I Eat My Mistakes

I have a simple guarantee with my business, one which has cost me a fair bit. Over time, I’ve come across a few other businesses with the same type of guarantee, and I prefer to give them my business. The long and short of it is that I eat my mistakes.

What I tell my clients is that I stand behind my work – if they find an error in my work, then I will fix it at no charge. When working on a project, this may not be a big deal. After all, the project should have been budgeted to account for this, and if it wasn’t, there’s no reason that the client should be impacted. When working by the hour, however, this can be a significant cost, since the hours worked fixing mistakes are unpaid.

I recently had a pair of chairs reupholstered and asked what the guarantee on the quality and accuracy of the work was. I was told that before any work is shipped back to a customer, two fussy old ladies look at the work, and decide if it passes muster. If not, it is sent back to be fixed. If the chairs arrive back at a customer, and the customer finds an error, then they are picked up and returned to the shop, and the work is redone.

The catch is who has to pay the cost of redoing the work. I was surprised to discover that it’s the tradespeople, not the company, that pays the cost of mistakes. However, this makes perfect sense. The tradespeople will be paid to do the work once. If it takes more than one try, then the company won’t pay them, since they were paid to produce quality. They must finish the work on their own time now that they made an error.

My work is the same, to some extent. My clients are paying me to produce a certain level of quality and reliability. Yes, my cost upfront might be a little higher than the next person, but my price upfront is the only price. As a consumer, I hate hidden costs, where the listed price is one thing, but you have yet to meet someone who actually paid that. As a supplier, I do my best to avoid such fees, but the catch is, I may have to join those hidden fees with the base price.

All in all, though, my customers generally appreciate the fact that I do guarantee a price. It allows them to budget properly for the project, and they have a greater level of confidence that they will be happy with the final outcome.

Why Do You Pay Too Much

I was chatting with someone a week ago, and he mentioned to me the price he was paying for a particular service. As it happened, I know the amount of effort involved in doing that kind of work, and raised some surprise at the price he was paying – it was about 5 times the going rate. After a little clarification, it turned out it wasn’t quite so bad, maybe only off by 100% instead of 500%, but it left me wondering.

Why do some people allow themselves to be exploited so badly when it comes to buying a service?

What came out of the conversation I was having was that he had hired a fairly skilled and experienced tradesman to do the work for him, and had been informed that he was getting a bargain. Without another quote to compare against, he had little to verify this against, and had to rely on the provided portfolio to make a decision. Naturally, the portfolio was outstanding (I happen to know this tradesman’s work).

What bothered me, however, is that the project he was hiring for was fairly straightforward, and could be done by an entry level trades-person. This is similar to hiring the top lawyer in the country to fight your $100 traffic ticket. She might charge you $5000 for her time, and be sure to get you off, but the question is, do you really need such top talent?

Of course, some people will tell you that they insist on the best, and are willing to pay for it. The price itself is not an issue, as long as they’re getting the best service possible. Without doing some fairly extensive research, though, they are often unaware that they are not, in fact, getting good value for their money.

As an example, look at the case of the lawyer. A $100 traffic ticket is not worth a $5000 lawyer – while $5000 might be a good price for the talent you’ve hired, it’s bad value for the need you’ve filled.

As such, I see there being two reasons people allow themselves to be taken advantage of like this:

  1. They are misinformed about the level of complexity of the task at hand, thinking they need much more than they really do;
  2. They insist on paying for the best, and therefore don’t know the difference between overpaying for the same level of work.

How much research do you put into your purchases? Do you know the difference between a good deal and good value? How can you tell?

Choosing an Online Image

With thanks to @robsarj who inspired this post with a question about selecting a new avatar.

Last week, I saw a question on Twitter regarding a choice of images for an avatar – should it be an action shot, or perhaps stick with a more formal portrait. Several messages later, it became quite clear that not only does the answer depend on the use of the avatar, but also on the audience and impression desired.

What’s it for?

In order to select an image for your avatar, you need to think about the environment in which your avatar is being viewed. Is it personal, or professional? Are customers looking at it? Co-workers? Friends? Public?

The answer to this question can help you determine the type of image that will best convey who you are to the person looking at it. If your answer to this question is personal, then there are few rules – you select an image that either reflects who you are, or who you wish you were.

If, on the other hand, the use is professional, or there’s a reasonable chance that people who know you professionally will come across the image, then you need to proceed more carefully.

What’s the norm?

In any industry, people have a preconceived notion of what a worker in that industry looks like. Bankers are imagined to be wearing 3-piece suits. A programmer is visualized to be dressed casually.

Remember, this isn’t about accuracy, but about impressions. If you told someone what your job is, there would be some level of expectation as to what you would look like, what you would wear.

When you select an image, the question becomes whether you want to reinforce the imagination, or contradict the imagination.

Reinforce the imagination

There are certainly benefits to presenting an image that fits the imagined picture of you – it provides a level of comfort to your viewers, and can establish a solid first impression – you fit the mold that someone else defined.

If you saw a picture of your lawyer in jeans and a t-shirt, it might make him memorable, but it will also impact his credibility up front, because he doesn’t look like a lawyer. That’s not to say that lawyers shouldn’t have pictures of themselves in casual attire, but that perhaps it would not be a good choice of avatar.

Contradict the imagination

On the other hand, presenting yourself in a different manner than the norm does make you memorable. A well-chosen image can portray someone who is not afraid to break down barriers, who can define their own path. If your industry has the reputation of being aloof, then dressing down can make you appear more approachable. If your industry has the reputation of being overly casual, dressing up can make you appear more organized.

Play the expectation

What is important here is not so much the image you select, but that you recognize how it will be viewed by those who do not yet know you. Your picture has the potential to create a first impression, and you need to be aware of what kind of impression that picture will make. What will also affect the impression is the context in which the picture is viewed, which means that you may want several different pictures of yourself for different environments.

My choice

If you are connected to me on several site, and have been for some time, then you may know that I use the same image on all the sites I’m a member of. The reason is simple – I want a completely unified presence. The image itself, though, has been changed a few times.

Original Profile PictureThe original image (shown at the right) shows a silhouette of me, taken while on a four month trip to Israel in the summer of 2005. I used it as my profile picture for many years, since it showed me in a casual environment, but also gave a sense of mystery and anonymity, an appearance I thought I wanted.

This image didn’t pass the test of time, though. While I did receive many comments on the picture (including wondering if I had touched it up, to which the answer is no), it wasn’t at all professional. Once I started moving onto sites other than Facebook, it was important to me that I be recognizable, and that people who viewed my profile be able to identify with me.

Current Profile Picture I switched through several images, eventually settling on the image shown on the left. The picture was taken on the day of my engagement at Casa Loma, in the summer of 2006. While I was still avoiding using a formal portrait, I did find a picture that showed my face (albeit wearing sunglasses, which is potentially taboo).

This image is very different than the previous one, in that it does portray some level of professionalism. Without knowing the history of the image, it shows someone who can dress well (at least I think so), and confident.

Remember, the image is not about accuracy, but about impressions. The second image, in my opinion, tells more about me in a professional setting than the first. I’m not looking for mystery, but for competence, confidence, and generally professional.

Were these two pictures the first you saw of me, what would you think? That’s what the choice of avatar is all about – making the desired impression on the people who will see it who do not yet know you.

How about you – how did you go about selecting your avatar? What kind of impression do you think it makes?

Risk and Reward

There are many expressions around describing the fact that you have to work to get rewarded – there’s no such thing as a free lunch – and that the amount of the reward will be proportionate to the work done – you get what you pay for. There are expressions relating risk and reward – the man who says it cannot be done counts the risk, not the reward.

What does all this mean to you? It is intended to serve as both a warning and as a motivator.

Like many people, I spent a significant amount of time reading about various get-rich-quick schemes, thinking that I would be able to plug into some formula and soon be spending all my time scuba diving in Aruba. I read through the posts about MLM schemes, about marketing other people’s products at significant commissions. But at the end, I learned a very simple truth – there is no way to get rich quick without putting in the work.

Granted, there are programs available that can change the nature of the work to something that you will enjoy more. You can change the number of hours that you will work. You can change the rate of return on your time investments. But the work itself cannot be eliminated.

The second reality I discovered is that the greater the payout, the greater the risk. Quite simply put, the opportunities I saw that had enormous potential to put large amounts of money in my pocket had a proportional chance of not only not profiting me, but also setting me back.

Is it all doom and gloom?

Not at all. The last reality I found was that every person has a tolerance for risk, though the level of risk varies wildly from person to person. But every person also has the ability to shape their own path to get it paved, to some degree, down the road.

As an example, my own risk tolerance is quite low when it comes to personal finances. I have responsibilities to my family, and so cannot (in my opinion) risk that responsibility even against a large payout. That being said, when an opportunity knocks, I can still recognize the opportunity and attempt to take advantage of it while at the same time mitigating whatever risk might be inherent in that opportunity.

In particular, I had an idea for several websites and applications. If I was more risk prone, I might have moved toward working on these applications full-time, and hope for the eventual payout. I might have borrowed money from the bank, or family and friends, to finance my dream of turning these ideas into a steady source of income.

I decided to take a different path. I continued at my day job. I did the occasional work for clients, sometimes more, sometimes less. But I also worked on my idea in the stolen minutes and hours in between my other responsibilities.

  • I did my own legal research as needed.
  • I did my own marketing plans.
  • I did the software development.
  • I used freely available templates for their graphics.
  • I looked into different payment structures.

What I did, in essence, was reduce the risk by doing as much as I could, when I could. As a result, the projects have been moving slower than they might have otherwise progressed. It will take me significantly longer to launch, increasing the risk that someone will beat me to it. But this is a risk I can accept, and I’m enjoying the journey.

Rewards will come, of that I am sure. When? Perhaps this month, perhaps this year, perhaps this decade (that was a depressing thought). The reward will in some way be proportional to the risk it took to get it. The delay in reaching my goals can perhaps reduce the ultimate reward. But at least I have enjoyed the journey will striving for the big reward, and that too is a reward.

You Need to Communicate

Earlier this week, I noted that I had written my 200th article for this site, despite the fact that I’m not a writer. While in school, I always enjoyed writing, but I have never studied the art and science of communicating. In hindsight, this is regrettable, as I have discovered since graduating university that the skill most in demand is the ability to communicate effectively, in all forms.

Looking at every industry (I used a naughty word there – please forgive me for generalizing), there is the need for communication in one form or another. A graphic artist must communicate with her clients to understand their needs and wants. An employee must communicate with his manager to understand what is expected of him. A cashier must communicate with customers to ensure good service.

The form of communication, however, will differ from one area of life to another, from one type of work to another. What is perhaps a necessity in communication for one person could be of no use to the next person. A singer must be able to communicate through music, but this skill is not a requirement for a computer programmer such as myself. Reversing that, I must be able to communicate effectively through code, something a singer would perhaps find to be of no use to them.

Additionally, effective communication is needed in all directions. While a manager must be able to coordinate their team to bring success to their projects, requiring good communication skills, the various members of the team must also be able to communicate effectively. The reason for this is simple – not everyone can communicate effectively, but having a few individuals on a team who are able to communicate well can decrease the impact of the other individuals on the team who cannot.

In your field, what forms of communication are considered to be the most valued? Written? Oral? Some other form? What are you doing to increase the effectiveness of your ability to communicate?

Technology Consultants

I’ve been touching on this subject on occasion, perhaps because this is the premise behind my business, but also because I’ve seen several business cripple their own ability to grow due to a lack of foresight in this area. Several people have debated this concept with me, and I’ll let you judge for yourself.

The statement that triggered each of the various discussions was as follows:

Every business needs a technology consultant.

Elie Kochman, April 2010

This statement triggered a variety of reactions, one of which caused me to rephrase my statement for the sake of clarity:

Any business needs a technology consultant.

Elie Kochman, April 2010

The change serves to acknowledge the fact that a particular business may not require this, but it will not be because of the industry or field, but because of some other factor. As an example, the second statement says that flower shops need a technology consultant, but John’s Flower Store might not.

The question that has not yet been answered, though, is why?

Other Services

Businesses have an accountant on retainer, because in the long run, the business will get better advice for financial issues from an accountant who understands the history of the business as well as its current structure. Additionally, long-term plans can be made for tax planning purposes that could only be done by someone who truly understood the business.

Lawyers operate in a similar manner – certain legal work could possibly be done by anyone, but a lawyer who understands his client’s history, current situation, and needs, can provide better service.

Technology

In technology, there are two very fundamental divisions of work done on behalf of clients. The first, which most clients are well aware of, is implementation. The second, perhaps less well-known aspect to technology work, is strategy and planning.

Implementation is as simple as the definition of the word – the client knows what they need/want, and they pay someone or a company to make it happen. For example, the client decides their website needs a complete makeover, and they want to do a full re-branding. They can find a company that does this kind of work, and get it done.

Strategy and planning goes further than that, and is provided by some technology-based companies. This work is less about the implementation itself, and more about determining what needs to be implemented at all. The planner will look at the business, what it does, its history, its current situation, what technology and processes are already in place, and then, based on that information, help the business reach its goals (usually a combination of reaching more customers, selling more products, providing better service).

Why it Matters

The most common argument I’ve heard to paying a technology consultant is that they don’t provide any real value to their clients. Sure, they can help figure out that you need CRM software, and even suggest a particular package, but often, this work will be done by someone else, who probably could have made the same decision.

This notion, however, is flawed, because it assumes that an IT consultant doesn’t do implementation. While there are certainly examples that validate this assumption, there are also many consultants who do provide both strategy and implementation. The difference, however, is the focus of their business.

A company who’s focus is about what they can build and create may provide extraordinary implementations. As an aside, they will help you figure out what it is you need. However, because their company specializes in a particular sub-field of IT, they will be concerned with that area more than any other.

On the other hand, an IT consultant has equal concerns for all areas of technology as it relates to your business. Additionally, they understand how businesses work, and spend time learning how your business in particular operates. This diversity of specialties means that your business ends up getting all its needs filled in harmonization with one another.

In fact, you can take the advice provided by an IT consultant and hire your own implementers directly. However, using the consultant to help in this area also ensures that the strategy is played out to completion, and all the pieces fit together smoothly. They will often have a large network of qualified providers, with whom they can get work done at a competitive rate, to which you can now get access.

Any Other Reason?

If you are not yet convinced, here’s another reason that an IT consultant provides ongoing value to your business.

Knowing the structure of your business and technology means that when new technologies become available, there is someone out there who is already thinking about how to apply it to your business in particular. Sitting down to meet once every 3, 6, or 12 months can make sure your business is adopting appropriate technologies as soon as possible.

Your accountant looks over your business at least once a year, and can help you plan forward. If you’re incorporated, you lawyer likely updates your minute books on an annual basis as well. You visit the doctor once a year (at least, some of us do) for a checkup. Visiting your IT consultant is exactly the same – it provides you with updated information appropriate to your business on an ongoing basis.

How about You?

What is your opinion? Do you see value in having such a consultant on retainer? Did I miss some points? Or perhaps you disagree completely – I’d love to hear back from you.

Milestones

This is the 200th article on this site, which makes it the topic of today’s article – milestones.

Back in January, I started a schedule of posting 3 articles per week, Monday, Wednesday, and Friday. Then, at the end of February, I merged another blog with this one, and increased my publishing frequency to 5 times per week. I have surprised myself by not yet missing a post.

To be honest, when I started the publishing schedule, I didn’t know what I was going to write about in the long-run. While I had many ideas for articles, I didn’t know if I would reach the point of having written 200 articles and going strong. My goal, at least back when I started scheduling posts, was to settle into the schedule, and to reach this stage of having written so much.

What goal was it that brought me to the point of being able to make the statement I write, but I’m not a writer and to have 200 articles published? Why do I bother with all this effort or writing 5 articles every week?

In the article I wrote for WordTree a little while ago, I discussed the reasons that I write and how, over time, it’s the general writing that brings me success, though not any one article or post in particular. Based on that, it would appear that my goal is to attract new clients through my writing.

However, writing 200 posts is really a milestone, because I have now written a sufficient quantity to evaluate what it is I am doing with my site and business.

This is, in fact, the reason to use milestones in the first place. Each milestone provides an achievable goal, and, once reached, can be used to evaluate how past accomplishments are helping you to move forward. Below is my own analysis of my personal achievements, and how they fit into my current goals.

Goals

My personal goals, when it comes to the consulting I do, are:

  • to be recognized as knowledgeable in the area of technology as it relates to running a small to medium-sized business;
  • to provide quality advice and service to my clients;
  • to be self-sustaining with both recurring revenues from existing clients and a constant influx of new clients.

This Site

This site helps me reach these goals, though not directly. I don’t get clients directly from the site, nor does it provide me with any real form of revenue. What it does do, however, is assist me in establishing credibility with potential clients. In that, I believe, this site has been a success, and is why I will continue to write articles at the same intensive pace.

Next Steps

The next milestone for this site is not about content, but about context. The content will continue to be expanded on, and extended to new areas. However, my next milestone is regarding the people I meet through my posts.

I’m now looking to establish clients directly through the content on this site, whether by having readers contact me (which has already happened) or by sending prospects to read up on specific articles I’ve already written that would be of interest to them. While I have not yet determined how to quantify success in reaching this “milestone”, it is a short-term goal that provides me with something to strive for in the next several months.

Explosive Growth

Running a business can be incredibly complicated, especially during a growth phase. As the owner, you have multiple demands on your time and attention, such as:

  • Answering customer questions
  • Reaching out to new clients
  • Dealing with legal and financial issues
  • Working with employees
  • Managing cash flow

If you want your business to grow exponentially, all of these will require some of your attention. The problem, though, is that there are not enough hours in the day to deal with all these issues. Some of these, however, are more important to your business’ ability to undergo explosive growth than others.

I was reading an article the other day in which the author discussed why it’s hard to get investors into a business which provides hourly services. The basic issue was growth and expansion – the business would only be able to grow by hiring more people to bill hours. If there’s little to be levered, then there’s little to invest in.

This is a function of the same issue as how you grow your business, which comes back to the question of what your business priorities are.

If your business is involved in distribution, then the cap on your business is how many customers you can reach for as small an investment as possible. If you manufacture a product, then the cap is the production limit. If you’re in a service based industry, then the cap is the amount of service you can provide for a single time-investment.

Work Once, Get Paid Often

Think about the author of a book. They spend hundreds or thousands of hours writing their book, and then sit back and collect money as copies are sold. Once the initial job of writing is done, further time investment is not needed to get paid again. (For argument’s sake, I’ll ignore book tours, speaking engagements, and so on.)

In your business, you want to do something similar. You need to make it a priority to develop something reusable. Maybe it needs to be customized, but the core of the work can be reused as often as you want. As an example, if you develop some software, you want to be able to sell the same program to many customers. Since you can charge the same amount for the 100th copy of the program as you did for the first, the only remaining cost is customer acquisition.

Customer Acquisition

The one cost your business will always have is how it attracts customers. Whether you are paying for advertising, pushing your website through SEO, or cold-calling prospects, there will be some cost to acquire a new customer. In the perfect business, this is your only cost.

In the previous example of writing a program, the cost to distribute the new program is negligible. Finding a customer, however, can cost significant amounts of money or time. As such, another priority of your business is to reduce that cost as well, and to find ways to leverage your current customers to make future sales at a reduced cost.

Priorities

The priorities of your business are therefore two-fold. You need to leverage your business to bring down costs, both by reducing the cost associated with each sale or service provision, and by reducing the cost of customer acquisition. Only then will your business be able to undergo explosive growth.