Thursday, April 30, 2020

Introduction to Recurring Revenue

A note for entrepreneurs.


If there’s one thing that comes close to magic in business, it’s recurring revenue.

If you make a one-time sale of $1,000, you get to put $1,000 in the bank. But if you make a recurring sale of $1,000, you get to put $12,000 in the bank every year.

Not every business can create recurring revenue, but if you can figure out a way to do it, I encourage you to do so. It is worthwhile to get creative here. As you look through your credit card statements, you will find many subscriptions. These might include a monthly dog box mailing, a car wash service, lawn care, or many other services.

Your recurring revenue offering might be a product or a service. It might be billed monthly or annually. No matter what it is or how you invoice for it, this offering can do wonders for your business.

Recurring revenue grows until it becomes a solid floor under your feet. This is “guaranteed” revenue every month. With luck, it will grow to cover your core expenses and your payroll. After that, it will grow to give you a steady profit on top of everything else.

All that sounds good. But recurring revenue does something else as well. It gives you freedom. It allows you to take some chances and try new things, safe in the knowledge that the rent will be paid and the employees will be paid.

In other words, it gives you the freedom to constantly breath new life into your business.

:-)


More juicy info for first time entrepreneurs . . .

THE ULTIMATE GUIDE FOR FIRST-TIME ENTREPRENEURS


The Small Biz Quickstart Workbook


Author: Karl W. Palachuk


Karl has worked with thousands of business owners and managers – and helped several of them make the move to self-employment. With this workbook, Karl will help you make the launch as well. This workbook is guaranteed to help you learn about what it takes to start and run your new business.

Available Now!









Wednesday, April 29, 2020

Join me at NexGen 2020 - October 18-20

You can sign up for NexGen in Anaheim FREE if you're a VAR or MSP . . .



I believe . . .

I believe we'll be getting back to normal in October.

And I believe I'll be busy running around the country, and the world.

From The Channel Company:

I hope you are well and staying healthy. The Channel Company is working diligently to continue to deliver best-in-class events that connect and build relationships between vendors and solution providers. We wanted to provide you with early visibility for this event as we understand schedules will start to fill quickly.

You are invited to join us as at NexGen 2020, October 19 - 20, in Anaheim, CA. NexGen is custom designed for solution providers aspiring to grow their monthly recurring revenue with managed services. NexGen features extensive peer networking, actionable conference sessions and a first-class line up of technology vendors.

Register For FREE


Session Preview

  • These Times Call For Disruptive Measures | Chris J. Snook, Chairman & Founder, Sandcastle Foundation
  • Rebrand For The Future | Travis Woods, President, Fort Point IT Solutions
  • NexGen Cloud & Edge Computing | Richard Villars, ResearchVP, Datacenter & Cloud, IDC
  • Internal HR Vs. Professional Employment Organizations | Allen Falcon, CEO, Cumulus Global & Nathan Rizzo, President, Rx Technology

Click here to explore the full agenda on their website.

:-)

Saturday, April 25, 2020

SMB Online Conference - Prices Goes Up Friday! Register Now



Please join us at the
SMB ONLINE CONFERENCE

Only $299 This Week

-- -- --
Please join us - Live Online!

This event has not "gone digital" - it was designed to be digital!

It’s focused on the Habits of Success and features industry favorites such as Jay McBain, Amy Babinchak, Richard Tubb, Nigel Morris and more. See the full lineup and topics here:


·     Just hit the “Sign me up!” button below and we’ll get you on the list.

Even if you can’t attend live, this conference is sure to be packed with great information that will be recorded and available to you after the conference.

Let us know if you have any questions!

Your 2-Day Pass Includes

·     Two Days
·     Ten Speakers
·     Eleven Hours of (recorded) Education
·     100% Action-Oriented, Geared toward SMB & Managed Services

Only $399
Only $299 until May 1st!
Sign Up Now and SAVE!

Jay McBain * Karl W. Palachuk

Amy Babinchak * Ryan Morris

Dave Sobel * Nigel Moore

Richard Tubb * Rayanne Buchianico

Manuel Palachuk


Small Biz Thoughts Technology Community Members: email concierge@smallbizthoughts.com for huge discount.


SCHEDULE




Wednesday, April 22, 2020

Video Posted: When You Have to Downsize

No one wants to fire or lay off employees. But the reality is that employees are your largest expense. If you have a severe cash flow problem, there may be no other way to survive.

Here are a few tips for dealing with this sad situation - with class.

(View on YouTube:
https://www.youtube.com/watch?v=zFfYAVnATt4)
Part Time: If possible, move to part-time workers. This can save you some money, add flexibility, and keep your employees with you (at some level).

If you don't have any choice, you may have to let someone go. Remember: Every change involving employees affects your culture.

Do it with class: Don't fire someone Friday at 5PM. Be as kind as possible under difficult circumstances.

Be consistent: Treat everyone the same when you let them go. Remember that the remaining employees will be watching.

Finally, you need to make the best of a bad situation with your remaining employees. If you have some spare time inside your company, make sure you manage them effectively. Set goals and measure the results.

Manage well: Set measurable goals - and measure them! Remember, some people are not built to work from home. Find tip sheets on working from home. Encourage employees to be effective and productive while working from home.

This is also a great time to work on training - especially on the skills they need going forward (such as Azure Active Directory). What will your company be selling at the end of 2020? Make sure you're trained on that!

Sherweb's YouTube channel is here: https://www.youtube.com/user/SherWebOfficial

-- -- --

FTC note: I was compensated by Sherweb for the creation of this video, but received no compensation for this blog post.

:-)


Make Your Finances Your Absolute Highest Priority

A note for entrepreneurs.


I have owned one or more businesses since 1995. I have been coaching business owners for more than fifteen years. So, I’ve seen lots of businesses, lots of plans, and lots of “profit and loss” reports. And now I am writing a book on starting a new business from scratch.

Even with all my experience, I am surprised at how many topics fall under the topic of finances. Over the years, I have learned that I have to take care of state and local taxes, licenses, employee expenses, supplier accounts, etc., etc., etc. Money. Money. Money.

I only point this out because it really struck me how much I wish I’d known when I quit my job and jumped into a business!

As a result of listing all the things you need to take care of – over 100, it turns out – I was surprised that 25% of them addressed some form of finances. And if you throw insurance-related cards on the same pile, you’re at about 40%.

The lesson is clear: If you want to take your business seriously, you need to take your finances seriously! And if that means taking some classes or reading some books, you need to do that.

There are certain financial topics you need to take extremely seriously and never take chances with. The top three, as far as I’m concerned, are taxes, employees, and cash flow. If you don't take care of those three things, you will be in financial trouble and have the government after you.

Once again, it boils down to working ON your business, not just in your business.

In these uncertain times, there's certain advice you must subscribe to. You may have heard this advice a hundred times and told yourself that it somehow does not apply to you. But it does. And if you had listened to this advice and put it in place anytime over the last ten years, you would have more money in your pocket today:

Get prepaid for everything.

I have written that phrase thousands of times. I have presented it in speeches and videos. I have begged coaching clients to accept it. And maybe it was safe to ignore this advice a year ago, or in December, or even in January.

But today, I guarantee that every dollar owed to you right now will be collected at less than 100%.

This is the day of reckoning.

Go collect your money - before some of your clients lose their business and can never pay you.

You will find yourself begging and pleading for money that is rightfully yours. You will bargain and think you've done well if you get sixty cents on the dollar.

Consider this your tuition - paid at full price.

And right now adopt the only policy that makes sense for your service-based business: Get prepaid for everything.

I can give you lots of other financial advice about payroll and taxes and cash flow reports. But all other financial advice is second to the most important rule you can ever adopt for your business.

Get prepaid for everything.

:-)



More juicy info for first time entrepreneurs . . .

THE ULTIMATE GUIDE FOR FIRST-TIME ENTREPRENEURS


The Small Biz Quickstart Workbook


Author: Karl W. Palachuk


Karl has worked with thousands of business owners and managers – and helped several of them make the move to self-employment. With this workbook, Karl will help you make the launch as well. This workbook is guaranteed to help you learn about what it takes to start and run your new business.

Available Now!

www.smallbizquickstart.com







Tuesday, April 21, 2020

New Class: Business Strategy Made Easy - Starts April 28th

100% Actionable Content!

Business Strategy Made Easy – Your Ultimate Success Hack 

– 5W21

Taught by Manuel Palachuk, coach and author

Five Tuesdays: April 28th - May 26th

Register Now

All classes start a 9:00 AM Pacific

The easiest way to gain a competitive advantage is simply to have a specific plan – because most of your competition doesn’t! 

They’re running week-to-week trying to strike it rich with the next big fad tactic they’ve discovered. And to have a significant competitive advantage all you need to is have a specific strategy for systematically executing your plan.

This course will break down the step an entrepreneur or business owner should follow to designing (or re-designing) their ideal business, from the top down, and then it will show them how to build (or re-build) that ideal business from the bottom up. It will show you how to share your strategy with stakeholders, leadership and the team in a way that everyone can understand and easily help execute on.

With continuous discussion on identifying significant competitive advantage, the concepts, materials, and coursework presented are all based on the instructor’s book Getting To The Next Level: A Blueprint for Taking You and Your Business to the Top. A complete copy of the book is included in the course materials for reference. These are the same time-proven methods employed by your instructor Manuel in his international coaching programs.

This course is intended for every entrepreneur, from those starting up a new endeavor to those seasoned business owners. Every business strategy can benefit from this course. The concepts and tools employed in this course are universal in their application regardless of the business maturity.




With the completion of this course, the entrepreneur should have:


  • Clear picture of the Business Strategy Lifecycle and its four primary components.
  • Solid understanding of the framework used to define a complete business - The Pyramid of Purpose and Value.
  • Familiarity with a variety of tools required for breaking down and analyzing the current or desired business – Business Value Aspects, The SWOT, GAP, and More.
  • Basic comprehension of business strategy, how it should relate to the business vision, and how it can be developed and tracked using a simple balanced scorecard.
  • Follow through example of basic business strategy development for an IT company using the concepts, tools, and methods from the book.
  • Functional understanding of Business Agile Strategy Execution, the most powerful method for developing and Executing on business strategy.


Full list of detailed topics at Great Little Seminar site.

Course Content Outline:

Week One: The “Why” – Tools Rundown – The Pyramid Framework

Week Two: Culture – SWOT – GAP – Organizing the Laundry List

Week Three: Compass – Balanced Scorecard – Strategy Maps

Week Four: Blueprint for Success – Example Strategy Development

Week Five: Business Strategy Meets Agile Execution


Delivered by Manuel Palachuk, author of Getting to the Next Level.

Includes five weeks of webinars with related handouts, assignments, and "office hours" with the instructor. All classes are recorded for download.

This course is intended for business owners and managers. It is particularly useful for the Service Manager or Operations Manager.



Small Biz Thoughts Technology Community Members: Great discounts. See the Community site or email Kara for details.

More Info at https://www.smallbizthoughts.org.

:-)


Monday, April 20, 2020

Video Posted: Take Control of Cash Flow NOW!

I got together with my friends at Sherweb to make some videos to help IT consultants succeed in the tough economic times of 2020. Here's the first one:

Cash is King!



A few key notes:

NOW is the time to go collect money owed to you. Cash will disappear very quickly in the days and weeks ahead. Go get yours now.

You've heard the old saying that profit is the food of your business. Well, cash is the oxygen. You can live a long time without food. You cannot last long without oxygen.

Lesson learned: Get paid in advance for everything you can. If you haven't done this before, now is an excellent time to get started. Clients will understand, and you can continue this excellent policy from now on.

On a related matter, now is a great time to start taking credit cards, if you aren't doing that already. The first time you have to forgive ten or twenty percent of a debt in order to collect some money, you'll never worry about that 3% expense again.

Run cash flow reports. Know how much cash you have on hand at all times.

Examine where your money goes, and start making cuts now. Keep the "necessary" expenses and cut the things that are merely "nice" to have.

Finally, look at your payroll. Employees are the largest expense in any business with more than one person. Consider moving people to hourly labor instead of salaried. That allows you to reduce a few hours here and there and keep employees on the payroll, even if less than full-time.

No one wants to lay off employees, but you may be required to.

Money is always a difficult thing to talk about with employees and clients when money is tight. But if you don't address it right now, your business may suffer!

Sherweb's YouTube channel is here: https://www.youtube.com/user/SherWebOfficial

-- -- --

FTC note: I was compensated by Sherweb for the creation of this video, but received no compensation for this blog post.

:-)

Wednesday, April 15, 2020

Now Available on Amazon: Business Plan in a Month

Business Plan in a Month


Build the Roadmap Your Business Deserves


Buy Now on Amazon - only $2.99


In the long run, it doesn’t matter whether the economy is up or down, shrinking or growing: Businesses with a plan always do better than businesses without a plan! Whether the economy is growing or shrinking, it’s always a great time to bring a little balance in your life, slow down a bit, and put things in perspective.


Your business needs a plan.

Very few people stumble around like Forrest Gump and make it to the top. In fact, zero people achieve that.

You also have to be flexible and spontaneous once you attempt to execute your plan. But, once again, this just reinforces the need for a plan. The planning will help you strategize and consider alternatives to your plan.

In the long run, it doesn’t matter whether the economy is up or down, shrinking or growing: Businesses with a plan always do better than businesses without a plan! Whether the economy is growing or shrinking, it’s always 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. Others are hoping that this is their time to shine and break out from the crowd. 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 small business space, it is particularly true that very few people plan at all. We work to stay on the cutting edge of our industry, 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!

Why?

  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.

Grab this great little resource by one of the most successful authors in the Small Business space – and start your business heading in the right direction!



:-)




More juicy info for first time entrepreneurs . . .

THE ULTIMATE GUIDE FOR FIRST-TIME ENTREPRENEURS


The Small Biz Quickstart Workbook


Author: Karl W. Palachuk


Karl has worked with thousands of business owners and managers – and helped several of them make the move to self-employment. With this workbook, Karl will help you make the launch as well. This workbook is guaranteed to help you learn about what it takes to start and run your new business.

Available Now!

www.smallbizquickstart.com







Tuesday, April 14, 2020

Think of Yourself Separate From Your Business

A note for new entrepreneurs.


No matter what happens in your business, you need to think about yourself separate from your business. You are you, playing a role inside your business. You need to always maintain this distinction between yourself and your business.

Here’s why this matters. At every stage of your business, your business has a character and a personality. It has specific financial requirements. It has needs and it generates rewards. All of these things change over time.

In the meantime, you have a changing role within your company. You might become an employer or an outsourcer. You might take on a partner, buy another company to merge with, or sell your business to another company.

No one who’s been in business for five years will tell you that they foresaw every single thing that happened in their business.

When I started my first business, I just wanted to make some money from my knowledge of computers and politics. Within one month of starting my business, I had dropped the political consulting and become a technology consultant.

A year later I was deep into consulting within an industry I’d never heard of when I started. Five years after that I had a few employees and had started moving down the road that would lead to my second corporation, my first book, and a business completely unrelated to what I started out doing.

Your business will grow and morph over time. As it changes, you will need different things from your business. You will probably start out wanting money from your business. Over time, it will probably become a source of creative inspiration. And, if you’re lucky, your clients and associates will become among your closest friends.

Eventually, you may decide to change the form of your business (for example, from a sole proprietorship to corporation). Or you might change your focus from one industry to another. There are many changes you might make.

At every stage, you will do well to think of yourself as the owner of the business – not as the business itself. In the hard times, you will need to make hard decisions and push the business to pay your full due. When you deal with employees, partners, clients, and associates, you always need to be the owner.

If you lose sight of this and see yourself as the business (and the business as your self), you will end up making bad financial decisions. For example, if the business is losing money, you might lose clarity of thought as you do whatever it takes to keep your business alive.

As extreme as that seems, it is very common. Remember: 80% of all businesses fail. And very often that failure is a result of confusing our personal ego with the business itself.

Even if you have to get rid of all your employees and go back to a business of one person, this is better than going out of business because you made bad decisions that led to borrowing money, growing debts, and eventual bankruptcy.

I know this sounds extreme. But mark your calendar and re-read this chapter one year from today. I promise it will make a lot more sense!

:-)



More juicy info for first time entrepreneurs . . .

THE ULTIMATE GUIDE FOR FIRST-TIME ENTREPRENEURS


The Small Biz Quickstart Workbook


Author: Karl W. Palachuk


Karl has worked with thousands of business owners and managers – and helped several of them make the move to self-employment. With this workbook, Karl will help you make the launch as well. This workbook is guaranteed to help you learn about what it takes to start and run your new business.

Available Now!

www.smallbizquickstart.com







Thursday, April 09, 2020

Brand New Book! Small Biz Quickstart Workbook Available May 1st

The Small Biz Quickstart Workbook


The Ultimate Guide for First-Time Entrepreneurs


by Karl W. Palachuk


Available NOW at no charge to members of the Small Biz Thoughts Technology Community. Follow that link, or check out the Books or What's New categories.

Available to everyone else May 1st!
Watch this space for details.


The Book

I have worked with thousands of business owners and managers – and helped several of them make the move to self-employment. With this workbook, I hope to help many more make the launch as well. This workbook is guaranteed to help you learn about what it takes to start and run your new business.

So, You Want to be Self-Employed…

Congratulations on taking the plunge! As scary as it seems right now, starting your own business will be one of the highlights of your life. This workbook will remove the “scary” part of your decision. How? It will give you information, direction, and inspiration you need to move ahead without (much) fear.

Maybe you have a long-held dream of starting your genius business. Maybe you’re trying to turn your “gig” into a business. Or maybe your boss has decided to downsize and you don’t fit anymore. No matter why you’re starting your business, you’ll be a lot more successful if you take it seriously from the start.

Everyone wants to quit their job sometime. But when you want to quit your job all the time, then you don’t have any choice.

This workbook is divided into three sets of tasks: Planning (before you leave your job); The Launch; and the First Year. There are 30-40 items you need to tackle at each stage. Thinking and planning about all these details will help you move quickly from a business idea to a profitable first year.

Official Release Date: May 1, 2020

Community Members Access Now

Note: The graphic above is from our book site -- www.smallbizquickstart.com -- and is not the official book cover.
:-)

Tuesday, April 07, 2020

How to Use Green Screens with Zoom

Whether you use them or not, you've probably heard of Zoom.us by now. They went from 10 million daily users to 200 million last month. Talk about being in the right place at the right time!

Zoom is great for group meetings, one-on-one meetings, webinars, and teaching classes. I sometimes use it just make videos.

One of the cool features is that you can click a button and add almost any picture in the background. It does a pretty good job of outlining "you" and cutting out the background. But if you have hair like mine, and glasses, and an interesting background, it may be better to use a green screen.

Strictly speaking, "green" screen is a common term for Chroma Key compositing. Bascially, your remove one color from your photo or video and allow the "background" to show through. The most common example of this is seen every day on the weather report, although it's also widely used in sport reporting and lots of other news shows.

I bought a big green screen background throw when I first started doing videos. But there are a couple of issues with the green for me. First, my hair used to be blond/brown, and light brown is over next to green on the color wheel. So the background and lighting have to be just right to make it look "real" without a lot of post-production work. Second, my hair sticks mostly UP. And since I pay to have lots of silver highlights (wink), the green reflective light comes right down the hair like fiber optic cables and makes the situation worse.

So most of the time, I use a blue screen instead of a green screen. Which is great as long as 1) I don't wear a dark blue shirt, and 2) I'm not using a blue background.

Here are some (hopefully useful) notes on maximizing results with backgrounds and green screens on Zoom.

The Challenge: Create a good effect for videos with a blue background, using Zoom to eliminate the "real" background.

Step One: Set Up Background Function in Zoom

Log into your Zoom account. On the left side menu, scroll down to Admin. Expand Room Management and click on Zoom Rooms.

On the screen that appears, click on Account Settings. Scroll down to "Background Image for Zoom Rooms" and unlock that feature.

You can upload an image here or from inside Zoom once you're in a meeting. Note: Suggested dimensions are 1920px by 1080px.


Step Two: Set Up Backgrounds Inside Your Zoom Meeting

Start or join a Zoom meeting. This will give you the Zoom interface.

Float your mouse over the lower menu bar and selection the UP chevron to the right of the video camera icon. Click on Video Settings...

Within the video settings screen, you can upload new backgrounds and select the background you want. Note: There is also an option to let Zoom know that you have a green screen.

When you check that option, the program will automatically remove most of the green spectrum from your video input.

Note: You can still drop a green picture in your background since it is not coming through the video camera.

Look at the picture on the right. Here's what's going on. The blue background you see is my chosen image. Note that it only shows up for part of the screen - the part where my green screen is. :-)

The left side of the photo is almost normal. The ink on the dry erase board is green, so it looks blue here because the background is showing through. Also, the far right dry erase marker is green, but it's cap looks blue because the background is showing through.

Confused? Give it a minute.

Step Three: Set Up Your Green Screen

Okay. So, to let you know what my "real" world looks like, here's my office, with the green canvas thrown over a big drawing board:

Now, I click the button in Zoom and add a blue and white background . . .

If you expand the photo, you'll see that there's a nice green-tinted halo around my hair. Also, there's green where the program couldn't figure out a nice clean line between my head and ear. Finally, the reflection in my glasses let all kinds of reflected background show through and did not replace it with blue.

Next, I checked the box inside the Zoom video settings panel and said yes, I do have a green screen. Now the green should all be gone.


Wherever there's green in the real world, the background image shows through. Even the palm trees turn white and blue because the green is so close to the backdrop color.

Note that big creases in the green canvas let the shadows show through because they are very dark and therefore not green. And . . . Ta Da! There's much better definition on my hair, around my ear, and in the reflective part of my glasses.

Finally, I grabbed two tall signs and threw the green canvas over both of them. Now I have a large green background and I should be ready to go!


I just need to get the camera focused so that it's 100% in the green area.

At last, we're ready to go.


-- -- --

I hope this was useful. You can create some great custom backgrounds for you video or meeting. And, if you're quarantined at home and don't want everyone to see you mess, this is a great way to hide that as well.

Note: If you go to Amazon and put in a search for "Green Screen Chair," you'll find products like This One that attaches to your chair. Just remember that everything outside the green area will show through.

Feedback welcome. If you have specific green screen products or tips, please put them in the comment section!

Have fun.

-- -- --

[Note: I have no connection with Zoom except they take my money for several logons each month. They are not sponsoring this post. Let's be honest, they don't really need to advertise. But if they decided to give me a bunch of money, I'd take it. Just being honest here.]

[Note: Sherweb had nothing to do with the blog post, although I will be doing some videos with them. But that's another blog post . . ..]

:-)

Monday, April 06, 2020

Community Weekly Confab: Helping Each Other Succeed through the Economic Downturn

Announcement for Small Biz Thoughts Technology Community Members:


Join us for the New Weekly Community Confab.


Starts Thursday
April 9th
8:00 AM Pacific
Members Access Here

At least through the end of June, let's grab our web cams and hit Zoom for a get together to talk about your business, and how you and your clients can thrive during the economic downturn.

This Thursday: Dave Sobel from The Business of Tech podcast will join us to talk about working with vendors and distributor during the economic downturn. Dave's been talking about well-behaved and poorly-behaved vendors over the last week. So I've invited him to help share some perspective.

Details Here

Basically, we’re opening up the Zoom channel and inviting all members to come hang out, ask for help, offer help, and generally be available to one another during the Virus Lockdown. Note: We will not be talking about the virus (which is why that over-used keyword does not appear in this blog post).

At the end of that period, we’ll decide whether it’s useful to continue meeting weekly. Note: This does NOT replace the standard “Third Thursday” monthly member meeting.

I want to discuss your business, how you collect cash and save money, how to implement managed services and recurring revenue opportunities during the downturn, etc.

The link to log in each week is HERE in the Community.

You'll also find an ICS file to add this to your calendar. That's at the top of the Community Dashboard. You need to be logged in for this to work.

See you online.

If you are not a member of the Small Biz Thoughts Technology Community, you should join now.

Just because you're in business for yourself doesn't mean you have to go it alone!



:-)


Accountants, Enrolled Agents, and Tax Professionals

A note for entrepreneurs.


There are lots of references on this blog, and in my books, to accountants, enrolled agents, and tax professionals. I think it is absolutely critical that you rely on these folks for advice.

I have found that a great tax professional is one of the best resources your company will ever have. Personally, I prefer an enrolled agent who can represent me before the IRS, if necessary. It has never been necessary – in large part because I use an enrolled agent to prepare my taxes.

But wait: That’s not all!

Tax professionals are also great business advisers on many levels. They see many more businesses than yours. They see businesses of all kinds, with a wide variety of opportunities and challenges.

And most importantly, these folks understand the tax implications of the actions you take. Should you hire someone part time or use a contractor? There are tax implications. Should you rent an office? The tax implications depend on how your business is formed.

Time and time again, you will find that business decisions affect your taxes in ways you probably did not foresee.

See my blog post entitled “The Paradox of Simplicity.” Please don’t do a mediocre job on your taxes when a tax pro will always do a better job.

:-)



More juicy info for first time entrepreneurs . . .

THE ULTIMATE GUIDE FOR FIRST-TIME ENTREPRENEURS


The Small Biz Quickstart Workbook


Author: Karl W. Palachuk


Karl has worked with thousands of business owners and managers – and helped several of them make the move to self-employment. With this workbook, Karl will help you make the launch as well. This workbook is guaranteed to help you learn about what it takes to start and run your new business.

Available Now!

www.smallbizquickstart.com






Saturday, April 04, 2020

Welcome to the "Not My First" Rodeo

Like most of you, I've spent a lot of time on Zoom in the last week. And it's hard not to talk about the economy - and speculate about where it's going. Are we in a recession? Technically, no. But we will be soon.

So the big questions are: What will you do? What will your clients do? How can you stay in business without taking too much money from your clients, since you also need them to stay in business?

And so forth, and so on.

I also noticed this week that the people who owned a business that survived the last big recession have a very different approach to the uncertainty than those who don't share that experience. They don't have any more certainty, but they seem to have a lot less stress.

I had a bit of luck in the 2008-2009 recession (I had raised my rates early in 2008). I also had some bad luck due to clients downsizing or being gobbled up by their competition. I made some mistakes, and I made some good decisions.

Overall, I probably did as well as anyone else who kept their business alive at the time.

We Know Some Things

I also learned a lot in the last recession. And that knowledge helps me be a little more at ease this time. I still don't have a crystal ball, but I do have a pretty good idea of the "stages" we need to go through. That's why my last blog post encouraged you to go get all the money that's owed to you right now: The next thing that's going to happen is that some people will stop paying their bills.

After that, there will be layoffs. You might have to lay off some of your staff. Your clients will certainly have some down-sizing.

People who rely on recurring revenue will now have the best cash flow. Use it wisely. Those who trade dollars for hours will see work disappear much more quickly. As everyone begins to hoard cash, discretionary spending will decrease. If you are "discretionary spending" then your work will decrease.

Some businesses will cease to exist. Talking to other people in this industry, there's general agreement that about 25-30% of all IT service providers disappeared during the last big recession. Some closed their doors intentionally. Some sold their businesses to the competition. Some just took jobs when they could find them.

I don't know if we'll see that much drop off this time, but I'm sure we'll see some.

. . . and then one day, without any notice, things will begin to improve. Old clients will call and ask for a quote. The number of tickets in your system will creep up. Sales will slowly appear. And eventually, things will become the new normal.

There's Plenty We Don't Know

There are also plenty of unknown factors. We don't know how deep or how long the drop-off will last. I also survived the 2001 recession, which was almost entirely an implosion of an over-sold stock market. The underlying economy was still strong, and we got back on our feet very quickly.

Until February, we were in the middle of a massive mergers-and-acquisitions feeding frenzy at all levels. IT consultants were gobbling each other up. Vendors were gobbling each other up. Private equity companies were gobbling up everything they could find. THAT wasn't the case in 2008.

Some of these companies are well run, have a long-term vision, and will be partners you'll want to keep when the storm has passed. Others will focus 100% on their bottom line without regard for their "partners." You might drop them during the recession or shortly after.

Some vendors and distributors have lots of cash. That gives them lots of options. We'll see what they do with it.

Another "new" element this time is the level of information we have about our own industry. There are blogs and podcasts that call out vendor missteps and praise vendors who do the right thing. I think (I hope) this will help vendors who are on the fence to come down on the side of helping partners survive.

The Bottom Line

In the end, we all should know this: The recession will end. It will run its course. With luck, the virus will fade away and we'll all get to get together at a conference. We just don't know when right now. But it will happen.

You may have never gone through a recession as a business owner. That's okay. After all, it's not something you'll look back on fondly anyway. BUT you can rely on the advice of those who have successfully trod this path. In the natural progression of the universe, many of these survivors are now bloggers, authors, podcasters, and coaches.

Listen to their words and watch their actions. But remember that you are an economy of one. That means that you need to focus on taking the best actions for your business. Don't assume the that national economy (or world economy) is your economy. Your economy exists only inside your Profit and Loss report. Trends and the actions of people outside your business are a source of information. You still need to make the right decisions inside your business.

Each client interaction is the one opportunity you have to keep that client. Each staff interaction is the one opportunity you have to build your company culture. Each new prospect is the one opportunity you have to make a sale today.

Stay focused. Stay informed. Make good decisions.

I sincerely wish you the best luck possible in the months ahead.

:-)

Thursday, April 02, 2020

Why the Absolutely Unbreakable Rules Matter: Getting Paid in Advance

Many people have heard me speak about the Absolutely Unbreakable Rules for success. These are, basically, the rules I've learned over the years running various businesses.

These are not "nice ideas" or good thoughts. They are absolutely unbreakable for one extremely important reason: If you adopt these rules, you will not have to change them when hard times come. These rules don't change because there's a virus, a recession, or when you lose clients.

And like all good advice, it would be really great if you put the advice into effect before there was an economic downturn.

I received a timely email yesterday from Stephen. He asks, "In your book, you recommend taking credit card payments monthly, or a check for 3 months at a time. I did not see where you explain why 3 months. Is a monthly check not recommended for some reason?"

Here's how I interpret that: One of the most important rules for running your business is

Get paid in advance for everything.

Why? Well, there are lots of reasons. The most important reason is that people stop paying their bills sometimes. And sometimes can suddenly become right now when there's an economic downturn.

Guess what? Right now is right now.

January 1: The worlds was happily moving along and the stock market was headed for an all-time high in mid-February.

March 31st: The stock market had it's biggest drop in history and unemployment filings are higher than at any time, ever.

It is going to be much harder to collect money this month than it was last month. And it will be much more difficult next month and the month after that. What can you do?

Get prepaid for everything you can.

Here's what I told Stephen in response to his question:

"There are a couple of reasons for the three-month check. First – and this is going to start happening right now because of the economic downturn – People who write a check every month will begin paying later and later. First a day or two. Then a week. And eventually 30 days late. 
Second, and very related, we are trying to move to getting prepaid in advance for everything. That’s easy with credit cards and difficult with checks. 
In a recession, lots of people will be hoarding their cash because they don’t know what will happen to their business. You need to do that, too. These policies make that easier and limit your losses."
- - -

Here is my very urgent advice to you: If you have accounts receivable, make collection of this money your absolute highest priority.

Second, as soon as possible, adopt a policy of getting paid in advance for everything you do. Period.

One of the sad truths of business is: Money owed to you is almost never collected in full.
Corollary: Old money owed to you is never collected in full.

I can't believe that people still argue with me about whether they should take credit cards. The answer is easy. Yes. You should take credit cards.

Their complaint? "But I have to pay [almost] 3% to collect that money."

Well, for those who don't take credit cards, today is the day you get to learn a very hard lesson. You will begin trying to collect money and realize that it's much easier to NOT pay a bill than it is to collect a bill. You will call people, write them letters, and beg them for money they owe you.

Sadly, some of your "good" clients and friends will simply not have the money they owe you. They will lie to you. They will say that they sent a check just to get you off the phone. They will dodge your calls and hide if you show up at their office.

Eventually, you will settle for something instead of nothing. You will take 75% of what they owe you. Or maybe 50%.

You'll do anything to collect that money.

. . . and it's going to cost you a lot more than 2.9%!

- - -

When it's all over, you're going to sit down and ask yourself, "How can I make sure that, no matter what happens to the economy, I will get paid for everything I do?" And the answer will be: Get paid in advance for everything.

That will become a policy. It will work its way into your business processes. It will not be negotiable nor flexible. It will become an absolutely unbreakable rule. And no matter what business you are in, you will not have to learn this lesson again.

Many economic lessons are only acquired by paying tuition in full. This is one of those lessons.

Go get your money.

And start requiring payment in advance from now on.

:-)


Wednesday, April 01, 2020

Your Constant Challenge: Work-Life Balance

A note for entrepreneurs.


One of my first books is called Relax Focus Succeed. It’s all about balancing your personal and professional lives and being more successful in both.

This balance is always a challenge. Everything in your life and business changes all the time. So you need to keep working on balance forever.

What does that mean? Ideally, it means that you consciously create your business – and re-create your life – so they are completely in synch. You need time to work, time to play, time with your family, time to work on your personal self, and time to recharge your batteries.

I know all that sounds like an impossible balance, but it is very manageable if you plan it out and work to make it happen. It might take years to achieve a sustainable, healthy balance, but it absolutely is possible.

Stress and exhaustion really do kill people. Build sustainable habits and you will be able to practice them forever.

It may seem impossible to imagine now, but you can create a balance between personal time, family time, and work time that allow you to have the best of all worlds. Most people never achieve this balance for one simple reason: They never try.

Creating work-life balance takes a great deal of time, attention, and work. If you start your business with the intention of creating this balance, and fine-tuning it forever, then you can create a successful balance that improves every part of your life and work.

:-)




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