Thanksgiving is upon us. For business owners like yourself, it's also the signal that the end of the year is coming up.
Hopefully it's also a a milepost where you can reflect back and say "I did what I set out to do this year" and also begin to make big plans for 2009.
Yes, we are in for a bit of a roller coaster ride with our country's economy. But business-wise be thankful for 3 things.
First, being in a technology based business is the best business to be in right now. No industries are more stable and dealing with other businesses that rely on your knowledge and services is a great position to be in. Your clients need your value based services.
Second, you control your own destiny. The only person laying you off is YOU. So at least you know it's coming, right? But if you revert back to thankful thing #1, you'll soon realize that firing yourself is not something that is going to happen.
Third, be thankful that you are in this great country of ours while the stuff is hitting the fan. If it's bad here, it's worse everywhere else.
Enough about business. In the next few days make sure you are thankful for those that have helped you achieve what you have up until now. Especially family and friends that have supported you through thick and thin. That's your backbone and it's an important thing to any entrepreneur.
So..... I hope each and every one of you has the opportunity to spend lots of time with those you love, gets to eat lots of turkey, and take a big nap right after.
I know I'll be on the couch by 5pm drooling as I fall asleep in front of a football game.
Happy Thanksgiving!
George Sierchio
The Consultant's Coach
Wednesday, November 26, 2008
Tuesday, November 18, 2008
End of the Year Tech Business Planning: 80-20 Rule
The end of the year brings a lot of fun things, especially here in the US. Thanksgiving, major religious holidays and of course end of the year planning for the next year.
What? End of the year planning is fun?
Ok, maybe not necessarily fun, but I always find it exciting to see how the year is going to end and swing it around into the new year.
Unfortunately, many technology business owners worry more about the end of this year versus prepping for the beginning of next year. It's a tough balance, but setting up for next year now is the key to a running start for the beginning of the next year.
For the next few weeks I'll be going over using your business metrics to not only see how you did this year, but also help you plan at least the first quarter of next year.
My favorite metrics are those that correlate to the 80-20 rule. They relate to clients, vendors, employees, contractors, marketing, sales and pretty much your entire business.
Today let's talk about the 80-20 rule as it pertains to your clients and client management system. Don't have a client management system? Then let's get you started now since it will help take a huge burden off of your shoulders at the end of every year.
Look, we've all been in a position where we picked up a client or two (or ten) that we just can't stand. Maybe we didn't see it coming and maybe we did and just saw it as more revenue.
Truth be told, bad clients typically make you LOSE money. That means you are better off not having them on your list at all. They serve no purpose to your bottom line or the sanity of you and your employees.
Part of your client management system should involve having policies regarding how you get paid (or how fast), how to deal with complaints, how accessible you and your employees are, and how you keep in touch with clients.
Additionally, you need to have some metrics to know how much revenue and PROFIT each client makes for you, how often you do work for them, and track how much effort it takes to keep them satisfied. That pretty much means using metrics to see how valuable they are to your business.
There are more pieces to client management systems, but these are some basics. When you have these metrics and tracking in place, you are easily able to apply the 80-20 rule on your client list.
So what do you do? You determine which 20% of clients cause you 80% of your headaches. Which clients are your bottom 20% in actually helping your business operate and profit.
Like I mentioned before, you are better off without these clients then with them. So your choices are to either tell them you can't service them anymore (and maybe find them someone else to service them if you think there could be a bad blood issues) or you raise your fees to them to the point that if they choose to pay it, you can handle having them stay as a client.
Often times for very low revenue/profit, but high maintenance clients, not only do they pay the money or ask you to not drop them, but they actually calm down and stop being a pain to you and your business.
Let's end this segment on this note:
No client that makes you cringe every time someone brings up their name is worth having. This is your business. You made it to provide a valuable service. You didn't build it to be someone else's punching bag. You deserve that respect so don't accept anything less.
As always your comments and questions are always welcome.
To Your Business Success-
George Sierchio
The Consultant's Coach
What? End of the year planning is fun?
Ok, maybe not necessarily fun, but I always find it exciting to see how the year is going to end and swing it around into the new year.
Unfortunately, many technology business owners worry more about the end of this year versus prepping for the beginning of next year. It's a tough balance, but setting up for next year now is the key to a running start for the beginning of the next year.
For the next few weeks I'll be going over using your business metrics to not only see how you did this year, but also help you plan at least the first quarter of next year.
My favorite metrics are those that correlate to the 80-20 rule. They relate to clients, vendors, employees, contractors, marketing, sales and pretty much your entire business.
Today let's talk about the 80-20 rule as it pertains to your clients and client management system. Don't have a client management system? Then let's get you started now since it will help take a huge burden off of your shoulders at the end of every year.
Look, we've all been in a position where we picked up a client or two (or ten) that we just can't stand. Maybe we didn't see it coming and maybe we did and just saw it as more revenue.
Truth be told, bad clients typically make you LOSE money. That means you are better off not having them on your list at all. They serve no purpose to your bottom line or the sanity of you and your employees.
Part of your client management system should involve having policies regarding how you get paid (or how fast), how to deal with complaints, how accessible you and your employees are, and how you keep in touch with clients.
Additionally, you need to have some metrics to know how much revenue and PROFIT each client makes for you, how often you do work for them, and track how much effort it takes to keep them satisfied. That pretty much means using metrics to see how valuable they are to your business.
There are more pieces to client management systems, but these are some basics. When you have these metrics and tracking in place, you are easily able to apply the 80-20 rule on your client list.
So what do you do? You determine which 20% of clients cause you 80% of your headaches. Which clients are your bottom 20% in actually helping your business operate and profit.
Like I mentioned before, you are better off without these clients then with them. So your choices are to either tell them you can't service them anymore (and maybe find them someone else to service them if you think there could be a bad blood issues) or you raise your fees to them to the point that if they choose to pay it, you can handle having them stay as a client.
Often times for very low revenue/profit, but high maintenance clients, not only do they pay the money or ask you to not drop them, but they actually calm down and stop being a pain to you and your business.
Let's end this segment on this note:
No client that makes you cringe every time someone brings up their name is worth having. This is your business. You made it to provide a valuable service. You didn't build it to be someone else's punching bag. You deserve that respect so don't accept anything less.
As always your comments and questions are always welcome.
To Your Business Success-
George Sierchio
The Consultant's Coach
Monday, November 10, 2008
Exit Planning Webinar this week
So when is a good time to set up an exit plan or strategy for your business?
And the answer is... as soon as you possibly can. The best time is when you first start the business but that's often the last thing on most people's minds.
That's unfortunate since the REAL reason to start a business is for the exit.
There are many exit strategies such as running it until you die, giving/selling to family, selling to employees, selling it to an outside buyer, selling to a competitor, going public and selling your equity, etc.
No matter what way you choose, the one thing that remains the same for all exit strategies is to structure the business for maximum profit and value NOW.
That will make it attractive to any type of buyer and to you as the owner. Let's be clear here, the best business to run and the one that is a magnet to any buyer is the one that does not need to be sold. Waiting until you are ready to sell or need to sell is way too late to prepare the business for this feat.
I promise you will be very disappointed in the value of your business after all of your hard work. Your value of the business will almost always be more than that of a potential buyer but you won't even be close to the mark without the right structure already in place for at least a few years.
No track record = tons of lost value
So with that said, who in their right mind wouldn't want to take my motto to heart and "run it like you're gonna sell it"?
Positioning your company to constantly add value to the business year by year, even if you never want to sell it, is the only way to live the dream of making the money you planned on making and actually having a business for yourself and not a job.
With that said, I will putting on yet another webinar (3rd one this year) this Thursday at noon EST. The focus is on exit planning, and specifically positioning your business to sell for top dollar, as a way to also maximize profit every year along with building business value.
Although the webinar host has an audience of mostly IT managed service providers, I'm inviting anyone with any kind of tech company that wants to participate to sign up.
Find out what business buyers are looking for and how to follow that model to increase the money in your pocket and decrease the time flying out the window at record speeds.
Use this URL to get on the participant list: https://www2.gotomeeting.com/register/565021441
Even if you've heard me talk about this subject already, you might want to hear it again as I've added some new information this time around.
Looking forward to seeing you there this Thurday 11/13 at noon EST.
https://www2.gotomeeting.com/register/565021441
To Your Business Success
George Sierchio
The Consultant's Coach
And the answer is... as soon as you possibly can. The best time is when you first start the business but that's often the last thing on most people's minds.
That's unfortunate since the REAL reason to start a business is for the exit.
There are many exit strategies such as running it until you die, giving/selling to family, selling to employees, selling it to an outside buyer, selling to a competitor, going public and selling your equity, etc.
No matter what way you choose, the one thing that remains the same for all exit strategies is to structure the business for maximum profit and value NOW.
That will make it attractive to any type of buyer and to you as the owner. Let's be clear here, the best business to run and the one that is a magnet to any buyer is the one that does not need to be sold. Waiting until you are ready to sell or need to sell is way too late to prepare the business for this feat.
I promise you will be very disappointed in the value of your business after all of your hard work. Your value of the business will almost always be more than that of a potential buyer but you won't even be close to the mark without the right structure already in place for at least a few years.
No track record = tons of lost value
So with that said, who in their right mind wouldn't want to take my motto to heart and "run it like you're gonna sell it"?
Positioning your company to constantly add value to the business year by year, even if you never want to sell it, is the only way to live the dream of making the money you planned on making and actually having a business for yourself and not a job.
With that said, I will putting on yet another webinar (3rd one this year) this Thursday at noon EST. The focus is on exit planning, and specifically positioning your business to sell for top dollar, as a way to also maximize profit every year along with building business value.
Although the webinar host has an audience of mostly IT managed service providers, I'm inviting anyone with any kind of tech company that wants to participate to sign up.
Find out what business buyers are looking for and how to follow that model to increase the money in your pocket and decrease the time flying out the window at record speeds.
Use this URL to get on the participant list: https://www2.gotomeeting.com/register/565021441
Even if you've heard me talk about this subject already, you might want to hear it again as I've added some new information this time around.
Looking forward to seeing you there this Thurday 11/13 at noon EST.
https://www2.gotomeeting.com/register/565021441
To Your Business Success
George Sierchio
The Consultant's Coach
Tuesday, November 4, 2008
McPalin or Obiden: Does it really matter?
One last politically based post for me and I'm done. Again, no opinions here. Honestly, we're kind of screwed (official political term) either way for a while no matter who wins.
Let's be real here; 50% of what each candidate has promised will never happen. Some if it they will just forget they mentioned and the rest was all hot air that they really have no control over anyway. We just forgot to remember this isn't a dictatorship country and the President has limited power.
Oh well. As a business owner, especially a technology based business owner, you really can't care one way or another. We have the power in this country's business world in present and future time. Technology isn't going away. As a matter of fact it becomes more important to consumers and businesses every year.
We make our own path.
Yes maybe the government could help us out a bit with taxes and health benefits so we can afford to hire people and make sure our own families get health coverage. Other than that, they play a very small role in our tech businesses.
When tomorrow comes, the country will still be standing and nothing will have changed. My advice to you is not to listen to the media as they spew their opinions on you about what the election outcomes means. If their opinions mattered, they would be running for President and not interviewing people.
We make our own destiny.
For most of the entrepreneurs out there right now, the government has never done a thing to help them have retirement money. The government has never even patted us on the back for the fact that we create the majority of the jobs in this country. We get rewarded with paying into both ends of social security, which many of us may never get to collect on. We also get to live with the fact that it's almost an impossibility to get out any money we put into unemployment. How's that for a kick in the pants?
We write our own ticket.
Businesses and consumers need us no matter who the President is. This is the greatest capitalist country in existence. Let's take full advantage of it starting today regardless of who's in the White House starting in 2009.
I still hope you went out there and voted. I just want to make sure you understand that the winner has much less impact on your business than you do.
To Your Business Success-
George Sierchio
The Consultant's Coach
Let's be real here; 50% of what each candidate has promised will never happen. Some if it they will just forget they mentioned and the rest was all hot air that they really have no control over anyway. We just forgot to remember this isn't a dictatorship country and the President has limited power.
Oh well. As a business owner, especially a technology based business owner, you really can't care one way or another. We have the power in this country's business world in present and future time. Technology isn't going away. As a matter of fact it becomes more important to consumers and businesses every year.
We make our own path.
Yes maybe the government could help us out a bit with taxes and health benefits so we can afford to hire people and make sure our own families get health coverage. Other than that, they play a very small role in our tech businesses.
When tomorrow comes, the country will still be standing and nothing will have changed. My advice to you is not to listen to the media as they spew their opinions on you about what the election outcomes means. If their opinions mattered, they would be running for President and not interviewing people.
We make our own destiny.
For most of the entrepreneurs out there right now, the government has never done a thing to help them have retirement money. The government has never even patted us on the back for the fact that we create the majority of the jobs in this country. We get rewarded with paying into both ends of social security, which many of us may never get to collect on. We also get to live with the fact that it's almost an impossibility to get out any money we put into unemployment. How's that for a kick in the pants?
We write our own ticket.
Businesses and consumers need us no matter who the President is. This is the greatest capitalist country in existence. Let's take full advantage of it starting today regardless of who's in the White House starting in 2009.
I still hope you went out there and voted. I just want to make sure you understand that the winner has much less impact on your business than you do.
To Your Business Success-
George Sierchio
The Consultant's Coach
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