Blogging can be an important part of any online business strategy. I’ve blogged here for 7 1/2 years, creating over 2,500 posts and getting as many as 100,000 Unique Visits per month at one point. I learned a lot during that time, but earlier this year I tossed it all out and started over.
Why? Because I didn’t start out with a plan. Conditions have changed a lot since I started in 2002 and a lot of the advice you get today is still based on the old reality. Can blogging contribute to your success? Sure. Will it? Not necessarily.
There are a lot of misconceptions about blogging — it’s simple, easy, and a sure-fire marketing tool. Technically these things are true, but practically it’s a lot tougher than it appears.
- If you write it they will come… No, they won’t. Promotion is key.
- People will read because of my great writing. This falls in the necessary but not sufficient category.
- Other bloggers will always be willing to help. Maybe. Usually. Sometimes.
- You will start making money right away. Only if you’re already famous. I used to get a few hundred dollars a year from Google, but it came out to about $0.10/hour. Be sure you know what you’re after.
- It’s easy to blog. Persistence, planning, predictability. After 7+ years I’m still working on these.
Successful blogging takes effort and a plan. Writing, even good writing, is not enough. The quantity of content and competition has grown exponentially. It used to be easy to get linked by “A-List” bloggers. Today — not so much. The technical barriers to entry have crumbled, but the quantitative and qualitative barriers have skyrocketed.
Blogging is like anything else in business — you have to treat it seriously if you’re going to succeed. You need to be clear on what’s required and what you expect to get in return. Bob’s list is a good starting point.
The Federal Trade Commission has begun its crackdown on internet scammers, get-rich-quick schemes, and other frauds. On July 1 the FTC issued a press release detailing some of their actions:
The Federal Trade Commission today announced a law enforcement crackdown on scammers trying to take advantage of the economic downturn to bilk vulnerable consumers through a variety of schemes, such as promising non-existent jobs; promoting overhyped get-rich-quick plans, bogus government grants, and phony debt-reduction services; or putting unauthorized charges on consumers’ credit or debit cards.
The article lists eight (8) early enforcement actions against some high-profile players across a broad range of get-rich-quick niches. Included in the early enforcement actions was TV infomercial regular John Beck/Mentoring of America, which produces “John Beck’s Free & Clear Real Estate System,” “John Alexander’s Real Estate Riches in 14 Days,” and “Jeff Paul’s Shortcuts to Internet Millions.”
Also named was Google Money Tree, for allegedly misrepresenting that they were affiliated with Google and failing to disclose their continuity fee billing.
It’s highly likely that this is just the first of many actions across the get-rich-quick universe, designed to gain some early publicity by tackling a few big hitters. I would not be surprised to see this enforcement trickle down the food chain. Fraud is nothing new, but bad economic times tend to increase the potential market for schemes. Lousy, unethical practices make it harder for legitimate small businesses to use good internet marketing. So I say good riddance to bad practices and let’s see who the FTC focuses on next.
Here’s a video the FTC put together to warn consumers about get-rich-quick fraud:
It does a good job of capturing a lot of information in a simple format. The actual map contained links to several of the sources, which made it even more useful, but it also had a stong visual impact on the audience, and helped us focus on what was important.
Today, looking back at it several years later, the map immediately brings to mind all the key components of innovation we discussed — many of which I would have long since forgotten otherwise.
That’s one of the great advantages of mindmaps — the ability to trigger related thoughts and quickly bring to the surface ideas that might otherwise be forgotten or overlooked.
Mindmapping is a bit like brussel sprouts — people tend to love them or hate them. But what I find mostly is that some people hate creating them, they feel the mindmap process is too cumbersome or freeform. Very few people actually hate a well-done, informative map unless it is too complex, or too crowded to be easily grasped.
For me, mindmaps don’t fit every circumstance, and they don’t suit every purpose. I use them when appropriate. They are terrific at capturing lots of information but, if not groomed and trimmed, can get a bit unwieldy.
Today I use an online mindmapping tool called Mindomo. If you’re interested in trying mindmaps to spur your thinking or memory give it a try.
Looking back at old advertisements is a great way get perspective on how much advertising has changed while staying the same. Internet marketing gets a bad rap for all the worthless get-rich-quick schemes, but the reality is that advertising has been filled with outrageous claims since it was first invented. Here’s a rousing look at early medicinal ads brought to you by Pill Talk. Weed, booze, heroin, cocaine — it’s all here. Including Mrs. Winslow’s Soothing Syrup for teething children, which apparently contained 65mg of morphine per fluid ounce. Ha, and we think Red Bull is bad…
Like most things the government does, its approach to “fixing” the auto industry/energy/environment problem is broken. Badly broken. Wrong-headed. Misguided. Appallingly stupid. And sad. It always amazes me that when we have an industry more-or-less crippled by poorly thought out government regulation, the answer to fixing it is in more government regulation. What a concept.
Recent polls show that only 26% of Americans think the government’s plan to bail out GM is a good idea, and only 42% of GM car owners are even “somewhat likely” to buy GM again. Clearly, most of us don’t think we’re on the right track for fixing this mess. But there are things that can be done, and the industry can survive and progress without massive government meddling, spending, and regulation.
So here’s my 7-step plan for addressing the auto industry/environment/energy situation. Amazingly, there’s not one single step that requires new regulation or money for the auto industry.
1) Don’t try to “fix it now.” It can’t be fixed now, and everything done to make it better now just makes it worse. You can’t mandate this, that, or the other thing because no one knows at this stage what is going to work. And, as we may have finally learned with the bailouts, just throwing billions at something does not fix it. The big pain associated with surging fuel prices is severely damaging, but it’s the only way we’re going to get people working hard on viable solutions to the energy/fuel problem. Trying to artificially raise fuel prices via taxes is unworkable, because it hurts people for no reason and no benefit when real prices are low, and it blows the lid off when real prices skyrocket (which they will again.)
2) Don’t try to fix it like Europe. This isn’t Europe. You can’t listen to people in countries the size of Connecticut telling you how things should be in the U.S. — where it takes four full days to get from one side to the other. The vast majority of Europeans are completely clueless about what needs to happen here, and so is anyone who proposes Euro-style taxes for us.
3) Create significant income tax incentives for individuals to purchase fuel efficient vehicles. By significant I mean $5,000 or more per year. DON’T tell them what kind of vehicle. DON’T tell them what technology. DON’T tell them what they can and can’t do. DON’T tell them anything, except it must have an EPA rating of more than XX mpg (or equivalent.) Give them the incentive every year they own the vehicle, not just for buying it. Make it a long-term benefit. Stop the incentive when they sell the car – it’s non-transferrable. Raise the MPG requirement every few years until we get it to 50-60 mpg. DO the same thing for businesses, but with lower standards for commercial vehicles that have to tow/haul stuff. Might have to have tiers for this, based on vehicle classification. DON’T give manufacturers a dime. DON’T make any law mandating they make vehicles with certain mileage. Just give people real incentive to buy such vehicles and I assure you the market will figure it out.
4) Create significant incentives for business to build out alternative fuel distribution infrastructure. DON’T tell them what kind of fuel. DON’T tell them what kind of distribution. DON’T pay them anything. DON’T give them any government money. But give them major tax breaks for money they spend to do this. Make all alternatives equal. Anything as long as it’s not gasoline. There is absolutely no sense in trying to ignore fossil fuels and focus on freaking solar cars or hydrogen or crap that’s 50-100 years in the future.
5) Stop assuming that everyone needs to drive a sardine-can econobox. It’s one thing to cram your family into a little econobox for a 30-minute jaunt to the train station or whatever. Entirely another to cram them in like sardines for a 6-hour trip to Grandma’s. You cannot start out with an assumption that consumers here can be coerced into acting like Europeans.
6) Do not try and tell people what to do. Do not start down the road of what is and is not a wasteful activity. What seems “unnecessary” to me may be extremely valuable to you. Whenever you setup judgments about what is and is not “right” to do in this situation you create the potential for enormous backlash and lots of energy wasted on not solving the problem. Just create incentives for what we want to achieve — high mileage vehicles and easy access to alternatives to gasoline. Leave everything else alone.
7) We should never have public-funded works projects, but since the Democrats can’t stop themselves (like drug addicts going to a crack house) at least put the work into alternative fuel distribution infrastructure. I don’t know how, but at least build pipelines or something. Lease them out until they are paid for then sell them.
We badly need a meaningful energy policy that addresses real world issues and not eco-freak bullshit. We need to address energy as a comprehensive whole, not just cars. For example: Hydrogen cars are dumb. I can’t believe this idea is even being discussed. There is no free hydrogen on earth, for pete’s sake, and hydrogen is just an energy carrier — it doesn’t create energy, it just carries it. You get free hydrogen by electrolysis — pumping electricity into water. You get exactly as much hydrogen out as you pump electricity in. You may as well be running your “clean” hydrogen car off a direct connection to coal-fired power plant. The overall efficiency of coal-to-steam-to-turbine-to-powerline-to-hydrogen generator-to-fueling station-to-car is about 20%. Pretty much the same (or worse) than gasoline. Same thing will all these electric cars. Geez.
In 75 years, when you can run your Hydro-car off a super-efficient wind or solar farm, things will be different. But not today.
Even though we should not mirror the Euros, there are a *few* lessons we can learn from them.
We have lousy infrastructure for alternative fuel distribution. In Europe, 50% of the consumer autos are diesel. Modern diesels are as clean (in some cases cleaner) than gasoline engines, produce more power, and get better mileage. A gallon of diesel contains 15% more energy than a gallon of gas, and cost less to refine. Diesels also run on more bio-alternatives than gasoline engines.
But diesels don’t sell in the US because you can’t get diesel on every corner, and the lack of distribution makes it more expensive than gas, even though it’s a lot cheaper to make. Also US manufacturers have, for the most part, built very poor quality diesels and consumers have reacted accordingly. Euros still don’t sell their modern diesels here because the market doesn’t support it.
Same situation with Compressed Natural Gas. CNG is not very efficient in terms of equivalent miles per gallon — it doesn’t carry much energy. But it’s very cheap, abundant, and clean. Again, there is no infrastructure. The market has delivered very poor alternatives for consumer use of CNG.
If we had decent infrastructure you can build efficient vehicles that combine these technologies. Just like the big three are building E85 hybrids (which has caused increasing food prices because farmers now grow crap corn for ethanol instead of food corn for food) you can have clean diesels with CNG or water/methanol that increase mpg of diesel by 5% to 20%. Imagine a “gas-guzzler” truck getting 20-30 mpg on a combination of diesel and CNG, with a lower carbon footprint than the Chevy Impala. Now that’s a viable alternative for the next 10-20 years.
And maybe there are other combinations that work better. But all this stuff has to be convenient and affordable. Give Average Joe a reason and the option to buy something different that is actually a functional equivalent to what he has now. He’s not going from his 4×4 SUV to some sardine can. But he will go from his 9mpg gas burner to a slightly smaller, comparable, version getting 20mpg-30mpg off a mix of alt fuels. As long as he doesn’t have to turn his life upside-down to get the fuels or pay three prices for the vehicle.
Of course, peak oil fanatics will cry about this, claiming “That won’t help! It just delays the inevitable!” Of course it helps. And of course it delays the inevitable. Until we have a realistic way of getting from the current point A to the end game Point G by folding space-time or somesuch we have to make some incremental steps. Better to have a plan that might actually work than one that is built on “hope”. Hope is not a strategy.
I went to Startup Riot in Atlanta this week and one of the more interesting startups was a company called ShoutNow — a rapid voice messaging company. The idea is that you record a short message using your own phone, then ShoutNow broadcasts that message simultaneously to a list of numbes you enter into their website.
The uses they suggest are more personal — coach notifying the youth soccer team that practice is canceled, pastor notifying the congregation in emergencies, etc. But a really good use of this technology for entrepreneurs is creating a voice reminder for registered attendees for your event.
You can’t be too proactive in making sure people remember to attend an event for which they’ve registered, and most people won’t mind a short voice message if it’s something they really don’t want to miss. Email is good, but it’s not reliable for time-sensitive events.
You could also use this as a follow-up reminder after the event to encourage people to get in touch if they have questions. You don’t want to bug people, but I can see a number of ways this could be used effectively to reach people who can’t reliably be reached online.
In a recent blog post titled Be the Red Leaf, John Jantsch of Duct Tape Marketing discusses the importance of defining, understanding, and communicating your unique value in order to stand out from the crowd. Being different is not being louder or having more ads. It’s about truly knowing what your product or service means to your potential customers. Jantsch listed three types of research every entrepreneur must do to uncover this customer-eye view of value:
Their are three kinds of research you should do right now if you aim to discover the best way for you to be the red leaf.
1) Study your competition – likely this will verify that everyone is saying the same thing and the opportunity exists for you to say something different.
2) Study difference makers in other industries – what do small business brands that you may already admire do that you don’t? Hire a coach who works with a different industry.
3) Talk to your customers – ask you ideal customers what you do that they value. Chances are it’s not what you think and greater chances are it’s what you need to tap as your essential difference.
Let me see if I can say this in dramatic enough fashion – you absolutely must tap or create a valuable point of differentiation and then build your marketing strategy around communicating that difference or your business will struggle to rise above the competitive noise.
What Jantsch is describing is referred to by internet marketers as your Unique Selling Proposition — or USP — and it’s the key to developing your business.
Too many entrepreneurs never take the time to carefully, conscientiously, consider just what it is that their customers value in their product or service. They are too busy thinking about the cool technical features they offer, or the variety of services they provide. But these are features, not benefits. And it the benefit, as seen through the eyes of your customer, that is your USP.
Well-known direct sales copy writer John Carlton has a simple starter formula for developing your USP:
We help [this group of people]… do [this benefit(s)]… [better].
For positioning John suggests that “better” be related to the competition or common wisdom about your topic. John calls this “getting inside your customer’s head” and emphasizes that it’s not about you at all. In fact, that’s the hardest thing for most entrepreneurs to do, get outside their own head and into the head of a customer. There are many ways to do this, ranging from face-to-face conversations to web-based surveys. But the important thing is to do it.
Your USP is the key to standing out from the crowd. It may change over time, as you learn more about your customers or as your competitive environment changes. But you must always have a USP in mind if your goal is to differentiate yourself and sell on value rather than price.
Recently I had a conversation with a friend who has a small consultancy. Over the years we have had a number of thoughtful, helpful conversations and we tend to feed off each other’s futuristic tendencies. During the conversation I was encouraging more product development to capture his methodologies and to use as promotional tools.
The conversation turned to resource constraints — time, effort, money, etc. – and the need to spend some portion of time on futuristic efforts as well. He estimated that he needs to spend 5%-10% of his time on long-term futures thinking and planning. I think that’s realistic – 100-200 hours per year. I asked if he was spending an equal amount of time on product development. His answer was that he spent about 200 hours this year on developing new seminar materials, and 300-500 hours on his blog.
I was surprised by this, as the ratio seemed upside down to me. So I asked another question, “Do you track leads/sales generated from the blog?” His response, paraphrased, was that he only tracks it loosely, but it helps.
What we have here is a misallocation of resources. 15%-25% of his time is spent on a marketing vehicle that he cannot connect to any specific improvement in sales or leads. This is an inappropriate, and potentially damaging, strategy over the long run and could be very detrimental to his firm’s growth unless he makes one, or both, of the following changes:
- Refocus the blog to have a specific, trackable, purpose
- Ensure that content developed for the blog can be leveraged through multiple use
Why You Blog
This next sentence is very important:
The only purpose for a small business blog is to turn Looky-Loos into Prospects.
That’s it. That is the one and only function of a small business blog. That is the one and only reason to spend time blogging. If you are spending time blogging for any other reason then you have a hobby blog, not a business blog.
You can find lots of articles on the internet espousing the value of blogs for business – build your brand, demonstrate your expertise, provide content for search engines so people can find you more easily, etc. All those things are true. But I ask you, what is the purpose of those things? The purpose is to convert lookers and seekers into prospects. What do you care how many people find you if they are never going to buy? So if you’re not blogging to actively convert readers to prospects you’re writing a… what is it again? That’s right, a hobby blog.
So, how do you make your blog a trackable lead-generation tool?
You start an Email List and use the blog as a mechanism to attract subscribers. You put an opt-in form on the blog, create a compelling offer to induce interested readers to subscribe, and you track the results. That’s it. Once you do this you have a useful business metric, The Prospect Ratio, for determining how effective your blog is. It looks like this:
As an example, if you get 1,000 Unique Visitors per month, and 35 of those visitors subscribe to your mail list you have a 3.5% Prospect Ratio. Simple, right?
Now we need to figure out how much each of these prospect conversions is worth. The way to do that is to track the number of sales that come from these prospects, as follows:
If you have 500 subscribers to your mail list, a reasonable number to shoot for in a year, and you know that you have made 22 sales to this group, you have a 4.4% sales conversion ratio. Now you know that for however many Unique Visitors you attract to your blog, 3.5% will become subscribers (aka qualified leads) and 4.4% of those will become customers.
These two ratios alone will give you valuable insights into where to put your efforts. Which is the best use of time – getting more Unique Visitors to the blog, creating a more compelling offer to increase your Prospect Ratio, or refining your email sales strategy to increase your Sales Conversion Ratio?
But there is still one piece missing – value. We need to know how much each point increase, for each ratio, is worth. We start by calculating our average sale value. This calculation is easy – Total Sales/No. of Customers. Let’s assume that last year (or quarter, or month) you sold $42,000 of business to 25 clients. Your average sale is $1,680. This gives us some interesting data points. First, the average value of a Unique Visitor to your site:
Using our example above, we can see that every Unique Visitor to the site is worth an average of $3.98. Now let’s calculate the value of each email list subscriber:
Again using our example above, we can see that the average value of each subscriber to our email list is $76. This assumes, of course, that you have an effective email marketing strategy that nurtures prospects and converts them to customers (more on that in a future post.)
Using these metrics you can now plot a business plan for your blog. You can assign a value to the time you spend developing the blog and developing your mail list, and you can compare the return to other prospecting and lead generation methods.
This process, called conversion tracking, is a key analytic that can and should be applied not just to your blog and email list, but to every sales and landing page on your site. Otherwise you don’t know whether your efforts are paying off, and you don’t know whether you are spending too much, or too little, time on your site.
Further, you can now get a clear indicator of the ROI for your blogging time. If, for example, you spend 500 hours per year to get 3,000 Unique Visitors, and each visitor is worth $3.98, you can reasonably estimate $12,000 of revenue from that effort – or $25/hour. Is that good? On the other hand, if you can get 500 new subscribers to your mail list you can reasonably project $38,000 in revenue. Which seems more promising?
Are there other ways to spend your time that can make you even more money? Or are there changes you can make to your blogging or email strategies to drive those revenue numbers up? Can you create entry-level products or services that will lower your average sale but drive up the number of conversions and give you more customers rather than more prospects? Now you can begin to answer these questions. But you can’t answer any of them until you have metrics.
Getting maximum leverage from your blog content
The other key to managing your blogging time is to be sure the material you create for your blog can be reused for other purposes. If you can reuse half your blog content – either before or after posting – you have effectively reduced your time expenditure by 50% – 250 hours rather than 500. If you apply this intelligently it’s the single biggest boost you can give to your blogging ROI.
Reuse it how? First, understand that very few people will ever go through all your blog archives to read everything you’ve posted. At best, readers will find specific pages via search engines and then scroll around for similar posts. But rarely will they invest time in finding everything you have written on a topic.
You need to feed it to them again, in multiple channels. Research indicates that the average customer needs to see something 5-6 times before it really sinks in. This gives you a half-dozen opportunities to present your message in different ways.
Your blog posts can be summarizations of key white papers or reports that you already published. Or your posts can be used as the basis for new reports. These reports can be used as incentives for Readers to subscribe to your mail list. Or they can be converted into entry-level products that your prospects want to purchase to better understand the problems you solve.
Some consultants prefer to use their email newsletters to simply point to a variety of new blog posts on specific topics. Others will mine previous posts and expand them into articles for trade journals or online magazines. Don’t discount the value of audio and video. Webinars, teleconferences, and other forms of presentation can be captured and reused as well. The possibilities are almost endless.
The idea is to get your blogging time to at least pay for itself in new revenue and, preferably, become an income generator on its own. This is certainly not easy, but having a plan and metrics to track your progress is far better than expending a lot of time with a completely unknown ROI.
The value of information product marketing
In my own experience I have worked for three firms that started and grew their business through the marketing of information – both before and after the internet era. One is now quite large, with nearly 50 employees and $10 million dollars in annual revenues. It was sold a few years ago to a major consulting and information marketing firm. The second is also quite large now – 20+ employees and $4-$5 million in revenues. The third is much younger and smaller but is doing quite the job of marketing it’s research, reports, and information products to build a brand.
And this is just in my experience. There is an enormous body of work, as far back as the 1960s, indicating that the development of information products is the cornerstone of building a successful consulting practice. Authors like Howard Shenson, Robert Mancuso, and Herman Holtz have written about this phenomenon as far back as the 1970s. Today there is an entirely new generation of people focused on marketing information products via the internet.
As an independent consultant or small firm you are simply a problem solver. Your value to clients is in helping them understand the problem you solve, the impact it has on their business, and teaching them how to mitigate it. To get business you have to prove that you can do these things.
Capturing your ideas, philosophy, approach, tools, methodology, and understanding in information products is the fastest, best way to communicate you value to a broad audience. The internet has brought Direct Marketing – one-on-one, personalized communications to your prospects – within reach of every small business. And Direct Marketing is still the Number 1 way small consultancies can promote themselves. But to use it effectively you must have a message that educates your prospects about your value. And you must track, test, and improve that message based on real metrics that give you a clear picture of your progress.
One of the mistakes that many new internet marketers make is forgetting that the internet is just one, and often not the most effective, channel for reaching customers. Good ol’ direct mail - yes, the USPS snail mail - is still a very viable and effective channel to reach customers and prospects that may not live on the internet. The challenge is that many of us don’t have an easy way of using Direct Mail, and we don’t have time to research all the available options.
Here are two resources you can use to simplify and automate your direct mail communications:
- MyCardSystem.com - this service offers a veriety of ways to send note and greeting cards to prospects or customers. You can upload address lists to send out cards in batches. The interface is good, and there is pricing to suit every budget. This is a great, affordable way to prospect if your product or service appeals to a non-technical audience, or even if it does.
- Ink-a-Note - This service is a little different, and focuses on “handwritten” note cards and Thank You cards. You have a variety of handwriting fonts to choose from. The interface is not geared to automation or large campaigns, but rather to individual follow-up. It’s a great way to speed the sending of Thank You notes to customers who have purchased from you.
The important thing to remember is that there is no such thing as the “best” or “perfect” marketing channel. Smart entrepreneurs use every channel at their disposal and, in stead, focus on automating communications so that the process is easy and fast so you can stick with it every day.
I'll be checking this out. Health care in the US clearly needs an overhaul, and Euro-style social medicine is equally clearly not a useful answer. Government never, ever, runs anything like health care (or education, welfare, or anything else) effectively, instead creating an ever-growing bureaucracy that produces less and less for more and more dollars. Hopefully Perrin and Rooney and provided a roadmap to a system that gets people the health care they need with the proper incentives to keep costs under control.
After 2 1/2 months I had exactly one - that's 1 - single success with GetFriday. Every other task I assigned was a miserable failure. Even after getting a replacement PA who was, supposedly, experienced in web search and basic web skills I could not get even marginally relevant results when I asked for search data on specific topics.
Worse, when it became clear to me that this wasn't going to work out it took nearly an act of Congress to get them to cancel my account. The entire affair was a disaster.
What I learned is simple - if this is the best the Eur-Asian nations can offer then we are in no danger of being overrun by a low-wage workforce. They demonstrated a lack of understanding, competence, response, and adaptability that was hard to comprehend.
I went so far as to start running my task descriptions by two of my colleagues to try and ensure I was being both clear and reasonable in my requests. The results I got were still stunningly inept.
In fairness, most of my colleagues asked the very basic question, "Well, what did you expect?" I don't know, maybe something a little above abject incompetence? How about someone with enough self awareness to recognize when they did not understand a task and ask for clarification until they did?
If you read my experience with BellSouth tech support from 2006 you'll see my GetFriday experience is neither my first encounter with such incompetence, nor is it any real surprise. I suspect the cultural and language barriers between a third-world workforce and US-based expectations are just too great to overcome. Or maybe it is something else. I do not know.
What I do know is that from now on I will stick with North American (and possibly European) sources for anything I want done. Given my experiences I do not think there is any non-repetitive task requiring foresight, intuition, or judgment that can be effectively outsourced to a third-world workforce. It may well be that if you can 100% script an activity, and spend enough time to get the workforce to actually read the script, and have enough patience for them to practice and fail repeatedly until they get it right, that you might eventually have some success.
But as a small business my tasks are not repetitive. At least not now. And they do require thinking - which entails all those things mentioned above. The third-world is simply not the place to get these things done.
I spent two hours with the new accountant today. We made some real progress and I feel good about how the project is going. But it's not over. We (the accountant, my office assistant, and me) will spend another 3-4 hours together on Thursday making sure that all the stuff we've done in between is right and proper. Then my assistant will go about getting the rest of the data entered.
So what's the queasy feeling? Taxes. I get it every year at this time - when I'm forced face-to-face with the unbelievable burdens our beloved government places on the self-employed. Every person in America ought to run their own business and have to pay their own taxes for a couple of years. It ought to be mandatory - like serving in the army or something.
There's no way in hell our tax system would be as abusive toward small business owners if everyone had to do it instead of having their employer pay taxes for them. It makes me ill to see the morons on TV commercials grinning stupidly when they say, "I'm getting money back!" as if the freakin' government has given them some sort of bonus.
But it's not just the Federal income tax. It's the state income tax, the Federal unemployment tax, the state unemployment tax, the MediCaie tax, the Social Security tax, the self-employment tax. Not only do I have to pay these, but my company has to match many of them. Yes, correct. I'm the only employee but I have to pay them twice. But that's just the personal tax. Don't forget the corporate tax, because my little one-man operation is an S-Corp.
And what does my money go for? Well, according to the Congressional Budget Office (pdf) 53% - that's five-three - of the 2007 Federal Budget went to welfare and other entitlement programs (foodstamps, MedicAid, etc), 20% went to the Department of Defense, 18% goes to everything else - like education, roads, the FAA, etc. What's worse, the Federal government employs 2.5 million people, most of whom are worse than useless as they do stuff that is completely unproductive and just gets in the way of the very few people left who actually do useful things. The Federal payroll is about $13 billion (billion, with a B) per month.
Being forced to face this every year turns me into a real grouch from about February thru April. And makes me completely intolerant toward my idiot acquaintances who think taxation is some sort of tool for punishing the rich. Being a Presidential election year doesn't help, with candidates spouting the stupidest economic fantasies one can imagine and throngs of near-retards buying into it.
The only reason these dimwits can think this way is because the government has cleverly isolated them from paying their own taxes by making the employers do it. Oh, and they are all functionally illiterate in basic economics.
So I am not happy. I am a grouch. And unless you want to really ruin a conversation don't mention politics or taxes to me until sometime around July. And if you work in some government-funded job, don't speak to me at all unless it's to say "Thank You."
I am, apparently, unique in my requirements. I just fired my second accountant for failure to help me do what I need. But I can't imagine that I am alone in what I want. I have a small service business. I am a consultant. I travel extensively. I am a sole operator. I have no employees. I need, and have needed, someone to help me setup a bookkeeping and record keeping system that I can understand, that meets all the requirements of the government for taxes, and for which I can outsource the day-to-day tasks of data entry, filing, etc.
Because I focus on my clients I do a very poor job of keeping my own paperwork in order. Oh, I invoice everything right on schedule. After all, I don't get paid unless I do. And my client and project records are first-rate - that's what I get paid to do. But taking time to do my own data entry, organization, filing, etc on anything like a regular basis just never seems to be a priority until there is a crisis. So I repeatedly end up at the end of the year with boxes and piles and stacks of stuff all over the place. And I know, I know, I am not alone in this.
So why is there apparently no one who offers this kind of service? How in the world do all the freelancers and free agents survive? Do they just do like me and spend two months a year under incredible stress trying to get it all together and spend the other 10 months dreading the process? Maybe. But I am done with that.
Previously, my VA helped me locate a very nice young lady with a nearby Staffing Solutions business. Christi has turned out to be a very good find. She took on the first part of my organization project and did a good job. We are now moving to the second phase - getting an accounting system established. For that I have gone through a rather strenuous research and screening process to locate an accountant who specializes in doing what I need.
For this I found the people at Intuit to be invaluable. I started with an online chat with a sales rep there, who gave my name to one of their sales advisors. Kelly turned out to be great. She helped me understand my options, the limitations of each, and what I needed to be looking for. She also made herself available to answer any additional questions and volunteered to help my (former) accountant setup my new system using QuickBooks Online Edition.
When that didn't work out she helped me locate several more that were certified QuickBooks Advisors. That's when I began my interview and screening process. I found two that were very helpful and knowledgeable. Both took the time to explain what they do, how they do it, and talk to me about my particular needs and the limitations therein. This past week I selected a provider to get started. He is former consultant who worked much as I do now, so he understands (I hope) my requirements better than my previous providers.
This next Friday we will meet - me, Christi, and the accountant - to go over the setup and processes for getting all the data in and keeping everything up to date. Of course, I still have to get all the back data entered, and that will be a challenge. But Christi is going to tackle that as soon as we're ready. This feels like progress.
I am also on my second Virtual Assistant. As mentioned previously, I'm using GetFriday - an India-based service that provides virtual assistant services. My first VA simply did not have the skills - either technically or language - to meet my needs. GetFriday was good about getting me a replacement as soon as I asked. I spoke with Venkat on the phone prior to his assignment to make sure I was comfortable with his English and we are working through some early tasks to see how it goes.
Working with a VA is as much a learning experience for me as it is for them. It is a challenge for someone like me who has done everything alone for so many years. Finding the right tasks, communicating them clearly, doling them out in the right amount, etc, are all things I'm having to learn.
It's also different in that my project work is conducted with a team of highly-skilled specialists and we all work to a common methodology. That means we all know what the other is doing, how it's done, etc. That's just not the case when you start using a VA. The type of tasks, and the level to which they can be done, are different. I want my VA to do all those sorts of routine, mundane, non-client tasks that must be done, but which I have neither the time nor inclination to do.
This might be keeping up with my personal calendar, sending reminders to me about friend/family things, or doing preliminary research on new car models for my daughter. It could be all kinds of stuff. I'm still learning.
I was discussing the 4–hour Workweek principle of Efficiency vs Effectiveness with a colleague today. Efficiency is doing as many things as possible within a given time – more often called being productive. It’s what we’re trained to do since grade school. It’s what all the time management programs are designed around. It’s what we all think of when we start looking at the pile of things on our desks and wonder how we’ll get them all done.
Efficiency creates slogging — slogging through all the crap we do on a daily basis without really assessing whether what we’re doing is the very best use of time and energy. I am a slogger. So is my colleague. Nose to the grindstone. Dedicated. Hard worker. All these phrases are associated with sloggers. We’re taught from an early age that getting everything done is important. If something is worth doing, it’s worth doing well. Yada yada yada. This is just not true. Here are two truisms from Tim Ferris:
- Doing something unimportant well does not make it important.
- Requiring a lot of time does not make a task important.
Slogging also leads to wasting time. Are you checking e-mail 50–100 times a day? Why? Probably because you feel like you need to respond to things immediately. Do you answer every phone call? Why? Probably because you feel compelled to respond to every inquiry. But every time I check e-mail, or answer the phone, or do anything that distracts me from doing the one important thing I lose 30–45 minutes of time just getting my head back into the important thing. By that time some new interruption has probably occurred and the cycle starts over. At the end of the day lots of unimportant things have been completed, but the one important thing is still sitting there, waiting. And waiting. And so I slog through the night to get it done.
Corporate people are great sloggers. They spend their entire day going to pointless meetings, answering e-mails, and returning phone calls. Then they either come in early, stay late, or come in on weekends to do the important things that only they can do. And the more “productivity” goes up, the more they slog.
Effectiveness is doing the right thing, the one important thing, and only that thing. It requires taking a hard look at everything you do and asking yourself one question — “If this is the only thing I accomplish today, will I feel like it was a good day?” If the answer is no, don’t do it. Just move on to something else. Find the one thing that will make it a good day. If there is time left when you’re finished find something else and ask the same question again.
Truly effective people never have more than two or three things on their To-Do list, and each of those things is significant. Everything else gets ignored or delegated. Virgin brand billionaire Richard Branson has reportedly said that everything he needs to do to run his empire can be accomplished in 30 minutes a day. I don’t know if this is true or not, but I do know that people like Branson have a fundamentally different view of the world than most folks, and they don’t slog their way through life.
Slogging creates stress. Effectiveness creates freedom. Slogging is like Brownian motion – random movement that doesn’t get you anywhere. Effectiveness is what creates meaningful output. And meaningful output — e.g. accomplishment — is what creates success.
Here’s my new motto — No More Slogging.
The plan is to have Kristie sort and file the backlog of mail, papers, and miscellany I have accumulated over the past two years. Once that's done I'll have her start scanning the papers that I actually need to keep and shred the ones I don't.
I also went to see a nearby Padgett Business Services office this week. I've used them to do my taxes before, but I've never had anyone actually do my bookkeeping. This definitely needs to be outsourced, as I never keep this up to date. The plan is for Padgett to setup QuickBooks Online so I can access it from anywhere and can grant access to whoever I need in order to get my data entered.
I started out trying to work with Brickwork India on the QuickBooks setup, but it just didn't feel right. Bookkeeping just seems like something I needed to keep close to home, at least until I get the process worked out. I may have Brickwork, or some other supplier, do the backlog of data entry if Padgett doesn't have a reasonable enough fee for that type of work, but for now I'll look for other opportunities to use Brickwork.
As part of my plan to simplify and eliminate the clutter in my life I decided to go on an info diet a few weeks ago. I dropped dozens of feeds from my reader, dropped almost all internet group memberships, and cancelled almost all internet newsletter subscriptions. By themselves these things made very little change in my day-to-day activities except for vastly reducing my e-mail load, which confirmed that I just didn’t need most of them in the first place.
The second part of the diet is I completely disengaged from the news. I mean completely. I previously just sort of ignored the news but would have the TV on in the background or would read the newspapers delivered to my door each day at the hotel. For some reason I thought I needed to do this to stay current. Well, I don’t. Now I studiously avoid newspapers, talk radio, and the TV with the exception of glancing at frontpage headlines as I walk by news stands (I don’t stop.) Turns out people I know and talk to on a daily basis also read and watch this stuff. And something interesting has happened to our conversations.
Now when they ask, “Did you see so-and-so in the paper/news/airport?” my response is “No, I didn’t. What happened?” They tell me and I get to listen. I actually listen. I’m not busy trying to express my own opinion because I don’t have one. Another nice thing - I can now have small talk, which has always been a problem for me. But now it’s really simple. I can sit down with someone I barely know and ask, “So what’s happening with the elections/industry/stock market/whatever?” And they actually enjoy telling me. Again, I get to listen.
People love it when you listen to them. It’s not like I didn’t know this, but giving myself the opportunity to practice it via my info diet has been really interesting. My ego no longer sits in the shadows going “Speak up! Speak up! You know that!” – competing with my desire to listen. And I don’t feel the least bit stupid because I have no idea where Britney Spears was last night. In fact, I feel better because I don’t know.