better or worse.  When I feel my opinion is valued by Jason, as evidenced by his listening to me, I am more likely to support him in any way I can.

-Be willing to alter your plans if necessary.  In one business venture, Jason and his partner were going to purchase several pieces of equipment.  Expensive equipment to be used in uncharted territory.  I was very thankful when they decided to buy about four units rather than eight.  The plan was to buy more later if the first units made money.  Nothing wrong with going slow at first.  This might mean doing your new project on the side rather than full time in the beginning.  And now, it seems to be working.

-Don’t be afraid to dream out loud with your spouse.  This is so important.  I have always known Jason desired to grow his firm, but until recently I did not know the specifics of his dreams.  Now that I do, he has my full support, especially since I know he is aware of my concerns.  Knowing his dreams provides me with the context for his everyday decisions to make sense.  Without this background, I could not always understand his decisions.

-Know your stuff.  I can trust Jason to build his businesses because he studies constantly.  He seeks the counsel of all kinds of people.  He is not going to just come up with an idea and open a business.  I can trust him to know his customer, the market, trends in the business, etc.  Research is so important.  This is one of those things that takes time, but pays in a big way later.

-Lastly, never stop communicating.  I do not need to know every detail of Jason’s day to day business operations.  I don’t necessarily care which software he chooses or which phone system is best.  But I do want to know the overall big picture and how it will affect our family. 

I hope these comments are helpful.  Thanks for letting me share.

Jennifer

I just heard (on a podcast) the head of marketing at jumpup.com, a great site from Intuit, talk about the 65/25/10 rule.  This rule was to offer some type of guidance on how to bill for your time once you make the jump to becoming self-employed.  It was originally suggested by one of the members at jumpup.com.

Basically, the member was struggling with how to bill for her services after starting her own venture.  After some time, she figured it out, and offered this model: of your total hours to be worked in your new venture, 65% of your time should be spent on billable client work, 25% should be spent on business development, and 10% should be spent on the administration in your company.

She used this model to create her new hourly billable rate.  Here is an example: Before making the move to self-employment, you made $65,000 in your last job (including salary and all benefits).  And now, you assume you will be working 50 weeks during the year for 40 hours per week, or 2,000 hours per year.  This will equate to 1,300 hours being spent on billable client work (2,000 hours x 65%).  Divide your last compensation package ($65k) by the hours to be billed (1,300), and you arrive at how much you can bill for your time - which comes to a whopping $50.00 per hour. 

At least it’s a model, but a few cautions:

-this calculation only gives you what you were paid last year.  But bill-for-time service industries typically have some type of mark up on the rate they are paying themselves in salary.  This is because their hourly billable rate now has to cover their wage AND their overhead costs to run the business.  Should the $50.00/hour be marked up 2.5 times to arrive at $125.00 per hour as a billable rate?  Maybe so, but it may depend on the industry…  

-the industry you are working in has a lot to do with how you calculate your hourly rate.  Some industries allow for a certain amount to be billed depending on the market.  For example, an attorney may bill out at $200/hour in a certain city, while a graphic designer may only be able to get $100/hour at the most in the same city.  It depends on the market rate in that industry.

-niche work can sometimes bring higher rates, if marketed properly.  An attorney billing out at $200/hour for general practice work may be able to charge $300/hour for high end health care work.  Likewise, the graphic designer in our example may be able to bump her rate up to $150/hour if specializing in 3D renderings for engineers and architectural firms.

-what if you work more hours than 2,000 hours per year (which you most certainly will if you are self-employed), and don’t get 65% of your time billed out (which is hard to do - administration is so freakin’ huge)?  Let’s say you work 60 hours per week for 51 weeks, or 3,060 hours per year.  And let’s say you only get 55% of your time billed out.  Now use the $65k you got paid from your last job and divide it by 1,683 billable hours during the year (3,060 x .55).  Now you get a whopping $38/hour.  You don’t want this calculation to lead you into charging $38/hour, when you should charge $75/hour. 

Just some things to think about when using “scientific” methods to calculate your rates - sometimes it’s more of an art!

Thanks, Jason M. Blumer  

An interesting post here on the upside to recession.  Joel Libava says that franchises increase when economies slow down.  The reasoning:  when the economy slows, people get laid off, and they think, “huh, maybe I’ll start that business my wife told me not to start” (or something like that).

But in the end Joel says everything will be okay.  The small business will survive.

I wonder what other potential upsides to recession there are?

Thanks, Jason M. Blumer

Wow!  What a plethora of good material I had to read through during this January 8th Edition of The Carnival of Small Business Issues, maintained by the elusive CA.  I feel like I just got a freakin’ MBA (maybe I did - hey, where’s my diploma?).

Anyway, on to the good stuff.  Here is what I learned…

Operations

Are You Copying Genius? Or Creating Mediocrity? by Debra Moorhead was an awesome post on receiving good business advice.  She so eloquently encourages us to hang out with the exemplary (and ditch the mediocre).  Surround yourself with good people, copy genius, and so many other points I can’t recount here.  Don’t miss this inspiring and accurate article by Debra!

Are You Exploiting Your Strengths? by David B. Bohl offers an interesting view on working on your strengths.  That’s right.  David points out that we normally tend to work on our weaknesses, but exploiting our strengths makes a lot of sense after reading David’s well-thought out article.  It’s definitely worth a read.

Business Performance And Profit by Jim Sansi had a great post on actually calculating and measuring the implementation of business processes (instead of just wingin’ it).  Using a simple example (that you should expand on), Jim explained how to measure profitability in order to help you know what type of systems you can and should implement into your company.   Great stuff.

Five Things Racquetball Taught Me About Succeeding in Business by Change Your Tree was very informative (and made me want to get on the racquetball court again).  Business does mirror so many other aspects of life… this was a great comparison.  This game teaches us to be patient, know the competition, know the angles, etc.

An Independent Consultant’s New Year’s Resolution, and How to Keep It, in 7 Steps by Tim King makes some confessions and commitments to improve in the new year.  How?  With his seven ethereal steps, of course (including): visualizing yourself completing the steps,  list the mental challenges and see yourself doing it anyhow, etc.  A wonderful New Year’s article (and he got in a few days of his “write 500 words per day” resolution too!).

Starting the Year off Right by Robert D Flach offers good reminders for all you self-employed people - start NOW tracking your income and expenses for 2008.  Tax time (in 2009) is no time to get organized.  He reminds us of the possibility of IRS audits for the nano business owner, and that you want to be prepared should the IRS chose to show YOU a little extra love this year (i.e. auditing you, that is).  Great advice worth heeding.

Marketing

Re-Evaluate and Measure Your Marketing Strategy in 10 Steps by Jay M helps us with the “science” of marketing.  With 10 ways to expand your marketing campaign, Jay spells out in clear and easy language how to review what you have done, what you should be doing in the future and analyzing how you did financially.  Wonderful material.

Marketing Tip - Train Your Team on Promotions by Ingrid Cliff makes such an important, often over-looked point to train your team on the new promotions offered to your customers/clients.  We all get so excited about our new stuff that we fail to brief the team on how to best sell it to the public.  Great reminder from Ingrid!

A Subtle Conversion Rate & Response Booster From 3 Masters by James Alenteal gives some straight forward advice on conversion at your site or blog (i.e. turning visitors into readers and/or buyers).  He gives examples (here, here and here) of three different people (actually four - see here) who have implemented some interesting conversion pyschology on their visitors.  It’s great stuff and takes just a minute to read (watch out - prepare to be converted!).

Bring the Love Back by Edith Yeung offers some quick advice on what your customers need (and the reminder that you might not be providing it).  With a funny video reminder, Edith tells us it’s time to give some love back to those customers… after all, they may not feel like you love them anymore.

The Power of Multivariant Testing by Jim Logan speaks to the need for testing of any marketing campaign launch.  But testing the success of a campaign can be daunting (how do you test direct mailers, their use and impact in an inexpensive way?  You have to change things and send them again).  Enter the world of multivariant testing online.  This is seemingly a powerful tool that lets you test multiple variables online all at the same time.  Jim knows what he’s talking about in this well-written article.

Blogging and PR: Six Principles to Live By by Laura Spencer offers six basic ways to get your business blog rolling.  They are straight and to the point, and come from experienced bloggers.  This is an article for all of us…

Mortgage Issues

When Should You Refinance? by Ryan from CareOne Credit Counseling offers some very practical advice on the decision to refinance your home, and for what reasons.  Use some of CareOne Credit’s handy dandy calculators or budget planner to help you make the right decisions.  There’s a lot of useful info on their site for those interested in repairing or enhancing their credit standing.

The Mortgage Loan Process by Ryan from CareOne Credit Counseling urges us to know the mortgage loan process before the surprises arise.  Walking you through the three basic steps of acquiring a mortgage (1 Applying for a loan, 2 the processing of your loan, and 3 the loan closing), this article provides very practical advice for the new homeowner, as well as those buying again for the second or third time.

The Power of Pre-Approval by Ryan from CareOne Credit Counseling provides yet another awesome and well-written article concerning a different aspect of the mortgage process: pre-approval.  The power of pre-approval during the loan process offers some very basic benefits to the future homeowner, that being ultimate speed of the loan approval, gaining bargaining power while house-hunting and offering comfort to the seller during the process.

Taking Advantage Of The Equity In Your Home by Ryan from CareOne Credit Counseling offers a great example of how much equity you can pull out of your home.  Explaining the difference between a line and a loan, Ryan details various terms, rates and costs to the homeowner during the equity-pull-out process.  Again, well-written content from this involved and detailed website.

General Business

Evaluating A Business Opportunity by John Crickett offers so many great tips on evaluating your move into business ownership.  There are tips on avoiding scams, making sure you’re the right fit for the business opportunity and making sure the move is profitable.  John’s blog is chocked full of so much more too.  It’s worth a visit (again, again, again and again).

Does Bad Personal Credit = Bad Business Money Management by Scott Allen explores whether the method by which you manage your personal finances spills over into how you manage your business finances (for better or worse).  No concrete answers here (except that Scott feels he is better at managing his business finances over his own personal finances), just good exploration into the possibilities.  Well written and insightful.

Top Ten Opportunities in 2008 for Personal Businesses  (article provided by Dawn as a guest blogger on Small Business Trends) by Dawn Rivers Baker gives a rundown of some upcoming opportunities (along with some convincing statistics on SMBs) for nano-businesses.  And Dawn has the experience to backup her predictions.  Ready to start your new business in 2008?  Why not start with Dawn’s suggestions.

Is the Sky Falling? by Mike Buckleygives us a candid rebuttle to the latest US recession scares in the news.  He reminds us that even in a recession, there are still many opportunities for the small business.  You may have to work a little harder, but you can do it.

Learn the Proven Money Making Keys to Success E-commerce by Dan-O gives some enlightening information of doing e-commerce well.  With a very interesting and brief history of e-commerce, Dan-O explains how personalization and online communities (among other ideas) make e-commerce sites enjoyable.  And enjoyable experiences online tend to bring customers back again and again.  Good reading from an experienced author. 

Social Security by Marc Blumer (is the name familiar… he’s my dad) offers some guidance on whether to take social security earlier or later, depending on your situation.  Interesting stuff for those in retirement mode… 

Miscellaneous

Finding Your Special Talent by Christine (all the way from France) shows us quite poignantly how trials can be avenues into embracing needed change.  And maybe this needed change can be a door to a new money-making venture, a new job, new fields of opportunity, a new life…  you never know what’s around the next corner.  Go ahead… go look and see what you find.

5 Questions You Need to Ask Yourself Before It’s Too Late by Liz Fuller offers her regular straight forward advice on reviewing what went right this past holiday season, and how to perpetuate that behavior.  How?  Write it down!  With 5 simple questions, Liz encourages you to make a note of the past, and apply it to the future.  Good stuff.

Can You Really Achieve Total Success? by Dr. Joe Capista highlights the often-forgotten parts of what Total Success truly is.  It’s not only defined by dollars.  Where do you stand on his primary four areas of Total Success?  They are Family (Relationships), Physical (External), Spiritual, (Internal) and Work (Business).  Many decades of wisdom on his blog, and in his books.

Total Success is Determined by Your Thoughts, Beliefs and Actions by Dr. Joe Capista talks about the ingredients to Total Success.  They are found in setting goals and being determined to seeing those goals through to the desired outcome.  Truly a well-rounded definition to success.

Be A Balanced Mom by Iamawahm gives Moms who work at home 8 helpful tips to make work happen… and stay balanced.  From knowing when to ask for help to fighting the guilt that often plagues the work-at-home Mom, this Mother of three speaks from heavy experience.

A Few of My Own Posts

Creating Customer Trust and Loyalty… with Consistency

Selling Yourself… to Your Employees

Excellent Networking… by Playing to Your Weaknesses

Change Your Mind

Whew!  I’m worn out (plum tuckered out, as they say it down here in SC).  This material was very enlightening.  I hope you enjoy the recaps as much as I enjoyed the reading (I got the best end of the stick).  If you are interested in hosting the Carnival of Small Business Issues, feel free to visit here to sign up. 

Here’s to another great edition!  Take care now, ya hear!

Thanks, Jason M. Blumer

1 Entrepreneurs are rich.  When we assist new clients with the purchase of a business, we tell them that you are buying a job.  And hopefully you’ll get a paycheck.  Everything else is considered gravy.  Does that discourage them?  Sometimes, but frankly, that is what they need (come back down to earth!).  The rich entrepreneurs you read about are the ones in the headline news, but it is not the norm.  But don’t despair, working for yourself is one of the most fulfilling experiences you will ever go through.  Being the boss is the bomb!

2 Entrepreneurs are reckless with risk.  Maybe broke entrepreneurs are risk-reckless, but successful entrepreneurs weigh their risk heavily.  And they do it over time.  I tell my clients to give their ideas six months to let the idea bake, do some analysis (to see if the door-to-door air filter sales idea will work) and know your market.

3 Entrepreneurs don’t have to work long hours and get to control their day.  Wow.  That’s funny.  I wish someone had told me that when I had to go get a paperroute to cover my income while building my business.  At least I didn’t have to clean the toilets (my Mom did that because I worked out of my parent’s home for a while).  Four and a half years later, and exponential growth, I still have to work three or four nights at home. 

It’s hard on the family - but we still say the benefits are better than “working for the man.”  We’re happier too.  And I always tell my kids that I have to obey people just like they do - my customers!  They control my time.

Thanks, Jason