However, this can rapidly backfire as you promise the world, and are left unable to deliver on those promises. In other words, you fall prey to the other saying, “don’t bite off more than you can chew”. How would you avoid falling into this trap?

Timely Payments

Last week’s question was one pertinent to anyone who relies on clients for their paycheck – how do you ensure timely payments from your clients? This post got many responses, most of which were variations on two themes. The first response was the stick, the second, the carrot.

Enforcement

The first response involved a baseball bat, some nasty people, and angry letters from lawyers. That is, bully the clients who pay late (after all, they deserve it for treating me badly) until they pay, using whatever means that won’t land you in jail.

This method is like a stick – train a dog to be afraid of getting hit, and it will behave. The problem is that some clients will only respond to the stick, some will pull into their shells and avoid you, and others will leave you for more friendly vendors, and may still not pay you.

Bribery

The second response involved bribing your customers to pay on time by offering a discount for timely payments. One common method is referred to as 2-10-Net 30, which roughly translates to a 2% discount if paid within 10 days, with the full amount due in 30 days. Precise numbers can vary, but this method is aimed to encourage penny-pinching clients to pay earlier rather than later.

There are two issues here. First, 2% is not likely to provide a sufficient incentive to many clients to even care. As a result, this system rewards clients who would anyhow pay early (not that that’s a bad thing) but not really encourage anyone to join their ranks. Second, experience has shown that this system is marginally effective in any case, indicating that this may only work for certain types of clients.

Summary

As with all things in life, it’s about moderation. You need to be nice to your customers, but if they hold out on you too long when it comes to paying, maybe you don’t want them as customers anyhow. Try to avoid the enforcement method, as it is more likely to generate bad-will than be truly effective, and can compromise your ability to get referrals from clients you had harrassed.

One method that is worth trying, at least, is to simply ask your customers to pay early. Explain to them why you need the money earlier rather than later, explain that you understand it’s their right to hold out for 30 days, or whatever your official terms are, and in many cases, you’ll find a check in the next day’s mail.

Related posts:

1. Question: Are Your Customers Always Right?
2. Question: How do you calculate salary?
3. Tips to Getting Paid Promptly

Within 6 to 9 months of becoming certified, if you are not getting 75% of new clients via referrals, you’re doing something wrong.

This is particularly interesting to those in service-based industries. Getting new clients is generally extremely lucrative, and many businesses would be prepared to pay hefty fees to bring in new clients. However, the vast majority of their new clients don’t have any costs associated with them.

Word of mouth is the best way to draw in new business, and there is no reason why any business owner need have any difficulty in this manner. Treat your clients well, and they will, in turn, pass your name along to their associates. Establish trust with people, and they will reciprocate over time.

Additionally, there is no reason not to try to use this method of bringing in new business. You should be treating your clients well, because in service-based industries, that is precisely what you are being paid to do. While this may not be true for every client, treating them well in general will see your clients treat you well – with respect, courtesy, and understanding as you may need it.

For example, I try to be generous with my referrals – but only in terms of whom I will give a referral to. That is, if you ask me if I know someone who can fill a particular role, I would be happy to provide such a recommendation – if I know and trust someone who can fill that role. Getting onto my list of people I refer, however, is much more difficult, as competency and courtesy must be established before I will consider giving the referral.

Over time, this has benefited me, and so most of what I’m doing could be considered selfish. As a result of the dozens of referrals I’ve given out, I have in turn been referred a few times, but every time that has happened, the value of that one referral has shown that it is worth considering others. No, I don’t demand, expect, or even hope for reciprocity every time I give someone a referral. But I know that by doing so, somewhere down the line, a referral will arrive.

I’ve been consulting for several years. As of right now, I have only one client who was not the result of a referral. That’s how service-based businesses work – I provide one client with a service, he mentions my name to his friend, who in turn becomes a client. She mentions me to a colleague, who also becomes a client. I earn each referral (or at least, I try to) by providing that client with the best service I can.

At the end of the day, this is all a matter of trust.

Related posts:

1. Why Bother with Referrals
2. It Pays to Give Away
3. Trust is Earned when Given

First, my goals for 2010 were accurate as of the time of writing, though priorities changed over the year, and with good reason. To recap the goals, and my current status with them:

• Learn PHP and Zend to a reasonable degree of proficiency – this has gone well, and while I would hesitate to call myself an expert on either, I am comfortable programming a web application using those technologies. I’m still working on getting the turn-around time down, but it’s moving in the right direction.
• Launch Client Data Tracker – this has not happened, because priorities change. The project turned out to be significantly larger than I anticipated, and I put it on the side because I didn’t feel I could do the project justice.
• Continue side development until I’m doing in excess of 30 hours a week of billable time – this has happened, and I’m now working solely on a contract basis. Happily, I’ve been able to leave the corporate setting.
• Complete the work required for KNIRL.com – this has not happened, though we learned a lot of interesting pieces of information and technology working with it.

Overall, 2010 was a good year for business, and looking forward, 2011 looks like it will be even more exciting:

• Launch the product I’m working on for my primary client before the end of the first quarter;
• Learn the intricate details of a fairly large industry to determine how to be able to carve out a niche in it;
• Solidify my knowledge of certain technologies I use frequently to the point I would call myself an expert.

What are your goals? Do you have a way to measure yourself against them?

Related posts:

1. Goals for 2010
2. Goals and Fitness
3. 2009 Goals

Fortunately, that didn’t ruin my business, but in hindsight, I was running a huge risk. There were certainly projects that I should have turned down for a variety of reasons.

What I discovered during the growth of my business is that there are really only a subset of projects that I personally should be getting involved with. For the rest? I have a nice Rolodex with names of businesses that would love to have those projects, and would do a fantastic job at them.

It’s not that I couldn’t do those projects, but rather, that I shouldn’t be doing those projects. While the short-term gains for me I perceived to be significant, in truth, they probably weren’t nearly as important as I thought at the time. What gains I made through those projects I could have made elsewhere, or made irrelevant through other projects I did.

In any business, it can sometimes be difficult to look at the current situation, and the latest opportunity, and determine whether or not the gains from that option are worth pursuing. What can help with this determination, though, is the presence of a clear goal, and you can look at the opportunity from the perspective of how much closer it gets you in reaching those goals.

For example, a project recently arose in which a client required a fairly complex web application to be built. This isn’t my area of specialty, and it’s not where I would take my business. Reflection told me to pass it on to a friend, who’s business does exactly this type of work.

The return benefits are often late in coming (I rarely take a referral fee directly from handing over a project), but can be more significant that what I’ve given. In this particular case, I landed a dream client I would have never met without this friend.

In other words, giving away a project or client now can have bigger returns. I consider it to be an investment in the relationship I have with the client and the company to whom I pass on the client to.

The client is happier because I forwarded them to someone more qualified. They trust me to tell them about my own expertise, because I’ve already proven that I’m not afraid to say that this isn’t what I do best. Forwarding them to others within my network increases the likelihood that if this client ever has a project that does fit my vision of an ideal project, it will be sent my way.

Likewise, the company who is being referred appreciates the business, and when they come across a project that suits my business more than their own, it too will make its way to my desk.

Oddly enough, this exchange is actually measurable in terms of pure profitability. I try to determine with every project that comes my way how the client found me. Once I do that, I can actually balance the project I got against those I gave away.

To date, I’m still on the leading side of this overall. Sure, there are a few relationships weighted in one direction or the other, but the benefits have far out-weighed the costs overall, and that’s why I will continue to pass along on projects that don’t bring me any closer to my goals, because passing those along is bringing me closer to my goals.

Related posts:

1. A Matter of Trust
2. Willing to Say No
3. Business Health Checkup

First, though, I should explain what I mean by being a magnet. If I attend a networking event, I’ll meet people with businesses larger and smaller than my own. Chances are, at least a few of these encounters will result in second meetings over a cup of coffee. Or, I’ll hire someone on contract to do a bit of work for me, and the next thing I know, we’re sitting down to discuss opportunities for development.

It’s not just that I attend these events, though that does lend itself to making it easier to meet people. I think it’s more about the attitude toward meeting people at an event.

At this stage of my business development, I will often have more to gain from a networking associate, who may be more established in their business, and therefore able to offer more. However, one of the things I’ve learned is to never ask for the help, but rather, educate your network on what you do and the types of people you would like to meet, and the introductions will follow.

The second part of this is how conversations flow at these events. I try to express a genuine interest in what other people are doing with their businesses, and what they might need. This knowledge helps me in that for most of my business needs, I can find an answer with a couple emails or phone calls. I know who’s out there, I know what they can and can’t do, and much of the time, I also know who they know, or are connected to.

This ability to link people together makes people want to be in your network – they want to know you, and are happy to share their network, because they are aware that I do the same in return. The benefits are rarely aligned, but it is a large cycle, and most people intuitively know this.

Apparently, they’re also good at spotting such people. I can think of several people who would likewise describe themselves as a magnet, and I’ve discovered that they are taking the same approach as myself toward meeting people.

That, I believe, is one of the cornerstones of building a solid network.

Related posts:

1. Parnasa Fest 2
2. The Right Time to Network
3. Post Parnasa Fest Toronto II

In a service-based business, recurring fees are simple – if you want to continue to receive service, you have to continue to pay. Think of paying for your cellphone: the company provides you with a phone and a plan, and for that, you pay a monthly fee.

Warranties are a little different, in that what you get for the ongoing fees you pay is a guarantee that if something happens to your product, the manufacturer will replace it. In that, they are very much like insurance policies.

Other businesses operate on a cyclical schedule; for example, you have to file your taxes once a year, and so your accountant can depend on your return each year.

If, however, your business falls into none of the above categories, how can you get your customers to continue to pay you month after month?

In order to do that, you need to turn your business model to something which offers ongoing value, which will be removed if the customer does not continue to pay. As an example, software licensing can work that way, where the purchase of the program entitles you to use of the program, but not support. An ongoing fee provides the user with access to support (yes, some companies really do distribute software like that).

Alternatively, you can have the customer pay a retainer, which gives them access to a certain amount of your time at a reduced rate. By paying up-front, the customer guarantees a lower rate, but if they don’t use the time allocated, then the time does not carry forward. In a business where most customers require some time on a monthly basis (for example, supporting websites in a typical month will involve some work for pretty much every client), this model can work well.

The problem here is determining a price that is fair to both you (the provider) and the client. In order to figure out what a fair retainer is, you need to estimate how much time you usually spend on each client on a monthly basis, and the rate you would want if you were guaranteed to get paid whether you worked this month or not (this is typically less than your normal rate by a significant amount). From the client’s perspective, the price has to be such that even in months where they don’t have work, they’re still going to be saving money overall.

My personal formula is something along the lines of the average number of hours I expect to work (say, 2 hours per month) times my hourly rate times 80%. For that, the client gets 2 hours of work, and can carry forward 50% of the hours each month. For me, the risk is low, since in any given month I’ve committed up to 3 hours (in the example provided) so there’s little risk of having to do large volumes of work for little pay (no banking hours). Additionally, from the client’s perspective, they know that they’ll often go over the two hour allocation, but by paying me upfront, they get a reduced rate on the first few hours. In the long-run, they’ll usually save between 10 and 20 percent of their total costs by paying me upfront, even though some months they don’t get any work done by me.

What do you do to establish recurring revenues? What models have you found to work well?

Related posts:

1. Finding the Right Price
2. Question: What would drive you away from a business?
3. Explosive Growth

I often recommend my clients to colleagues of mine like graphic/web designers as well as other agencies if I can’t take on the job. What is the protocol for this, or process?

Cinci Csere

I posted a quick answer to the question as asked, but then realized that perhaps I had answered the wrong question. Before you can discuss the protocol for handling a referral, you need to understand the more basic and fundamental reason why people give referrals in the first place.

In trying to answer that question, I pulled up a conversation I had several months ago when someone asked what would most motivate me to give a referral. My answer there, once again, did not explain why I would give a referral, but did give a hint – it’s not about the money.

If a client asks me to do some work, and for some reason I cannot or will not do the work myself, then my next thought is as to whether I should give the client the name of someone who can help them. The first questions I ask myself are therefore whether I want to have any association with this client – if they are easy to deal with, don’t quibble about the bills, and are appreciative of a job well done, then the answer is usually yes.

The next thing I look for is to determine who in my network is best suited to this kind of work. Since I’ll be banking my own reputation on the referral, I want to ensure that I make the best possible reference.

If there are multiple people in my network who could perform the work satisfactorily, then, all else being equal, I’ll pass it off to the person who would benefit the most from the referral.

Note, at none of these steps did compensation factor into the equation, and the reason is actually quite simple. I’m referring my own clients, which means that I’m already being paid by this client. I don’t need to earn something off every piece of work done by every one of my clients.

Additionally, I can look at the bigger picture. Every time I send some business to a colleague, I strengthen that relationship, and business will come back to me. Perhaps not this week or month or year, but it will come. My payment will come when my client is happy with the work done and hires me again, or when my colleague has a project that fits my expertise and sends it my way.

It’s easy for me to remember what it was like waiting for the referrals to come – I still live in that world. When a business is small, every referral matters, and so, you appreciate it when a colleague drops something in your lap that means you can grow your business another step. You’re even more appreciative when they tell you not to worry about paying them, and so, when a project is a little too big for you, or out of your area of expertise, you send it their way.

One colleague put this barter system another way – if we add all the referrals I send him, and subtract all the referrals he sends me, we’ll probably balance at about $0 anyhow. This way, we save ourselves the bother of counting.

I would be curious to know what motivates you to provide a referral – is it the money? returning a favor? Or is it something else entirely?

Related posts:

1. A Matter of Trust
2. It Pays to Give Away
3. Business and Lies

This question was put to me the other day, and made me think about how a business grows. To answer the question, I started by looking at what I used to do for money and what I currently do for money.

I used to accept money for anything that occupied my time:

• Write something for you? $20 per hour.
• Tutoring? $35 per hour.
• Teaching? $50 per hour.

I settled down. I have a full-time job. I do some consulting. I do some programming.

• Review your online presence? $200.
• Custom programming? $50 per hour.
• Plan technology strategies? $75 per hour.

Is this a way to grow a business? Not really. If you look at what I’ve been doing over the last few years, I’ve been all over the map. I’ve charged a variety of fees over time. I’ve done a wide variety of tasks. I rarely turned down an offer for some work.

A business doesn’t advance that way. In a well-balanced business model, there are certain core aspects to what the business does. Everything else becomes secondary to that. When asked about what your business does, you should be able to state that in one or two sentences.

I help small businesses acquire appropriate technology so that the business can grow sustainably.

That’s not complicated. What might be complicated is how I do that.

• I buy hardware and software
• I write custom code
• I build web applications
• I help with marketing and branding
• I establish social media outlets
• I develop technology infrastructure

However, all those tasks are secondary to my clients. I don’t get hired to write a web application, but to solve a problem.

Perhaps the client needs a custom scheduling application to coordinate his 25 employees. I’ll look to see if there’s a solution already out there that I can buy. If not, I’ll arrange to have one built. Maybe I’ll build it myself. To my clients, that’s not relevant. What’s important is that when I’m done, they are able to coordinate their employees.

In your business, what defines your services? What value do you offer your clients? Are you accepting work to earn a buck, or are you accepting work to grow your business?

Related posts:

1. Choosing to Outsource
2. Time for Work, Time for Play
3. Growth and the Panic Response

Working holiday

Christmas and New Year’s fall on Fridays this year, which means for many people, they are not working from Thursday afternoon on December 24 until Monday morning, January 4. That’s 10+ days of not working. Even for those who do go into the office in the week between Christmas and New Year’s, there is little work getting done, as people are in the holiday spirit.

As a small business owner, though, you may not have the luxury of being able to take off 11 consecutive days. My own plans include a significant amount of work to get done while everyone around me is in party mode. No, I’m not being a party-pooper, but when I have some time to spare, I’m getting projects advanced, meeting with what clients are available, and setting myself up to have an easier January by being prepared.

If you are able, then you might want to consider joining me in this. Sure, you can’t work with your suppliers (they’re on vacation somewhere warm), nor with your clients (they’re busy closing out the books for 2009). But you can work to figure out where your business is going, and how you can adapt to changes. The good thing about getting a break like this is that it lets you catch up, while the world around you slows down to party.

It’s a once-a-year opportunity to get ahead. What are you doing to help yourself for next year?

Related posts:

1. Dragons' Den Special Holiday Episode
2. Goals for 2010
3. Fiscal Year End

Some people dream of success, while other people live to crush those dreams.

What I did last year was to post some of my professional resolutions for all to see. Whether or not that was a good idea is debatable. There is a study that shows that the more you share, the less likely you are to do. I don’t agree completely with that study, and so I’m going to do it again.

First, however, a follow-up to the goals for 2009:

• Only one of my contracts from the start of 2009 is still in development, and it is scheduled for completion with two weeks.
• I have not picked up one new contract per month, however, the past 3 months have been very good to me with 2 new clients and one returning client.
• I haven’t taken any courses this year, but am in the process of learning PHP and the Zend Framework.
• I have continued to use C# for some development, and am increasing my level of proficiency.

All in all, I feel good about what I’ve accomplished in 2009. While I haven’t met all my goals, I did strive to do so, and had I met all my goals, it would be an indication that I had not set my sights high enough. So, without further ado, here are my goals for 2010:

1. Learn PHP and Zend to a degree of proficiency whereby I can construct an entire website based on those technologies in a reasonable amount of time (i.e. in under 250 hours for a fully-functional site, and not including the design of the interface).
2. Launch the product I’m currently working on, Client Data Tracker, to beta in January 2010 and live to the public before the end of March 2010.
3. Continue developing my consulting to the point that I am putting in 30+ hours per week in billable time on various projects.
4. Complete the work required for KNIRL.COM and get the site up and running.

These are my goals that I’ll be using to measure my success against in 2010. What are your goals? How do you intend to measure success?

Related posts:

1. Goals for 2011
2. Goals and Fitness
3. 2009 Goals

It isn’t easy to tell a potential customer that their ideas are terrible, or to try and make them modify their concepts in order to allow them to work better online.
Part of that is that developers and designers are by nature creative people, and we don’t like raining on somebody’s parade.
Part of it is also the risk of losing a possible customer.

This triggered a brief discussion in the comments about how to learn the skills required for dealing with [potential] clients. It’s not something covered as part of a standard degree in Computer Science or the like. It’s not part of a certification in web development for most colleges. As a result, many would-be web developers working for themselves fall into one of the following two categories:

Customer Management Chart

1. They treat the client’s opinions and ideas like gold, and implement them regardless of whether or not it’s a good idea. While this is good for getting work, it’s not good for developing a business, as you end up spending too much time dealing with the whims of ill-informed clients. This prevents you from developing your business of building quality websites that fill real needs. In the end, your clients are not happy because the site doesn’t live up to their expectations (regardless of whether those expectations were reasonable) and you end up losing the client.
2. You build what you like building, or what you think is a good idea, and if the client likes it, that’s great, and if not, they can go bother someone else. I don’t think this method needs much explanation as to why it’s a bad idea.

What’s needed here is to find a good balance between the two extremes, a sprinkle of tact, and some of your business experience.

Evaluate what your [potential] client is proposing, and try to figure out what the client is trying to achieve. Then confirm your guess with the client. For example, the client talks about creating a blog where every web developer in the world will spend all their time (not going to happen). But what the client really wants is a way to market their new product for web developers.

Now, rather than putting down the idea completely, gather some facts about what the client is trying to do, and what they’re trying to achieve. For example, you might collect some articles about how many web developers have A.D.D. or the fact that there are thousands of sites out there for developers, and the largest such site only has 200K members. Get some examples of how similar products are marketed (e.g. show Eclipse vs. Rational Application Developer for a Java IDE) and what their numbers look like. Try to gather as many quantifiable facts as you are able.

Next, present an alternative to the client, from the perspective of someone who understands what they are trying to achieve. “In order to market your software using various social media platforms, how about we run through some options, and what some companies which are similar to yours are doing.”

There, you’ve said it – what you’re trying to do (market software), there will be choices (some options), and where they came from (other companies). Now, outline the ideas clearly, and demonstrate the breadth and depth of your knowledge by having answers ready for common questions to each option. Don’t show off, just be knowledgeable, and if you don’t know, ask: “Can I get back to you on that?”

Knowledge is Precious

Not every client is reasonable, but then again, not every client is yours. The key here is not to attack their ideas, but to understand where they are coming from. Why did they choose you for the project? It’s because you know more than they do about how to do it. Share your expertise, use your special knowledge. Make sure your opinions are clearly delineated from the facts.

At the end of the day, you may be able to reason with your [potential] client and land a project that is a good idea, that’s well structured, and balanced.

Some [potential] clients will still insist on a bad idea, despite your feedback. However, you’ve already told them it’s a bad idea, just not in those words. You’ve outlined what they’re trying to do, and you got that right. You’ve outlined some real options that would reach that goal, and they’ve been turned down. What now?

Now you need to look at your business, and the impact accepting this client, and their bad idea, will have on the rest of your business. Will it help improve cash flow because it’s a short project (i.e. high profit margin for minimal resources)? Will this client refer you future business, thus making this a strategic move? Is this a client who has other projects with you, thereby putting pressure of losing other contracts?

Or will this project keep you busy, stressed out, and prevent you from pursuing better clients who will help your business reach its goals?

The answer to these questions will help you determine if you should be accepting or rejecting the bad idea. (Note that while you may refuse the project, treat the client with respect, and you may end up with a valuable connection as a result.)

Related posts:

1. The Customer is Always Right… Sometimes
2. Slow Economy and Developing a New Business
3. Customer Satisfaction

Before going any further, one thing needs to be clarified. I was asking the original question for a particular reason, and it was not so that I could write this article. I’m planning on attending a speed networking event next week, in which participants are seated at tables with five other people and get two minutes to make an introduction. The last time I attended, before anyone spoke, I had 5 cards in front of me, one from each person. After the introductions, however, I only really saw value in 2 or 3 of the connections.

The second half of the issue is that I did, at that event, reciprocate the handing out of my card. I ended up on 3 distribution lists as a result, and it took a while to get taken off one of those. All three people who put me on their mailing lists had something in common – they were all mutual fund salesmen. The question I was trying to get answered was whether I could [politely] refuse to give my card to the mutual fund salesmen at the next event.

I got many answers to my question, some of which addressed my concerns, others which seemed to ignore that aspect of the question. However, I did learn a few things about such events, and the ramifications of sharing a card.

1. Speed networking events are of limited value, because, while they allow you to meet many people in rapid succession, they often do not allow you to establish a solid connection with any one person.
2. Given then I will be attending this event (although this may be my last such event), sharing my card is considered to be a necessity. That is, I cannot politely decline to share my card with any one person or group of people.
3. I can control when to share my card – I can wait until it’s my turn to introduce, thus linking my card to my introduction.
4. I can make mention that I do not wish to be placed on any distribution lists – while I welcome networking opportunities, please keep my e-mail off any type of mailing list you may have.
5. When receiving cards, make notes on the back regarding the person who gave me the card, and any other information that may be relevant.
6. You never know where your next successful connection will come from, so don’t try to guess. Instead, hand your care to anyone who will take it, but always include a brief summary of what it is you do, and what it is you’re looking for.

What do you think about sharing your card? What value can you find is such events?

Related posts:

1. Preparing to Attend a Networking Event
2. Post Parnasa Fest Toronto II
3. How do you Network?

For starters, I work as a Programmer Analyst for the Dominion of Canada General Insurance Company. This occupies me from 9 to 5, and occasionally beyond.

I am also the acting treasurer for my synagogue, handling the recording of pledges, collections, receipts, budget, and so on, as well as maintaining their website.

Third, I do occasional consulting for small and medium sized businesses on the appropriate use of technology and for the development of custom software packages.

Fourth, I am in the middle of developing two websites for launching in the first quarter of next year.

Fifth, I read an fair bit, from books to newspapers, magazines, blogs, and pretty much any form of writing that will stay still long enough. That reading is what provides the content for my two blogs, which is what I spend about an hour every two days working on.

Of course, I spend some time each day with my family, during which business is put on hold.

Related posts:

1. Business Research in Canada
2. Business and Social Media – Part 2
3. Business and Social Media – Part 1

I apologize in advance for what is about to happen. I’m going to be separated from the internet for about 10 days. So if you post a comment, it may take until I get back for me to respond. However, I will respond when I get back.

Recap

When I left off the series, our model business owner, Jane, had started a blog which she uses to hold directed conversations with her readers. She has also started a Twitter account which she uses to post news and links to her articles, and uses the account to see what topics are of interest to people, and then writing about those topics.

Facebook

The largest problem with blogging and Twitter is that conversations are generally one-sided. Jane acan pick a topic to discuss, and interact with her audience regarding those topics. Using Twitter, she can respond to short questions. What she cannot do (yet) is allow her audience to pose its own questions, to hold undirected conversations.

This is where the networking sites such as Facebook and Linked In become important. Both these sites allow groups to be created. The creator of the group can act as an administrator of the group, and encourage conversation and participation among the group’s members. However, each member can start a new conversation, a new discussion, on a variety of topics. They can ask questions.

This will put Jane back to the first stages of becoming involved in social media, in which she interacts directly with her audience, as a member of the audience, but now Jane is in control of the environment. She can market the sites to people who come to her store. She can start getting feedback from her customers on topics she didn’t realize were issues.

Conclusion

Social media is about personal interactions used as a means of promotion. The fundamental component of social media is interactions. Social media is built on socializing. In order to run a successful campaign, you must interact with your audience – respond to their questions and comments, start conversations, ask questions of your own. Everything else is merely a tool to help you interact.

Related posts:

1. Business and Social Media – Part 2
2. Business and Social Media – Part 3
3. Business and Social Media – Part 1

Note that any clients referred to in these articles are fictitious, unless I specifically indicate otherwise.

Applying the Concepts

The client described in the first post in this series can make good use of the previous article as she develops her strategy. Social Media is built around interactions, so Jane must decide what kind of interactions she would like to foster. She must also look at how each platform is constructed, so that she can play to its strengths.

The Blog

The first step for most businesses starting with social media is to write a blog. If the client is technically adept, they can follow the instructions here on how to set up a WordPress blog on their own site. If not, they can hire someone to set up the site for them. (If you are looking for someone to set up a blog for you, please contact me directly and I can refer you to a reputable company that does this for a minimal fee.)

Before going live with the blog, there are a few things Jane needs to do.

1. Choose a topic for the blog. As the owner of a hardware store, she may feel comfortable writing articles about how to fix some common problems around the house on a tight budget. The title and sub-line for the blog should reflect the topic chosen.
2. Set a schedule for posting. More important than posting frequently is to post on a regular schedule. It is tempting to post each article as soon as it is written, but that may end up causing the blog to die quickly, as the speed of your writing drops. My usual recommendation is to start with one article per week, posted in the afternoon of Tuesday or Thursday. As the number of viewers of the blog grows, the frequency of publishing can be increased to twice a week, then three times a week.
3. Prepare some articles. While Jane has selected a topic that she feels confident she can write about, she does not know how much time she will have available for writing. She should prepare about 3 months of articles (if she’s publishing once per week, that works out to 12-15 articles) and upload them to the site in draft mode.

At this point, Jane can launch her blog. Some companies (including the one I recommend) can do some preliminary advertising for her to increase the number of viewers quickly. Other plugins for Search Engine Optimization (SEO) can be installed so that new posts are automatically submitted to various search engines. Certain types of content will result in Google scanning the page earlier. A reputable company will help to explain and set up these components.

Jane should also be sure to monitor the number of viewers to the site, and respond to comments on her posts. Writing the article is only the first step – interacting with her readers is more important. While it may take time to convert a reader to a client, if she does not interact at all with her readers, then her blog is merely another form of traditional media.

Jane must also remember to tell people about her blog, and ask for feedback. A sign in her store can drive her existing customers to the site, and they can tell her, in person, what they like and don’t like about the blog. She can ask them for ideas for articles and for suggestions on how to improve her existing articles. They may tell their family and friends about the site. If Jane can establish her credibility as an expert on the blog, then people will be more inclined to come to her store when they need something, or need advice on her area of expertise.

Tweets – Part 1

Now that Jane has her blog up and running, she may want to create her first Twitter account. With this account, she can post links to articles on her blog, talk about those articles, and create an additional community of people interested in those topics. Using various tools discussed in a future article, she can analyze what people are talking about, and write relevant articles on those topics. With this Twitter account, Jane is trying to attract more readers to her blog, to increase the amount of attention on her writing.

What’s Next

In the next article, I will be discussing other uses of Twitter beyond driving traffic to a blog, and the benefits to creating a page on a social media platform such as Facebook.

Related posts:

1. Business and Social Media – Part 4
2. Business and Social Media – Part 2
3. Business and Social Media – Part 1

Note that any clients referred to in these articles are fictitious, unless I specifically indicate otherwise.

The Tools of Social Media

Social media requires, as a fundamental component, the ability for people to interact. Therefore, any tool claiming to be a part of the world of social media must include interactions between the provider and the audience. Each tool will therefore include one or more of the following components:

1. Comments – the ability for the audience to publicly reply to some statement
2. Forums – the ability for the audience to create a statement and then provide feedback
3. Messaging – the ability for people to communicate in real time

Looking at some of the common tools of social media, it is easy to see how they are making use of at least one of these components.

Blogs

Blogs, such as this one, allow their audience to provide feedback on any given article. In this manner, the provider can post a message of arbitrary length, and the audience can then provide feedback.

The distribution of information is weighed strongly in favor of the provider, as they usually retain the ability to edit or select responses to be posted. (As an aside, I do not edit comments to this blog, and only refuse to post those comments which can clearly be seen to be spam.) The provider can control the topic of discussion to some extent, and can choose to incorporate the opinions of the audience in future posts.

Twitter

A form of micro-blogging in which each post is limited to 140 character, Twitter allows its users to post short messages. Conversations can be held by tagging posts, or marking a post as a reply to another user (via the # and @ tags).

Facebook (and other social networking sites)

A page can be created on a social networking site, providing an online location for people with a common interest to congregate. Interactions are usually via a message board, although private messaging is usually available as well. In the example of Facebook, targeted conversations can be created as well using forums.

What’s Next

In the next article, I will be providing an explanation of how the sample client, Jane, can make use of each of these tools to promote her business, and what some of the other tools she may want to make use of to facilitate her use of these forms of social media.

Related posts:

1. Business and Social Media – Part 4
2. Business and Social Media – Part 1
3. Business and Social Media – Part 3

Note that any clients referred to in these articles are fictitious, unless I specifically indicate otherwise.

The Client

Harvey’s Hardware is a small store located on the corner of a busy intersection in a residential neighborhood. The original owner, Harvey, has retired, and the store has been sold to Jane. Jane has an MBA from a prestigious school, and is interested in running her own business after spending over 20 years working for a large multi-national corporation. She bought the hardware store using funds she has saved, and spent the first year after the sale becoming familiar with the store and its clients.

Jane is not technically illiterate, but her use of technology is limited to word processing and checking her e-mail. She is comfortable with her inventory management software.

Recently, a few of her customers asked if she had a website for her store, to which she had to answer no. However, she is interested in creating an online presence, and has heard about social media and would like to become involved.

The Problem:

The real problem, in this case, is that Jane does not understand what social media is, nor how it can be used to help her store grow its customer base. Her first step, therefore, is to learn about social media, and how it compares to the more traditional forms of media with which she is already familiar.

The Background:

Social media, as defined by Wikipedia, is “…online content created by people using highly accessible and scalable publishing technologies… transforming people from content consumers into content producers”. In other words, social media makes use of the internet as a dstribution medium and is based on interactions between people, rather than simply delivering information.

Traditional media including newspapers, radio, and television, are based on information delivery. Information is collected and converted into a message, which is then broadcast to the audience. The audience may be able to provide responses to that information, but those responses are delayed, such as the letters section of a newspaper. Additionally, distributors of traditional media are faced with large expenses in creating and delivering the content.

Social media, on the other hand, relies on the audience itself to both create and distribute information. This has the benefit of incorporating feedback from the audience in the message itself, and in reducing the cost of distribution to a negligible amount.

The downside, however, is directly tied into the benefits. Traditional media, such as newspapers, go to great expense to distinguish fact from opinion, and to verify any facts to the best of their ability. This results in a quality of information that is difficult to find in social media. Since the control over information in social media is distributed among the audience, it is nearly impossible to ensure that all the facts will be accurate.

Another key difference between social media and traditional media is as follows. In traditional media, the creation and delivery of content is where the majority of the effort is. Social media, however, requires more work in following up on content than in the creation or delivery. This form of media bases its distribution on interactions – the more interactions there are, the more successful the distribution will be.

What’s Next:

In the next article, to be published on August 14, I will be giving an overview of some of the tools of social media, and how to use them successfully.

Related posts:

1. Business and Social Media – Part 2
2. Business and Social Media – Part 4
3. Business and Social Media – Part 3

At the start of a project, the timelines look good, the schedules may be aggressive, and optimism is high. People enjoy a fresh start, and the work begins. However, as time goes on, the Project Manager realizes that the schedule was unrealistic, or perhaps something unexpected came up, and now the project is a month behind. Suddenly, the client is clamoring for status updates, and wants to know why the project is late.

As a Project Manager, what do you do?

In order to answer this question, the first step is to understand the various reasons why a schedule might slip, since that can affect how to resolve the issue.

1. The initial schedule was never accurate. It was overly aggressive, and did not allow for unforeseen problems. As a general rule-of-thumb, there should be about a 20% allowance for unforeseen difficulties. Additionally, the people doing the work should be involved in creating the schedule, since they will be the ones expected to adhere to that schedule.
2. The schedule was sufficiently conservative, but a delay from a third party held up progress. Once the third party delivers, the schedule will be back on track, although pushed out by the length of the delay. The third party could be a resource for either the vendor or the client.
3. The schedule was sufficiently conservative, but changes to scope caused the schedule to break.
4. The scope did not change, but the amount of work required for some portion of the project was not estimated correctly and this was only determined once the work began.

The first step in resolving a problem with the schedule is communication. The client should be informed:

1. There has been a delay in the project, and what the new schedule is
2. What caused the delay, and whether or not another delay for a similar reason can be expected during the remainder of the project

Once the client has been informed of the new schedule, the relationship with the client must be repaired. Depending on the nature of the delay and the ultimate cost to the client, how the relationship is repaired will vary.

If the cost to the client can be measured with a dollar value, then that cost should be, to some extent, reimbursed to the client if the vendor was the source of the delay. However, this situation is not that common as making such a measurement is fairly difficult, and may not be determinable until after the project is complete.

In most cases, offer the client some form of compensation for the delay, with the amount depending on the nature and severity of the delay. Clearly, a single day delay is not as severe as a month delay. However, if that single day means that the client misses an industry deadline, the severity is greatly increased.

One form of compensation that allows for an opportunity to repair the relationship fully is to offer a discount on future work. For example, if the vendor was supplying a website, they can offer a discount on future maintenance, for example, a 10% reduction in the hourly rate for the first 50 hours of maintenance.

What is clear, regardless of the nature of the delay, is that the relationship between the client and the vendor will need repair. What should not be done is to attempt to hide or deny the delay – the client will eventually find out, and then trust will be lost. By being honest about the schedule, and keeping open lines of communication, you can work with the client to bring the project to a successful close. Your practices in dealing with delays will assist in future goodwill, as clients tend to appreciate when vendors are honest about schedules, and take appropriate action to adhere to them.

Related posts:

1. The Customer is Always Right… Sometimes
2. Slow Economy and Developing a New Business
3. My Guarantee

In recent months, we have watched as dozens of people and companies have been charged with unethical behaviour in their business practices. This is a clear demonstration of bad karma -  a company steals money from its shareholders will eventually pay the price (although the shareholders themselves will likely not get their full investments back). On the other hand, companies which have maintained good business practices, along with providing clear information to the public, find themselves able to weather the economic storm, and many of these will survive.

Good karma in a business is not just how you treat your employees, or your shareholders, or your clients and customers. You must treat all of your associates with respect, with consideration. In hard times, you will need to rely on all of these people to help you, even at a cost to themselves.

As an example, I read this morning in the National Post that 800 British Airways employees will be working without pay for up to a month, and thousands of others have agreed to  pay cuts. While it can be argued that this behavior is self-serving in that it ensures that these employees will retain their jobs, the fact that the cuts were voluntary speaks loudly of the good karma British Airways has with its employees.

As an example of the reverse behaviour, here in Toronto there is a strike of the unionized municipal workers, including garbage collectors and daycare workers. Part of the issue which demonstrates the bad karma is the fact that city councillors have the option of a pay freeze (but it is not mandatory), while trying to enforce a freeze or cut on other city workers. While I personally don’t agree with the requests of the striking unions, their argument of unfair discrimination is valid. (It should be noted that several councillors did take the voluntary pay freeze.)

When dealing with employees, clients, and shareholders, it is necessary to look to the future. While at the moment it may be costly to ensure a postive relationship, when the times are tough, it can become necessary to ask them to make sacrifices on your behalf. At this point, they will examine your past behaviour in great detail. If you, as a business owner or manager, were ethical and upfront with all interested parties in the past, you will find people willing to work with you in the hard times. On the other hand, if you were unethical in any manner in the past, you may be looking at spending some time in substandard federal housing.

The past can come back to bless you, or haunt you. Without a crystal ball to predict when the past will return, you’re better off erring on the side of caution and always being ethical and upfront with your actions.

Related posts:

1. Decision Making Process
2. Motivating Employees
3. Business and Social Media – Part 1

Related posts:

1. Business and Social Media – Part 3
2. Business and Social Media – Part 4
3. Business and Social Media – Part 2