I was excited to guest on Coach World TV with Laurie Lawson. We talked about a wide array of topics from my journey from employment to entrepreneurship, to personal branding (does everyone need social media, a blog, a website?) to sales and the small business owner:
One of the resources I mentioned is a free audio on the 5 Strategies I used to take SixFigureStart to multiple six-figures. You can request the free audio HERE.
In this business advice post for Purple Clover, I share three strategies for consultants, freelancers, and entrepreneurs to get clients who pay:
A Bureau of Labor statistic shows that by 2020, 40% of the workforce will be temporary. You probably already know someone who is a consultant or freelancer, and you may be one yourself. When you earn your salary project-by-project, it is critical that you get paid what you are owed in a timely manner. If you’re finding it difficult to collect, here are three strategies to follow:
Make collection a part of the process from the beginning.
Ask for a deposit. Charge a registration fee. The easiest way to avoid late payments is to make payment the first step in working with you. If you need to get started before money changes hands, ask early and ask often about getting paid. If you work onsite at the client’s office, ask to meet with accounts payable when you’re introduced to everyone else. Don’t wait till the end of a project before collecting on your fee.
Read two more strategies at Purple Clover: How To Stop Attracting Deadbeat Clients.
This business coaching post originally appears as a guest blog for Practice Pay Solutions eUniversity:
As an entrepreneur, you face many decisions that do not have clear-cut answers.
Should you discount your prices and under what circumstances? Should you say Yes to a client that is less-than-ideal? Should you pursue the big client with a long sales cycle or the small client with a lower purchase point?
Many decisions ideally depend on your particular business situation. It might make sense to discount to test a lower price point but not if your business brands itself as a premium service. It might make sense to say Yes to less-than-ideal clients if it means that you sustain your business long enough to build your ideal client base (but you will have less time and energy for ideal clients that do come along). It might make sense to prioritize the big clients with long sales cycles but you might run out of cash (yet, if you prioritize the small clients you might have cash and then be hard-pressed to grow your revenues).
If the best answer for YOU is that it depends on your business, then key answers are revealed when you get to know your business. Here are 7 insights you can get by looking at your business data:
1. Burn rate
Your burn rate is your average monthly costs. Unless you have a day job or spouse to cover your living expenses, you should include living expenses in your burn rate. Along with your cash position, knowing your burn rate allows you to calculate how long you can wait for your first sale. You might not be able to wait for the big clients initially until you build a larger cash position.
2. Time to sell by client
If you are already in business, look at past sales and how long it takes for you to land clients. Maybe that big client isn’t that slow to close relative to your average sale, and it’s worth waiting.
3. Time to collect
Calculate the time from when you make a sale to when you collect the revenue. Compare this to your current cash needs. This tells you how long it takes for sales to convert to cash. If it’s longer than you’d like, you might offer an early-pay discount
4. Cumulative revenues by date
If you order your sales by date and see how your revenues accumulate over time, you can see what months, quarters or seasons are better for sales. Plan your sales and marketing according to the rhythms of your own business. Save your operations, finance and back office projects for the slow season. Save your discounts for the slow season.
5. Revenues by client
Know what each client contributes to your total sales. If a single client accounts for the majority of revenues, you are exposed to that client and may want to prioritize diversifying your client base. If that client is less-than-ideal, you might want to let them go, but only when you can absorb the loss with new business.
6. Cumulative revenues by client
If you order your clients by how much they purchase, from largest to smallest, you can calculate what percentage of cumulative revenues each subsequent client contributes. Many businesses find that their top-grossing clients account for a disproportionately high share of the overall revenue (Pareto’s Principle says that 80% of income is generated by just 20% of a population, and this 80/20 phenomenon has been noticed in other population measures). If 80% of your revenue is generated by 20% of your clients, then you might want to rethink how you manage these relationships – how you define who is ideal, how you dole out discounts or other incentives, how you spend your time.
7. Year over year calculations
How do the above measures look year-over-year? Are your key clients getting more dominant or are you diversifying? Is there really a seasonal pattern to your business or were the fluctuations more ad hoc? Are you improving your collections, shrinking your sales cycle, and otherwise improving how you run your business in a way that benefits your bottom line?
Getting to know your own business data is one way you can make better decisions about pricing, time management, client service and overall business strategy. I cover two more ways you can make better business decisions in my upcoming webinar for Practice Pay Solutions on July 30: Revenue Now Or Later: What Opportunities to Pursue and When
I had the good fortune of attending a fascinating business conference organized by The Corporate Agent. Inside Edge 2013 (April 17-20) focused on how small businesses could effectively pitch and win business with big corporations. There is too much to summarize from the 4-day event but here were some of my favorite takeaways:
As entrepreneurs we aren’t reward on our efforts. Our results are our rewards. – Angelique Rewers, The Corporate Agent
Sometimes improving your results is not about what you need to do; it’s what you need to STOP doing – Angelique Rewers, The Corporate Agent
The only person who can stop, limit or restrict your success is you – Angelique Rewers, The Corporate Agent
Knowledge not acted on is useless trivia – Larry Broughton
Representation, Observation, Interaction = ROI of LinkedIn – JD Gershbein, Owlish Communications
Be flexible about how you do things, but be inflexible about why you do things – Scott Robley, Infusionsoft
Successful businesses quit survival marketing – Scott Robley, Infusionsoft
Branding is not a logo, tagline, name, design, message, marketing, social media, or website. Branding is a desired perception. – Re Perez, Branding For The People
You don’t own your brand; you shape it – Re Perez, Branding For The People
Great marketers don’t make stuff. They make meaning – Seth Godin
People buy people. Who you are is always more important than what you do – Eiji Morishita, Genius Marketing Academy
Make the pie bigger. Be the tide that lifts all boats – Eiji Morishita, Genius Marketing Academy
Don’t confuse business with charity. Serve clients who can afford you. Give to those who can’t – Eiji Morishita, Genius Marketing Academy
Content isn’t King. Insight is King – Angelique Rewers, The Corporate Agent
It was so nice getting away from the daily grind of the business to think more broadly, get inspired, and meet new people. An added bonus was staying in an ultra-luxurious resort (and yes, I made time for a spa treatment). There was the requisite swag bag, including a treat from one of my favorite boutiques, Pink Olive.
While I’m climbing my way back after four days away, it’s a worthwhile investment. What investment or conference do you have on tap to forward your business in 2013?
I had the privilege of hearing a talk by social media expert, Lori Greene, sponsored by New York Women In Communications. Greene has devised content strategies with venerable brands, including BBC, History Channel and The World Business Forum and teaches social media and content strategies at NYU. Here are my 7 favorite takeaways:
1) 22% of Fortune 500 companies blog v. 45% of Inc 500 and 80% of non-profits
I was surprised by the stat, and of course, it merits further probing before jumping to conclusions. But as a blogger who writes to build my own business, does this mean that the biggest companies didn’t need blogs? As a blogger who also writes for pay for other sites, does this signal a business opportunity to go after the 78%? Perhaps, it’s both, but those stats blew me away.
2) Content strategy = what is your unique value proposition + what people will come to you for
Greene shared the example of how she grew BBC America’s traffic over 100% (and won Cable Website of the Year) by focusing not just on how BBC had content around all things British (its unique value proposition), but also how BBC already had brand awareness among people of being the British channel (so people would already be familiar). This is a great exercise for even the solo writer – most of us know our expertise but what will people EXPECT from us? WHY do your readers COME to you?
3) Launch off of current themes (so be fast)
BBC hired a dedicated Royal Wedding blogger. International Women’s Day is coming up on March 8, so Greene is recommending a piggyback off that holiday for a client whose target demo is women. How can you set our editorial calendar to take advantage of upcoming events? The Oscars are on Sunday, St. Easter is early this year, the tax deadline is coming up…
4) Test a lot (and follow the numbers)
Greene advocates experimentation and then actually using the numbers (traffic, comments, forwards) as a guide for future posts and subjects. This means doing more of what audiences flock to, but also dropping categories that aren’t resonating. What ideas should you say NO to?
5) Openness + transparency = criticism (so prepare)
Greene recommends watching comments and proactively responding to reader feedback. This includes negative feedback, such as when a Dell computer malfunctioned and Dell posted the story on its own blogging page, responding to it, and engaging in the discussion rather than squashing it. How can you better engage with our detractors?
6) New ideas spread best
Greene stressed the importance of entertaining content that offers an original spin or point of view. How can you entertain? What is new about what you want to say?
7) Number 7 works best for lists
Greene has found that Top 10 lists work but lists of 7 are also very effective. I’ve been guilty of breaking my posts into lessons of 3 or 5! I know 7 as a final digit has been found to work well with pricing, so this seems reasonable. So I’ll stop the lessons here, at number 7, as a toast to a great workshop.
I was excited to get a free ticket to an all-day seminar on entrepreneurship, sponsored by the World of Business Ideas, featuring Shark Tank judge and real estate entrepreneur Barbara Corcoran, along with other diverse thought leaders such as Alexandra Wilkis Wilson of Gilt Groupe, Will Pearson of Mental Floss, and Slava Rubin of Indiegogo. Here were some key takeaways from the day:
Barbara shared how she was fired several times over 20+ jobs before coming into real estate and selling her company for $66 MM.
Barbara was able to compete with the big firms by issuing a regular report on the state of the real estate market, which gave her credibility and a platform for sharing her work. She also was ready with quick sound bites to keep the press interested. Finally, she nurtured celebrity relationships to attract publicity.
Barbara always rented double the office space that she needed to use the pressure of the empty desks and the fixed costs involved to spur on the growth.
Barbara talked about two types of personalities, Expanders and Containers (the dreamers and the detailed). She was an Expander, so she partnered with a Container to mind the details. I found it particularly interesting that she offered her partner 1% equity per year over 10 years, so 10% total when she sold. A partnership does not have to be even close to 50/50 to work!
Barbara had a systematic way of ranking her staff and firing the bottom quarter. She did give regular reviews and offered three months to turn things around, but she was ready to fire if her clear performance benchmarks weren’t met. Barbara also didn’t tolerate complainers, “thieves of emotional energy.”
Barbara offered manicures, massages, parties and offsites to the rest of her staff at a cost that could have supported more runway for poor performers. Instead, she deliberately chose to invest her money in the winners. She also focused on fun, outrageous party themes (e.g., a cross-dressing party!) to build culture and team spirit. Barbara justified her preference for the bizarre because it is the “kissing cousin of innovation.”
Barbara shared a story of her top real estate broker, Carrie Chiang, who made $18 MM in commissions (at an average 6%, that’s $300 MM in sales!) by becoming a specialist in the Taiwan market. When the Taiwan economy collapsed, Carrie didn’t miss a beat, immediately hiring two Japanese assistants to break into that booming market and had an even more successful year after losing her key client base.
Don’t dwell on bad conditions. Don’t try to do it all yourself. Your own choices and actions trump market conditions. How can you pull a Carrie Chiang in your business? Which lesson from Barbara Corcoran will you implement today?