Sunday, January 27, 2013

I Need Your Feedback on Pricing

Please Take 60 Seconds to Give Some Feedback

I am working on a new service offering. I am debating between several options. So I decided to ask for some feedback AND provide you with the answers so you can use the research to help you set pricing for lower-end recurring services that you sell.

Please visit:

I have five pricing options there. Please rate each with 1-5 stars and then select your favorite. You will instantly see the results page. I will add some cumulative data to the results page as it grows, so you can just bookmark that page for later reference.

More and more, products and services are being purchased on a recurring basis with a credit card. You can speculate about how people would like to have things priced, but you might lose a lot of sales if you pick the wrong pricing model. Below are five pricing options for a moderately priced service. Please enter your preferences. We display the aggregate answers from all respondents after you complete the form so that you can use this information when you consider how to price your recurring services.

Please encourage your friends and business associates from any field to fill out this form. The more responses we have, the more likely it is that the results represent the broad audience of buyers.

And of course I'll report my results here.

Note: This research does not need to be limited to I.T. consultants! All participants are welcome. The broader the audience, the better.

Thank you!


Friday, January 25, 2013

SOP Friday: On Call and Night Staff

This post is not about the client side of After Hours Work, but strictly about your employees. It does refer to the Tech On Call for the Day. You might also want to review the after-hours portion of the Server Down Procedures.

- - - - -

Disclaimer: I'm not an employment attorney. I'm not any other kind of attorney. I only have enough common sense to know what we do in our business. You need to verify all employment policies with your attorney.

- - - - -

Paying Employees to Be On Call

When you grow from one to many, one of the rewards is that you - the owner - no longer have to be the only person "On Call" twenty four hours a day. You get to go on vacation because someone else is handling the details.

You also get to sleep without a cell phone next to your bed because someone else is going to get that call!

There are three primary kinds of "on call" statuses. There are different rules for each.

1. An employee is off the clock but can't go anywhere. For example, if someone has to stay in the office during their lunch hour to cover the phones or fill in for the front desk, you need to pay that person for the time. Basically, they are not free to do what they want. They have to stay there to do your bidding. Similarly, if you send a tech to a client's office. Once they arrive, their "commute" is over and they need to be paid - even if the client is not there. Again, if the employee can't go do his own thing, then you need to pay him.

2. Employees are not at work, not scheduled to be called in, but are on the list of people who could be called in. This is aside from the fact that, really, anyone in the company could be asked to come in. Sometimes you specifically say that Person A is scheduled to work and Person B is on call in case we get busy. If Person B cannot go out of town on a whim or go drinking in the afternoon because he might have to work, then you have limited his personal time.

3. Employees who are scheduled to catch calls after hours. Just like working through lunch, these folks may never actually get a call. But they have to carry their cell phone, respond to alerts, and be ready to remote into client machines and fix things. If there is an after-hours emergency, these folks will do the after hours work and client call-down discussed in the Server Down Procedures article.

We used to call this beeper pay. Now the term is sleeper pay. But unless you're paying someone to sleep at your office, you might not have to pay them at all.

Note that #1 is pretty clear. These folks just can't go anywhere except where you need them to be. You need to pay them for that. Period.

Examples #2 and #3 are a little less clear. There's really a scale from almost-zero chance of having to work to 50% or 60% chance of having to work. In most cases, after-hours on call duty is pretty close to zero. But if they do get a call, they need to be able to respond, so they can't be otherwise engaged. Again, where on that sliding scale have you limited their freedom?

Part of this is just plain fairness. And part of it bumps into the laws of your state. Very often, there are no clear rules. But also very often, there are decisions by judges that become standards for other judges to use when they make decisions.

Now, just to keep it complicated, simply requiring someone to be reachable by phone is NOT considered to be restricting enough to require pay. So if you don't say anything about limiting activities (e.g., drinking) or travel, then simply being available by phone is not required to be a paid event.

If you don't have Continuum, Level Platforms, PacketTrap, or some other service that can send out an alert, then you may have to require someone to check the service board once an hour. Now we're back into the scale discussion. How much does this limit their time, especially when no work comes in?

As a general rule, the U.S. Fair Labor Standards Act does not require that "exempt" or salaried employees be compensated for on-call duty. Thus the entire discussion applies to only hourly employees.

[Insert here your favorite "why people hate lawyers" joke or comment.]

Practical Recommendations

Enough speculation and legalese. Here's some practical advice to consider when you formulate your after-hours on call policy.

First, let fairness be your guide. Be reasonable with your employees and they will be reasonable with you. This is particularly true if your company is very small. The last thing you need is some smoldering resentment because someone once had to work an hour in the middle of the night.

Second, if feasible, you should rotate after hours and on call assignments among managers and other salaried employees. Assuming that you really get very few after-hours calls or alerts, this is just a very minor limitation and very reasonable for their slightly-higher compensation. Note that the rest of the suggestions here will help make this even less of an annoyance.

Third, for hourly employees, set a reasonable compensation. For example, pay them time and a half for any hours outside their regular work hours. And pay a minimum of one hour or two hours for work that actually has to be done.

Fourth, set a long response time in your service agreement. For example, if you have a three hour response time, then your employee has lots of freedom. In three hours your employee can finish watching a kid's soccer game, drive back from the lake, or even sober up if need be.

And remember that "responding" to an alert might not really require any work. If the employee just has to acknowledge the ticket and assign it to the team at Continuum, that's a three minute task. It's only when they have to sit down at their computer and log into a client machine, or drive to the client office, that serious labor takes place.

Fifth, consider a response time in Business Hours. That's what we do. If you say you'll respond within three business hours, then a call at 6:01 PM does not need to be acknowledged until 11:01 AM the next day. (Of course you'll respond at 8:05 AM.) This eliminates after hours on call work altogether.

You might not be comfortable with that, but you can get used to it. As I've said before, 99% of the after hours work you do is because you've decided to do it, not because you really have to.

We have used a business hours response time policy for about seven years now. It has never been an issue. We've had a few incidents in which someone has sent nagging emails and voice mails until we called them back. Then we mention that our after-hours rate is $300/hr. See the article on After Hours Work. Too bad we don't charge a "pissing me off by bugging me after hours" fee.

Sixth, if you have hourly employees on call, give them some minimal reward for being on call even if there are no calls. This could be a $25 gift card or something similar. You don't have to think of this as "pay" but more of a token of appreciation. This can go a long way to let employees know that you acknowledge their contribution even if they don't get an hour's pay.

Seventh (and I'm sorry about this), write up your very reasonable, well-thought-out policy and have it reviewed by a lawyer. She will make a minor change even if it's perfect because she has to earn her money. But once she blesses it, you're good to go.

- - - - -

I know a lot of this is a pain in the neck. But it is definitely worth the time and effort. After all, once you have a good workable policy, you'll be able to sleep at night without your phone on!

Comments welcome.

- - - - -

About this Series

SOP Friday - or Standard Operating System Friday - is a series dedicated to helping small computer consulting firms develop the right processes and procedures to create a successful and profitable consulting business.

Find out more about the series, and view the complete "table of contents" for SOP Friday at

- - - - -

Next week's topic: Employee Review Procedure (Quarterly or Annual)


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Saturday, January 19, 2013

Total Consulting Make-Over: Redesign Your Business to Fulfill YOUR Personal and Professional Goals

Please join me and Harry Brelsford Thursday ...

January is a PERFECT time to commit to revamping your business in 2013.

Free Webinar:

The Total Consulting Make-Over: Redesign Your Business to Fulfill YOUR Personal and Professional Goals

Karl PalachukDate: Thursday, January 24, 2013

Time: 10:00 am - 11:00 am PST


  • Karl Palachuk, Author and Coach
  • Harry Brelsford, Founder, SMB Nation, Inc.
Your business should exist to serve your life. Join Author and Coach Karl Palachuk for a step by step look at re-forming your technology business to make more money while fulfilling your personal goals.

Register Here

 See you then!

- karlp


NOTE: This event was recorded. You can download the audio and related handouts for free at

No registration required. Just download and listen!

Friday, January 18, 2013

SOP Friday: After Hours Work

While we like to keep it to a minimum, after hours work is a fact of life in most service businesses. As technology consultants, we need to have some guidelines about after hours work. There are lots of reasons to do this. You have costs in time and money. Your clients should have costs (because you should be charging them for the work). And if you have employees, you need to compensate them for after hours work.

I recommend you have a statement of philosophy and a few documented policies (procedures) regarding after hours work. First the philosophy.

One of my constant arguments with technicians is about the "requirement" for after hours work. It is only under truly extreme circumstances that you need to work after 6:00 PM on regular business days. That is a fact.

But all too often, we get into this business assuming that we need to work after hours. I can't count how many times I've been in a meeting when someone made the casual comment that "of course" you need to work after hours.

No. You choose to work after hours.


No matter how loudly you protest, it is simply a fact that MANY companies never have people work after hours - even in service businesses. Even in I.T. shops.

We have a tendency to concoct emergencies and then work after hours. Very often, these so-called emergencies simply amount to an urgent need to get something done and an unwillingness to figure out how to do it during business hours.

If you examine your after hours labor, it is overwhelmingly normal, straight-forward tech support. It is not rebuilding a crashed server or fixing the machine needed for payroll the night before payroll is due. No, it is more likely to be just plain tech support that you felt somehow obligated to perform after hours.

I know that you don't have to work after hours because so many companies have figured out how to avoid it. You can too.

On many occasions I have challenged technicians to set up the first policy we discuss below. And guess what? 95% of their after hours work simply disappeared. Gone. It becomes a non-issue immediately.

I encourage you to implement the same.

So the statement of philosophy goes something like this:

Our work day is 8:00 AM to 5:00 PM Monday through Friday. Employees must receive prior authorization to work past 5:00 PM. Our clients are aware of this policy and know that after-hours work is billable at a higher rate.

Policy 1: After Hours Rates

Now for the big policy that will make your life easier. This policy has wide-reaching implications. And yet it is very simple:

Regular business hours are 8:00 AM to 5:00 PM Monday through Friday. All labor outside these hours is billable at 1.5x the regular hourly rate. This includes evenings and weekends. "All labor" includes labor on managed service agreements.

In other words, all labor covered under a managed service agreement must be between 8:00 AM to 5:00 PM Monday through Friday. Even labor that would be covered under an MSA is billable at 1.5x the regular rate if it is performed during evening or weekend hours.

(Note: We prefer to use 2x the regular rate. We get even fewer requests for after-hours with that rate.)

Implementation: Client Permission

You implement this policy by placing it in all of your service agreements. It is very reasonable and you will get no argument from clients. They may not be happy on the day they ask you to work late, but they will be very cooperative on the day they sign the agreement.

You need to have a very clear policy with your employees: If you are still working on a task at 4:30 PM, and you think you will not finish by 5:00 PM, you must contact the service manager and ask how to proceed.

In general, this is how you proceed: First, determine whether the technician is able and willing to work after 5:00 PM. If not, you need to determine whether someone else is willing to do this work. (Anyone else includes you, the owner.)

Second, you need to talk to the client. Inform him that work may be needed at 5:00 PM. Any such work would be billed at the after hours rate. Tell the client this rate. For example, if your regular rate is $120/hour, you need to make sure the client understands that the after hours rate is $180/hour.

If possible, give the client an estimate of the time required and ask whether they want the work done after hours or whether you should start up again in the morning.

Our experience is that clients overwhelmingly say that the work may be completed in the morning.

Note that this applies to all work - whether remote or onsite.

Implementation: Your PSA

You need to create a work type and labor rate specifically for after hours labor. When you are working a ticket, you need to make sure that you stop putting time on the regular agreement (managed service or time and materials) and start allocating time to the after hours rate.

The precise process varies with your PSA. But the habit of allocating time properly is the same.

Policy 2: Onsite Access After Hours

If after hours onsite work is requested, inform the client that there must be someone from the client's company available to get your technician in and out of the building and office as needed. In addition, someone from the client's company must be present at all times in the office while your technician is on site.

This limits your liability in case that happens to be the night when something goes missing or something get broken. In addition, this will probably cost the client extra money. Therefore, it is a further deterent to after hours work.

A Few Comments

I am not sure why so many of us have convinced ourselves that it's "bad service" to refuse to work after hours, or to charge extra for it. Try to get an electrician to your house at 6 PM. Or an attorney. Or a plumber. Or an accountant. In most cases you'll hear that after hours appointments are simply not an option. Period. When they are available, you can bet the price will be at least 1.5x normal.

It is perfectly acceptable, and reasonable, and normal to limit your hours to "normal" work hours.

On a very personal level, you need to have a life outside work. You need to balance work and play. If you have a family, you need to tend to them. The work will really always be there. Balance and perspective will help you to see that years of working until nine or ten o'clock at night will never make the work go away. You will never get caught up. You will only lose contact with a very important (non-work) portion of your life.

One entrepreneurial approach to labor boils down to this: If you are willing to pay me enough money, I will work for you. How much I'm willing to take to sell you my time varies. There is also a limit on your willingness to pay me. So it is very natural that we come to an agreement on terms for trading dollars and hours.

But after-hours labor is in a different category. You should be willing to do it for a certain price. And that price should be high enough to take you away from your personal life. That number will naturally be higher.

Comments welcome.

- - - - -

About this Series

SOP Friday - or Standard Operating System Friday - is a series dedicated to helping small computer consulting firms develop the right processes and procedures to create a successful and profitable consulting business.

Find out more about the series, and view the complete "table of contents" for SOP Friday at

- - - - -

Next week's topic: On Call and Night Staff

- - - - -

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Monday, January 14, 2013

Tune into My Annual "State of the Nation" Address for Small Biz IT Professionals

Mark your calendar now and don't miss this once-a-year podcast. For several years now, I've produced a podcast on the "State of the Nation" for small technology providers.

Don't miss this year's podcast.

Karl's Annual State of the Nation Address
Wednesday, January 16th
10:00 AM Pacific

Here's the Link you'll need:

No cost. No registration. Just log in and listen.

Paste that into your calendar so you don't forget!

Topics Include:
  • Highlights (lowlights?) from 2012
  • The Death of SBS
  • Cloud Services
  • Economy
  • Rebooting Your IT Consulting Business in 2013
- - - - -

When I speak about change, I like to point out how different things are in any five year period. For many of us, when we look back five years we see great changes. In addition to being five years older, . . .

You might live in a different place,
Drive a different car,
Hang out with different people,
Go to a different place of worship,
Have a different job,


Well - We're now well into the fifth year of recession. Once again we start the year hoping it will be over. But once again it keeps on going. 

As strange as it sounds, this is a wonderful time to reboot your business, sell some new products, and improve your business.

Tune in to learn more.


Friday, January 11, 2013

SOP Friday: Voicemail Passwords, etc.

There are some passwords that need to be guarded very heavily. Domain administrator passwords are a great example.

But there are all kinds of other "less important" passwords and codes that need less security. But they still need some attention. These include the passwords for employee voicemail, access codes for the office gate, the garbage bin, the alarm system, and so forth.

There is a tendency in very small businesses to either give the same passwords/codes to everyone or to share these freely and openly. That's actually not bad in most cases. But you really should have a simple 1-2 paragraph policy for each of these things.

The gate code, the code for the bathroom, and the code for the garbage bins can all be posted on the wall as far as I'm concerned.

With alarm codes, however, I believe that each employee should be assigned a unique code. After all, that's one of the built-in features of an alarm system. It will log entry and exit times for everyone. Well, if everyone uses the same code, that's useless information.

And then an employee leaves the company. They have the alarm code. And I know we shouldn't suspect everyone of being a criminal, but it's just prudent to disable codes when employees leave. Think about it: Someone crowbars the front door in the middle of the night. They enter in a code and the alarm never goes off.

One of the main reasons I've heard for using the same code is that no one knows how to enable or disable alarm codes. Well, I know someone who DOES know: The alarm company! Call them and ask for a quick walk-through. Write down the steps and type up a procedure. File it in your Processes and Procedures folder. Then print out a copy and put it in the alarm company file in your filing cabinet.


Voicemail is another interesting one. Here there are two major schools of thought. One is "open" and one is personalized.

What's the deal with voicemail? Well, of course everyone needs voicemail. But this is company voicemail. That means that it is company property. If a technician leaves the company, or is out sick, you may need to access that voicemail and make sure nothing important is being lost.

In the personalized approach to voicemail setup, you allow everyone to set up their own password. This means that, in certain circumstances, you will need to go into the voicemail system as administrator and change that password in order to access those voicemails.

In the open approach, you set a standard policy for all passwords. For example, 5 followed by the extension number. So x101 has password 5101, x108 has password 5108. In this approach, you just have to feel confident that people won't mess with each others' voicemail. It has the real advantage that you don't have to change passwords when someone's out sick. Of course if you need security, this kind of password system won't work.

Of course you might have different policies for desk phones and cell phones, if the company provides cell phones.

The bottom line . . .

You should determine the level of security you need for all these pesky little things. While these are mostly minor items, you should write up a quick policy for each and file them with all your other policies.

And, of course, make sure that all of your staff are informed about the policies as part of their onboarding process.

Comments welcome.

- - - - -

About this Series

SOP Friday - or Standard Operating System Friday - is a series dedicated to helping small computer consulting firms develop the right processes and procedures to create a successful and profitable consulting business.

Find out more about the series, and view the complete "table of contents" for SOP Friday at

- - - - -

Next week's topic: After Hours Work


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Friday, January 04, 2013

SOP Friday: How to Maximize Billability of Technicians

This post assumes you have a ticketing system of time kind. If you want to really see what your numbers are and how you can work with them, you need to put 100% of your hours in the PSA (professional services automation tool). You can only get reports out if you put data in.

Lots of people have told me that they need to figure out how to make their technicians as "billable" as possible. Somehow in our heads, we think we can get a perfect technician to bill 40 hours a week. Unless the tech works 60 hours, you're not going to get 40 hours billable out of him!

Assuming a full time tech is working 40 hours/week . . . the best you can hope for is about 70% billable on a consistent basis. Technicians check email, sit in on company meetings, do training, watch webinars, etc. If you don't charge for travel both ways, then they spend time driving around unbillable.

I've heard people say their techs are 80% or 90% billable. But every time I hear that, I ask about how rigorous they are at tracking time. Does every technician account for every minute between 8:00 AM and 5:00 PM? The answer is invariably NO. So these folks have an impression that their technicians are super-billable, but they don't even know how much time they are logging on the job every week!

If you track this very carefully, you will discover that it is extremely uncommon for a tech to be more than 65% billable. Now, as we move to doing more and more work remotely, this number increases. As a tech's job moves from little jobs to big jobs, he becomes more billable.

Please see the following posts:

SOP Friday: Running Regular Financial Reports (This covers the ideas and expectations of billability).

SOP Friday: Time Tracking for Employees

SOP Friday: Should You Do Billable Work First?

SOP Friday: Working in Real Time

What Does "Billable" Mean?

Let's begin by defining Billable Work. If you are in the world of break/fix, the definition is easy: Billable work is labor for which you will invoice the client. In this world, there are really only two kinds of work. There is work you give away for free and work you bill for. (Free labor includes rework or other work you intentionally do not charge for. There's a completely separate discussion about all the labor you give away for free because you don't properly track your time.)

In Managed Services, the discussion can be a little more complicated. "Project work" is just like break/fix above. You either bill for it or give it away. But with Managed Services, you have work that is covered by the service agreement. For example, all work to maintain the server might be covered. So checking the logs, applying fixes, and verifying that there's plenty of disc space is all covered work.

For our purposes, productive labor covered by a service agreement is considered billable. Rework and floundering around unproductively trying to figure something out should be considered un-billable here as well, but it's very hard to track.  The key point here is that "billable work" under a MSA (managed service agreement) includes work to fulfill the agreement. It is "time on task" and you will not invoice the client for it separately.

See the pie chart. Of course your numbers will vary.

The chart represents an example of how time can be divided in a week. We start with 40 hours. Fifteen hours is "overhead" time (light blue). This represents meetings, training, driving, etc. as discussed above. This number will be larger for managers and smaller for dedicated technicians. Just remember that it can only get so small. So be realistic.

Another fifteen hours is work on covered machines (purple). This includes whatever you have in your MSA. Two hours are rework (red). Another three hours are otherwise unproductive (orange). This unproductive work includes things like standing around waiting for another technician. Most commonly, it represents working on a problem and making no headway. This happens when you (your tech) bang your head against a problem for an hour or more and make no progress toward the solution.

Finally, we have five hours of truly billable labor. These are hours spend on Add-Move-Change tickets and billable project labor. For MSA clients, this is work not covered by the MSA.

When I say we want to maximize billability, I mean we want to increase the time spent on Covered Labor and Billable Labor. These are at about 50% of hours for the week. This is a very realistic number.

The Overhead time might be different for different roles in your company, as mentioned above. But it probably doesn't vary much for an individual over time. So if Joe spends 15 hours a week on Overhead, you cannot expect to squeeze much time out of this area.

That leaves two key areas for increasing billability: Reduce Rework and Reduce Unproductive Labor.

Reducing Rework and Reducing Unproductive Labor

So our culprits boil down to these two categories. You might be tempted to lump them both together under Unproductive Labor, but Rework really needs to be separate. Unproductive labor may not be related to competence. Rework means you (your tech) did something wrong and then they (or someone else) had to go do the work again. This is very often related to training, competence, and experience. You absolutely have to minimize rework.

Here are six things you can do to minimize these categories and increase billable hours.

1. Work from Highest Priority to Lowest

This starts with assigning a priority to every single ticket or task. Everything in your company needs to be prioritized. Low priority tasks might be easy or even fun. But you have to be disciplined to work based on priority level. Search this blog for "priority" and you'll see lots of articles about why priorities are so important.

A lot of the low priority items fall into the category of Urgent but Not Important. Clearing up high priority tasks often clears up some smaller tasks that were related to the issue. It also guarantees that techs are working on the most important things. It is rare that high priority tasks are not covered under an MSA or truly billable.

2. Schedule Work, but Schedule it Loosely

The most productive work is planned. Time and time again I have to coach people that it's okay to tell a client that you schedule work two or three days out. Projects might be two or three weeks out. If you can plan to tackle specific jobs on specific days, you can organize the work and prepare for it. You can have the right tools and research.

Reactive work is always less effective. You jump off one task and onto another. That action automatically reduces the effectiveness of your work on the task you are abandoning. And because your work on the new problem is completely unplanned, you are less productive on that as well.

Here's what happens to the task you abandoned: When you go back to it, you have to figure out where you left off. It will take some time to come up to speed. Remember, you WERE up to speed on the problem when you abandoned it. The time spent coming back up to speed is not rework, but it is certainly unproductive labor - and unnecessary.

I say to schedule loosely because it gives you flexibility. Tell clients you'll be there on a specific day. If you need to, say morning or evening. As a general rule, that's much better than agreeing on a specific time. Specific time slots mean that you might have to stop doing one job to go do the scheduled job. See previous paragraph. It also means that you might have a time gap between jobs. Totally unproductive time.

In a perfect world, you won't rush from one emergency to another. You'll plan things out a day or two in advance. For each task, you'll complete it or come to a natural stopping point. Then you'll move on to the next task, minimizing the unproductive gap between jobs.

3. Develop and Encourage Specialization

For any given hardware or software, you will have a specific level of knowledge. Ideally, your team will include a variety of people with a variety of skills. If there are any products you consider critical to your success, you should have someone who specializes in the product. If this person is not on your team, then you should make sure you have access to them when you need them.

It is pretty obvious that someone with specialized knowledge will fix things faster. This reduces time spent floundering around trying to figure things out. Of course, once you solve a problem, you should take time to put notes in the ticket so you can replicate your success.

4. Call for Help

You should have a policy in your company that no one is allowed to work on a problem for very long without making progress. You might decide the limit is 15 minutes, 30 minutes, or even an hour. But at some point, they MUST call for help. They might call their manager, another technician, a friend at another company (if appropriate), the vendor's tech support line, or anyone else who can help.

In addition to a "fresh pair of eyes," calling for help immediately limits the amount of unproductive time that can accumulate in your company. You might even have lower limits for newer techs. Of course everyone should be using a Troubleshoot and Repair Log (TSR) to keep track of what they've done.

A TSR Log will allow other team members, or third party tech support, to come up to speed very quickly when you call for help. Many young techs refuse to call for help. Then they end up spending countless hours on something that another person might have fixed right away. Or perhaps the problem was known but undocumented, so no amount of research would reveal the fix. It takes a certain maturity and self confidence to say that you don't see the answer and need help.

Interestingly enough, more experienced technicians tend to ask for "help" all the time. It is often the fastest path to success. We all have different experiences and perspectives.

5. Make Minimizing Rework a High Priority

There are many causes to rework. Making it a company-wide priority to minimize rework will have a dramatic effect. First, it makes everyone aware of the need. So team members can enforce the goal of minimizing rework and help each other out. Second, it will make it easier for technicians to ask for help.

Third, making this a priority will lead to other actions that are good for your company overall. Without knowing anything about the specific rework, you can guarantee that it is related to either poor planning or lack of training/experience. So you need to make sure you have adequate training programs. These can be internal. In fact, sometimes internal training is the best because you can go at the student's pace, and you know the training is on YOUR way of doing something.

Planning is obviously good for any project. It is particularly good for avoiding rework. If you slow down and plan your work, you are much more likely to proceed from start to finish without retracing your steps.

6. Documentation is Your Friend

You knew I had to throw this in the mix. Documentation includes procedures and planning. It includes TSR Logs. It includes putting all of your notes and hours in the PSA. It includes using checklists - and only checking each box after the task is complete.

When you know exactly what you have done and not done, troubleshooting becomes a lot easier. Ideally, you should be able to read through the notes on a ticket and come up to speed very quickly on the problem and what has been tried so far.

If the client has a similar problem in the future, you'll have the answer at your fingertips. If other clients have a similar problem, you'll still have the answer at your fingertips.

Final Thoughts

What do we do for a living? We implement, maintain, and troubleshoot. Implementation can be very efficient with proper planning. But it's not perfect. Maintenance should be very easy, but it's not perfect. And troubleshooting is certainly not a perfect science.

So it is impossible to totally eliminate rework or unproductive labor. You can minimize it. But you can't eliminate it.

Maximizing billability, therefore, is also not a science. It takes constant attention and effort. It takes proper training and a company-wide ethic of reducing unproductive labor. (Note that training is time spent in the "overhead labor" category.) This is not something you can implement and walk away from. Maximizing billability is a never-ending job.

It relies on excellent time tracking, excellent documentation, excellent planning, excellent training, and excellent teamwork to support each other to eliminate rework and unproductive labor.

Comments welcome.

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About this Series

SOP Friday - or Standard Operating System Friday - is a series dedicated to helping small computer consulting firms develop the right processes and procedures to create a successful and profitable consulting business.

Find out more about the series, and view the complete "table of contents" for SOP Friday at

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Next week's topic: Voicemail Passwords, etc.


Thursday, January 03, 2013

The Most Popular Blog Posts of the Last Month

Last January I posted the most popular posts from the previous month. I find it interesting what people choose to read. In the last month I've posed 12 blog posts at Four of those were "SOP Friday" posts. But the most recent posts are not always the most popular.

I've written 180 posts on this blog in the last year. 52 of those were SOP Friday posts. That series has become very popular, so it's no surprise that it dominates the traffic.

Here are the most read blog posts from the last Month:

#1 = SOP Friday: Employee Onboarding from Dec 14, 2012
One of the current SOP Friday articles. Employee-related stuff always seems to be popular.

#2 = Microsoft Announced the End of of SBS from June 5, 2012
This is the biggest post of the year and is finally dropping off the #1 spot for the month. That's appropriate since it was probably the biggest announcement of the year for the small business space.

#3 = Joe Panettieri: You're Killin' Me, Man! from June 14, 2012
This is a shout-out to one of the great bloggers in our space. Lots of great information.

#4 = SOP Friday: Hiring vs. Outsourcing Technicians from Dec 7, 2012
Another SOP Friday article on employees.

#5 = SOP Friday: Labeling Equipment (etc.) from Nov 23, 2012
This is a popular topic, even though it doesn't get a lot of press. Nerds love labels. For some businesses, labels are the only documentation they have!

#6 = SOP Friday: Building a Business Plan for Your I.T. Company from Dec 28, 2012
A very recent post. We'll see what kind of staying power it has. I am betting this will be a perennial favorite. The daily hits remain high.

#7 = SOP Friday: Disaster Recovery - Simple Restores from Nov 30, 2012
DR is another topic that's always popular.

#8 = End of Year Sale - And $2 Shipping - at SMB Books from Dec 18, 2012

#9 = SOP Friday: Helping Clients with Audits - Security and Insurance from Dec 21, 2012
This is another topic that I think will be popular for awhile. In fact, it may become more popular as small businesses are regulated more - which seems to be our future.

#10 = Earn a FREE Copy of the New Managed Services in a Month from Dec 7, 2012

Traffic to this site is now largely generated from my own domains. The SOP Friday page at ( is the most popular "entry page" at and the most popular source of traffic to the Small Biz Thoughts blog. Overwhelmingly, people are now starting at my web site or blog and then poking around there for awhile.

Other than my own sites, I get a fair amount of traffic from Facebook and And of course Google brings in a lot of visitors. As you might imagine, I'm doing well on a number of search terms related to "SOP" and "Standard Operating Procedures" (especially when combined with computer, technology, or management).

As a new year begins, I am grateful for all the visitors and readers. If you ever have any suggestions for how I can improve this blog, please let me know.

Have a great 2013!


Wednesday, January 02, 2013

Arlin Sorensen Announces Sale of Heart Technology Solutions!

Wow. The New Year begins with a bang.

I just got a note from my friend Arlin Sorensen - Famed for the HTS company and HTG (Heartland Technology Groups). Arlin is officially OUT and a new owner is IN at HTS. This deal was finalized last year  and announced today.

Congratulations to Arlin and Nancy (and their amazing team) for putting together such a great model company in the small business space. Arlin remains an inspiration to me and many others in our community.

Of course he's not retiring. But cutting back to only 40 employees will make for a much more relaxed year in 2013. LOL

Here is Arlin's announcement:

Based on the recent events this week, I opted to hold off sending out our 2012 Christmas email which has been my habit for a number of years.  It is enclosed below, but I decided to wait and send this to announce a significant change in my world as of 12-31-12.  There is a new sheriff in town, or more accurately a new owner of HTS.  Effective the end of 2012, WestTel Systems purchased HTS from us and is now running that company.  They have purchased all the assets and are now directing HTS as a DBA of Western Iowa Technology LLC.  So my world looks a bit different in 2013.  I have been retained to advise and help with the transition, but my role as CEO has come to an end and now my focus can become more directed at HTG, HLG, HTS Ag and Varvid in the new year.  I will continue to be involved in leading those organizations and continue ownership in each. 


You can read the press release here that has some of the details.  The headquarters remains here on the farm for the time being, Connie Arentson will continue to lead as President, and there are a handful employees that are remaining with me at SCCI (parent company to HTS) to provide needed services to the other Heartland companies.  We will still have almost 40 staff across those four companies, so it isn’t like my bride and I will grow lonely here on the farm.  But less of them will be local to our office here, and definitely a large component of our risk portfolio has been removed through the sale.  So I am excited about the future and what it holds.  We will be extremely busy during the transition to assure success and as little disruption as possible. 


Thanks for allowing me to be a small part of your world these past 27 years in the industry.  I’m not going anywhere – just giving up one hat so I can focus on wearing some others more regularly.  You’ll still see me around industry events and working to serve MSP’s and VAR’s like I have for a long time.  But hopefully I won’t be quite as stressed and pressured with one less responsibility on my plate.  I hope you enjoy our Christmas letter.  It has been a very blessed year, and the events of wrapping up the year are just another touch of God’s blessing on our patch.

I am looking forward to a great 2013!

I hope you are too.

And I look forward to all the new things we can expect from HTG and the other "HT Properties."