Sunday, November 30, 2008

Our Hearts Go Out to Mumbai

When the plane crashed into the Twin Towers, we got a real sense of how connected the world is. My wife received an email that day from a store owner in Germany. She'd bought shoes over the internet and exchanged a few emails.

When the London Metro was bombed, I was at SMB Nation. The television kept showing the Russel Sqare tube station. Six months earlier, we'd stayed at a hotel near there and used that station several times a day.

It's just a tiny thing, but makes us feel connected.

With the horrible bombings in Mumbai, and the senseless deaths of so many civilians, our hearts go out again.

We "know" people who help us with support in India. Many are from Mumbai. They work for Zenith, HP, and others. Between emails and phone calls, we talk to someone in Mumbai every week.

In particular, I feel connected to our friends at Zenith. We actually communicate with some of them on an ongoing basis.

We pray that they and their families are safe.

And it occurs to me . . .

If there's one thing that we can count on to save us from the insanity of terrorism, it's our totally-connected, "flat" world.

We just got back from a Thanksgiving get-together up near Crater Lake, OR. One of the couples there was from Kent, England. They met another couple some years ago on a cruise. The Americans visited England. Now the English were visiting America and investigating our Thanksgiving holiday.

More and more, we find ourselves having true friendships with people in other countries.

While there will always be people who simply refuse to get along with one another, there is also a natural tendency in the human spirit to make friends -- and to band together in times of adversity.

As Christmas approaches, let's take a little time to pray for world peace. I don't know if it's any more possible than it was 50 or 100 years ago. But it just seems that our technology, our communication, and our inter-connectedness ought to be useful for something besides making money!

Wednesday, November 26, 2008

The Super Amazing Productivity Tool

Here's a little Holiday Fun . . . and a reminder that you need to make changes if you want to have changes in your life.

The Super Amazing Productivity Tool


Tuesday, November 25, 2008

We Can Fix Everything We Touch

Didya ever have a client that wants to "replace" some of your services with an in-house technician? You know, the guy who knows all about installing games and therefore must be really good with computers. He even opens them and does stuff.

Freakin' genius.

We kindly refer to him as Cousin Larry.

Cousin Larry can be there all the time. He doesn't cost much. And he can fix lots of little stuff.

So the client wants to step down from Platinum to Gold. Cousin Larry will handle all the rest.

In our case, that means you just dropped support for the network, firewall, routers, switches, and printers. Oh, and the spam filtering. And vendor management.

Cousin Larry is a hobbyist who knows deep in his heart that he's just tinkering with computers.

Is is Vlad's SPF writ large.

But knowing you're competent, and that your client is considering relying on someone who isn't, does not help you right now. What can you tell this client?

After all, they're just trying to save money. The stock market is down 50%. Everything related to the housing industry is down. Everything related to the car industry is down. We're told that the times ahead will be bleak.

Your client wants to save money. You charge $125/hr. Cousin Larry charges $10/hr.

Consider three important points:

1) The client doesn't understand computers any more than you understand law, accounting, dentistry, etc.

2) For twenty years, people have been used to the "fact" that computers are unreliable and stuff just breaks for no reason. (This is not true and never has been, but people believe it.)

3) You and your staff are supremely more qualified than Cousin Larry. You need to communicate this to a client who doesn't understand the technology.

First, do not try to educate your client on technology. They don't care or they'd be in this field instead of that field. What you can tell them is that it is extremely important that they place their computer systems in the hands of someone who really understands the technology. This is the only way they can maximize the value they receive from their investment.

Second, ask the client to think back to the "before time" (when you weren't around). Remember when machines rebooted randomly for no reason? Remember when everything was slow? Remember when the Blue Screen of Death was a regular occurrence?

Those things don't happen anymore because you have excellent technical support. Computers can and should be trouble-free background technology. Virtually all of their bad experiences with technology can be traced to incompetent technicians. Computers don't show up broken or mis-configured.

I once gave evidence in court about improperly sold and configured hardware. The loser party wanted to argue that he sold a perfectly working device and that the software (drivers) were to blame. I had to explain to the judge where the line is drawn between hardware and software.

What it came down to is: The technician has to have the skill to make these things work together. We can't throw junk at the client and expect them to make their stuff work. Does the refrigerator repairman throw you compressor and a screwdriver? No. If you're inclined, you can figure it out. Or you might totally screw it up and break other things while you're at it.

But you're paying a professional to just do it right the first time.

Computers should be like that. Computers can be like that. Computers ARE like that when you do the work.

When Cousin Larry does the work? Who knows.

Third, use this extremely powerful phrase with your clients:

We can fix everything we touch.

We all know that Cousin Larry can set up a monitor, keyboard, and mouse. But we've also had "helpers" like him get the keyboard and mouse wrong and blow out a motherboard.

Here's a great rule to put in your contracts: All work must be completed by _Your Company Name_. Any work performed by you to fix up after someone else is completely billable and outside the managed service agreement.

We've had them spend hours and hours working on stuff they couldn't fix. Eventually it gets turned over to us. We have to charge for all of our labor to un-do what he did, and to provide the real fix. In the meantime, your downtime is significantly longer than it should have been.

We can fix everything we touch.

Cousin Larry can fix some things. But everything he can't fix makes a bigger mess for us. Everything he can't fix becomes a bigger expense for you.

$10/hr doesn't seem so cheap any more.

Tattoo it on your arm: We can fix everything we touch.

- - - - -

I've mentioned before that we sometimes need to step back from what the client is asking us for and figure out the real problem. For example, a client calls and says "We need a new router." What are you talking about, John? Why do you think you need a new router?

The Internet is suddenly slower than it was before. The collision light keeps blinking.

You could just order a router, grab some juicy installation labor, and be on your way. But you probed and discovered that there's a 99% chance that the client's problem has nothing to do with replacing the router.

When it comes to hiring Cousin Larry the Wonder Tech, you need to do the same kind of probing.

Why do you think you need to do this? Is this just a money saving adventure? Is it a permanent situation, a temporary cash flow problem, or is this guy just looking for a job?

Probe. Talk to your client.

If the problem is about money (and we expect to see more of this), find ways to save them money. We've blogged about this before. (See Making Money When Clients Want to Save.)

Just remember, in the end, competence matters. Make this about competence and efficiency and you will win the day.


Monday, November 24, 2008

Business Plan in a Month - Final Thoughts

Quick links: Part 1, Part 2, Part 3, Part 4, and Part 5.

Final Thoughts on a Business Plan

I hope you have a 3-ring binder with a few paragraphs and lots of notes.

Here's an outline of what we've done so far:

    - Get a 3-Ring Binder (Part 1)

    - Download the excel spreadsheet (Part 1)

    - Commitment 20 mins/day (Part 1)

    - Examine 2008 finances (Part 2)

    - Create first-run draft of 2009 financial projection (Part 2)

    - Set goals for 2009 (Part 3)

    - Draft mission statement (Part 3)

    - Draft 3 goals for Q1 2009 (Part 3)

    - Draft 3 goals for year 2009 (Part 3)

    - Begin creating written business plan (Parts 1-4)

    - Revisit numbers from 2006-2008 (Part 4)

    - Project numbers from 2010-2011 (Part 4)

    - Draft Marketing Plan / Revised Budget (Part 5)

This is what's called an iterative process. That means you keep going back and doing it again. With each iteration, the plan becomes more real.

By real, I mean the numbers are more realistic, the projections are more realistic, the costs are more realistic, the effort is more realistic, and the results are more realistic.

We started with the proverbial view from 30,000 feet. I hope you spent a little time each day on this, at least for part of the month. We examined 2008, where we are, and how we got here. Then we speculated about 2009, where we're going, and how we'll get there.

The mission statement is critical because it helps you focus more clearly on both the WHY and the HOW. All too often we accept that our business exists to grow, but that may not be your personal mission for your business. Why are you in this business and what do you want your business to do?

Goals help us focus even more clearly.

Small businesses need this focus more than large businesses. We're easily side tracked. And, more importantly, very specific goals are easily attached to very specific actions. If I have a goal to get out a newsletter every month, then the actions needed to accomplish that are pretty clear.

Goals and mission statements won't motivate you to get off your butt. Or out of a rut.

But once you get off your butt, or out of a rut, then having goals and a mission will help you figure out what to do next.


Central to all of this is your budget -- income and outgo.

Whether you plan it or just do it, every significant action you take will cost money. Every significant success you have will bring in money.

Does all that "just happen" to you, or is it planned?

It could be planned. It should be planned.

With every iteration of examining your business plan, you also re-examine the budget. Your budget should become more accurate every time you touch it.

Looking ahead, notice that the spreadsheets you downloaded in Part One had a row with the work "Projected" above some months.

As you complete the finances for each month, fill in the monthly column with real numbers from your QuickBooks of MS Financials. When you're sure that all the credit card stuff and little slips of paper are accounted for, you can remove the "projected" label.

As the months roll on, you have a part of your year that is based on what really happened and a part that's based on what is projected to happen.

As things move along, you'll be tempted to play with your projections. This is fine in small doses. Remember that your projection represents a great deal more than idle speculation. It is the financial representation of your goals in support of your mission statement.

I recommend that you revise you financial projections once a quarter. As you add clients, you can adjust the revenue numbers up for future month. Assuming you're selling managed services, you'll have a very good idea of what the ongoing revenue will be.

If you get increases in major expenses, you should adjust them quarterly as well. This might include more licenses for Kaseya or another product.

It is also extremely important that you look at your projections vs. reality on all the little costs. You though office supplies would be $500 (because you've never tracked it before). Now it's consistently $1,000. What can you do?

The point of having a budget is that you can track these things and adjust as needed. Buy supplies as needed and not just because there was a good price when you walked by a stack of paper. Hint: We cut our supplies budget noticeably when I stopped going to the store. I have the power to impulse buy whatever I want. Jennifer buys what we need.

Weekly Routine

Most small business owners hate finances. That's one good reason so many go out of business. They're no better off than someone who doesn't know a balance sheet exists! If you don't pay attention to money in and money out, I promise that more will go out than in. That's the nature of the universe.

Each week, you should look at a few key numbers:

- Accounts receivable (money owed to you)

- Accounts payable (money you owe to others)

- Billing for the week. (I highly recommend billing your clients every week. Just do it and it will become a small chore very soon.)

- Balance in your check book / other bank account

- Available credit (cards, leasing arrangements, financing, line of credit, etc.)

On any given day, these numbers will give you a sense of where you are financially. Over time, you'll get a real sense of whether you're expanding or contracting, becoming more profitable or less, etc.

Your finances are the pulse of your business.

At lease once a month, you should review your income and expenses and update your excel spreadsheet. Is your spending under budget or over? Is revenue coming in at the pace you need to meet your targets.

Monthly Business Tune Up

And on the business side . . .

Post those quarterly and annual goals where you can see them.

Post your mission statement where you can see it.

Once a month (at least), review how you're doing. Are you moving toward your goals?

If these are the most important things you need to achieve, then what next action step will you take to achieve each of them?

If these are not the most important things you need to achieve, then re-write your goals.

There's no cheating here. You get to decide what your goals are. If you change your mind, nothing bad happens. You just start pursuing different goals.

The biggest excuse in the world for not reaching goals is that there's too much little stuff to do, and not enough time. That's a bunch of baloney!

We all have the same time every day. Are you spending it focused on the goals you stated, or are you allowing yourself to be distracted? When you decide to focus on your goals, you will achieve them. You have every excuse not to. But when you choose to be successful, you'll have every reason to do whatever it takes to advance your goals.


One of the key tenets of the Relax Focus Succeed philosophy is that you get better at whatever you put your attention on.

You don't have to be a business major or a financial wizard to do the few things outlined here.

Just work on it. Use that 20 minutes a day to think about your business. As Michael Gerber (and now everyone else) says: Work ON your business rather than IN your business.

If you spend a small amount of time working on your business every day, every week, every month, then you will tune into the goals and the financials that will move you forward.

It can take a long time to form a new habit. Some say you have to do something 42 times (of course that's a number picked out of thin air, but let's roll with it). So, if you spent a little time every day for a month, plus a little weekly time, it would still take you five or six weeks to develop the habit of paying attention to the goals of your business.

Don't let all of this become overwhelming.

I hope you have something written down, some kind of budget, and at least enough of a "business plan" to get you started.

Please don't hide it on a shelf.

Put that little binder where you'll see it all the time. Pick it up occasionally and flip through it.

Anything you do to plan your future will be good.

A business plan is a great way to start holding yourself responsible for moving ahead.

Please don't let the next year sneak in without planning. Every day makes it a little easier to put off planning. Every day is an opportunity to START planning and moving in the right direction.

Good luck. Let's make 2009 a spectacularly successful year!


Saturday, November 22, 2008

Business Plan in a Month, Part 5 (Marketing Plan)

Quick links:
Part 1, Part 2, Part 3, and Part 4.

Now to Marketing

This is not the big, global, spectacular, everything-you-need-to-know discussion of marketing. For that, see Robin Robins.

We're just going to give a quick overview and throw out some ideas.

Overwhelmingly, when you ask SMB consultants what they do for marketing, the answer for most is "We live off referrals." And when you ask how they get those referrals, there is no clear answer. It just happens.

I hope you see why that's not a plan.

Let's look at what you do. It's probably more than you let on. Get a pad of paper and a pencil. Write down everything you do to promote your business.

Once again, QuickBooks is a wealth of information. If you paid for something, there should be a note in QB.

Brain Storm. What have you done in the last year?

- Web
- Business Cards
- Email newsletter
- Printed newsletter
- Events with Microsoft, HP, Sonicwall, etc.
- User group
- Memberships
- Networking (Chamber, breakfast groups, etc.)
- Mailings
- - lists
- - postage
- - printing
- - etc.
- Press releases
- Mouse pads, cups, squeezy toys, etc.
- Radio advertising
- Having your car "wrapped"
- Newspaper ads
- Listing in various professional phone books
- and . . . [other]

So, putting it all together, what's the plan?

Just as with finances, we'll use the last year to help us plan the next year. But rather than just spend money whenever it seems like a good idea, let's lay out a plan for 2009.

If you haven't done any of the items above, make a list of the few you're going to try in 2009.

Warning: Don't overwhelm yourself. Revamping your web site might be a fast job or a long, involved process. Only you know that. But think realistically. All market-related planning will involve a handful of activities:

- Write up a plan (even 1-2 paragraphs)
- Determine which resources you'll need (tools on hand, envelopes, stamps, etc.)
- Costs. This includes the resources you just listed, plus labor
- Timing. When will you start? When will you finish?
- Evaluation. How will you measure your success?

So, for example, let's look at the reality of doing a mailing.

Sample Direct Mail Campaign

Timing is critical in a mailing. If you write up an amazing letter and send it out, then start working on the second letter, you probably won't have time to get it out in time to make a connection.

Mailings should be close enough together that the reader actually connects them in his mind -- at least to say "I've seen that name somewhere before."

Here's a typical sequence for us:

- Agree on target audience (see previous blog post on targeting clients

- Acquire a list (Zap Data or some place else)
- Note: There's a cost here. The more names you mail to, the higher your cost is for everything. Don't forget the postage.

- Do you need a bulk mail permit? Or does your mail house have one? That will save you money.

- Prepare letter one. Write the letter. Determine your offer (free network checkup, etc.).
- Note: There may be a cost to the offer

- Determine what goes in the mailing (6x9 envelope, 5 page letter, plastic lumpy thing from Oriental Trading)
- Note: There's a cost here

- Prepare letters two and three. Write the letters. Determine your offer (same or different?).
- Note: There may be a cost to the offer

- Determine what goes in mailings #2 and #3
- Note: There's a cost here

- Send out mailing One
- Note: There's a cost here

- Note: always ask for address correction. IMHO, a corrected address is yours to keep and not part of the list you bought. There is a small cost for address corrections. But there's no point in continuing to mail to people who don't exist or are otherwise undeliverable.

- Prepare mailing Two; Send out mailing Two. Should arrive 8-10 days after previous mailing.
- Note: There's a cost here

- Prepare mailing Three; Send out mailing Three. Should arrive 8-10 days after previous mailing.
- Note: There's a cost here

- Start Calling. To the extent possible, you should call every single person who received a mailing from you. This is a huge weakness for SMB consultants.

Just ask yourself this for 2009: Do you want to be comfortable where you are, or do you want to grow?

If YOU aren't the kind of person who calls prospects, find someone who is.
- Note: There may be a cost here

- Evaluate Your Success. How many letters did you send out? Waves two and three will be smaller than wave one. How many contacts did you make? How many wanted more info? How many became meetings? How many became clients? How much did those clients agree to spend?

That's one mailing. Isolated from everything else, it will take an experienced campaigner 8-10 weeks to complete, start to finish. If it's your first mailing, it could take six weeks to prepare and six weeks to execute.

Other Marketing Campaigns

Microsoft has "Ready-To-Go" campaigns you can use for graphics, marketing material, etc. Some involve training or special offers. Go to, find the Ready-To-Go link, and click on it.

I'd direct you right to it, but it will be changed by the time I finish typing this.

HP and other vendors have great programs where you can get really nice marketing materials for free. Some (e.g., HP) also have co-marketing dollars. Check out their partner portals.

Obviously, you could make a full time job out of this. That's why marketing people exist. I think I mentioned before, don't take on too much.

Planning and Money

It should be clear that "real" marketing takes planning. It takes money, in most cases. And it takes evaluation. At the end of the day, marketing is successful when it moves people into the sales funnel. No amount of marketing expertise can sell for you.

But good marketing can make your phone ring; good marketing can make prospects feel they know you; good marketing can get you in the door. Selling is up to you.

As you plan your year, consider which marketing campaigns you want to invest in. Consider some of the most common (successful) marketing activities for SMB consultants:

- Direct Mail (may 3-4 campaigns a year)

- An "event" of some kind. Perhaps a tour of your data center, lunch for prospects, Microsoft Bus visit, chamber of commerce business fair, etc.

- Telephone calling campaign

- Speaking at events (marketing breakfasts, various professional groups, etc.)

Schedule these per quarter and then estimate the cost of each.

Now place those costs into the spreadsheet you've been building (see links above).

Here's the good news: Assuming you have a decent marketing campaign, the result will be New Clients (yeah!). That means you also get to adjust your income UP.

Again, don't overdo it. It is much better to over-estimate costs and under-estimate results. Plan on getting one decent client from each major direct market campaign.

My experience is that the other "events" are not as fruitful. They're good fun, and they warm up people to the fact that you're on the move. So, even if they never attend, your reputation goes up. Anyway, I'd plan on a minor increase in sales from the other events.

Of course your experience will be different from mine (unless you're using the same list, the same letters, and the same events, AND you're doing it in Sacramento, CA).

But you should plan on some increase in revenue for your efforts.

If you don't plan an increase in revenue, then don't spend the time on the marketing!

[Side Note: Your Name On A Race Car]

I love Eric Ligman.

But what the hell?

Have you ever sponsored a Nascar driver? Even if you did, would anyone know?

Boys like shiny objects. My guess is that ZERO female SMB consultants considered the offer to put their logo on a race car.

Remember that last stage in the campaign: Evaluation. How do you tie these dollars spent to that income? Improving your reputation in the community? Sorry, too fuzzy for me.

You need money directly tied to your efforts. That means a prospect calls you and says "I met you at the Chamber (or received your letter) and I want to talk about our network." Bingo. That's a result. Again, sales is up to you.

Unless you've already done a bunch of other marketing, do NOT flush your money down a campaign that only vaguely improves your name recognition.

And don't ever spend a nickel on improving your name recognition outside your core marketing area.

If some good old boy in South Carolina sees my logo on a race car, tracks me down on the Internet, and asks me in for a sales call on his 6 desktop network, I'm going to have to turn him down.

[/side note]

Bottom Line

Most people haven't done much "real" marketing.

Start small, but please do something.

Plan what you do. Don't just jump in and try stuff haphazardly.

Plan the expenses. Put them into your budget/excel worksheet.

Plan the rewards! Get those clients and schedule the revenue in your budget.


Thursday, November 20, 2008

OT: Communications Log

I was just responding to an email and realized that I was sending a partner over to Amy Luby at MSPSN. I thought for a minute. Do I want to send this simple question on to her and add to her work load? I do the same thing to Erick Simpson, Erick Ligman, Vlad Mazek, Harry Brelsford, Arlin Sorenson, Dave Sobel, Stuart Selbst, and a handful of other people.

Is it fair (right, just, noble) to add to their workload?

After all, I know what it's like to have an overwhelming about of email to filter.

Here's what I've done between 5 AM (first cup of coffee) and 7 AM (go for my walk) today:

[You don't have to read this. Just glance through it to get an idea.]

    - Read through the four overnight orders

    - Filed 34 emails related to clients (orders, cc's, questions, misc.)

    - Reviewed comments on 162 emails sent to autoresponder account (no replies expected)

    - Replied to one of these anyway

    - Made a note to Lana to process autoresponder contact information on a weekly basis

    - Deleted 14 junk emails from the Jobs mailbox

    - Reviewed 4 new resumes

    - Forwarded one resume to Manuel (company pres) with comments

    - Responded to request from a conference sponsor

    - Read email with product info from one of the people listed above

    - Sent thank you email to one of the people listed above

    - Replied to two requests for information about something mentioned in the Robin Robins SMB Conference Call

    - Forwarded a note to my to-do folder with comments re: product

    - Read confusing email from staff. Inquired about the email.

    - Provided info to web developer we're working with

    - Replied to humorous interchange between several of the people mentioned above

    - Forwarded a note to to-do folder with comments re: connecting with a partner when I travel to his city

    - Replied to an ongoing discussion thread with a partner regarding SMB Books products

    - Replied to three inquiries from Untangle webinar and attached file

    - Emailed salesman from _product_ to let him know I'll get back to him on Monday

    - Forwarded a note to my to-do folder with information on product posting for SMB Books and one of the people listed above

    - Sent email to Manuel re: client web site question

    - Sent email to partner about troubles connecting our schedules. Proposed new time.

    - Forwarded info to one of the people listed above re: possible bulk discount of product to user group

    - Emailed my office manager to make sure auto payments from checking account are on calendar and in QB

    - Emailed administrative assitant re: sending out product links to specific partners

    - Emailed office manager about mail pickup and deposit question

    - Replied to a partner about inquiry regarding forthcoming book (Network Migration Workbook)

    - Emailed partner who had problems downloading a product to verify that all is fixed

    - Deleted five spammy-type messages

    - Filed seven emails into policies or products folders

    - Deleted two ConnectWise notices that jobs were completed

    - Deleted one personal email

    - Reviewed and deleted two Google Alerts

    - Reviewed and deleted last night's spam report

    - Processed a (spam) request to post on the SMB Rides and Rooms yahoo group

    - Read, clicked through, and replied to five Facebook wall comments (more to come after 7:00 AM)

    - Browsed through and deleted six e-newsletters I subscribe to

    - Moderated a (spam) comment to the RFS Blog

    - Deleted a notice that a file has been downloaded by a partner

    - Read and deleted four comments from a computer business yahoo group

Note: the only thing out of the ordinary here is the Facebook activity. It's my birthday, so more folks pinged me.

Got back from my walk. Sixteen more items in the in-box. Including two from the people listed above.

So Back To The Question

When I get a request from a partner and I don't have just the right information, should I say "I don't know" or should I pass it along if I know that someone else DOES know?

Every single person in my rolodex has more work to do than they can can get done in a day (a week, a month, a year). Is it fair to pass things on to them?

After all, aren't they all (you all) going through pretty much the same thing today?

I decided that I WOULD forward the email. While I don't want to add to anyone else's workload, here's the way I see it. All those folks (listed above and others) have put themselves out there as community resources. Whatever tools or processes they need to filter this stuff, they WANT people like me to call on them as resources.

When you put yourself out there as a resource, you can expect a lot of requests. If you fulfill them well, your reward is more requests. :-)

But all these community resources are also working to make a living. And a piece of that equation is to be available for the little requests that come in over the transom.

BTW: If you send an email to me and don't get an immediate response, please be patient. Some days I get busy.


Wednesday, November 19, 2008

Response Point Book Available at SMB Books

Had a chat with Harry Brelsford this morning about Response Point.

We now have Harry's latest book - Microsoft Response Point Primer - in stock. This is the 16th book Harry has either authored or co-authored.

As Harry describes it, this book is 1/3 technical and 2/3 business related.

We talked about it on the phone this morning. Listen to 13 minutes of that conversation over at SMB Books. Among other things, Harry reveals

- 24 undocumented "hacks" to Response Point
- Connecting speakers to an RP system to use as an intercom
- The new Telephonation web site and community
- Preliminary thoughts on certification
- and more!

Now THAT's a fun-filled 13 minutes!

Check it out.

Then check out the new book.

Thanks, Harry.


Tuesday, November 18, 2008

Two Quick Stories About Robin Robins

We have about a hundred people signed up for the big SMB Conference Call with Robin Robins on Wednesday 11/19 at 9:00 AM.

Register here:

I can't help myself. When I think of Robin Robins, one phrase keeps popping into my head: She's got something to teach me about marketing.

Story One

The first time I met Robin was (like many of us) at SMB Nation. She gave a great presentation and everyone took lots of notes. Near the end she went into her "close." Within ten minutes she had people begging to hand over their credit cards.

You know the shtick: "We only have 70 of these with us. When they're gone, they're gone."

Like many of the people in the room, I was unsure about whether to plop down three big payments. But then I stared at that line of consultants happily queued up to spend their money. Three things occurred to me:

1) I only need to get one new client EVER to pay for this.

2) I don't want to be number 71!

3) She's got something to teach me about marketing.

I did a quick calculation in my head. I think I estimated $75,000 being collected in 75 minutes.

Yeah, She's got something to teach me about marketing.

I sometimes fly across country and don't sell enough books to pay for the airfare and hotel.

Yeah, She's got something to teach me about marketing.

I think that was 2005. I've been a Robin Robins client ever since. I've bought her Technology Marketing Toolkit, her Managed Service Toolkit, and I'm a member of one of her mastermind groups. It's all GREAT stuff.

Story Two

Some time after that, I was putting together a book called Service Agreements for SMB Consultants.

That book comes with a CD featuring all kinds of links to resources (AutoTask, Kaseya, Exchange Defender, etc.).

Before I pressed these CDs, I thought it was a good idea to contact all the people and make sure they didn't mind being mentioned. So I sent a note saying what I wanted to do and asked them whether they had any objections.

I got lots of replies that basically said, "Okay with me. Thanks."

But Robin sent a different reply: She wanted to know whether she could make an offer that was only good for people who bought the book. If they click on this link, they get the deal and I get a referral fee.

I said yes.

It is interesting to me that dozens of people got the same memo. Only one of them saw the opportunity.

She's got something to teach me about marketing.

- - - - -

I think it's a bit odd that Robin always bills herself as a marketing consultant. I gain a huge value from her monthly materials as a business consultant. I look forward to her monthly mailing, especially the monthly seminars on audio CD.

Still, if you've heard of Robin, you've also heard people say that her stuff just wouldn't work with "my" clients or in "my" market. Some people find her approach offensive and insulting.

To which I say, "You no idea what you're talking about." To find out what Robin's response it to these comments, tune in tomorrow.


Robin is my special guest tomorrow (Wed., Nov. 19, 9AM Pacific) for the SMB Conference Call. Please tune in as we talk about why her system is successful, why it's controversial, and how to make money in the tough economy ahead.

See you then.


Monday, November 17, 2008

Untangle-ing Managed Service In A Month

I was quite surprised and impressed with a webinar I did last week for Untangle. The topic was, quite simply, "Managed Service In A Month."

We were in direct competition with the SBS 2008 launch (exact day and time). Still, we had 748 people sign up and almost 400 attend.

The recording is archived here:

I also received a large number of questions. I'm surprised how much attention there still is for this topic.

Here are a few of the questions I received by email after the webinar, paraphrased, with answers:

- - - - -

Do you cover systems that are out of manufacturer's warranty?

Our "written" agreement is that all machines must be under manufacturer's warranty. We don't let servers slide on this. We make them buy an extended warranty.

On desktops, we don't care as long as they're trouble free. But we don't cover hardware troubleshooting or replacing parts. So once they start to go, it become expensive fast.

The longer clients are with us, the more kool-aid they drink. That means they buy new equipment every three years. As a result, everything is always under warranty.


I've used the technique of offering an audit report to clients, but with no success so far. Any tips?

The key is: the report is an excuse. You need to work on getting them to trust that you can take care of their systems. You can never present this report by any other means except in person. Don't mail it. Don't email it. Don't do it over the phone. The "price of admission" is to sit down and have a talk with you.

Remember, the client has been open enough to invite you in. They're not doing this for every other consultant in town. Eventually, this technique will work.


You mentioned that you have 7 employees. May I ask what roles they fill? I also have 7 employees- 2 Sales (me included), 3 technicians, 1 part time office assistant, 1 Office Manager/Service manager.

Our employees are:

Karl - CEO, owner, sales, marketing, chief architect
Manuel - President, service coordinator,
Josh - Technician (2 years on the job)
Dan - Technician (1 year on the job)
Jennifer - Office manager, finances
Lana - administrative assistant
Erin - administrative assistant

I'm often asked why we have such a high ratio of admins to techs. Recall that we have two simple rules when work comes in the door: 1) If it can be done by Zenith, assign it to Zenith. 2) If it can be done by an Admin, assign it to an Admin.


Pricing. We had several questions about setting pricing. There seems to be a large group who know they need to raise prices, but are afraid to do it in this economy.

Here are three books with great discussions of pricing:

- Managed Services In A Month

- Service Agreements for SMB Consultants

- The Guide to a Successful Managed Services Practice

In General, most people could and should raise their prices. Very shortly we are going to announce our price increases for 2009.

The rent goes up. Electricity goes up. Medical insurance goes up. Even the price of cars from failing car companies goes up.

Your rates need to go up.

For most people who ask about rate increase, I find that they are WAY below market. Like $60/hr or $75/hr.

I am not kidding you: No one in this profession who knows what you're doing should be less than $100/hr. -- anywhere in the U.S.

This may sound absurd, but The fastest way to make more money is to raise your rates. No kidding, Sherlock.

I've harped on this issue so many times in this blog, I should have a tag for "Raise Your Rates Already!"

This is a scary time for many consultants. But clients aren't buying (or not buying) your services based on the rate. They are buying you. With very few exceptions, your rates probably don't come up in the conversation until the end -- when they've already decided to hire you.

On more than one occasion I've had someone agree to sign a deal and then I felt obligated to say. "Just for the record, our rate is . . .."

Remember, there are consultants at $25/hr. And $60/hr. And $100/hr. And $200/hr.

You became a consultant when you printed up business cards and said "I'm a consultant."

You become a $150/hr consultant when you start saying "We charge $150/hr."

Do Not Fear This Economy

First, you need to charge what you need to charge to stay in business and make a little money.

Second, If you're good at what you do, charge for it.

Third, you might lose a client or two. But probably not.

Fourth, you are now eligible to get some of the "better" clients who would never consider a cheap consultant because they don't want second-rate work.

Fifth, if you don't make enough money to last the next twelve months, you're likely to be doing something else for a living at this time next year.

Raise your rates.

- - - - -

Anyway, we had a good webinar with a huge response.

Greg from Untangle did something that all good hosts should do with a webinar: He prepared some starter questions in case there were no questions from the audience.

The thing about Managed Services webinars (seminars, conference calls, etc.) is that there in never a shortage of questions. I think that's one of the reasons I enjoy doing this.

I don't have all the answers, and my experiences are just my own, but I really feel like there's a need out there in the community. I'm happy to help where I can.


Saturday, November 15, 2008

Business Plan in a Month, Part 4

Summary to this Point

Part 1 of this series is here.
Part 2 is here.
Part 3 is here.

If you've been following along, you have a small binder, which contains
- A Mission Statement
- Three specific, measurable goals for Q1 2009
- Three specific, measurable goals for year 2009
- Financials for 2008
- Very rough first take on projected financials for 2009

Now, Let's Revisit 2009 and Make Adjustments

First, review your goals for 2009, and Q1 in particular.

Do you have plans that will require additional expenditures? If so, figure out what those expenses are and pencil them into the spreadsheet.

Sometimes, we have a tendency to increase sales on a nice, straight line. If that's realistic, then you should write it down. But don't forget to put some money in there for marketing and sales expenses.

You're going to hire a new employee to handle the new work? You'll need salary at a minimum. You might also need furniture, phone, computer equipment, etc.

If you need new equipment or other major purchases, pencil those in.

You get the idea.

We all want to do things. What specific things have you got planned for next year? When will you do them? When will the expenses hit?

Make notes about everything. You don't even have to use complete sentences. You can add comments inside Excel spreadsheet cells, or add a notes column to the right of the financials.

In general, you're going to use the financials and goal statements to define actions you'll take in 2009, justifications for those actions, and notes about how you'll pay for them.

In the end, that's what a business plan is:
- A statement of your mission or vision
- A statement of your goals (action plan) for the the year
- A justification for these actions in light of your company mission statement

Now review again . . .
- Are hardware sales projections realistic, based on 2008?
- Are software sales projections realistic, based on 2008?
- Are hourly labor sales projections realistic, based on 2008?
- Are managed service sales projections realistic, based on 2008?

Think. Have fun. Make notes.

Be able to justify your decisions to your spouse and your accountant.

- - - - -

Now go backward . . .

Just for fun, now that we have most of our numbers for 2008, and projections for 2009, let's do a quick recap of how we got here.

Look at the Excel spreadsheet you downloaded in Part 1. The third worksheet is entitled "Where We've Been." Go there now.

Now that you have the general numbers to plug into 2008 and 2009, let's go back into QuickBooks and plug the numbers for 2006 and 2007.

Why? Well . . . we're looking for more of those quick explanations. Why is one month so big, and why does an expense drop off suddenly?

It's a good idea to summarize income and expenses for about three years going back.

You don't have to do anything with this information now, but I'll bet you do anyway. :-)

As a curious business owner, you'll look for trends. Cause and effects. Do you have cyclical "ups and downs" in your business?

- - - - -

Now go forward . . .

You've got a first run at 2009 numbers. Now speculate about 2010 and 2011.

These are very wild guesses. No one has a crystal ball.

But that doesn't relieve you of the responsibility to make some choices (and guesses) about your business.

I hope you see what this gets you: a total view of your business. Even if your business plan doesn't have one complete sentence, you can look at these notes, spreadsheets, mission statement, and goals all at once.

Your 3-ring binder might only have five pages, but it should be a very nice summary of where you've been and where you're going.

- - - - -

I've received a few comments and emails from folks who want to know how to get off their butts and get started. I don't know what to tell you except Do It!

Earlier I encouraged you to sit down 20 minutes a day and review where you've been and where you're going. If you do that, and give that few minutes a day to the process, you'll have your business plan in very short order.

Next Up: Building a Marketing Plan in light of your business plan.


Sunday, November 09, 2008

Business Plan in a Month, Part 3

Part 1 of this series is here.
Part 2 is here.

In this installment we'll look at your company goals.

But first, let's take a look at alternatives to doing it yourself. Matsonian posted a comment on the first part of this series, pushing his product for creating a business plan. Pure spam, but I left it because it's relevant. I've never used that product, or heard of it before. You might want to check it out.

I have used Business Plan Pro, however. I'm not sure I'd endorse it. After all, it is basically a tool that interviews you and has you do some busy work. When you're done, you get a kludgy business plan, but at least you have one! If you are then motivated to learn the tool and create a more elegant plan, you can do that.

The tool is not important in this process. You can do it all without a tool.

But if the problem is motivation and getting started, then these tools may help.

Now, let's look at goals for your company.

- - - - -

Here's the bad news: I want you to make a commitment of 20 minutes every day until you've written down seven things . . .

- Your company mission statement

- Three primary goals for the first quarter of 2009

- Three goals for the year as a whole

That's it.

The most important thing about business plans is that they exist. And, to be honest, the shorter the better. If you come out of this with seven paragraphs, that would be perfect.

PLEASE agree to set aside 20 minutes every morning, before you get busy with everything else, to focus on this. Sit and consider the seven sentences (or seven paragraphs) you need to create.

The first rule of goal-setting is to take it seriously. That means

- Don't rush it

- Think about it

- Work backward
(from your ultimate goal to shorter-term goals)

- Write down your goals.

One important conclusion to draw from all these rules: Don't do hasty goal-setting in the week between Christmas and New Years. Goal-setting is arguably the most important thing in your life, and your business.

- - - - -

Item One: Mission

For a complete discussion of values, vision, and mission, I highly recommend the web site and book Relax Focus Succeed. In particular, for your personal lives, you might want to look at the following articles:

- Getting Started with Goal-Setting

- Hierarchy: From Values to Actions

- List of Values

I find that it is much easier to create a mission statement if you start by considering the values you hold and wish to maximize. For example, our company honors the following values and principles:

- Honesty, Integrity
- Fairness
- Skill and Ability
- Good Personal Relationships
- Balanced Life
- Professionalism
- Helping Others

Those values lead us to our company mission statement:

    Our vision is to provide the highest quality technical support available to small and medium size businesses at a reasonable rate.

    We believe that profitability will follow from providing a great service at a good price. We will be honest, accurate, and professional. We will support each other in pursuit of these goals.

    We will not lose sight of the fact that we employ and work with human beings, and that we place a high value on positive personal relationships. This works hand in hand with many positive aspects of customer service and thereby supports our profitability. But we also acknowledge that there are times when we will sacrifice profitability to achieve and maintain positive, supportive relationships within our company and between KPEnterprises, our clients, and the larger community.

Obviously, you need to come up with the values and principles that are meaningful to you and your company.

There is no success in following someone else's dream.

Summary: This is obviously more than one sentence or one paragraph. You don't need all this to have a great mission statement. But if you spend 20 minutes a day, you'll have a great mission statement in just a few days.

- - - - -

Items Two, Three, Four: Goals for the first quarter of 2009

All that mission statement stuff is quite ethereal. Now let's look at real world actions.

What do you want to achieve in the first quarter of next year? Pick three things that are more important than anything else. They might include maintaining profitability, increasing profitability, hiring new staff, retaining all clients in a down economy, or even adding three managed service clients during the quarter.

Be as specific as you can. In particular, you should be specific enough to measure whether or not you are successful.

Summary: You really only need three sentences here.

Many people prefer to write these goals as an affirmative statement: "We will gain three new managed service clients." Or "We will increase revenue by five percent in the quarter."

- - - - -

Items Five, Six, Seven: Three goals for the year as a whole

In some ways, this is like the previous assignment, only easier.

What three things do you want to achieve in 2009 that are more important than anything else?

This is the ultimate "big picture" time. But don't get unrealistic just because you have a whole year. You still need to measure your success.

Again, goals might include increasing profitability every quarter, getting 80% of labor revenue from managed service, or implementing AutoTask as your PSA system.

- - - - -

Remember that little binder we started working on? It should now contain your financials from 2008 (we worked on this last time.

With luck, you might also have some information in there for 2009 projections.

Now you can add a Goals section to that. Include your mission statement, goals for 2009, and goals for Q1.

Next time we'll re-examine the 2009 numbers in light of these goals.


Friday, November 07, 2008

Robin Robins to Appear on SMB Conference Call

November 19th, 2008

9:00 AM Pacific Time
Robin Robins
Author / Marketing Consultant / Coach
Technology Marketing Toolkit

Topic: Successful Marketing in a Tough Economy

Register Now

Everyone knows that I'm Robin Robins' biggest fan.

I asked her what her title would be for this call and she said:
Join Us for a

FREE Teleseminar to

Discover Why So Many Small IT Firms Flop, Fumble, and Struggle to Generate a Profit While Others Easily Rake in Obnoxiously High Fees, Profits, and All the High-Paying Clients They Want…Even During A “Tough Economy”

Let's face it, you've HEARD of Robin Robins.

Lots of people love her toolkit and her style. As they say, "Works for me."

But other people don't like her approach.

We'll talk to her about that approach, why it works, and why you should consider trying it.

We'll also talk about the specific actions you can take in this tough economy to GROW your business.

This is not the time to "survive." If you're an entrepreneur, this is the time to THRIVE. Robin has some great tips on taking advantage of the economic environment.

During this session, Robin will answer:

- What is the fastest, easiest, and most reliable way to bring in profitable new clients when I don't have a lot of time, money, or staff?

- How do I find the TIME to do marketing? What vendors, resources, and shortcuts are available?

- What marketing methods work absolutely the best for promoting my consulting services, and which ones are just a waste of time and money?

- What are the secrets to securing an above-average return on every single marketing dollar you spend?

- What marketing methods are working best to sell managed services?

And, of course, you can send in your questions and we'll get to them as well.

Sounds like a three-hour call instead of a 60 minute call! We'll do what we can to cover it all.

Register Now

This call is limited to the first 1,000 attendees. (Really.)

Register Now


Thursday, November 06, 2008

Simple Little Pocket Guide to Virtual Licensing -- Servers

Again, I had a great SMB Conference Call with Dave Sobel yesterday on Virutal Environments in the SMB space. It included specific questions and answers regarding SBS 2008, and the all-important Licensing of virtual systems.

My last post was Simple Little Pocket Guide to Virtual Licensing -- Desktops. Somehow, I boiled down everything you really need to know about licensing desktop VMs into a handy dandy guide you can clip out and stick in your wallet.

I expect you to show me yours at the next conference.

Now we're going to do the same thing with Servers!

First the Caveats: I don't work for Microsoft. None of this is official. Go educate yourself. I'm not responsible for anything. You're responsible for your own actions. Car salesmen lie.

Now for the meat of the matter. I believe the information presented here is accurate and that you can procede to make money with the following simple guide to licensing in the virtual environment. As with the previous post, I welcome feedback from Microsoft and I will update the post itself if necessary and not just the comments.

- - - - -


In an attempt to keep you confused about licensing and perpetuate the belief that it's just too difficult to understand, Microsoft's Server licensing model is absolutely unrelated to the desktop model. Nothing you learned there applies here.

There are two basic pieces to the server licensing model. I will refer to them as the physical server or host server and the virtual server. A physical or host server is the actual machine you can touch.

Here's a basic diagram of how you can look at it:

Virtual Server running inside physical machine

Physical or Host Server

Now, here's the nut you need to crack with virtual servers: You have to somehow license both the physical machine and the virtual machine. You COULD just go buy a Server 2008 license for each one and you'd be good. But, if you don't need that host machine to serve a roll outside the virtual machine (e.g., file server, web server), then it seems really expensive to buy two licenses for the simple environment diagrammed above.

Microsoft's answer is: Load the O.S. on the physical server. Then only use the physical server to host virtual machines. At this point, you have "1 + 1" licensing. That means you are using one license to just run the virtual environment(s).

And you can legally load the operating system again into a virtual server.

Let's tweak our diagram a bit. This is the same machine, but we've noted the 1+1 feature.

Virtual Server running inside physical machine
(using 1+1 licensing)

Physical or Host Server
(using 1+1 licensing)

The really good news is that you get this licensing built right into Server 2008. Woo-hoo!

There aren't many reasons to NOT use this licensing by default from now on. See Dave Sobel's discussion of this on the SMB Conference Call on Virtualization.

You can also add additional virtual servers on this physical machine. You will need additional licenses for any additional servers. Sorry. You already got one freeby.

If you add another Virtual Server, it would look like this:

Virtual Server running inside physical machine
(using 1+1 licensing)

Second Virtual Server
Additional License Required

Physical or Host Server
(using 1+1 licensing)

Very simple, right?

Additional servers each require a separate license.

Other software (e.g., Exchange, SQL) must be licensed the same as a physical machine.

The only real difference between physical and virtual at this point is that you only need as many licenses in the virtual world as you have running servers. In other words, you can create 100 different virtual servers, but if 99 of them are off and you only run one at a time, then you only need licensing for that one.

Reference: Please read "Licensing Microsoft Server Products in Virtual Environments" on the following page:

SBS Coolness

What about the SBS 2008 environment?

Somewhere back in time (I think it was the SMB Conference Call with Jeff Middleton) I publicly announced that we are ONLY going to quote SBS 2008 Premium edition. There's just too much great flexibility with the Premium edition. If I ever had a client who needed a virtual environment, or needed a second server, I'd feel very guilty if I hadn't sold them Premium edition.

So it's a guilt avoidance thing, really.


SBS 2008 Premium edition includes the license for a complete Server 2008 machine. You can load the SQL or Exchange server onto that machine, if you wish. OR . . .

As Dave points out, because it's a full version of Server 2008, you can also use the 1+1 licensing option to:

- Load the O.S. on a physical machine

- Load the 1+1 O.S. into a virtual server to run one or more premium content servers (SQL, Exchange)

- Put your SBS machine into a virtual environment.

You get all this licensing with the Premium edition.


Virtual Server running SBS 2008

Virtual Server running SQL
(using 1+1 licensing)

Physical or Host Server
(using 1+1 licensing)

How cool is that?

Important safety tip from Dave: Do not make the physical machine a part of the SBS domain. Let it be a stand-alone machine. That way, you won't have any delays as you boot it up and it looks for a domain controller (which hasn't started yet in the Virtual Environment).

I hope all this makes sense. As you can see, it's a completely differnt model from desktop licensing, but it makes sense. And it's not difficult.

Let's see if we can boil it down.

Clip this Pocket Guide to Licensing -- Virtual Servers

  1. Server 2008 includes licensing for one physical server AND one virtual server, IF the physical server only hosts virtual servers
  2. The Server 2008 license that comes with SBS 2008 Premium can be used exactly like any other Server 2008 license
  3. You'll need an additional Server Licenses for each virtual server you add

WOW. That was shorter than I thought it would be.

Licensing is simple!


Simple Little Pocket Guide to Virtual Licensing -- Desktops

Had a great SMB Conference Call with Dave Sobel yesterday on Virtual Environments in the SMB space. It included specific questions and answers regarding SBS 2008, and the all-important Licensing of virtual systems.

[Side Note: iTunes, etc.

You can always download SMB Conference Calls on the SMB Conference Call Page. Click on "View and Browse Previous Calls."

Or you can add the page feed into your RSS reader:

Or connect to us on iTunes. Just look for SMB Conference Call. Any reviews you want to throw up there would be appreciated.

/end Side Note]

Due to the perceived complexity of licensing, I think it is useful to boil it down for you.

Caveats: I don't work for Microsoft. I don't know anything. I'm not responsible for anything. You're responsible for your own actions. Jack Ruby acted alone.

Having said that, I believe the following is true and valid and that you can proceed to make money with the following simple guide to licensing in the virtual environment. I will ask folks at Microsoft to vet this information and I will update the post itself and not just the comments.

- - - - -


Windows Desktop Operating Systems (Windows XP, Windows Vista) are sold as either an original equipment manufacturer (OEM), a full package product (FPP), or as an upgrade license (via open license).

Virtual machines cannot take an OEM license. FPP is really Full Price Product and is too expensive. And the upgrade license won't work if you don't have an existing operating system.

So it appears that there is no way to legally license a virtual machines. WRONG, dog breath.

Long Version of Licensing Discussion

1. Connecting from a PC to a VM

There are two pieces to licensing on the virtual machines (VMs). Interestingly enough, licensing is based on the machine that connects to the VM. We're going to call this the User's Machine.

First, the user's machine must have a valid operating system with Software Assurance. This includes volume licensing with basic SA and open value subscription. How you acquire Software Assurance is not important for this discussion. Just be aware that some form of SA is required.

Second, the user's machine must have a Vista Enterprise Centralized Desktop (VECD) license.

So, the successful combination is:
- Desktop PC or Laptop PC
- Valid Windows Operating System with Software Assurance
- VECD license

For each machine that connects to a Virtual Machine.

NOTE: In all cases, you can use "downgrade rights" to put Windows XP on the VM and on the user's machine.

You can create an essentially unlimited number of virtual machines with various configurations. Each is licensed by having the correct licensing on the user's machine that connects to it.

2. Connecting from a Thin Client to a VM

Life is just a little easier with a Thin Client. Because it won't take a full operating system (XP or Vista), the Thin Client is not required to have Software Assurance.

Therefore, all you need on the Thin Client is a Vista Enterprise Centralized Desktop (VECD) license.

The successful combination is:
- Thin Client with embedded or "ce" license
- VECD license

Note: See the document "Licensing Windows Vista for Use with Virtual Machine Technologies" on the Microsoft Licensing web site. THE page to review, learn, memorize, and love is:

Really good information lives there.

That page is literally a top-ten link for the next two years of your life. Add it to your internal sharepoint and read whatever you find there.

Clip this Pocket Guide to Licensing -- Desktops
  1. VM can be Vista or XP
  2. Licensing is related to the machine you're connecting FROM
  3. When connecting with a PC Desktop or Laptop, the User machine must have Windows O.S. with Software Assurance And VECD license
  4. When connecting with a Thin Client, the Thin Client must have VECD license
Note: VECD and MS Desktop Optimization Kit both include the necessary VECD licenses.

See? That boils down very nicely!


Wednesday, November 05, 2008

Business Plan in a Month, Part 2

We started discussing building a business plan in a month last time. If you haven't read that post, go do that now.

Also, if you haven't downloaded the "handouts," get them here.

In this installment we'll look at your finances a bit.

Note, please, that a business plan is not simply a financial plan. A business plan states the goals for the organization and gives some idea of how they will be achieved.

We're going to start with the finances so you can at least know where you are before you decide where you're going.

Let's start by looking at the pdf document labeled "Financials 2008." This is a very basic spreadsheet. It includes the following simple categories:

- Products
- Labor Break Fix
- Managed Services
- Misc
Total Revenue

- COG Products
- COG Mngd Svc

- Payroll - Total

- Sales - Marketing
- Computer Colo
- Employee Expenses
- Office Supplies
- Rent
- Telephone
- Other
Total Expenses


- - - - -

This is a very common list of categories for a small business consultant. There may be lots of other categories, such as tools, books, or memberships. I have combined all that little stuff (less than 1% of expenses each) into the "Other" category.

In your QuickBooks (or PeachTree or MS Small Business Financials, etc.), run a standard profit and loss report for each month of 2008. You can fill in these categories very quickly. Drop "other" income into the the Misc category and other expenses into the Other category.

Notes on Keeping Track of Categories
It is really worth a few hundred dollars to sit down with an Accountant or Bookkeeper to make sure your QuickBooks (or whatever) is set up right.

The right categories for what you bring in and what you spend is very important.

When you make sales, you need to use the correct categories so that you can collect the right data. Don't use too many items or too few. We use the following:

- Hardware
- Software
- Other stuff

- Labor - Hourly
- Labor - Managed Service

If you use the right set of categories when you make sales, you'll be able to get the right data when you run reports. If you don't use an appropriate set of categories, your reports won't be as useful. You'll have to dig a little deeper.

Start setting up and using these categories right away. Ask your accountant for assistance, if you need it.

A couple of minor notes:

- COGS refers to Cost of Goods Sold. In come calculations, you will see REVENUE - COGS = GROSS PROFIT.

- At the bottom we have a YTD -- year to date -- total. This is the running total all months to this point.

- If you don't have your servers in a colocation facility, then you don't need the computer colo category.

- If you have questions about other elements of the spreadsheet, please email me.

- - - - -

If you do not have this information in QuickBooks, or whatever you use, then you may have some trouble. You could have a much more elaborate set of categories (as we do), but you really shouldn't have any fewer than we have listed here.

Adjust the Excel spreadsheet a little for now. I don't recommend making major changes at this time unless you have another major category for income or expenses.

Now, go ahead and fill in the categories for each month of 2008. You should have complete numbers for January through September. If you put purchases on visa cards, you won't have everything for October. And, of course, November and December are just projections at this point.

Note the two far-right columns: percent of expenses/income and average per month. The most useful is the average per month. That's a pretty good idea of the "base" you can expect.


Note: this is all very preliminary. But we're going to do a very rough draft of next year's numbers.

On the 2009 Financials spreadsheet, start with some very realistic guesses about what you can expect in January for income and expenses. From there, you can fill in each month with a little increase or decrease, depending on what you think will happen. Note: If you make big changes, be sure to make some notes about why you think those changes will take place.

I would hope that any accountant or other advisor would ask you about any significant changes.

Sometimes there is a tendency to add a bit each month, assuming that revenue will climb gradually throughout the year. Be careful, if you don't do a reality check, you'll find yourself projecting 20% growth with no real good reason. Look at this year's real numbers. They are your best guess about next year's real numbers.

If you make a few big sales, will you also drop a few clients, or hire an additional staff member.

At this point, play with the numbers and fill in something for 2009. We'll return to this.

Next Up: Goal-Setting

Here's your homework for next time: Carry a notepad with you for the next few days. Write down your thoughts about you business. These include, your mission statement, why you're in business, and what you want to do next year.

Warning: This is where most people get stuck.

You don't have to come up with anything profound. You can use a pencil, so it's easy to change your goals. But fiddle with ideas. There are no commitments at this point. Just notes.

We'll look at goals next time.


Tuesday, November 04, 2008

Business Plan in a Month

[ed. This is the first of a six-part series. The other posts are here: Part 2, Part 3, Part 4, Part 5, and Part 6.]

November is upon us. As I mentioned in my weekly email (sign up here), you've got just over eight weeks until the new year. Whatever religion you practice, you've got at least one holiday wedged into that space. In the U.S. we have a Thanksgiving holiday thrown in the mix.

It's a great time to bring a little balance in your life, slow down a bit, and put things in perspective.

Some people are facing personal and business challenges as they look ahead.

Whatever your situation, it is much better to have a future that's planned instead of an unknown future that will simply happen to you.

Nobody wants to fail, but very few people plan to succeed.

In the SMB space it is particularly true that very few people plan at all. We work to stay on the cutting of technology, but that's not a plan.

Most small businesses don't have a business plan. Most don't have a marketing plan. In fact, most don't even have an Excel spreadsheet that tells them whether they're making money or losing it!


1) I know I should, but I don't have the time.

2) It seems complicated.

3) I have more important things to do.

4) I know where I'm going; I just haven't written it down.

5) I bought the software, but it looks more complicated now than it did before.

Excuses, excuses, excuses.

I could give you a lot of platitudes about why you need a business plan and a marketing plan.

[e.g., If you're failing to plan, then you're planning to fail; Before you climb the ladder of success, make sure it's leaning against the right wall; If you don't know where you're going, then any road will get you there.]

But you already know all that.

And yet, chances are very good that you don't have a written business plan or marketing plan.

Let's change that.

In 2009, let's ALL have some kind of business plan. Let's look at your excuses again:

1) You do have the time: You've got eight weeks before the new year.

2) It's not complicated.

3) You do not have more important things to do.

4) You might think you know where you're going, but if you can't articulate it to someone, then you probably can't articulate it to yourself. If you really have it all worked out, then this process should take about 15 minutes.

5) Software is great. But let's get something down on paper first, and plug it into the software once you're ready. In the meantime, you'll at least have a business plan.

In the next few blog posts, I'm going to walk you through a simple process to accomplish three things that improve your success in 2009:

  • Create a brief written Business Plan
  • Create a brief written Marketing Plan
  • Build a very simple process so that you'll actually use these and get value out of them


If you know me at all, you know what's next:

Go get yourself a 3-right binder.

A skinny one is fine. Maybe 1/2 inch is all you need.

You should be relieved at this point. Since we're using a tiny little binder, you know the Biz Plan and Marketing Plan will be succinct, to the point, easy to create, and easy to use.

Trust me.

If you work for a multi-national corporation with 99,000 employees and you want to go through this with us, then you'll need a bigger binder. But if you're a small business with 0-19 employees, then I think you'll find this useful.

When you boil a business plan down to it's absolute basics, it needs to contain just a few things:

- Where we are and how we got here

- Where we're going (overall goals) and how we'll get there

Each of these has a finance component, which we're going to make very simple.


I've created a simple Excel spreadsheet you can use as a starting place if you don't already have one. Go to to download the sample spreadsheet. Free.

You'll get a zip file with an Excel spreadsheet and three PDF documents (the three pages of the Excel spreadsheet.

If you can't open an Office 2007 format document, this might be a sign that you are in the wrong career.

Poke around and play with that spreadsheet. Make a copy for your own company so you can always go back to the original and look at formulas, etc.

I'll discuss that spreadsheet in some detail here. Stay tuned.

Get out your calendar. One month from today you'll have a written business plan!


Monday, November 03, 2008

Hot Conference Call Topics: Virtualization and Marketing

Dave Sobel and I are geared up for a great one-hour discussion of Virtualization and Virtual Environments on Wednesday, November 5th at 9:00 AM Pacific (12N Eastern).

Then, on Wed. Nov. 19th, Robin Robins joins me for a discussion about Marketing Techniques for a Tough Economy.

Register for both on the Great Little Book SMB Conference Call page.

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This week:

Dave Sobel is the CEO of EvolveTech in the Virginia/Washington DC area.

[Side note: If you want to drive him up the wall, ask him about paying various taxes in three states and several cities and counties.]

Dave is also the Author of a series of great blog posts on Virtual Environments and Virtualization. See In September, Dave and I put on a four-hour seminar on Designing, Implementing, and Making Money with Virtual Environments.

Soon, Dave will have a book out called Virtualization: Defined, the only book on virtual environments pointed directly at the SMB consultant. Keep your eyese open for that.

Now tune in as I do a live one-hour chat with Dave on this very hot technology.

We'll talk to Dave about virtual environments generally, and how you can use VMs with (in, on, and around) SBS.

If you're looking for something to boost your business in the year ahead, consider virtual machines and virtual servers.

Listen in and find out more.

Join us Wednesday, November 5th, 2008 at 9:00 AM Pacific

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Find out more on the SMB Conference Call page.

Tell all your friends and colleagues!

Or you can skip right to the registration for the next free SMB Conference Call at

Mark Your Calendar Today!

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You can also register now for the Robin Robins appearance on the SMB Conference Call (November 19th) at

See ya there!


Saturday, November 01, 2008

Blog Rolling Part III

The Blog Roll continues some more.

You can't follow every blog or every web site on the Internet. Most people don't try. If you do try, people will come up to you and ask "where do you find the time?"

I certainly can't follow every blog. So I try to keep in touch with a variety blogs, hoping to find a variety of opinions and information.

As a blogger, I can tell you that it is hard to keep up sometimes. At times there doesn't seem to be much news about technology. Or certification. Or SBS. Or business. But when one of these is quiet, another one will likely be more active. I think most people should be able to follow 5-10 blogs.

That doesn't mean you read every word, but at least the headlines. It's kind of like reading the newspaper. You scan the headlines and then read the articles that look interesting.

Here are a few more that I try to keep up on:

Stuart Crawford / Computer Network Leadership Management /
Stuart is a real leader among SMB consultants and mentors. He has other blogs as well. This is the primary one, so it's the one we link to here. In addition to great information overall, you'll find a nicely Canadian perspective on Stuart's blog.

Arlin Sorensen / Peer Power /
A long-time leader in the SBS and SMB space, Arlin is the founder of the HTG Peer Groups. You'll find that most of the blogger on my blog roll are members of one of the HTG peer groups. Arlin is one of the first SMB community leaders I met at SMB Nation 2004. A successful consultant with a great set of community values.

The Microsoft EMEA SBS Blog /
Factory fresh and official home of SBS knowledge in Europe, Middle East, and Africa. A very practical and technical focus from the EMEA group. Nicely done, overall.

Vijay Riyait / IQubed /
Another anonymous blog. Vijay is a great resource for news from a UK perspective. Lots of good info on what's happening AND what it means to you.

Erick Simpson / MSP University Managed Service /
One of the true leaders in the SMB community. Erick provides a variety of news and best practices. In particular, you'll find information on a variety of things that aren't being reported anywhere else. Erick travels very widely across the SMB World. And he shares that with you.

Dave Sobel / Evolutionary Business Thoughts /
Dave's blog started as a client-facing blog, and probably still has some content in that direction. But Dave has also provided a lot of great information about Virtualization, Virtual machines, Virtual servers, and Virtual machines. Great stuff.

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That's it for now.

I'll revisit the blog roll from time to time and add or remove blogs as needed. I hope you find it useful.