Tuesday, October 31, 2006

Your Time May Be Worth Nothing

If you're a sole proprietor (or have ever been one), then you know that sometimes your time is worth nothing.

By that I mean that you can give away your time with no ill effects on your business. The most common scenario is when something goes wrong. Suddenly you're on the SS Minnow and your three hour project goes on for a long, long time. You might give away ten or twenty hours in order to make the client happy and "do the right thing."

Companies with employees can't do that.

If I send a tech out to do a one-hour job, it needs to be a one-hour job. If it takes two hours, I'm barely ahead. At 2.5 hours I'm losing money. At three hours, we have a serious problem.

In addition to the cost of labor (including workers comp, medical, dental, etc.) you also have lost availability. If a tech takes three hours and we bill one, we have also lost the ability to bill at least one hour to another client.

Do that every day times X number of technicians and you'll go broke in no time.

So we have some hard, fast rules about time.

1) You never work on any project for longer then the allotted time without contacting your manager.

2) You never troubleshoot unproductively for more than 15 minutes without calling someone (manager, another tech, etc.)

3) After 30 minutes of troubleshooting (even if it's productive) you start a troubleshooting log. The log is simply a notes page with 15 minute increments. Stop every 15 minutes and write down what you've been doing. We need to know where you've been and need to be able to document the process AND make sure another tech doesn't come in and duplicate your work.

4) After 60 minutes of troubleshooting, we call the relevant vendor (Microsoft, Veritas, etc.).

5) Some jobs we know we eventually fix, but we set limits in order to be as productive as possible. For example, in a data recovery project. Client is willing to pay for two hours. Do what you can within the limit. But do NOT put out ten hours of heroic effort. The client has already determined the dollar value limit for that data. If you hit a dead end, go back to the client and discuss.

Our business tends to be dominated by bulldogs -- we sink our teeth into a challenge and don't let go until we've wrestled the problem to the ground and we come out victorious. Great. Go buy yourself a cape. But just stop losing money. If the client isn't willing to pay more than $300 for a project, stop, bill the client, and move on to the next project.

YES it is very dissatisfying to leave a series of un-done challenges behind you. Go to therapy if you need to. But get over it. You don't have to win every battle at any cost. Because the cost might be your business.

Sole proprietors take note. You think this time is free, but it's not. In addition to being a really bad habit, you are also giving up the opportunity to make money with the time you've been giving away.

We all know that somestimes you don't make money. Fine. Actively work to keep those times to a minimum.

Comments on Comments

Thanks for all the backdoor comments on the last few posts.

There seem to be a lot of loose nerves out there.

It's nice to know someone's paying attention. ;-)

Customer Loyalty -- The Other Kind

When someone says customer loyalty we naturally think about our clients being loyal to us.

But you also need to be loyal to your clients. After all, this is a relationship.

One of the things that separates small service firms from many other companies today is that we do have this relationship. You don't have a relationship with Home Depot, Staples, Best Buy, or Sears.

If you think about it, one of the great frustrations about "customer service" in the 21st Century is that you think your money should buy a little commitment from the big company. But the big company doesn't care and no one inside the company is paid to care.

I recently had an argument with Verizon Wireless because they wouldn't give me even one penny off of a $600 purchase, even though I've been a customer since before they WERE Verizon Wireless and I spend $300/month, plus another $1,000 per year on equipment. I pay the same price for a phone as some punk off the street who's going to pay $19.99 a month and never spend another penny.

It seems like a small thing, but it's not. I've spent tens of thousands of dollars and my business should be more valuable than some stranger.

But it's not.

I would be foolish to think that I should have any loyalty to Verizon Wireless. After all, Verizon Wireless has no loyalty to me.

The result, of course, is that I'm slowly moving phone lines to other carriers who give me the right coverage at a lower price. Thomas, for example, doesn't need to travel all over the country. So the local carrier's "all you can eat" plan is perfect for him. Manuel only needs Northern California. And so forth.

We had a "test" recently within our own business. You need to watch out for this.

An employee of one of our clients called to ask about setting up a domain name, how to handle email for a one-person company, buying a fax machine, etc.

All of that would have been merely interesting except that she said "I'm going to be leaving at the end of the month. Please don't say anything."

Whoa there.

Alarm bells go off when an employee says "Please don't say anything to my boss." Our loyalty has to be to the company with whom we have a contract.

The last thing I need is for "the boss" or owner to call me and say "You knew about this and you didn't tell me?" I can't lose a loyal client because my company wasn't loyal to their business.

Unlike large, faceless companies, we can't afford to treat our clients as if we don't care. We need to care very much and to make sure we handle them properly.

We're not spies for our customers. We've been asked to do that and we don't. In fact, we ended up dropping the client who asked that because that attitude reflected some other unpleasant attitudes.

But there's a legitimate red flag when an employee says "Don't tell the boss."

Here's another example.

A little while back I got a call from one of my oldest clients. She said they were having financial problems. They were going to be having problems for a couple of years. As a result, she can't make her commitment under the service agreement and can't really afford the monthly payments. She asked to be released from the contract and to not be dropped as a client.

I told her that was no problem and that we'll help them manage their technology money for the next two years. And when the money starts flowing again, we'll be here.

One-sided loyalty is really irrational. Why should a client be loyal to you if you're not loyal to them?

It's true with all relationships. Why should you be loyal to a vendor who is not loyal to you?

So, don't think of Customer Loyalty as merely customers being loyal to you. Reciprocate.

Thursday, October 26, 2006

Guidelines to Make Sure I Throw Away Your Resume As Quickly As Possible

An open letter to job applicants.

It seems many applicants are not really interested in getting hired.

I know it's very difficult to be out there looking for a job and getting no response. But let me tell you, it's also difficult to be looking to hire and to dig through mountains of "spam" applications.

Hiring is difficult. Keeping that in mind will help you get past the first few hurdles. When I go through the hiring process, I have to cull through hundreds of horrible, unqualified resumes. Then I ask for appointments and 60% of the applicants don't respond. I make interview appointments and 25% don't show up. I make second interview appointments and another 25% don't show up. It's difficult and depressing.

So when you drop your resume into the "inbox" of that process, you need to work hard to make sure you make the cut.

The first time I look at a resume, I plan to spend less than ten seconds per applicant.

In a perfect world you, the perfect candidate, will apply to us, the perfect company, and we'll be together forever. In the real world, your perfect application comes in with 200 others, most of which are garbage, spam, unrelated, or unqualified. In a batch of 200 resumes, I'm lucky to find ten people who are qualified and don't turn me off immediately.

Don't fool yourself into thinking you have an equal chance. Your first goal is make sure I don't throw away your resume. After that, if you're one of the ten, then you'll have an equal chance.

Here are some tips. Please take them seriously.

When the job says $X/hour firm, don't ask for the moon. If you're really worth $60,000, that's great. Don't apply for the $9/hour admin job. Do you expect me to say "I was looking for someone to file contracts and fill my car with gas, but you can do so much more. I'll pay you three times the salary." It's not going to happen. If I need an entry level tech, I'm not going to move from $20/hr to $40/hr because you have lots of experience.

Seriously. Read your resume. If you send me a resume in a Word doc and it's got red squiggly underlines all over the place, I'm not even going to look at them long enough to make fun of you. I'm going to close it, delete it, and move on. This takes me one second.

And have someone else read your resume and cover letter -- aloud if possible. "Your excellent add caught my intention." Delete.

Basic qualifications.
If the job announcement says "Microsoft Certification Required" and you don't have it, do not apply. Period. You will never get a chance to tell me that certifications are meaningless and you know brilliant, talented people without certs, blah, blah, blah. Your opinion on this subject does not matter. If the certification is easy, stupid, and meaningless, then go get it before you apply. If I say you have to have a license or certification, then you have to have it. Period.

Along these lines, don't bother starting your cover letter with an explanation of why you're not qualified. Nothing personal, but I've got a stack of resumes and most of them aren't qualified. Go get qualified. If you need a clean DMV, stop driving like an idiot and come back in three years. If you need a professional license, go get it.

Fake certifications.
Your tech school is not doing you a favor if they tell you that passing their class on MCSE training allows you to use the title "Associate degree in MCSE A.A.S.S.X.Y.Z." There is no such thing and whatever it is, it's not an MCSE. If you have an MCSE, say "MCSE, acquired June 2006." Similarly, if the only place I see MCSE is a bullet point under XYZ Technical Institute, I'm going to assume you took the prep class but not the exam. If you have a certification, say so.

Job Title.
If I'm advertising for a desktop or helpdesk technician and your cover letter begins with "I'm seeking a position as a programmer" I stop reading and delete. If your speciality is Oracle databases, I don't care. My assumption is that you're spamming every remotely-technical job with your resume and generic cover letter. If I'm not looking for a programmer, don't say programmer. And if you think I'm going to keep this on the shelf for the day I do need a programmer, you're wrong.

Color and Cuteness.
Green and pink resumes with floating balloons and cuddly teddybears.
Just don't.
What are you thinking?

Think about how you name your resume.
I won't reject someone whose resume is "resume.doc" or "currentresume.doc." But if your resume is "Johnson Resume.doc" it will make my life easier. And I'll know that you have some common sense. If I were to search my archives for "resume.doc," I'd probably get 10,000 hits. But even with the name Johnson, I'd get very few hits.

And don't name your resume somthing cute like "The best technician at any price.doc." Cute works after you've made the first cut. Before that it's just annoying.

I have nothing against people who live in other cities or countries. But please read the job description. If you live in Iowa and want to work for me, driving to client offices in Sacramento, then you have to move to Sacramento. If you live in Bangalore and the job description includes stuffing envelopes in Sacramento, you can't telecommute. Why do you waste my time?

Sending Links rather than the Resume.
I've never clicked on 4freeresumes.com. I don't know what's there. And I'll never find out. 1) I work hard to make sure none of my clients click on unknown links that show up in email from strangers. You think I'm going to break this rule myself? 2) Don't make me work any harder to see your resume than I work to see someone else's resume. Delete.

Attaching irrelevant files/info.
When I open your email and you've accidently included listings for all the jobs you're applying for, or letters to other employers, I'm never going to write back and tell you that you made a mistake. By the time I realize what's gone on, you've wasted two minutes of my time, which is more than I've allotted to applicants at this stage. Be careful. Go slow. If you put a bunch of crap in my inbox, I'll just delete it. Sorry.

Your requirements.
At this point, your requirements are irrelevant. Remember, your first goal is to make it through the pile of 200 and onto the pile of 10.
If you need every third Thursday off, save it for after you've been offered a job, or if you get asked about it in an interview.
If your religion requires that you don't work overtime, save it for after you've been offered a job, or if you get asked about it in an interview.

Don't ask about benefits in your cover letter. Even if we offer everything you need, this is not the place to bring it up. My reaction will be "This doesn't taste right." Delete.

Don't apply for unrelated jobs.
When I post for an administrative assistant and a technician, I reject applicants who apply for both. These are totally different jobs, one part time at $9/hr and one making $50,000/year. Decide what you want to do with your life and get back to me.

Don't brag so much that you make me look bad.
When you say "Don't be intimidated by my skill level . . . I can bring extensive knowledge to this low level position," I'm not impressed. Similarly, don't promise that you can bring a new level of organization to my company unless you actually know something about how we're organized. Remember, if the phrase "Forget You" floats through my mind, I press the delete button and you are forgotten.

Explain large time blanks.
If your most recent job ended a year ago, that's a major flag. I actually go looking for an explanation of this. Took time off for a kid? No problem. Worked in an unrelated field for a year? Probably okay if the rest of the resume is fine. But you have to understand that every employer will want to know about that big blank. Rather than giving an excuse to reject you, just put some explanation in your resume.


The bottom line: This isn't fun for you and it isn't fun for me.

Look good and professional. Don't waste my time. Don't do things that will get you rejected right off the bat.

And I wish you luck in your search. Getting the right job can make your life truly enjoyable. And that's the way it should be.

Friday, October 06, 2006

Expensive Books and Tools

We had a difficult discussion with a client this week.

Let me start with the end of the story, because you know it so well: She's not willing to spend one dollar on the most important application in her business.

We've all seen it.

She has an old DOS and FoxPro application that only runs on Windows 98. Won't run on 2000. Forget XP. Vista? Hahahahahaha.

It's on a failing laptop.

- Upgrade the application. Too expensive.
- Find a legal copy of Open License w98 media and sell her five licenses with backward compatibility. Too expensive.
- If we can find a legal copy *somewhere* (e.g., unused oem pack), load it onto a new pc. Too expensive.
- Load it onto some old piece of crap from Ebay. Too expensive.

STOP. You entire business relies on this one application. From what I'm hearing, you're not willing to spend even $100 to address the problem?

What the . . . ?

Reality check. It's time to sit down with the client and take a look at the big picture.


Reality check for you, the SMB consultant:

Are you doing the same thing with your business?

Because I sell a pricey book, I seem to be involved in a lot of conversations about the value of expensive books and tools.

For example, Erick Simpson's new (and excellent) book on Managed Services.

Whine: I don't want to spend $100 on it.

Slap: Stop. You're considering revising every single aspect of your company around managed services. You're going to revise hiring, staffing, hours, contracts and subcontracts, compensation, pricing, packaging, the kind of services offered, etc. Everything. Every little thing from "Hi, my name is" to "Thank you for your business."

And you're not willing to spend $100?

What the . . . ?

We can stumble along in the dark figuring this stuff out for ourselves, or we can turn to someone who has already done it.

Remember your personal Big Mac Index: How many hours of labor do you have to sell or save to pay for this? One. If you said two, raise your rates.


Expensive Programs are similar.

Here's the analogy from your own business.

When one of your clients has a major problem (e.g., exchange server is down), then they'll spend any amount of money to get the problem fixed. The same is true of hard drive failures, internet outages, and failing switches.

The more urgent the situation, the more money they're willing to spend.

The more they need information they don't have, the more money they are willing to spend.

You're the same way.

The more urgent the situation, the more money you're willing to spend.

The more you need information you don't have, the more money you are willing to spend.

Example One: Ken Thoreson and Acumen Resources

Example Two: Robin Robins Technology Marketing Toolkit

Ken's systems for hiring and human resources are spectacular. But they cost a lot of money.

  • When you hire your first employee, you don't need it and can't afford it. But somewhere along the way, before you hire your tenth employee, you're going to need a _system_ for making sure you hire the right people -- and keep them.

    If you can gain the knowledge you need gradually over the years and put a system into place, then you're set.

    But if you're like the rest of us, you'll suddenly find that you're spending hundreds (or thousands) of dollars a year stumbling around trying to figure out where to find the right people, how to hire the best, and how to stop wasting money with hires that don't work out.

    Your system is down and you'll spend whatever it takes to make it work.

    Now, you can take yourself to school and learn this stuff.

    Or you can lay down some cash and do a quick learn. You probably won't do every little thing Ken recommends, but you WILL get a great big step up.

    That step up will pay for itself. Really.

Robin Robins' toolkit is also expensive. But the argument remains the same. She's figured out how to sell the products you sell to the clients you want.

  • Not everyone wants a "system" for selling. But growing consultancies have to have a system of some kind. You either build yourself or buy it.

    Does Robin Robins have a deep dark secret that only her subscribers know and they can't tell under penalty of death. Maybe.

    No, of course not.

    Her programs are filled with a huge amount of education and common sense, and topped off with a series of proven techniques for marketing in our space.

    You could build this yourself. You could spend huge amounts of time, take classes and seminars, read every sales book you can find, and distill it down for our market space.

    But if you need a marketing program fast, then you're willing to spend the money.

    You won't live long enough to try every campaign idea Robin has in her toolkit.

    Again, you may not use everything here. But you'll have a big step up.


How can these tools be worth $1,000-$1,200 ???

Well, that's pretty simple. 1) When you need it, you need it fast. Urgency=willingness to spend. 2) A good kit gives you enough information and tools to pay for itself in short order.

In the case of Ken's system, look at the costs of hiring, firing, posting, sorting through resumes, etc. It makes me want to scream. I hired a guy last year that cost me about $1,200 to hire, plus weeks of unproductive labor as he was trained, plus training materials and exams. Not counting his salary, he cost me about $5,000 in three months. Then I fired him.

Thanks to Ken, I know how to avoid that forever in the future.

The case for Robin's toolkit is much easier. How many new clients does it take to pay for the toolkit? I hope everyone responds "one."

When I look at the smallest client we've gotten from a Robin Robins campaign, I see a company with one server, three desktops, and two laptops. Their initial job grossed about $10,000. Since then we've billed additional labor. They've signed a contract and will be with us for many years.


The same is true for many tools. We tend to be like our clients. I can justify a $200 phone, but I'm not willing to buy Beatrice's book on Making it Big in Small Business. Gimme a break.

Be what you ask your clients to be. Create a budget. Put training and books in the budget. Add tools for H.R. and marketing. If you don't have a CRM system, AutoTask, or ConnectWise, put that in there. Same with your managed service software, whether it's Shockey Monkey, Kaseya, or LPI.

I know this is a lot of money. And most people can't do it all at once. But the equation is pretty simple:

You have to either build the stills and build the tools, or you have to buy the skills and buy the tools.

Technology Roadmaps for Clients

Our company provides free planning meetings for our clients under contract. Basically, our goal is to help them develop a budget (most don't have one) and to develop a vision and plan for their technology.

My definition of "managed services" focuses heavily on being the outsourced I.T. department for my clients. As such, we try to help develop the budget, the policies, and the 1-, 3-, and 5-year plans for the "I.T. Department." Basically, if they have a big business plan or binder, we provide the I.T. section that slips into place.

Here are some notes from a recent client visit to show the type of things we cover:

- Client has been buying whatever (brand name) PC strikes his fancy. We want to add some consistency to this. We'll explain that a few dollars here and there will be saved by reduced costs over time.

- Client uses office licenses but wants to move to the latest versions of several programs without a huge outlay at once. We'll discuss Office licensing options but make no decision until we've reviewed other factors.

- Client thinks they want to move to Vista but doesn't know why. We'll explain the hardware hurdles and propose a plan to move to Vista gradually. We'll talk about OEM vs. upgrade license. And defer decisions . . .

- Client has Server 2003, Exchange 2003, SQL 2005. And 35 employees. With partners and reps accessing the system, they may need more license. We'll talk about growth for the next three years. Part of me wants to see them on SBS, but they already own most of the tools in current versions. We'll talk about costs on this. Try to explain that R2 will allow them to actually use SQL and Exchange on separate boxes if the choose, since they already own those servers. Again, we'll defer a decision.

- Client is very excited about SharePoint. Again, SBS looms large. But putting current system on SBS is about $6,000 plus lots of labor. SharePoint would be about $7,000 plus a little labor. Have to evaluate the desire for SharePoint vs. this cost.

- One more factor: Client uses Citrix to get to the desktop. This cost would go away with SBS.

- OK. So back to office. With Open Value, we can get desktop licenses for office SBE, Windows, and SBS cal in one big lump for about $44,000. This can be spread over three payments for a few extra thousand dollars.

- Timing is important. If we buy office or SBS today, for example, some kind of software assurance is a must. If we buy office the day after 2007 is released, I cannot in good faith sell a two year S.A. because there's no way the client will ever see the next version (sorry, Eric).

As you can see, all of these decisions are interrelated. And they all involve lots of money and labor. And timing matters.

MOST small businesses make these decisions one at a time, trying to save the most money on each purchase. The result is that they spend more money as time goes on. All of these decisions are inter-related, and they should be governed by a single "Roadmap."

Reality check: This client will not be using Server 2003, Exchange 2003, or SQL 2005 in three years. January 1, 2010 all of this will be very old technology.

And we can't push upgrades just to push upgrades. If Microsoft gave these folks everything they wanted for free, they would still have the costs of my labor plus downtime per desktop and potential downtime for servers just to install it all. So we don't push every update that comes down the road.

No matter how you slice it, this client is looking at a minimum of $200,000 for tech support over the next three years. Probably closer to $250,000. They can be disorganized and spend more, or they can coordinate it all into a grand scheme and spend less.


We meet with this client once per quarter. 1-2 hours to discuss things at the highest level. Specific issues like response times and why Jane can't change her Outlook signature are left for another meeting. This meeting is designed to build a technology Roadmap. In the next three years we'll only have 12 of these meetings, so they need to be very productive.


Here's what we're doing this Fall:

1) We're holding a Technology Roadmap "Summit" for all of our clients, even those not eligible for the quarterly freebie. We're providing coffee and muffins. We're presenting the roadmap concept as something _they_ should do. But, of course, if they want help they'll call us.

2) I ordered ten copies of Patrick Colbeck's little book "Information Technology Roadmap for Professional Service Firms." P.J. will arrange a discount if you buy five or more copies. Anyway, here's the plan:

The first five copies are for me to distribute in the next few roadmap meetings I do with clients. The other five are give-aways for my seminar.

I'm basically test-driving Patrick's theory that my clients will read the book, bring me some questions, and be softened up to the whole process. The book is very good from a techno-goober perspective and most consultants could learn a thing or two abou technology planning. I do have to say that the font is way too small for most of my decision-makers. And the flow of the discussion may be above the commitment level they want to put into the process.

But the bottom line is, I don't care if they read it. It's a great give-away and provides a wonderful intro to many concepts I never get a chance to discuss with clients. So I can rely on the book and present the material even if the client hasn't read it. Perhaps it may pique their interest and they'll read the book. No matter how you slice it, I don't have to sell much product to make this $29 investment pay off. With ten give-aways, I need to sell less than two hours labor to break even.

Haven't seen the book on Amazon yet. As far as I can tell, it's just available at smbnation.com.

3) Follow up will be to take the best roadmap example I can find and anonymize it for use in advertising to future prospects.


Your first objection: Wow! that's a lot of work. And you give it away. You're an idiot.
Answer: Maybe I'm an idiot. I charge clients who are not under contract. This $2,000 value is now available for the low-low price of $999. But very often they sign a contract in order to get this for free. Also, remember that I'm not a sole proprietor. This is hard work and requires that you step away from the help desk. It may be very difficult to implement if you're still in the trenches. My job description is to do sales, marketing, and general B.S. -- mostly not billable.

This idea's not for everyone. If you can swing it, you should give it a try. If you've ever had a "difficult" discussion with a client because you over-spent a budget you didn't know they had, then you should definitely give this a try.

Bed Ridden Blogger

Blogger sucks.

The first draft of this disappeared when I hit spell check. So here's the revised version, drafted in UltraEdit and pasted to Blogger. Lesson learned, I guess.

Just an FYI:

I had a minor foot surgery yesterday, so I'm spending today on the couch with my foot up. Thank goodness for laptop computers and wireless networks.

As a result, I'll be catching up on some posts I've been meaning to finish.

I keep drafts in a folder called Blog Fodder. We'll see if we can empty that out.

< begin boring details you probably don't care about>

I had a neuroma, which is a nerve gone bad. Swollen all the time and very painful. The goal of the surgery was to remove that nerve.

On Tuesday I went in to have this done under local anesthesia but they couldn't get it numb enough to do the operation. But it hurt like crazy because they poked my nerves full of 40cc of lidocain. About twice the norm, and enough to swell up the foot. So that hurt for about eight hours.

On Wednesday I went to the general quack to make sure I was healthy enough to go under general anesthesia. OK.

On Thursday I had the surgery about 4:30 PM. No food since 10 PM the night before. I was starving. Needed to lose the weight, though.

That surgery went fine and my foot feels okay. No more post-op pain than an average day with the neuroma. So I'm not taking the pain meds they gave me. Did some major meditation last night and today. That helps.

< /end boring details you probably don't care about>

The bottom line is: I have to spend the day with my foot up doing nothing. So I'll be posting to the blog so I can catch up on stuff.


Money is requested in lieu of flowers.