Anthony

Posted @ 07:39 AM on June 12, 2008

I've been an avid reader of your blog for a couple years now (first time commenting!). I just have one small gripe I'd like to get out there. While I love your advice (and writing style), it seems to me that you take fairly obvious points and then use the "why doesn't everybody follow this guideline" approach - kind of like the Dr. Phil of business.

For example, with this article, you're making the point that if you hire an employee instead of doing hourly client work yourself, you will no longer have to worry about balancing business growth and client satisfaction. I don't think there's any small buisiness owner in the world that doesn't understand that concept. There's just one little point that's being left out of all of this: expenses and how they relate to your bottom line! For many small businesses, hiring an employee is simply out of the question. Between business expenses and personal income requirements, it's simply impossible for most people to pay even one employee and still make enough to get by while trying to grow the business. In addition, if the answer is loans, well, not everybody has close contacts with tons of cash, and when it comes to banks, they're not exactly willing to throw money in any which direction in June, 2008. So, what's a small business owner *really* to do?

Don't get me wrong. I'm not saying I have the answers. I just wish that the articles on here were presented more as a discussion, with all of the true, real-world negatives, factored in, vs. a simplistic, end-all point, that just doesn't necessarily work in all/most situations.

The Trizle Team

Posted @ 09:16 AM on June 12, 2008

Definitely understand your point and we didn't mean for the article to be an end-all-be-all.

(Also, we should've prefaced that the article is not meant for extremely new startups that haven't established a predictable revenue model yet, and definitely not for folks who prefer to work on their craft as a freelancer/contractor, and totally not for folks who are perfectly content with where they are.)

I also understand the salary gripe, and I'll explain that below.

Remember that the solution to automate anything is to do this:

1) first do the work yourself (or if you can afford it, have a team member do it)
2) then automate it so somebody else can do it too

The problem when you're working directly with clients full-time-all-the-time is that you're taking time away from building your business (i.e., growing the bottom line). That is, instead of trying to improve processes and accelerate how fast your business works, you're working on the client's project.

For instance, client projects forces you away from growing your business (i.e., sales and forming relationships with folks who have the necessary budget to really grow your business) -- which ultimately lets you provide more value to more people (customers), while funding your time *away* from working with the client (i.e., those clients will sufficiently fund you to pay another salary).

An *optimal* one-man service operation should take in between $150,000 to $200,000 in revenues. If your clients aren't getting you that, it could very well mean they're too small for you to profitably service. (Hint: Target bigger clients or bigger work.) Now, if you're at the optimal level, that remaining salary figure can be split since you can save some money now and put off the luxurious spending for the future. Use that to fund somebody so you can focus on building that business to amplify the revenue stream.

Further, to cut costs and increase your cash, keep in mind that a lot of things can be automated. McDonald's drives its multi-billion dollar franchise off $10/hour cashiers. Geeksquad hires IT gurus for $12/hour because they created a system where they can attract quality peeps for that wage.

The result is that you're left with more cash to fund more peeps (even if they're just college interns, new grads, part-timers, contractors, overseas contractors, etc.). If you're looking around, you can find really good labor for a bargain -- so hiring is possible with any reasonable salary you're making.

There's a lot more I can explain, and I'll try to respond more later tonight.

-A

Anthony

Posted @ 01:11 PM on June 12, 2008

Andrew is it? That's a good comment, and I appreciate you taking the time. I think the most important part about what you're saying, in terms of initial growth, is in the 3rd-to-last paragraph where you speak about an *optimal* one-man service, although I think that concept can extend & multiply itself into very small businesses that have a few employees as well.

Here's the thing, to be frank. I run a web development business that is, at this point, a 2-man operation. We make enough to pay our bills, for sure. The problem is, we don't make enough to hire somebody else. And here's the problem - you speak about getting larger clients who are willing to pay more, but our clients aren't necessarily cheap. It's just that, at the end of the day, they only need so much work done in a year, and the money doesn't add up quick enough, at least not to the point where we can pay an entire salary with it.

So, what are we to do? Find clients willing to pay 2x more for services we already charge at ~$50/hr? Find clients who simply need more work done on an ongoing basis? Perhaps. That really does sound great. But I don't have enough connections to just make that happen out of thin air. To get a few *great* clients, that means reaching out to hundreds, filtering down to dozens, and then having to convince at least 10-20% of those few dozen. That can't be done without some kind of creative advertising/marketing. And that's not to say there aren't free methods to take advantage of out there, but let's be honest, to find such a quality group of clients, it's going to take a bit of money, no matter what. Money I don't have. I realize this is my particular situation, but I have a feeling I'm not alone by any means. So what's a small business hour like myself to do? How am I supposed to *begin* growing when the catch 22 is that I need money to grow, only make enough to pay my bills, and probably won't (and can't) take out a loan considering the current state of the economy? Given those real-world problems & circumstances, how do you suggest I find "better" clients", since that is clearly step one?

Looking forward to your response - genuinely.

The Trizle Team

Posted @ 04:16 PM on June 12, 2008

Hey Anthony,

I have a meeting in 30 minutes, but I'll answer your question more fully tonight.

I totally know where you're coming from because Trizle started as a web development shop (and our main focus is B2B web applications/software).

Just think this. Skype for cheap/free calls. Persistence. Value first. And you'll eventually get through. (It takes practice and lots of failing forward.)

(more later!)

NewWorldOrder

Posted @ 06:35 PM on June 12, 2008

I think this comment thread just might have trumped the blog post.

The Trizle Team

Posted @ 03:21 AM on June 16, 2008

(We're understaffed here as you can tell :)

Just a few answers:

"Find clients willing to pay 2x more for services we already charge at ~$50/hr?"

-First suggestion is don't charge by the hour. If you really have to do so, attract somebody who can take over your job, so you can hand off that work while you find more clients. For instance, if they're paying you $50/hour, find somebody who's willing to work for $35/hour (college students, folks who live in less expensive areas, etc). Train them if you have to (really depends on the complexity of your work), be sure they have all resources they need, then go out and look more work -- repeating that cycle. That helps you grow your business exponentially further (however big you want it to grow).

An established business shouldn't require its owner to work directly with clients. Otherwise, you're really just a self-employed worker (not a business owner).

"Find clients who simply need more work done on an ongoing basis? Perhaps. That really does sound great. But I don't have enough connections to just make that happen out of thin air."
Try this: Approach a client cold. You'd be surprised how open companies are. If you can help them, they want you.

Keep chugging value, and you'll be in business for eternity.

(again, there's no quick answer. there are many, many different things you can do, so we'll try to touch on them more for you. our previous articles really touch up on a lot too, so you can adapt that to your situation as well. be back soon!)

jill

Posted @ 07:32 PM on June 23, 2008

we miss you guys, when are you coming back?