Learning doesn’t stop once you’ve earned a master’s degree, have letters behind your name, or get a fresh stack of business cards with Executive Vice President on them. You should strive to be a sponge and learn everything you can, all the time, from all walks of life and experiences. If you aren’t continually learning, you will fall behind and eventually be passed over and replaced by young kids fresh out of college that will work twice as hard, for half the pay, with knowledge you don’t have or don’t want to learn. Staying current may take you out of your comfort zone or break your routine, but it is invaluable.
A surefire way to stay on top of things and continue to learn is to read. All the time. And I mean ALL THE TIME, like when you are waiting for your coffee to finish brewing, when you have to eat alone (not encouraged), when you are on the metro sitting next to the dude that polishes his shoes with his tongue. A lack of time is no excuse. Everyone has time. It’s a matter of making it a priority, and you should want to making reading a priority if you want to learn.
So go get yourself a Kindle or iPad, or just download the free Kindle reader app to your smartphone, PC, or Mac if you are broke, and start reading. I’ve put together a list of seven business-related books that I highly recommend.
Rework, by Jason Fried and the guys from 37signals. Quick read, 2 to 3 nights, tops. It’s a book about how to start and run a business their way, which flies in the face of most textbooks.
The Lean Startup, by Eric Ries. This book is all about building the minimal business or minimal viable product, testing it, and learning from it. If you are thinking of building a software business, this is a MUST READ.
Different, Escaping the Competitive Herd, by Youngme Moon. One of my all-time favorite books about doing something different, truly different, and not following the crowd. Here’s a short video about the book:
Anything You Want, by Derek Sivers. I saw Derek at the 2011 Business of Software conference in Boston. This book is the story of how he built a company, ran it for a decade, sold it, and donated all of that money to charity.
Never Eat Alone, by Keith Ferrazi. This book is about establishing and nurturing relationships, which Keith believes to be the linchpin to success. The network you create (and nurture) is your path to success.
Hire people to think. Don’t hire people to follow a recipe book. If you do the latter, and you are a small business in today’s world, you are hiring the wrong people. And hiring the wrong people is a huge time suck. Huge! It’s easy to hire someone, but try getting rid of them. Not so easy. And you will justify why it’s ok to keep the wrong person around, even when your gut tells you otherwise. So do it right from the beginning.
No one has a crystal ball and can tell if the prospect you are interviewing and about to hire will turn out well for you. That’s a subject for another blog, not this one. What I’d like to discuss here is the difference between someone who follows a user guide, employee handbook, or some sort of “cookbook” to get things done at work, and someone who doesn’t. As Joel Spolsky always says, you want to find people that are smart and get things done.
A Cook Is Not a Chef
Cooks are not chefs. But all chefs can cook. That’s what my wife always says. She loves to watch Top Chef, Chopped, and all of those cooking shows, and she also happens to be an amazingly good cook herself. So what’s the difference between a chef and a cook? A chef is a professional who creates. A cook follows directions.
In a small business, especially in this rapidly evolving new economy, you need chefs…people who can create things, who can react rapidly to change…people who are not just smart, but also get things done. You don’t need “cooks”. Cooks are people who follow a set of instructions laid out by others. The problem with employees that act more like cooks is that if there is a deviation from the norm, it is difficult for them to adjust or react, especially when difficulties arise. Deer in the headlights syndrome. All you get is “um, what do I do now, boss?”
Employee Handbooks Lead to Less Thinking
Most people prefer not to think too much at work. They would prefer to simply follow a guidance document or set of instructions on what their employment duties are, get their paycheck, and move on with their real life. After all, if it’s written down and you can check off those things as being done, then in your mind, you have “succeeded” in your work.
Employee Handbooks Are Static, but the Marketplace Is Not
But in a small business, and especially in today’s new economy, where change occurs every day, where entire industries are being disrupted and implode in a single year, where Kodak files for bankruptcy protection, Blockbuster Video is on life support, and now even RIM – a Wall Street darling just 5 years ago – is predicted to bite the dust, employee user guides are obsolete. I would dare to say that employee user guides and handbooks are also dangerous, because they encourage employees to simply “follow the rules and stick with the plan”, even when that plan may not be what is best for the firm anymore. Employee handbooks don’t encourage employees to be creative, because all of the duties, all of the rules, are written down…they are static. And in this new economy, static is NOT where you want to be.
What worked 1 year ago might not work so well now, and certainly not in a couple of years. But it’s not the employee manual you need to worry about. It’s the mindset of the employee. Your employees need to be able to adjust to changes, all the time. They need to be able to perform different kinds of functions when needed. To sum it up, you need smart people on your team who can actually think and get things done without having to refer to some sort of checklist of duties written down by the human resources department or a department head.
So…what do you do with those employee handbooks? Chuck them. Burn them. Recycle them. After all, if you hire smart people who can think and get things done, chances are that your best work in fast-changing times will come from those employees and not from the ones that are merely following those “rules”.
On this week’s post, I wanted to talk about Gary Vaynerchuk but thought that the discussion should come from someone who understands social media better than I do. So instead of me, Mariana Gallegos will be talking about Gary V. Mariana’s experience includes working as an online merchandiser for Scripps Networks, a project manager for FireSign, and a project manager for Auxis.
Now-a-days everybody is a social media expert, and when I say everybody, I mean EVERYBODY. I recently saw a resume on LinkedIn that had social media listed as an area of expertise. Being that this person is the company’s marketing director, I decided to check out his work. Well, the Facebook company page has FOUR likes, the Twitter account has FOUR followers, and apparently they aren’t really that interested in potential clients because they don’t follow a single person. Not one! Their blog (or lack thereof) has three posts, and ALL of them are regurgitated information from their website. Social Media Expert? Not so much.
If you are looking for a true social media expert, if you are looking to truly understand, succeed, and make it work for your company, then I’ve got your guy — Gary Vaynerchuck, author of Crush It and The Thank You Economy and founder of winelibrary.com. He’s not an expert because one day he decided to start tweeting and call himself an expert. This guy earned that title from his peers. When the majority of us (me included) had no idea about Twitter and prided ourselves on not wasting time because we weren’t interested in celebrity gossip (which we know we are, admit it), he was using it to grow his business. How? Well, he decided to become a trustworthy resource in the wine industry. He would log onto Twitter and search for wine-related questions and then answer them without EVER pushing his product. He didn’t pull any of this business: “Try pairing an Australian Shiraz from Wine Library with your beef stew.” No. He knew better. Instead, he’d reply, “Try a bottle of 1996 Wolf Blass Shiraz. I had one with dinner last night, and it was amazing.” He simply helped potential clients with their questions. That’s it!
I mean let’s face it, aren’t we all just fed up with in your face marketing, folks pushing their products old school? Offers like, “If you take advantage of this offer now, you will not only receive the tater curler, but you will also receive the world’s sharpest and most innovative potato peeler that has ever been manufactured, so ACT NOW!” This, my friends, is called push marketing. And in this economy, push marketing is about as effective as the crap products I just mentioned. Don’t even get me started on Eggies. I mean, are people just THAT lazy?
We are now entering into the world of pull marketing, which is what Gary is referring to in the The Thank You Economy. We are smart and informed consumers that would prefer to go out and ask our friends on FB or research consumer reviews than make a purchase because we received a phone call during dinner. Such a simple concept that makes perfect sense, yet is hardly practiced. Stop talking at your customer and start listening! What they have to say can and will change your business.
Still don’t buy it? Let’s say you buy a pair of running shoes for your very first 5k race, and you are waiting anxiously for them to arrive. When they do, you realize the company sent you the wrong size. You panic because you believe, along with my 5-year-old, that certain shoes will just make you faster, and your race is in 2 days! You post on the company’s FB wall and immediately get a response. They tell you that for your inconvenience, they will overnight you the correct size. The next day, your package arrives, and not only do you find a replacement pair, but you realize they have sent you a second pair of shoes. Now you are really ticked off. Can’t these dingbats (keeping it PG) get it right?! You contact the company AGAIN, and they quite politely explain that the extra pair is a gift and wish you luck in the race. Now who’s the dingbat? That is “The Thank You Economy”! What you will do in return is tell all your friends on FB, Twitter, and Pinterest how amazing the company is. That’s what I call a “win, win” courtesy of social media.
Let me be absolutely clear. I AM NOT a social media expert. But I’m learning one tweet at a time. I’m surrounding myself with knowledge and spend time researching every day. In October, I attended the 2011 Internet Summit, and the keynote speaker was none other than Gary Vaynerchuck. I’m a very skeptical marketer, but 2 minutes (or maybe 1) into his speech I was SOLD. I don’t sign up for email alerts anywhere; I don’t give my email to anyone; and once I hear, “Can I please speak to Mrs. Gallegos,” I say “Please remove me from your list” before they can even tell me where they are from! But Gary, oh Gary. He had me at hello.
If you want to understand this crazy social media frenzy that we are living, I encourage you to read his book or listen to one of his speeches. You will not regret it. Pinky swear.
Do you attend regular meetings at your workplace? Do you dread the walk down to the conference room, drag your feet, and call the last stretch of hallway with the indoor/outdoor carpet “The Green Mile”? Do you schlump down in your chair, just hoping that no one will notice you staring at your crotch as you text your way through the boredom that is the administrative BS you have to deal with on a weekly basis? Does anything really ever get accomplished at those meetings other than watching some meeting hog blab about how important he thinks he is, while you nod your head and wonder about how often he has to trim his ear hair? Do most of the people attending those meetings voice their true opinions, or do they merely agree with the others because they don’t want to sound dumb in front of their peers, upset someone in attendance, or prolong such nonsense?
Meetings Suffer from Group-Think
If your meetings are similar to most business meetings, they are not as productive as they could be. Usually one or two people will dominate the conversation, and everyone will tend to “agree” with the opinions of others even if they don’t truly agree with them. This happens because of a dynamic called group-think, where diverse opinions can quickly be quashed by other opinions that are more popular among the group attendees. If your opinion differs from the CEO’s or from several group attendees, for example, you will likely not even voice your real opinion…you will simply agree with the group consensus. Your thinking here is that if you just agree with the others, you won’t risk looking dumb in front of anyone. Don’t rock the boat, you tell yourself.
Leadership Doesn’t Come from Meetings
There’s a reason why Army platoons have a single person in charge of deciding what the platoon will do when in combat. Imagine a group discussion among the soldiers, deciding what course of action to take. By the time everyone finished talking, they’d all be dead. So why are so many key decisions affecting a company’s future conducted in such group meetings?
Why Do We Have Meetings?
Leaders seek the true opinions of their closest allies. What they want are sounding boards for their ideas…they don’t really want or need “yes” people that simply agree with them. They are looking for objective opinions outside of their own, hoping that additional honest and true feedback will improve their ability to make informed decisions that will improve chances for success. It’s part of a leader’s approach to receiving additional input before committing to a decision.
Some leaders also believe in “democratizing” important decisions, allowing active participation by others in the decision-making process, including them instead of excluding them. But the problems with meetings are big – so big – that I have basically decided that I just don’t like internal meetings anymore and have chosen to have as few as possible at my company. The fewer the better, in my world.
What I Hate About Company Meetings
My beef with internal meetings is as follows:
They are time-intensive. Getting everyone together takes time. Did you know that corporate America hosts more than 11 million meetings per day? That is one giant s***load of meetings!
They are expensive to have. Add up everyone’s wages for the time spent in useless, boring meetings where half the people aren’t even paying attention, and the real costs to the company add up fast. According to a study performed by Microsoft, 5.6 hours per week are spent by the average employee on useless meetings. That’s 14% of a typical work week. So, do the math…14% of your total annual payroll cost is not immaterial. It’s big bucks.
They are subject to group-think (see point made above).
The results are not necessarily any better than decisions made without formal meetings.
They become less effective over time.
They are hard to eliminate once established.
They can mask problems by thinking people are actually doing real work, when all you are seeing is that they are attending meetings.
The more meetings you have, the less time you have to get real work done.
How I Came to Hate Meetings
About 3 years ago, we started having company meetings all the damn time (or at least it sure seemed that way). If we had an upcoming opportunity to bid on, we would have a regularly-scheduled meeting for that (as in once a week or more often) until the proposal was submitted. Then we would hold meetings about sales-related efforts on a product, also once a week. Then we would have a general meeting about the state of the company, also once a week. Soon enough, we had a large number of people attending 3 – 5 meetings a week. That may not seem like much, but after you’ve attended one boring-ass meeting where nothing productive seems to get accomplished, you’ve had enough of them. You end up wondering about the efficiency of the firm and what you are actually accomplishing.
I’ve concluded that leadership does not come from meetings. You can’t lead your way to success through meetings. While I believe in active participation by others and obtaining key data and opinions of others, the actual decision-making needs to come from one individual. And in the case of Terraine, that individual is me. The decision-making does not need to come from a committee of folks that would argue something to death before actually making a decision about it. If we did things like that, we would not be trying to change the environmental industry with unique software ideas. Instead, we’d still be conducting traditional environmental services, just like everyone else.
Does your firm have boring meetings that seem to go nowhere? If so, are you doing something to change that?
College Days – The good life!
My college days were among the BEST times I’ve ever had, and a big reason for that is that no one could really tell me what to do. For me, it was complete and absolute freedom. Freedom from parents and zero responsibilities. If I didn’t want to go to class because it was a nice day, I would just blow it off and catch up with a buddy later about what was covered in the class I missed. If I hung out at the bar too long the night before and couldn’t make it to class, no big deal. And if I wanted to sit in on a lecture at a different college, I did that. I didn’t have to ask anyone for permission, and I didn’t have anyone telling me what to do, period. As long as I learned something; was actively participating in academic events; and was performing well on grades, homework, and such, I earned my keep and could continue enjoying the good life known as college.
First Job – Man, this sucks, but at least I can buy beer now.
Now flash forward to my first job, and bam! There were RULES. Someone was telling me what to do. I had to fill out timesheets explaining what I did with myself each day that wouldn’t make me look bad. I had to ask for time off for pretty much anything that occurred from 9 to 5 on weekdays.
If I wanted to get my teeth checked, I had to ask my boss. If I wanted to take advantage of a free stay at a friend’s beach house that is only available on a Thursday, I had to ask my boss. If I wanted to leave early so that I could be first in line at the U2 concert, I had to ask my boss. I asked myself, isn’t this what I did when I lived with my mom? Ask for permission to go out or stay late?
So…the first years of our lives we take orders from our parents; in our late teen years and early 20s, we can do whatever we want; and then we go back to taking orders from strangers, not to mention marriage – how the towels have to be folded, how the toilet paper has to hang, how the bed has to be made…
Unlimited PTO – A “radical” idea that really isn’t.
Netflix had an idea: Treat its employees like adults and they will, strangely, act like adults. Let them take the time off they need whenever they want, without any ceiling on the amount of time, and they, in return, will be happier and possibly perform better at what they need to do at work.
Life Happens.
The rationalization of this idea was basically that life happens. Life is messy. Kids get sick. Carpools don’t always work out. Babysitters quit. Obscure relatives come to visit. Opportunities come up every now and then that conflict with work schedules. But if someone is doing their job competently, on time, and on budget, why should they have to show up for mere facetime? How productive is that? Now you have someone in the office that doesn’t want to be there. Do you think that that person is going to have a productive day? You know what people do when this happens…they surf the Internet, look for something on Amazon, update their Facebook status, watch a few YouTube videos. Oh wait, if you work at one of those repressive environments that watch utilization rates like a hawk, all of that stuff is blocked…just like mom used to hide your favorite toys when she wanted you to clean up your room. Are we kids again?
Our attempt at this idea.
Our experiment with a new policy of essentially having no policy for paid time off started a little over a year ago, after my gorgeous, funny, and downright amazing wife straight from the heavens (she better be reading this) saw an article about Netflix and their policy of not capping PTO. After reading about this, I decided that we should give this a try…essentially not capping the hours someone at our firm could take off for personal reasons, vacation, in celebration of an obscure holiday, to enjoy the nice weather…it doesn’t matter the reason. No cap, no questions asked. After our controller finally acquiesced with me (a lot of prodding there), we implemented this concept at Terraine.
Does it work?
So you are asking yourself, well…does it work? Yes, it does work. Adults generally behave like adults, if treated that way. In only one instance was there concern about the amount of time being taken off. Some folks thought it was unfair, but I was never worried about it. Turns out this particular individual had some personal issues going on that no one knew about, which could happen to anyone.
What ends up occurring, at least in our case, is that the system seems to be self-policing, meaning that peers will hold others accountable in their work. And the benefits? I don’t really care if someone wants to take time off for some holiday I never heard of, or if they want to go visit a relative in Jackson Hole, WY, or if they want to go to the library and read in isolation on a Monday. In fact, I don’t even want to know about it. To me, all that matters at work that is work-related are the results, not the process. If one of our folks comes up with a really creative and genius way of doing something, why should it matter if they come up with those ideas at 2am from home while drinking a beer and listening to Mogwai? It shouldn’t matter, and that’s the whole point of an unlimited PTO policy. Life gets in the way, and we are all adults. Treat your folks like adults, and they will appreciate it and might even perform their best work.
I hate timesheets. I really do. My employees joke that the mere mention of the word “timesheets” turns me into an incredible hulk-like monster with choice four-letter words, or causes cranky-toddler-kick-and-scream syndrome. But I’ve been entering timesheets for 20 frickin’ years, and I can’t stand it anymore! I am a 47-year-old adult. Why should I have to record what I accomplish during the day in 15-minute increments?
Timesheets = Proper Cost Allocation
The reason companies ask you to complete timesheets is so that they can properly account for payroll costs across projects. By doing this, management will know whether the project made or lost money.
Overhead Costs Also Need to Be Accounted For
Other costs such as office supplies, rent, and liability insurance are captured in overhead pools. On a periodic basis, these costs are calculated as a percentage of total direct costs or direct labor costs. Once a ratio is calculated, then each real project is allocated a portion of the total overhead costs incurred.
Project Cost Accounting Is Important
Going through this process helps determine which projects are winners and which are losers. This information can be critical to ensuring accurate bids down the road or determining whether your employees are working slower than dial-up Internet.
Percent Utilization Defined
In most consulting firms, all of this is watched closely by upper management. Most go one level deeper, using what is known as percent utilization, which is calculated as the number of hours worked on billable projects divided by the total number of hours paid (in a given payroll period). Expected utilization rates may differ based on the employee’s role within the company (eg, Project Manager vs. Field Technician).
Utilization Rate Thresholds = Enormous Pressure on Workers
And herein lies the problem…pushing employees to meet or exceed defined utilization rates. Lets say that Joe Blow, who has worked as a Project Manager at the company for the past 6 years, has a bad week. One of his daughters is sick, so he takes time off, and one of the projects he is working on is winding down. He knows his utilization rate is going to drop because he has less billable work, and if it drops to a certain level, he knows that he will get a phone call from his boss’s boss asking him about this. He knows this because he has worked there for 6 years and knows the system. He also knows how to game the system. So what does Joe do? He pads his billable hours. Simple as that. Add a few extra hours here and there, and presto! No call from upper management, life is good. Problem solved…
Meeting Specific Utilization Rates Can Lead to Stealing
…Well, not quite. If the project is a time and materials project, the client will receive an inaccurate bill. This is wrong, plain and simple. Clients need to be treated with respect, care, and honesty. Charging them more than what was performed is stealing. Period. It is also likely that the client will notice some cost overages, bring that up, and scrutinize their bills more closely in the future (or find another firm to work with).
If the project where Joe padded his hours is a task-based lump sum project, padding his hours will lower the project’s margins, thus skewing project financials. And wasn’t this the whole point of using timesheets in the first place? To figure out if a project is profitable or not?
Padding Hours is More Common Than You Think
Not convinced that people pad? It happened to us! On one of our long-term Navy projects, we noticed something odd when the data provided to us indicated that a remediation treatment system pump was running for more hours than is physically possible in a month! It was like having 30 hours per day! The technician was simply inventing data and not actually doing the work, even though our invoices kept getting larger and larger every month. When confronted, the firm backed down on the invoice charges, but the damage was already done. Will we ever trust this firm again? Not a chance.
This is not an isolated exception. It happens all the time. And I believe it does because of the intense pressure placed on workers by upper management. It’s these artificial utilization rate thresholds that workers are supposed to meet or exceed that are at the heart of the problem. Meeting these thresholds can be challenging, and employees will inevitably pad hours to keep the timesheet and utilization police from knocking at their door.
Can We Eliminate the Use of Utilization Rates and the Timesheet Police?
Who makes up these utilization rate thresholds anyway? Are they based on historical data, the accounting department, management, or a combination of these? How were they derived? Should they change over time, as the industry changes? Who ultimately is responsible for ensuring that there is plenty of billable work to go around? Why penalize the workers and their clients for the lack of work or high overhead structure? Why not just eliminate timesheets and utilization rates altogether? Can we just get rid of this stuff, simplify, and treat workers as adults? Who says we can’t or shouldn’t? Who makes up these rules, anyway?
What are your thoughts? Leave me a comment, but please, whatever you do, don’t tell me to fill out another damn timesheet.
Everybody has ideas. However, very few people actually execute or otherwise take action on those ideas. Most people never actually try to make their ideas come to fruition. They merely let their ideas die a slow death, locked up inside of their brain. And of those few that actually make a go of it, they usually do it with one toe in the water and the other foot on solid land, just in case things don’t turn out the way they expect. In other words, they treat them as mere hobbies, with the expectation that if their hobby “takes off”, then they will treat it differently.
In most cases, it doesn’t work that way. At least, I don’t think so. You have to go all in. Give your hobby a real chance at success. JFDI.
If you have a sideline hobby, interest, or idea that you would like to do on a fulltime basis or otherwise truly pursue, the following is a list of eleven steps that I believe you need to work on to convert your hobby into a real business.
Disclosure: I am not an attorney nor do I ever want to be one. So use the following information at your own risk. In addition, most of what is mentioned here pertains to a business that can be done online. Some things may not apply to other types of businesses.
Buying a domain name is a pretty obvious first step. I would do this prior to incorporating or setting up a formal business structure. Once you buy a domain name, you can either have that hosting provider also host your email, or you can use Google Apps to host your email. Most domain registry providers offer ample instructions on how to manage your DNS records and other details. I recommend that you simply use the services of the domain registry to manage your DNS records. It is much easier than managing your own DNS server and software.
Bottom line: It’s not complicated, and it is really inexpensive, usually on the order of $10-15/year/name.
Incorporate
Incorporate in the state in which you live. Despite what some people say, there’s no real tangible benefit for a small firm – initially – incorporating in Delaware. You can always move your firm later as it grows. Besides, by incorporating in the state in which you live, you won’t have to find someone to act as your registered agent.
If you have one, consult your lawyer about this step, but it is not necessary to have a lawyer incorporate for you. You can save yourself a lot of dough if you do this on your own. Simply Google search “how to incorporate in” and then click on the State agency responsible for corporations. This is usually called the Department of the Secretary of State. For example, in North Carolina, the proper web address is: http://www.secretary.state.nc.us/corporations/
Incorporating usually means applying as a business corporation (C or S corp) or a limited liability corporation by paying a fee and submitting a form/document called the Articles of Incorporation. This is a simple one-pager defining the number of shares, etc. Nothing complicated. There are plenty of examples online.
There is another document that you will need: the Buy-Sell Agreement. This document spells out the mechanics of how stocks can be sold. You can Google the term “buy-sell agreement” for examples. In the case of my firm, when I did this 20 years ago, I went to the Law Library at Duke University, found a few Buy-Sell Agreements, made a photocopy of one I liked, and then copied/typed it up on my Mac. There’s no “magic” to this.
If you want some advice on the pros and cons of the different corporate entity types, consult an accountant or a lawyer. Accountants are less expensive than lawyers and can provide you with most of the information you need regarding this topic. You can also do some research on your own…plenty of websites that offer opinions.
The big difference between an S Corp and a C Corp is that in an S Corp, the stockholders are responsible for paying the corporation’s taxes, whereas in a C Corp, the corporation is responsible for paying its own taxes. One of the big benefits of an S Corp is that if the company experiences losses, then as an S Corp, those losses are carried over to the stockholders and therefore will lower a stockholder’s taxable base. If you decide to incorporate as an S Corp, there are certain rules that require you to make this determination rather quickly. Again, consult your CPA or lawyer.
At Terraine, we started out as an S Corp because of the (double taxation) benefits, but eventually, we switched over to being a C Corp. What it came down to for me was that as my firm grew, we had to pass giant paper gains from Terraine to me personally (to my personal income tax return), which pushed me into a much higher tax bracket. To compensate for this, Terraine would issue me a big check but where the entire amount of money in the check was deducted and paid in as tax. No money for me, higher tax bracket, and major pain in the butt explanations to the spouse, so I eventually opted to switch over to a C Corp. Keep in mind that there are restrictions as to how often you can switch from one type of entity to another…I think it’s every 6 years.
Getting into the nitty gritty on this topic is beyond the scope of this article. Again, consult an expert.
Bottom line: Do some research, ask a few people what they think, and spend a few bucks on an accountant or lawyer for some advice, but the actual incorporating can be done on your own. That’s what I did 20 years ago, and we are still around.
Open Up a Separate Bank Account
If you are using your personal checking account for handling your business transactions, you are 1) playing with fire and 2) treating your business like a hobby. I have coached a few people about this, and they still don’t get it. To put it in perspective, they no longer have a business and work for someone else.
When you open up a business checking account, please don’t tie a check card to your account. If you do, you will abuse it. You will end up buying groceries or filling up your car with gas, or paying for drinks at a bar. You know it and I know it. Don’t. F***ing. Do. It.
Bottom line: If you treat your business as a personal expense account, or otherwise intermingle your personal things with your business things, then don’t bother reading the rest of this article. Keep your hobby.
Most people are usually really excited about this step: What should my logo look like? It is exciting, but I would encourage you to not get too excited about it. There are other more important functions and tasks to be done to move your hobby into a real business. Nevertheless, this is important too, and it’s fun. A good design can, in some cases, make a big difference.
Rather than hiring a local firm or big-name firm to design your logo and/or website, start a contest on 99designs.com. It is easy, inexpensive, and you will receive dozens of high quality designs from many varied and talented people all over the world. The way it works is that you select a package (logo design, website design, silver package, gold package, etc.), and off you go. You can describe what you are looking for, what colors and themes you like, etc. When you start receiving designs, you can grade them and provide feedback to the designers, and they will go back and either start over or refine their concepts. Once your contest is over, you can then select a winning design and exchange design files. Simple as that.
Bottom line: You don’t need to hire an expensive agency to get a great design.
With Facebook, Twitter, and other social media tools at your disposal nowadays, hosting a website and branded email are not absolutely necessary. However, it is relatively simple to do, it’s inexpensive, and there are lots of options. We use a small outfit called LocalWeb.com/ADTI. They are good, offer a fair price, and an actual human answers the phone at tech support. When selecting a company to host your data, make sure that the datacenter they use is a SAS70 certified datacenter, and make sure that their tech support hours are reasonable. While we at Terraine own our own equipment (rack-mounted servers, load balancers, VMWare and XenWare software, SQL Server licenses, etc.), there are plenty of options nowadays that include bandwidth, software licenses, hardware, and tech support. This is what is sometimes considered “cloud computing”.
Obtaining a branded email address starts with your domain name. Usually, the domain hosting provider can provide your email hosting as well. However, you should also consider the free version of Google Apps. It’s easy to set up; if you already use Gmail, you will be very familiar with the UI; and it’s free! More information about GApps can be found at this website: http://google.com/a/
Bottom line: Get a website and branded email address. Don’t use your Hotmail, Yahoo, or Gmail email address for business correspondence.
When larger firms think of Voice-Over-IP (VOIP), they think of Cisco Unified Communications, Avaya, Microsoft, or similar tools and hardware. This usually requires expensive VOIP handsets, a VOIP server box, proper routers, and large amount of bandwidth. Do you need this?
Hell no! You can do almost exactly the same thing these larger outfits do by leveraging Skype or Google Voice with a virtual PBX system like Grasshopper.com. The way it works is that you first obtain a permanent company phone number. This can be in the form of an 800-number or some other number that you can purchase from Grasshopper or other provider. Then you associate your Grasshopper.com account with your cell phone, home number, SkypeIn number, and so on for you and your employees. When someone calls your designated company number, Grasshopper then hands off the call to the right person. More information about how this works can be found here: http://grasshopper.com/how-it-works-and-features
While this may sound confusing, it really isn’t. And you don’t really need to do this until you start hiring some employees. Once you have a few folks at your firm, it is best to have a common phone number for clients to call, and using a Virtual PBX system like Grasshopper can handle all the call transfers to particular employees.
Bottom line: Use modern consumer-grade tools for your communications.
Once you start growing, you will need to share and store electronic documents. While tools such as Dropbox and YouSendIt make it easy to share and exchange files, it is best to use a server-based content management system like Alfresco to more permanently store, share, and exchange files. The nice thing about Alfresco is that it is open source and free. You will need someone to install the software for you, but once it’s up and running, not much else needs to be done. You can rest assured that if someone steals your backup drive or if a fire breaks out, all your files are safe, and you can retrieve them from anywhere. An added benefit of using a CMS for all your document files is the ability for employees to essentially share a drive virtually, over the web. Alfresco is pretty good about offering a high level of permissions-based rights for content access, and it also includes solid check-out and check-in procedures and file version control.
Bottom line: Once you grow beyond your own hard drive, don’t send your files around via email. Store and share your documents using a CMS.
If you build it, they will come. NOT! Once you have your website up and running, you will need to add rich, quality content regularly to your site. While search engine optimization and the art of blogging are beyond the scope of this article, the takeaway here is that you need to consistently add quality content to your site to keep people coming back for more and to also rank well enough on long-tail keyword phrases for people to find you in the first place. Once you start adding quality content, you need to then start tracking the metrics to make sure that what you are doing is working. If not, change course, make a few changes, and track that.
Bottom line: Your website should not be treated as a static site, where nothing new is ever added. Use a tool like Hubspot, or Google Analytics in conjunction with WordPress, to add content and track results.
All of us have great ideas in our heads about something we’d like to build. Getting those ideas conveyed to others can be challenging. One way to do this is to sketch out those ideas on a napkin, sheet of paper, or chalkboard. Another way is to use rapid prototyping software to help you sketch it out. I would encourage you to download and try Balsamiq Mockups. It is an awesome piece of software that is very affordable (less than 80 bucks) and can be used to mock up/design a website, mobile app, you name it. It’s also a lot of fun. Balsamiq now has a web version of its software that can be used as a collaborative tool, where you can share a design with someone, comment on an existing design, and offer alternative designs.
Bottom line: Don’t use standard graphics packages to design your app screens; use Balsamiq Mockups or something similar.
Get Stuff Built by Quality Contractors Who we used: odesk.com and elance.com
If you are in need of programming assistance or otherwise have a need for someone to build something for you because you don’t have a) the chops to do it yourself or b) the time to do it, outsource it to someone through a service like odesk.com or elance.com. Setting up a project on either of those sites is a cinch. Thousands of sharp contractors are accessible at those sites, they both contain customer reviews, and in the case of odesk, you can actually view the contractor’s computer screen via snapshots taken periodically. Payment for services rendered is usually conducted on a weekly basis. In order to succeed at this, it is best to post a small, relatively simple project first. In other words, throw someone a bone, and if they prove themselves to have what it takes to build what it is you wanted them to build, on time and on budget, then throw them more work. Eventually, you will find a contractor you are happy with and can make arrangements outside of odesk or elance.
Bottom line: Use services like odesk and elance to find inexpensive, high quality experts
If you stuff receipts into a shoebox, and then hand that shoebox to your accountant or spouse to enter into some mysterious “black box”, then you are running a hobby. While I am not advocating that you run your own books, you do need to understand accounting to some degree, and it is important to keep a tidy and up-to-date ship as it pertains to accounting.
A mistake many people tend to make is to rely on a copy of Quickbooks software running on a single computer. The issue is not the software; it’s the motivation to enter the data into the software. In most cases, people tell themselves “I will enter those receipts tomorrow”. Then tomorrow comes, and it doesn’t get done, then a month goes by, and so on, until you have a stack of receipts to enter, a bank account to reconcile, and so forth…too much to do, and it’s easy to see why you get overwhelmed and resort to a shoebox full of receipts. Avoid this trap by paying for a web-based software accounting subscription. Every month, a small amount of money will be taken out of your checking account for this service, which is more motivation for you to actually do something with the software. And if you can’t seem to ever get motivated enough to do it yourself, find and pay someone to do it for you.
When we started using a web-based accounting software service in 2002, it was something that was not very popular. Security was always cited as a concern back then. Nowadays, using web-based accounting software as a service is fairly common and an accepted practice. We currently use a software product called workamajig.com, but there are now others available that at one time didn’t exist. When choosing a package, make sure it is simple enough to understand, and if project costing is of importance, make sure that the package you choose can handle that, because some don’t.
Bottom line: Throw out your envelope/shoebox full of receipts and get serious about your business by using web-based accounting software.
Running a small business can be scary, painful, and a lot of work. But it can also be awesome and a lot of fun. If you plan to take your hobby to the next level, you will need to get serious about a few things first and act on those things. I hope that the information above was useful for you in taking those next steps.
A new year, new excitements, new opportunities! I still – to this day – wake up excited to see what new things will happen at work. To me, each new day is sort of like being a kid opening up a new present each morning: what new, exciting, unknown thing is going to happen today?
Sounds weird, I know, but it’s true. And 2012 is no exception. In fact, I am sooooo excited about 2012 that I need to be careful and try to focus on just a few things; otherwise, it may lead to overextending and overreaching, which has its own set of bad consequences. So…here’s my list of things for me to try to get right this year:
Blog more often, and about stuff that matters
I am going to try as best as I can to write more frequently and about important topics, like things that I find relevant for self-improvement and things that we are doing as a company.
Actively seek out successful entrepreneurs
I have reached out to a few folks already, have attended a few seminars like the Business of Software, and have read quite a few books like The Lean Startup. But I need to be doing more. I need to be attending more seminars, reaching out more often to successful entrepreneurs, and reading more. There are kids half my age that are building things that matter and whose impact is felt worldwide. I want to be able to do that, even if the impact that I make is limited to the environmental consulting industry. This means doing more of the following:
Reach out to successful entrepreneurs for advice and mentoring.
Learn from others as much and as frequently as possible.
Attend more seminars.
Read and learn, even more, all the time.
Focus on building a few great products
This year I am going to focus on building a few kick-ass products. This includes EdgeBase (environmental database for geoscientists), SwampBase (wetland delineation app), and SF330Pro (proposal prep app), all products that are mainly relevant in the environmental industry. Since funds are always limited, we will build these using Lean Startup principals and will focus first on the apps that might have the largest impact. That means doing the following:
Focus first on industry changers.
Follow lean startup principals (Build-Measure-Learn) and react to metrics.
Ignore fear and follow my gut instinct
Fear can be a hell of a motivator, but it can also be one hell of a brick wall. For most people my age (I’m 47), fear comes in the form of risk taking, or rather, the lack thereof. Many of my peers and friends risk losing what they currently have…their job, their savings, their house. In other words, they are afraid that trying out something that is untested, unknown, and subject to failure is too risky of a proposition. So they usually end up taking the safe route, which is to maintain what they have. The status quo. Rationalization then plays into this, where they end up rationalizing why they took the safe and less risky road. Ironically, this “safe” path is actually pretty risky, because college-age kids graduating now and in the next few years will be running circles around them with “new economy” knowledge, working twice as hard for half their pay. What will happen to those folks who get replaced when they are 50-55 years old? Are they going to be able to retire on what they have or work at an equivalent position somewhere else? Doubtful.
I am thankful that I never followed that “safe” path. I started my own gig over 20 years ago, and I am still at it. I have failed countless times, but I keep getting up, I learn from each failure, and I’m still here and still excited about the future and what lies ahead. Believe it or not, I am more excited today than I have been in at least 10 years. The technological changes that are going on right in front of our eyes, right now, are so exciting and are opening up possibilities that would have been impossible just 5 years ago.
So to wrap up this section, I need to focus on the following:
Follow my gut instinct, not my fear instinct.
Take the long-view and long-term approach, not the short-term path.
Don’t worry about hurting others’ feelings
Finally, my last New Year’s resolution is to put less emphasis on worrying about how others feel about something I do or say. This includes my own employees. In other words, my focus should be on doing the right things to move Terraine forward and on making a real impact in our industry, not on doing things that will have the least negative impact on my staff. This means that I need to get better at doing the following:
Be straight with people. No hidden agendas.
Don’t worry about criticism from others. Expect it.
Listen to all viewpoints. Get better at listening.
Ultimately do what I need to do. In other words, lead.
Do you have a New Year’s resolution list? Would you like to share that list?
After a long Thanksgiving break with my family at Legoland Florida and Disney World recharging my batteries, I decided to work up a presentation for the troops at our company. This I did because I felt that we needed a little bit of coaching, leadership, and focus, particularly because our firm is transitioning from being a provider of traditional environmental consulting services to a firm that builds software applications for the environmental and energy industries. This transition is viewed as a scary thing among our employees: the fear of the unknown. They all understand what we have done in the past – and understand it – but they don’t quite understand how they fit in with the future of our company. It’s uncharted territory to some, and there is no user guide to follow.
Do you attend regular meetings at your workplace? Do you dread the walk down to the conference room, drag your feet, and call the last stretch of hallway with the indoor/outdoor carpet “The Green Mile”? Do you schlump down in your chair, just hoping that no one will notice you staring at your crotch as you text your way through the boredom that is the administrative BS you have to deal with on a weekly basis? Does anything really ever get accomplished at those meetings other than watching some meeting hog blab about how important he thinks he is, while you nod your head and wonder about how often he has to trim his ear hair? Do most of the people attending those meetings voice their true opinions, or do they merely agree with the others because they don’t want to sound dumb in front of their peers, upset someone in attendance, or prolong such nonsense?
what to do. I had to fill out timesheets explaining what I did with myself each day that wouldn’t make me look bad. I had to ask for time off for pretty much anything that occurred from 9 to 5 on weekdays.
