Absence of Malice

February 26th, 2009 Chris

A couple of friends visited me last weekend here in Miami Beach. They left on Monday and I’ve just about recovered from the varied excesses that such a weekend inevitably entails. One particular morning (er… at least when we woke up) we went out for coffee and happened to be discussing the benefits of incorporation versus not (yes – we are huge losers).

The pro’s and con’s of incorporation are pretty well documented (liability, tax treatment) and as soon as your microbusiness becomes more of a going concern (employees, office, etc…) it really is mandatory.

What really surprised me is what my buddy was told by his lawyer – that it would cost thousands to incorporate. I was pretty shocked.

Now, I want to be very clear. I have nothing against lawyers per se. I view them as any other business professional who provide a service for money. Nothing evil, no malice. But they do exist to make money – like the rest of us.

So when my friend got his verbal quote for incorporation, it probably incorporated all sorts of good stuff (shareholders agreement, minute book, name search, etc…). But the real question is do you really need all. Especially, as a micro-business owner, this comes right out of your pocket. That’s right, we’re talking beer money!

I know all the lawyers in the audience will say that there are a million and one risks unless you do everything they recommend. The way I look at it is: 1. If you’re starting a micro-business, you’ve already accepted a bunch of risks much greater than this legal stuff, and 2. My doctor keeps telling me I’m only allowed one beer a day and I don’t listen to that either.

I contrast the role of a lawyer (make money) with that of the government department here in Canada that is responsible for incorporation: Industry Canada. Their goal is to make it as easy as possible to do business ’cause that’s good for the economy. I know that sounds oximoronic, but it’s true. Canada is the #2 country in the world for ease of starting a business (see all the gory stats here).

What did we did:

• Did a name search (you can do that through Industry Canada for $20 or your lawyer) – regardless, it’s cheap.
• Went to Industry Canada where you can incorporate on-line for $200. There are several forms but they are easy to download, complete and submit.
• That’s it…

We didn’t do things like shareholder agreements (there is only Colleen and I) and corporate minutes as they simply weren’t necessary for incorporation and for our simple structure.

Having said all this, two points:

• Do talk to your accountant. There is a myriad of financial stuff that needs to be considered (like picking the right fiscal year, initial funding of the corporation, etc…) which has an immediate and material impact to your money.
• At some point, some of the things you ignore are going to need to get done. For example, after five years, we did up a corporate minute book (a record of board of director meetings, etc…). It provides a record you’ll need if you ever want to sell the business or get additional investors – and it get’s more difficult to find all the paperwork with each year that passes. But you don’t need it to start.

So, I guess the moral is that when it comes to engaging your lawyer, think of him/her like any other professional – they provide a valuable service but you need to decide what is mandatory versus nice to have.

Just like if some high-tech guy came to your office and told you that you need a double-redundant T1 line to ensure business continuity: sure it’s a nice to have and there is a risk without, but it’s money that can be more directly invested to generate revenue. ‘Cause without that, there is no business.

C.

P. S. I am not a lawyer, this is all my opinion, take all advice at own risk, always consult an attorney (huh? didn’t you just say not to?), etc…

Posted in Legal | No Comments »

Press 0 to speak with an operator

February 19th, 2009 Chris

I really like the movie Contact. I’m not sure exactly why: could be the sci-fi aspects of meeting aliens, could be the techno-stuff in building a really big machine, could be Matthew McC???ney (two words: dream-mee, or at least so Colleen tells me).

Anyways, one of the central story lines of the movie is that us little humans spend a lot of money and time to try to make contact with our brothers from a different primordial soup. And believe it or not – I see a lot of parallels with web site development.

My philosophy with our use of the web has changed significantly in the last two years. Originally, my dream was to develop a bunch of web functinoality and content, and let it loose. I’d just put my feet up on the desk and watch the cash roll in.

Today, I have a very different view. Instead of the primary goal being to get people to purchase something off the web site while we rest comfortably in bed, our ultimate goal is to get people to make Contact!

Why? Well, I’ve noticed a few things:

• The more prospects feel like there is a person behind the business, the more likely they are to purchase.
• The more prospects feel like there is a person behind the business, the more they are willing to spend.

I think that shouldn’t be a big surprise. For most adults, this ecommerce stuff is relatively new (last ten years) and we basically trust people, not web pages.

So now, our web site objectives are aligned with that philosophy. The primary goal is to provide information as effectively in order to maximize the number of qualified buyers who take the next step and contact us.

What do I mean by effectively:

• Simple – make it easy to find the information based on who they are and what they need
• Efficient – be able to get to the information they need as quickly as possible
• Interactive – engage the user in order to deliver information visually, aurally and with words (readilly?)

And when I say take the next step and contact us, we want to provide as many mechanisms as possible:

• Call (toll free of course!)
• Email / Contact Us
• Live Chat

On the LiveChat front, I previously mentioned our implementation. I have to say that it has been great. Just in the last week, Casey in our office has closed over $1,200 in sales using Live Chat. That just paid for the service for the next 15 months. And by providing a mechanism to quickly get questions answered, it’s enabled or accelerated countless other sales.

Now – don’t get me wrong! I still love on-line sales that don’t require human intervention. We have several products that continue to sell very well and deliver great value to the customers. Our view of them strategically has evolved to be in line with this new philosophy. Instead of the dream of building our entire business around these autonomic sales, we see them as gateway products that introduce customers to our business. They are the first step in engaging with the business which hopefully leads to larger sales as they get to know us.

So, down here in South Beach, I’m feverishly working on a substantial redesign of our web site in-line with these objectives. Simplified structure, even more interactivity, more role-based content.

Take a look at your web site – how easy it for your prospects to press 0 to speak to an operator?

C.

Posted in Marketing, Web Site | No Comments »

Discipline in the Sun

February 11th, 2009 Chris

Since we’ve arrived down here in South Beach for the rest of winter, I’ve had many a friend ask how we can afford to take this much time off. When I protest that it’s not vacation, I get the inevitable Yeah, right…

Well – it’s not! We’re working!

But it is tough… Something about all the temptations of a temperate climate…

So I’ve developed several rules that keep me focussed and on-task. I’d thought it worthwhile sharing them as I think that they can be of use to anyone working at home.

Oddly enough, they all involve avoiding temptation. As many know, this is particularly important for me as I am, well, easily tempted by all manner of vices.

Anyways, here are my three rules:

1. Regular “office hours”. First, I force myself to be actually at my desk and working by 9am at the latest and go until 5pm. The former is a bit tough for me as I’ve been trying to get some exercise (running on the beach) and the latter is tough on the dog who struggles to wait until them for his daily romp. Regardless, we make it through and forcing yourself to be at your desk helps to avoid temptation to take an early afternoon and head out to the (many) neighbourhood bars. Sure, both Colleen and I normally work at night and on weekends – but core hours during the day really helps productivity.
2. Daytime Prohibition. There are very few things that I enjoy more than sitting back and drinking a beer. I do suffer from two simultaneous foibles that make this extremely dangerous. First, I am less productive after a drink. Second, I typically don’t stop at “a” beer – so the issue gets exasperated (see foible #1). So, during those hours, nary a single beer cap gets popped and I stay focused. There is a related issue with junk food but that has more about me becoming a dough-boy…
3. No TV. What goes better with that elicit beer than last night’s Daily Show. Stop! Do not turn on the TV – even for that brief time while I make lunch. I do listen to CBC Ottawa radio down here but the TV does not get sparked up .

These three rules keep me focused on the task at hand and make sure I stay productive. There are so many distracting vices – especially when you don’t have a little competitive peer pressure to keep you on your toes.

And when you think about it – it’s crazy to not stay on task. If you don’t focus, work hard and continue making money then you could be forced to go back to the corporate world and a regular job.

Noooooooooooooooo!!!!!

C.

Posted in General | No Comments »

What, are you wacked?

February 4th, 2009 Chris

We did something crazy the other day. Something particularly foolish given all the doom and gloom of the current economic situation. We raised our prices.

Why did we do it? Well, to make a long story short we confirmed three things about new, higher pricing:

1. We are competitively priced
2. We provide substantial value
3. We are aligned with the way we were selling

The first one is sometimes hard for us in our micro-business. There are many, many competitors out there with different slices/niches of the sales training business. But we can get a sense of the pricing of those that offer similar services and products, ensuring that for what we are offering, we are in the right ball park. Oddly enough, there is a fair bit of consistency (at least in our market).

This is a bit tough for me. I’m used to getting out powerpoint slides with granular analysis of competitors pricing at different volume, studying discretionary discounting, etc… And maybe I’m making excuses for not getting that gory. It’s just that we’ve found our market for our services there is a lot of price elasticity so along as you’ve got good value, you can charge appropriately.

A good example of this is the speaking business. There are speakers that are $1,500 a day and there are speakers that are $30K an hour. In that spectrum of prices you get different value – speakers who are more engaging, more entertaining, more famous, more impactful, etc… And there is good business volume through out that entire range. So the key is maximing speaking fees based on your return-on-investment to the customer.

 That’s a long winded way of getting to my second point. That is, value is king.

So when I said we raised prices, how did we do it? We took each of our services and added additional value. For example, in Colleen’s base level coaching program, we went from one web class a year to four. That has tremendous value and more than compensates for the price increase. And, showing again the importance of managing costs, we can do so with no incremental costs to the business. So that price increase is pure profit (good for us) and the customers get even more return on their hard-earned dollar (good for them).

Finally – one of the most profitable things we did was align what we sell with how & where. For example, when Colleen speaks at an event, she used to offer our base coaching program. That it, our cheapest offering and the same one we sell on-line.

Then we realized that this was nuts. Here is our greatest asset – our sales queen – up in front of a live audience and she’s only selling the base offering. We changed that at the beginning of January and now Colleen sells her mid-tier package (at it’s new even-more-value price). Low and behold, our sales quantities dropped by about a third but the package is over four times the price. So, we’re far ahead.

So, to make a long (too) story short, by taking a look at how you can add more value without increasing your costs and ensuring that you align the offering with how you are selling it (or vice versa), you can raise your prices and make more money. Even in today’s economy.

C.

Posted in General, Pricing | No Comments »