Inside Out!

"IF YOU PAY PEANUTS, YOU GET MONKEYS!"

I wrote this article over a year ago.  But I am amazed at the number of times it has been read --- in these times of financial uncertainty, value for your money is even more important.  Maybe you could benefit from the "old" advice below.  Remember --- you get what you pay for --- my Mom's advise still rings true:  Be careful what you wish for . . . you might just get it!

Sir James Goldsmith, a European industrialist known for his flamboyant and outrageous reputation, is attributed with the quote:  “If you pay peanuts, you get monkeys.”  As I came across this quote a few days ago in a notes file I keep for writing inspiration, I couldn't help but think how well that fits the whole area of small businesses, independent consultants and solopreneurs.  If you turn it over in your mind a bit, it applies to both sides of many equations.

Am I The Monkey?
First of all, many individuals running their own businesses find it excruciatingly difficult to charge what they are worth.  They undercut their prices hoping that will bring increased business to their doorstep.  In the end, the opposite is more likely to happen.  Generally what a cut rate implies to people is that you are either extremely new to the profession, or you are not in demand -- which implies inferior service.  Neither of these scenarios may be true --- but it's the perception that counts.

Next one must consider how to live on "peanuts."  Notice I did not say how to "survive" on peanuts.  Why?  Because if you are working for yourself you are most likely doing so because you want a better quality of life than you were experiencing while employed by others.  Why else would you take on the headaches of marketing, managing, packaging and processing a business with little outside help, difficulty in getting insurance coverage, and a myriad of other wicked issues just waiting to pounce as you round the corner to your "Home Office!"  Wanting a better life does not necessarily mean you will make as much money as you did working for someone else.  But it DOES imply that you will make enough money to keep the wolves from the door while you enjoy a moderately good time with your family and friends.

If nothing else, you MUST learn how to price your product or services in a fashion which will reimburse you for your investment (materials, time and overhead) and leave you with a reasonable profit.  This is the biggest mistake entrepreneurs make and one of the reasons most small businesses fail.  If you never cover the cost of the goods you are selling, you are consistently digging into your own pocket to cover costs.  Sooner or later you reach the bottom of that pocket and have nowhere to go except back to the corporate world and a regular paycheck.

One of the biggest mistakes independents make is they work on the assumption that they have no overhead.  Especially if they provide services rather than an actual product.  They feel they have no overhead as they are not purchasing goods to be turned into a product.  But that simply is not true.  Even if you do not include basics like utility costs, you must still consider telephones, computers, software, automobile maintenance and gasoline, marketing materials, and perhaps packaging of your product.  These are all part of your overhead.  And these must be taken into account when setting your fees and prices.

Do your research.  Talk to others in your field; surf the internet; read trade publications; join appropriate professional organizations.  Nearly all of these arenas will provide you with clues for setting your financial margins.  Many of these resources will provide you with actual formulas you can use to determine what your prices should be.  Try out several of the equations you find.  See which ones you feel most comfortable with.  Then establish your price/cost grid and publish it to the world. 

You will be amazed at how good you feel once you do this.  Fear is the biggest reason we undercharge.  Fear that someone will say we are not worth what we are charging.  In the end, if you are well qualified and have the ability to deliver what you offer, hold your head high and charge an amount that is reasonable. 

Organizing Is No Monkey Business!
This will also help you in your attempts to organize your life.  How?  Well, to begin with, if you produce a product you will know what your parameters are for purchasing components --- in other words, how much you can spend on items which are incorporated into the product.  No more guessing as to whether this will be "too much" or whether you will "lose money" on something if you use this part instead of another.

Next, you will no longer have to constantly hem and haw when asked for a price quote for your product or services.  You will know what you are going to charge and you will be able to state it quickly and firmly.  When you do that, the person on the receiving end will see you as a professional who knows what he/she is doing.  If you hem and haw they may think this is merely a hobby for you and look elsewhere for an affiliation.  Additionally, because people will know what you charge, only those who can truly afford your services will take up your time discussing their needs.

Don't Be The Monkey Wrench In Someone Else's Business!
Not only will you help yourself, in terms of bringing clients to you who are willing and able to pay, but you will help others in your profession too.  When YOU undercharge, clients expect others to undercharge.  This creates a domino effect which is of no benefit to anyone.  It does nothing to help your professional arena as a whole.  When people tell me that working in a certain field isn't productive, I frequently take a long look at WHY it isn't productive.  More often than not, someone has started the downward capitulation of that product or service by trying to undercharge others in that field.  In the end, they all get lumped in one large bag marked "worthless."

If you feel the need to reward a particular customer for some reason, offer a discount on a particular purchase.  This gives the buyer a sense that he has received something unusual and something of value.  Perhaps he sent a referral your way.  Or maybe your turn-around time was not what it usually is.  Whatever that may be, give a one-time-only discount and clearly list it as a discount and the purpose for the discount on your invoice.  You will be amazed at the positive response you will get from clients when you handle things in that manner. 


Have You Hired A Monkey?
Now, let's look at the opposite side of the coin.  As we have discussed here, becoming organized and staying that way means you most likely will need an assistant who can advise you and help you accomplish a myriad of tasks which currently are languishing on your piled-high desk!  Virtual Assistants are excellent choices for this because they are generally highly experienced individuals who have spent many years administering, organizing and handling a multitude of tasks in the corporate world.  But think about it.  Do you want a highly skilled virtual assistant working with you --- or a monkey?  Do you want someone you can turn work over to and know that it will get done?  Or do you want someone you have to follow around and supervise every day? 

The whole point to delegating work is to relieve yourself of the responsibility of that work so that you are free to move forward with other aspects of your business.  If you delegate these projects to an inexperienced person not only do you run the risk of having the work done inappropriately, but you also have to spend time checking to make sure the work is actually being done.  Even if you only spend 30 minutes a day doing that, in a week's time you have likely lost more billable time then you paid this person to do your work. 

For instance, let's say you are a consultant who bills at a rate of $160 per hour.  You hire someone inexperienced for $10 an hour to work on several projects for you.  Not only will this person likely spend more time completing the projects due to inexperience in that work area, but the time you spend supervising, checking the work, and determining if deadlines are being met will also have to be figured into the equation.  Say you hire this person for 20 hours a week --- at $10 per hour that would total $200.  If you spend a mere 30 minutes a day supervising this person, you have invested $400 of your own billable time into this project --- that is ON TOP of what you paid this person to do the work for you!

So when you are looking for a virtual assistant to help you with your business, please understand that cheapest is not going to benefit you greatly.  In fact, stand back and look at what cheapest means.  Would you hire the cheapest doctor or dentist to care for you or your child?  Would you hire the cheapest contractor to replace the roof on your house?  Would you buy substandard produce simply because it was the cheapest?  While in some cases you might accept the lowest bid, it would ONLY be after you checked the provider's qualifications and references to make sure you were really going to get what you paid for.

Don't sell yourself short in hiring people to help you with your business.  Make sure you hire quality professionals who know what they are doing.  In the end, caviar may be less costly than peanuts!

Today's Assignment:  Take a close look at how you price your products and services.  Even if you think you are charging enough, break down your product and recalculate what you are charging.  If you set your prices a year ago, the economy has changed.  It may be time for an incremental price hike.  Examine every aspect of your business and make sure that what you are charging gives you a healthy profit margin.  Make up a price grid and put copies on your computer, on the wall by your phone, in your briefcase.  Don't be ashamed to charge what you are worth.  Inversely, make sure you are hiring only professionals who have the experience to advance your business.  And make sure you pay them appropriately.  Once you do this, you will really be on the road to Organizationville!!

$200 MIRACLE? OR AFRAID TO TRY SOMETHING NEW!

Recently I received a Google alert regarding virtual assistants and proceeded to check out an entry entitled "$200 Miracle" by Karl Palachuk.  I read his Blog and the more I read, the more irritated I became.  I could simply restate his opinion here, but I think it more appropriate to let you read it for yourself. 

$200 Miracle

I'm amazed at the people I meet in this business who haven't yet hired an assistant of some kind.

To be honest, it took me ten years to decide that I needed someone. If I had it to do over, I'd hire an assistant my first year.

I refer to my assistant, Jennifer, as my $200 miracle. That's what it cost me per week when I first hired her.

Depending on where you live, you should be able to find an office assistant/bookkeeper for about $10/hr. Start out with 20 hours a week. That's a $200 miracle.

And what does Jennifer do for me?

- To start out, she makes sure bills get put into the system. So I can always open quickbooks and see what we owe at a glance. She works with the accountant to make sure we're using quickbook properly. She balances the checkbook.

- She collects the mail when I don't. She gathers up all the checks and deposits them in the bank.

- When people are a bit slow to pay, she emails them, calls them, gets their credit card information, resends invoices, etc.

- Oh. And she prints up all the invoices for my review.

- She prints off all newsletters and marketing letters. Or has them printed someplace. Stuffs envelopes, applies postage, deals with the post office for bulk mail.

- When I hold seminars, she gets the fruit and coffee and pastries. She organizes all the sales materials, sends out packages as needed, and keeps track of all the office supplies. She orders supplies as needed.

- She handles new employee check-in, payroll processing, and printing all kinds of stuff I don't even keep track of any more. She proofreads everything.

- When something breaks, she calls the landlord or the fix-it place.

- And pretty much anything else we can think of. She's been known to get the pizza for staff meetings and take my car to get the oil changed.

- When there's too much for her to do, she supervises someone else to help get it all done.

--> And that's just for the consulting business. She does even more for the book business!

So this $200 miracle costs me about two hours of billable labor every week. And for that I get a bunch of stuff taken off my place. A bunch of stuff that takes a bunch of time.

Getting Started

Do not -- repeat, do not -- put an ad in the paper or on craigslist for an administrative assistant. Holy Smokes, Batman. You'll be overwhelmed with totally useless resumes.

I started by putting out an ad for an assistant. Got about 130 resumes, includes several dozen from out of state and out of coutry. "I'll be your virtual assistant." Sorry. A virtual assistant can't sit and wait for the air conditioning guy to show up. A virtual assistant can't run down to Staples for staples.

I started to plough through the resumes, but -- and this is key -- I was looking for someone because I was too busy. So I didn't want to read 130 resumes.

Reboot. I put a new ad on craigslist. I said I was looking for a "Person Friday" who would do whatever needs to be done around the offine, including filling my car with gas. I only promised 20 hours. I think I got nine resumes. All of them were from people who were not looking at this as a career move that would eventually lead to being a $60,000 assistant to the governor. All of them understood that this was entry level and not particularly high paying.

I interviewed three people. They were all talented, with a decent education and job experience. To be honest, they were all Moms who needed to spend serious time with the kids and couldn't take a full time job. Their experience varied from graphics to teaching to office work. All were comfortable with computers. All were willing to work and had a great attitude.

Jennifer had some particular skills and interests. And, since she and her husband had owned an S-Corp, she understood some elements of the business side of business.

Over time, Jennifer has received more money, more responsibility, and more hours.

Fear Not

Experience tells us that fear is one of the major reasons we don't grow our businesses. Fear of handing the finances over to someone else. Fear of making a commitment you can't pay for. Fear that you won't have enough for the new person to do.

The reality is: You will need to do a bit of extra work in the beginning. Training takes time. You'll need to side-check her work until you're comfortable.

But here's the promise: If you hire a $200 miracle, she only needs to free up enough of your time to bill two additional hours to pay for it. At the end of a month, you'll have someone who relieves you of ten hours a week AND gets more things done than you do in two weeks. Your business will be able to get that newsletter out on a regular basis. Invoices will go out when they're supposed to. Expenses will be properly entered into quickbooks.

Take the $200 Miracle 30-day challenge: Hire someone 20 hours/week at $10/hr. for one month. My guess is, you'll see a dramatic improvement in your business -- and a reduction in your personal workload.

Posted by karlp at 5:26 AM

OK, now you've read it.  What is YOUR opinion.  I hope you will take a moment and leave your comments here today.  Just move to the "Comments" section at the end of this entry, click on it, and enter your comments.

Aside from the obvious thoughts --- a) how can someone write about virtual assistants without having never utilized one; and b) he sure expects a lot for his $10 an hour --- I also feel it reflects the reason that many people do not succeed when they go into business for themselves.

If you are going to do business in today's world, you have to utilize what is new and good and helpful out there.  Whether that be new computer technology, the latest phone gadget, or a virtual secretary.  But many are afraid to do that.  They only know the kind of corporate "old school" environment they have worked in for the past 20-30 years.  So instead of thinking outside the box and availing themselves of what is good and new and useful, they encumber themselves with the old way of doing business.  In the end they often strangle their business before it ever gets off the ground.

Admittedly, getting out of one's comfort zone is hard.  It's much easier to say to the boys at the Club, "I'll have Suzie-Q, back at the office, take care of this" then it is to explain a virtual assistant to a table full of clients.  On the other hand, you really don't need to explain anything to anyone.  In most cases the clients won't have any idea where your assistant does her work.  All they will know and care about is how knowledgeable she is about YOUR business, how experienced she is at what she does, and how much more efficient you are since you started working with her. 

I make calls weekly to law firms, collecting on invoices for one of my clients who acts as an expert witness.  Nobody ever questions where I work.  They know I work for Ima Expert and that I can provide them with all the information necessary to locate the unpaid invoice --- even going so far as to fax or email them an additional copy.  They know I'm going to follow-up with them every few days until the invoice is paid.  That's all they need to know.  It works.  Ima Expert gets paid --- in some cases on invoices that had been outstanding for more than 6 months before I came on the job.

The majority of things Karl mentions above, I do for my various clients --- I even help on seminar days for a local client.  In situations where I am not within the client's area, I can arrange for all sorts of assistance by telephone, the internet or email.  Often I can get it done more quickly and at less cost then if you had someone in the office do it.  Why?  Because I have experience with a variety of vendors across the country from all of my years of work in the corporate environment.  And those connections pay off, both monetarily and in terms of speed --- which can be a huge asset.

I will agree with Karl on one huge point --- everyone needs help, ESPECIALLY the small business person or consultant.  If you have delayed getting help, the only one you are hurting is yourself and your business.  I can guarantee you are wasting your valuable time doing things that an assistant could do more efficiently and in less time.  Yes, there is a bit of a learning curve.  Even if you were to hire new secretary in an ordinary office, there would be a learning curve.  So that is really no excuse.

Most virtual assistants are experts at what they do.  If they were not, they would not feel comfortable offering their services without someone close by to give them direction or answer questions.  The majority come from backgrounds which are varied and which required exceptional attention to detail and the ability to stay motivated and work well unsupervised.  They bring those same strengths and knowledge to their work as virtual assistants.  When you hire a VA, you get a well-rounded package of exceptional knowledge and experience.  Yes, you must interview VAs, just as you would anyone else you would hire.  You must make sure their experience meets your needs and meshes with your environment.  But once you find that most excellent working companion, you will truly wonder why you waited to long. 
Today's Assignment:  Take 15 minutes and make a list of all the jobs and projects you would hand off to an assistant or secretary were you still working in a corporate environment.  Then do some research and find the perfect virtual assistant for you.  In most cases you will be able to pay the additional cost of having a reliable VA work for you by picking up a few more hours of billable work --- time which would otherwise have gone into administrative work --- time for which you would never have been paid.  See, now you're on your way to Organizationville!

CAT'S IN THE CRADLE . . .

First Birthdays Are True Milestones! 
Yesterday I spent a wonderful afternoon with my first grandchild.  It was her first birthday and I had not seen her in 5 months.  I knew she wouldn’t remember me --- at that age children have so much going on in their head that new people can bring forth more fear than curiosity.  So I was prepared to watch her from the sidelines and just enjoy the verbal interaction.

My son, however, was determined that Grandma would eventually get to hold his princess and he amazed me with his method.  I’m not sure whether he had thought it out ahead of time or it just evolved --- either way it was perfect.  Teagan adores her Daddy and he was holding her as we prepared to leave for a local restaurant.  While holding her he sidled up to me and gave me a hug too.  The 3 of us stood there hugging each other and suddenly he said to me, “Have you got her?” and walked away!  I had her --- and she was OK with it.  What a momentary thrill to be holding and snuggling this miniature of my son (he is now 37 and I'm a midget next to him!).

We went to the restaurant and eventually she ended up on the seat next to me, playing with my cell phone (she is obviously thrilled with all forms of technology --- cameras, cell phones, etc., and will likely be follow in the footsteps of her parents in that regard).  Her Mom would put her cell phone to her ear and say “Hello” and Teagan would put my phone to her ear and say “Allooo” --- just as her Mother had taught her with a play phone.  I have a picture of her on my cell phone screensaver.  When it would disappear Teagan would start pushing buttons and look at me saying “baba” until I made the picture come back.

What Does This Have To Do With Organizationville?  Well, I’m glad you asked.  As I watched her standing on the tips of her toes --- exactly what her Daddy had done at that age --- I realized how quickly the time had passed --- and how many tiny little moments like that I had forgotten about over the years.  As the day progressed and I saw so many little things that brought forth a flood of memories, I realized how very grateful I was that I HAD those memories to revisit.  How sad it would have been had I spent the entire afternoon with Teagan and not been reminded, even fleetingly, of similar moments with her father.  I quickly realized there ARE people out there who do NOT have those memories of their darling children because they were too busy working or doing other things.

Do You Love Your Family?  Do They Know It By Your Actions?  Part of getting organized is making more time for the people and projects you love.  If nothing else motivates you to get your life in order and find the right people to assist you with your professional life, being able to spend more time making wonderful memories with your family should be a key motivator.  And if, like many folks, you missed those precious moments the first time ‘round, take this opportunity to make up for that with your grandchildren.  You’ll be amazed at the things you will learn about yourself and your family members in the process.

New studies on family life and children seem to come out daily.  But numerous evaluations have shown that there are several basic categories of interactions which children consistently want with their parents:

• TRADITION!  Remember that song in "Fiddler On The Roof?"  Successful lives revolve around rituals and traditions.  Things such as reading to children in bed, sharing mealtimes and repeated family celebrations are profoundly important to children --- especially younger children.  It gives them a sense of security.  These rituals are, by definition, exact and specific.  If you want teenagers to respect these family traditions, you need to work them into daily life from infancy.   
• AM I IMPORTANT, DADDY?  Relationships are built on a singular basis.  Just as you meet regularly with that important client, you need to spend one-on-one time with each of your children on a regular basis.  With younger children it can be playing a game.  With older children, perhaps a special lunch --- a girls’ day out getting a manicure and pedicure --- or a stop for coffee at the local “in” café.  Something that says to this child that they have your undivided attention for that time frame and that they are important to you.  Children who are having problems, middle children and preteens often benefit greatly from this additional attention.
• DO A LITTLE NESTING.  Don’t schedule every minute of time.  Allow for spontaneity and  fun.  My best memories of my own childhood were Sundays when we came home from church, ate dinner, and then kicked back and read the newspaper, played board games, read books together or decided on a family project.  Family holidays were a treat as my Mother, who had her own business, had more time to spend with us.  In today’s climate we often pack holidays to the brim with various “must do” things.  We forget that something as simple as an evening baking Christmas cookies can be more fun then nonstop running around to various external Christmas events. 

I have a close friend of Italian heritage.  Every year she and her boys bake traditional Christmas cookies and they watch with anticipation as they present me with my plate of goodies.  I always love the cookies and I love the joy it brings to their faces when they see how excited I am to get them.  It’s a ritual --- small, but significant.

Scheduling Takes Work --- Teach Your Kids How To Do It!  Busy people have to plan ahead, prioritize and delegate in order to get things done and have time left over.  Put your family time and family activities on your calendar.  Sit down with your spouse and children on the weekend and find out what is coming up in the next week that needs your time and attention --- put it on your calendar.  If Mom is at home with the kids most of the time, then Dad should plan to spend time during the week helping the kids with schoolwork or Saturday morning chores -- or vice versa.  Set aside Saturday or Sunday afternoon/evening as simply “family time” and use that time for whatever seems like fun at the time.  Don’t allow anything but the utmost emergency to steal that time from you and your family.  Most clients and coworkers will respect you far more if you tell them you are unavailable on Sunday afternoon as that is your family time!

Learn the value of saying “no” and meaning it.  We constantly complain about how busy we are, yet refuse to develop the skills necessary to relieve all that stress.  Nothing will impact your life more than taking control of your time and including your family in your plan.

Time You Can Never Reclaim!  In the last year or so I have often thought of the old Harry Chapin song “Cat's In The Cradle.”  It made me cry, even as a young adult.  And from this side of the post I now see even more clearly how it happens --- Father is too busy working to spend time with his young son, but keeps promising that he’s gonna spend time with him soon.  The scenario is repeated throughout the boy’s childhood.  One day the father retires and has loads of time and now his son is too busy to spend time with him.  It happens to each and every one of us on occasion.  It is the saddest thing I can imagine and yet at one time or another we are all guilty of it.  The point is to make sure it does not become a ritual of the worst kind.

My parents were divorced when I was young.  After my son was born I remember my Father saying he hoped with my son he could experience some of the moments he missed when my brother and I were growing up.  Bringing up beautiful, positive, well-adjusted children is the highest achievement for any parent.  You are, after all, influencing another generation.  When you look into that crystal ball, what do you hope to see?  How do you want your children’s lives to play out?  We can’t control everything, but we can give them the skills to move forward in life confidently, with respect for all, and with skills that allow them to do more than just survive.

Children reflect what they grew up with.  Let them see what it takes to make life work well.  Kids grow up so quickly.  Don’t let the world steal those precious moments from your stash of memories.  Live a balanced life --- professionally and personally.  Make the changes necessary to truly be a part of your family --- make your children and/or spouse your highest priority in life --- you will never regret it.  Time is something we alone can give --- but we can never retrieve the time we lose or throw away through sheer negligence.

You can make the necessary changes --- it just takes a bit of planning.  If you want additional help with family-oriented ideas, check out the website Parenting Ideas.    After all, “ . . .if you don’t change now, you’ll end up where you’re going!"

Today's Assignment:  Sit down with your family and carve out a 2 hour time frame when you will all spend time together on a consistent basis.  Put that on your calendar.  Then find out what meetings, school events or programs, sporting events., etc., need your time and attention this week and enter those on your calendar.  Now you have something to plan AROUND!  Now your family knows when they will see you.  Now you are on your way to Organizationville!!