Win-lose


I’m in dispute with my accountant at the moment over his latest bill, which seems exorbitant. I wrote explaining my concerns: that work had been completed that I hadn’t requested; that the time taken, with the associated cost, seemed far more than what the tasks demanded; and that a letter of engagement setting our their costs and conditions hadn’t been provided to me before the work commenced (apparently a no-no).

I’m not without blame in this. I should have been clearer in what I wanted them to do for me, and should have understood that having requested a company tax return, for example, it was natural for them to also complete the company accounts. The greater oversight on my part was not demanding the engagement letter. They’re at fault by not formally submitting it, but I’m a duffer for not asking for it before they started working.

My error is a common one for me. You would think I would know better, but my default attitude is one of trust. I’m one of those old-fashioned types who generally believes that people will do the right thing, and that my word is as good as my bond. Mostly that’s good enough too, but not always obviously. (Ironically when wearing my consultants hat I’m a stickler for getting everything ticked off as a matter of good governance).

I received a response yesterday to my email. I won’t bother going through all the blah, blah, blahs, but it’s the last line that caught my eye. He stated, my accountant, that normally he would be charging me for the time he took in responding to my email, but on this occasion he would waive it. To me that goes to the heart of a lot of things wrong in professional services these days.

I used to work in that environment. I still do occasionally. When I worked for one of the international firms it was gospel that we would charge our time out in 7 minute, or 11 minute (elsewhere), blocks. That was drilled into us.

It never sat comfortably with me. It made me feel mercenary. More particularly it made me feel that my purpose in meeting with clients was to rack up billable hours in 7 minute increments, rather than serve them with my expertise and experience. It reduced me to a commodity. I guess that’s the bottom line when you’re doing business, but when it’s such a blatant factor I think it corrupts the process, and undermines trust.

Trust should be the essential aspect of the relationship between client and consultant: faith that the job will get done as it has been contracted, and confidence that the trust between client and consultant will not be abused.

The fact of the matter is that consultants and professional services firms are held in poor regard by so many because that trust does not exist. There are bad apples out there who gold plate their contract, or drag the job out to maximise their income. More commonly professional service firms invoice their clients virtually down to the second. That may be in their charter, but it does nothing to build rapport with the client, who comes away thinking that in the consulting world greed is good.

I think it’s foolish. I’m a strong believer in partnering with my client. I’m in it with them, and I want them to know that. I find that goal is undermined if I then start charging them for everything. I provide my clients with a service agreement which details everything. I make it clear at the same time that I’m flexible and reasonable. I don’t start the meter any time they call me. Email is a part of business, and not something I will add to the invoice. In fact I tend to be generous and err on the side of conservatism when I bill them.

I think that’s good business practice. It engenders trust and it builds a relationship. I’m a straight-shooter, and they know it. Most importantly it makes for long-term relationships. I’d rather work with a client repeatedly over a number of years than milk him dry at the first opportunity and never see him again. What I’m about is creating goodwill.

That’s what my accountant has lost. He’s gone hard finding every angle to bill me – this is not the first time I’ve had reason to object. Well, he’s got some cash out of me, but he’s lost my business.

 

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Early days as a massage mogul


Mega busy right now getting a handle on the new business. Took over last Friday after the usual round of complications, none of which I can be bothered going into. Walked in the door Friday and basically said, “Hi, I’m your new boss!” It went down better than it might have.

Since then I’ve tried to get a sense of how the joint operates, whilst looking to gradually introduce improvements across the board. Functional improvements are needed, but I don’t want to spook the staff there too much so that’s slowly, slowly. In the meantime I’m implementing some simple marketing jobs to get things up and rolling. I’ve advertised in the online advertising sites, both in general, and looking forward to Mother’s Day and the specials available then. The brochure is being re-done, business and loyalty cards printed, gift vouchers created. At some stage I’ll engage with the local traders to introduce myself, as well as to offer discounted massages. There’s also a hospital around the corner I want to get in contact with to offer discounted massage to anyone who can produce an ID. And so on.

To assist in all of this I brought in my own manager, otherwise formerly known in these pages as the yoga teacher. That moniker may be out of date as she’s also a marketing manager. It’s quite by accident that I got her involved here. I was having a drink with her, mentioned all of this was happening, and she piped up with I’m here to help if you need it. I do need it. She’s happy to take on a part-time possie, and is quite enthused at the prospect of marketing the business.

So, how’s it going? Hard to draw a line through things at this stage. Had a couple of goodish days, one very nice, and one ordinary. I might be little ahead when I take out all my costs. Given there has been no marketing put into the business since before Christmas, and the lack of general collateral, I’m satisfied that I can make some early inroads once our plans have been rolled out.

So far the biggest challenge has been the personnel. That’s not a huge surprise, and I had been warned. It didn’t take me long to figure out that I should be taking a step back. Here I am a middle-aged, burly Australian male. I’m not the sort you want to bump into in the reception area of a genteel massage shop. More importantly, I represent a difficult demographic when it comes to dealing with massage staff who are almost all Asian and completely female.

Having travelled through Asia a bit I was ready for the cultural divide, but knowing it doesn’t necessarily help bridge it. I’ve spoken very quietly and with a smile on my face, while getting the yoga teacher to act in my stead. I’ve bought chocolates a couple of days running – very happily received – and generally tried to allay any fears they might have. Most challenging is the most important person there – N.

N has worked there for more than two years. She’s an elegant, attractive Thai woman, but like many quite diffident with the likes of me. She works on reception, as well as giving the occasional massage – she is one of the staff customers request by name. She’s quite upset that the owners have sold out, despite the fact they exploited her shamelessly – working her 7 days a week at $10 an hour. She doesn’t understand that. She’s unsure I think of what she wants to do, and claims she no longer wants to do any massage. Complicating it further is that her English is no better than rudimentary, and she seems unable, or unwilling, to say exactly what she wants.

I’m giving her a lot of rope for now. I’m hopeful that she will calm down and that we’ll be able to establish some parameters going forward – which includes at least one day off a week, and a pay increase to the legal minimum ($16/hr). I’ve asked her to think about what she wants, and reassured her that we’ll help out in any way we can. It’s no good though if she won’t do any massage. I think she’ll come around.

In any case I’m advertising for someone else to help us out. A qualified masseuse who is also responsible, reliable, and capable of looking after reception as required. And I’m going to give another of the girls a retainer on top of her massage commission. She’s a go-getter, friendly, and has lots of energy – I’m going to encourage her to be the boss back of the house, of all the masseuse, savvy enough to know what needs to be done and capable of keeping them in line.

Don’t reckon you can have a successful business unless you have the right people. That’s the theory I’m working on.

Hands on


A few weeks back I posted something about how I want to work differently. At the time I outlined a couple of business opportunities I was exploring in relation to that. I can now update with the latest developments.

Second things first. One of the business opportunities – which I can now reveal was based around vertical gardens – is now unlikely to go forward. The woman who pitched it to me is still keen, but the first choice option she put to me 6 weeks ago looks like it’s dead in the water. I met with her again 2 weeks ago, and she put to me plan B. Plan B is nowhere near as exciting – plan B’s generally aren’t. She promises me a 20% return on investment, but that’s insufficient as is given the risk involved. My desire is to lock down residual income, and require a share of her business- in the order of 20-25% – to keep me interested. She’s amenable to that, but then there are problems with the plan B option. I’m sure it would make a return, but a lot of product would need to be pushed to make it worthwhile – I’m happy to start at $1K/month initially after the settling in period, and more over time.

I put a proposition to her. I don’t think there’s enough money in it if it’s marketed conventionally, and going head to head with competitors. Both the challenges and the opportunities lay with spreading the word Australia wide, and getting a distribution network to manage that. My recommendation was to look at party plans as a means of marketing and selling the product. I think it copuld work, and she’s looking at it now. If it’s viable then that’s the only way I’ll be involved, interesting challenge as it might be.

The other option I wrote of was a massage business. As of today I submitted a formal offer for the business. It’s somewhat less than what they’re asking for, but I’m sure we can come to an agreement. After all the scrutiny of the last month both my accountant and I believe that the business is worth a lot more than what they’re asking for it. That is, maybe 70-80% more, so, literally; it would be cheap at double the price, but don’t tell them.

I expect that the deal will be done within the next fortnight, and that I’ll be the new owner of a massage business. I’ll let it run, but look to introduce some initiatives to scale it up further. There’;s a lot more potential for growth. As it is, figures suggest I’ll clear $180k pa in my pocket. Happy to cop that.

That’s where it’s at, and with my eyes open for further opportunities.

Working differently


At the start of this year I set myself some targets to achieve. In working towards them I’ve discovered the potential to live and work in a different way to what I had ever anticipated. Right now these are no more than possibilities, but I find the prospect exciting.

As I write now I am still in discussions to get involved in two different businesses. One is a well established massage shop on a busy stretch of road in one of the more affluent suburbs of Melbourne. It looks good in theory, the premises is well set-up, and on the surface the potential to make a handy profit is encouraging. The delay right now is getting some concrete details to hand. They’re disorganised, which is frustrating, but also works in my favour. They want to sell quick so they can return to their home overseas. Because a good part of their business is cash their profits are formally understated, which drives the asking price down further (not a mistake I’ll make). On top of that they’ve failed to market the business, which means their is potentially a decent upside (especially with a large hospital around the corner). Overheads are low (the masseuse are paid per massage), and there is a manager in place.

I’m still only 50/50 of agreeing to buy, but if I do think I can likely get it for about 25k under the market price – and I’ll have income from day one.

The second prospect I can’t really write off as I’ve signed a non-disclosure agreement. What can I say? Well it would be going into partnership with an industry expert in a new enterprise. The Au/NZ market will be locked up, it’s a product/service which has become very trendy/popular, there is built in residual income and great potential to franchise out. Investment on my part would be relatively low, and one of the surprising attractions of the proposition is the possibility of doing some work in the business very different to any I’ve done before. Get it right, and I think there is a great upside in it. Right now I’m waiting on a business plan so that I can formally assess.

There is a third prospect which I’ve virtually discounted – acting as an agent for a niche software provider. Not really my thing, though the software falls within my area of expertise.

On top of that I’m halfway through re-positioning my business, which will soon necessitate a website revamp and the kick-off of a new marketing campaign. I meet with the marketing guru on Friday.

Now, let’s just say all these things happen – which is a big maybe. On the one hand I’m receiving income from the massage business, anywhere between $1,000 – $2,000 a week without really getting off my arse. I visit occasionally, I pick up the takings, I do some marketing, I might even get the occasional massage. Now add to that the second prospect, which might take up a day a week of my time, maybe more down the track. Initially I expect to get very little out of it, but assuming it tracks as we hope (I know, another big assumption), then the income from that will very quickly grow – potentially to a several thousand a week (and more if and when we get the franchising going).

Finally there is my business. With these other things going the pressure is off. That’s good because it gives me the space to do it properly, something I haven’t managed till now. In my ideal world I might only work 3 days a week in this, but given my rates that’s enough to live on even without these other things. The way I’m positioning it now is that in 12 months time I can live off retainers just about without pressing too hard for extra work. I will, nonetheless, and if everything goes as I desire it I’ll be farming out the extra work to others and keeping the cream for myself.

Of course, reality right now is very different and these things live only in the realms of possibility. Fine – chances are it won’t happen as I’ve mapped it out. But if not this, then there are other variations, and that’s what I’ve learnt.

I don’t need to work 9-5, Monday to Friday, if I do it right. I have the resources right now to get involved and make a difference. I can mix and match these possibilities within limits, and find a way to make a living through disparate activities. I find this a very attractive idea. Multiple streams of income is a lovely notion, and I’m spreading the risk in different industries and markets. I love the variety of it too. I’m the personality type that always needs a challenge. To work the one job, and for the man, is way too limiting, besides being boring.

This, maybe, is the new way of living and working. Different things, different jobs, different possibilities. I get engaged in different ways, am stretched in different directions. Just the idea of it excites me, especially because I know it can happen. There’s a big challenge, but none of this is out of reach.

I have to be careful of getting greedy, but I’d like to get an online business going too.

Just to get it out of my system


I had lunch with Vinnie yesterday during which he continued his griping about work. Now he’s up against it in a challenging environment, and has good reason to be upset, but his grizzling only served to infuriate me.

Vinnie works for a company I’ve been trying to get into for months. Last time I spoke to them was on Monday, when I spoke to the head of operations. As far as it went it was a fine call. She was a lovely, bubbly person and our conversation covered off the marathon tennis match the night before and we even managed a few laughs. Then we spoke about their situation and how I might be able to assist. Now I know from Vinnie that they have problems. I’ve learned from experience that many organisations are oblivious of the problems they have. Some know it, but don’t care enough. There are some – a statistical blip – who know, care and hope to do something about it (yay!). And many that even if they have problems will never admit to them.

From my conversation on Monday I figured they were reasonably aware they had problems, if not in detail and to degree. All the same, and in the absence of a CEO, they were unwilling to do anything about it just now. What can you do? Like your stuff though, we’re really interested and do call again – but, so sorry, not now. I didn’t quite plead, but I did point out that many of the challenges they were dealing with are those I’ve had great experience with, and I’m here to help? No dice, and so once more I marked my diary to follow-up come late March.

I had just about come to accept that as a frustrating reality when Vinnie reported his latest problems. He’s a one man IT department, and experience much more at the support end of things. Here though he had to take on everything and often was staying back late into the night to get it done. Get this he says, and then goes on to tell me about all the things they want him to do now: do the IT budget for the next year, map out the project program with cost and scheduling info, recommend IT enhancements required, and refresh completely the corporate intranet. I’m listening to him knowing that Vinnie has never done any of this stuff before, has no expertise at it, much less interest – yet he’s been lumbered with it (on top of everything else). Then there’s me, who has done all of that, has introduced innovations into the process, and furthermore is a bit of an expert in the arcane art of intranet building, who was in contact with this mob Monday before any of this – and I miss out. Instead I’m sitting there listening to Vinnie thinking I want to do all of the things he doesn’t want to do. Except it doesn’t work that way. He must but can’t; I can but won’t.

I got a little riled at the sheer inefficiency of the world at that point, which led me to further contemplate the frequent misery of dealing with clients. Quite aside from those timeless occasions when I bang my head up against ignorance or smugness or fear or conservatism, and sometimes just plain stupidity. Fact of the matter is that I can’t do anything without convincing the client that something needs to be done and I’m the man to do it. Fair enough. The frustration comes when clearly there are issues that they refuse to address. Because no amount of explaining will make them understand. Or because it aint broke so we shouldn’t fix it. Or because I’ve always done it this way and I know what I’m doing. Or they agree, but let’s wait for next years budget, or for so-and-so to get back, or the next lunar eclipse, or whatever. Or because they don’t understand a technology they won’t touch it. And have I mentioned politics? Yes, that’s another hurdle to leap.

I’m sorry, but a lot of it is so dumb. There is a simple truth that many in the seat need to understand: even if you have to make it so, it’s a lot cheaper to be efficient than inefficient. It’s cheaper to pay extra to get it right than to pay less and get it wrong. Isn’t it better to make 10 widgets in the time it used to make 5? Or to use 25% less resources to do it? Isn’t it better to introduce those improvements worth 30% in productivity now for a one off cost than to procrastinate for 12 months? Isn’t it more beneficial to get data and analysis on your market, your customers, and your competitors using meaningful metrics using automated tools than to do it by hunch? Isn’t it more efficient to have the information you need somewhere you can find it, indexed and close to hand rather than in someone’s bottom drawer, or in the head of the person who just left? Or to have accurate reports with meaningful data, than reports that reveal nothing? Isn’t it worth doing it properly rather than half-arsed, or incompetently? And so on.

There’s one client of mine. I did all the work in prep. It was exhaustive and detailed, and I even mapped out some of the efficiencies to be achieved if they did xyz, as well as detailing next steps. All gratefully received, with even some excitement in quarters. So, what happens then? Nothing. Not because they don’t want to – they do. Not because there won’t be benefit – the benefits will be great. Why then? Because they don’yt.

In an ideal world they might have engaged me to go on with the project. That would have been logical since it was my plan, I had the knowledge, had conducted the research and analysis, as well as conducting extensive stakeholder interviews. I even had a relationship with the vendors. At that stage I had it all in my head. I knew how it would fit together, just like a jigsaw puzzle. All the IP was in me.

They chose not to do that which is their prerogative. They didn’t want the expense of an outside party and so chose to manage it in-house. Now with the right people properly managed that can work well, but it can also be very much a false economy. Which is what happened here.

Rather than appointing a dedicated resource they decided to spread it out between them as a job in addition to their normal duties. I think there was some jostling too between IT and finance as to what shape and focus of the project should be. Time went on. Months. The available discounts available to them with quick action passed by wasted. Internal wrangling slowed things down, but even so little energy was put into the project. I watched from the sidelines, consulted occasionally on this or that, and asked my opinion of vendors and so on.

More than 6 months has past and no more significant work has been achieved beyond my original proposal. Yes, it will happen they tell me, some time. I watch, bemused, a little frustrated. There’s ownership in these things – you put so much work and creativity into them that you can see what a thing of beauty the final deliverable will be. You want to come true, and when it doesn’t, when it is squandewred instead, there is a sense of disdainful disappointment. It’s not really my problem.

The real victims in this are the users, and ultimately the business. There’s a reason why projects like this are floated in the first place. Bottom line is productivity, efficiency, and money in the bank (plus the small matter of employee satisfaction). There’s been 6 months of waste – 6 months of increased productivity etc, and the dollars that go with it – that wasn’t realised. On top of that the discounts I’d negotiated for them have gone. Plus there’s been another 6 months of frustration for the managers and users having to make-do with an inadequate system. Finally, much of the vision that was there 6 months ago is gone. How many more months will they lose?

The system may eventually be in place, but in opportunities lost there is opportunity cost. And I reckon when it is implemented it will only 60% of what it could have been – frustration, weariness, and ignorance will cost them the cream that really would have made it worthwhile.

The razors edge


I haven’t really got into 2012. It’s a quiet time of year and besides, I’ve had other things happening. That all changes tomorrow.

Professionally speaking I’m back into it tomorrow morning when I get out of bed. The big task tomorrow is to try and land a client I’ve been cultivating for nearly 6 months. It’s been a frustrating experience, they’re keen but not ready, maybe in a months time has been their mantra. Every month then I put on my polished, charming face and follow-up again – each time for pretty much the same response.

Frustrating as it is, it’s also credible. It’s a reasonably high profile organisation that has been going through some strife. In response to that they initiated a quite radical re-structure which has taken months to work through and bed down. While I would have been happy to assist in the process their view was that they didn’t want me beginning until it was settled down. Fair enough, you’re the boss – and there’s the delay.

Another client I might have given up on them by now, but not this one. If I get in I figure it’s more than likely I’ll be there for the long haul on a good rate. That it’s a 5 minute walk from home is another bonus. And I reckon I can do a lot of good for them i areas which they have little knowledge and where they struggle.

The problem I face is that the person I spoke to first, an intelligent and conscientious woman, left the company about a month ago. She was good enough to speak to the CEO about me and suggest I follow up with her in January. That’s what I’ll be doing tomorrow, but in the meantime I’ve discovered that the CEO is moving on also, finishing up this week. Her priorities may well be otherwise, but at the very least I hope she can refer me to someone else. At best we meet and agree to terms.

It would be nice to sort this out. If we can ink out an agreement that’s one less thing I need worry about. It’s just about make or break for me, that close either way. Such is the life of the self-employed.