Three Lessons From Last Year
The end of the year is a time for reflection.
However, if you’re in the accounting profession, there’s little time to reflect at the actual end of the year, as January is our busiest month. So, the end of January becomes your default time for reflection.
As we approach the company’s six-year anniversary, it’s easy to look back on the things we’ve done over the last few years. From a family business operating over the kitchen table, with only a handful of clients, we’ve grown to a team of eleven full-time staff serving over 170 clients. We’ve met a lot of people and helped a lot of businesses but, more than what we’ve done, I’ve been thinking about what we’ve learned.
I could (and someday might) write a book about what I’ve learned through small business ownership, but today I wanted to talk about three lessons that have stood out to me from the past year.
Celebrate wins, but keep training in the offseason.
Finishing a big project, landing a big account, or getting kudos from a client is a great high. It’s a time to recognize staff, and give yourself a pat on the back. But it isn’t the time to stop what you’ve been doing.
When things are going well, it’s easy to get complacent. But it’s effort that breeds success, and that can’t be taken for granted. If you stop putting forth the effort, that success can depart just as easily as it came.
We’re about to complete the month of January, which is “1099 season”. It’s a very stressful period and, once we get through it, we’ll do something special to recognize the team.
But, we’re also already discussing what we can do to improve the process next year. Which brings me to my next lesson.
Never stop improving, but don’t change for the sake of change.
Over time, we’ve identified better ways to do things within the company. However, we have found that there are times when you have to accept that perfection is unattainable.
One area we have found this is particularly true is in the realm of project management automation. We’ve been able to put certain templates and systems into place to help cut down on both administrative and client hours. However, we found that we could only take that automation so far if we wanted to continue to offer highly-customized service. There might be a better solution out there that we have not found yet, but we can only dedicate so many hours to researching a better option (unless we want to limit the number of new clients we accept). Which leads me to my final point…
Everyone matters.
It’s always exciting to land a “big” new client, but some of my most-cherished client relationships are with those small, one or two-person companies. We have many clients who just come to us for a bit of training or help with their start-ups, and I’m the go-to person in the office to work with those, because I enjoy them so much.
Ironically, though this was never the intention, some of those small clients have led to big business. For example, I helped a local interior designer with cleaning up and training on her QuickBooks account. She connected me with a friend of hers in Charlotte, for whom I did some remote training. Those relationships led to referrals to other interior designers, until, suddenly, we found ourselves working with half a dozen new interior designer clients, a few of whom are very large and for whom we’re providing extensive services. And this all stemmed from helping someone who many other companies would not have given time to. (This makes me think of our first ever blog post, Nice Guys Finish First.)
Our little company is not so little anymore (and certainly not as little as when that first post was written). But we’re still learning, and still have so much to learn. I’m excited about what new lessons 2019 will bring.
Networking: What's Worked for Us
I know this will probably get lost in the sea of thousands of articles telling you how to be a better networker. But if you're reading this, it's likely that you are at least passingly familiar with The Bookkeeper. We get asked frequently how we grew our business so fast, and networking is certainly a component of that.
When it comes to networking, here is what has worked for us over the last three years.
Know your message.
A friend in marketing once told me, "Don't tell people how you're better. Tell people how you're different." We expended a lot of energy, early on, in trying to present the image we thought a serious bookkeeping company should have. (I, in particular, in an effort to look older, adopted a uniform of all-black, conservative clothing with my hair in a perpetual bun.) People didn't respond to the image we were putting forth because a) it wasn't genuine and b) they had seen it a thousand times.
Success came when we nailed down who we are, specifically. We're the company who does high-standards bookkeeping, but then also uses the information the books provide to do so much more for our clients. Once people found out that we did things like pricing strategy, forecasting, or even just filing 1099s, they got a lot more excited about our business.
Knowing exactly who we are has also helped us pinpoint who our ideal client is. In networking, it's easy to say, "My ideal referral is anyone!" But that really does not help the people who are trying to send you referrals. Yes, we would love to work with just about any small to mid-sized business. However, our ideal referral is really a potential client who is willing to listen and follow guidance; otherwise, they wouldn't be taking full advantage of our services.
Narrowing the scope of your business, as opposed to using a "shotgun" approach, helps your message penetrate deeper in your audience's mind and leave a lasting impression.
Mix it up.
Every company officer at The Bookkeeper has membership in a seat-specific networking group (i.e. a group where we're the only bookkeeper represented). Some of us are in more than one. And we demonstrate reliability to those groups by honoring the attendance requirements, but we also try to keep our routine fresh. Changing up our 60-second "elevator pitch" (a short spoken commercial about the company) week-to-week helps, as does bringing visitors or sending substitutes when we're absent. If we were to come and make the same speech week after week, the members of our groups would learn nothing new about us. Sometimes, just wording our pitch a little bit differently can spark something in another member's mind to make them realize, "Ah, I have a referral for them."
We've also found it helpful to break outside of our own groups. Visiting other groups, even if they have a member who might be considered "competition", is valuable. Not all bookkeepers work with all types of clients, and we frequently receive referrals from other bookkeeping companies who don't do exactly what we do. Night networking, which is typically more casual, can be beneficial as well. This is particularly good for those who are nervous about public speaking, as there's never a moment when you have to stand up and be the center of attention. And, since many small business owners are still working day jobs while they grow their own business, you get to meet a different set of people.
Follow up!
Yes, every bit of networking advice includes this, but only because it is so important. If someone meets 100 new people in an evening, how can you expect them to remember you long-term unless you remind them?
In a networking situation, you're not getting to spend much time with each person. The real work comes after that initial meeting, when you follow up with a 1-to-1. The one-on-one follow-up meeting is where you get to really show the person why you're interested in their business and what you have to offer, to them or referrals.
However, 1-to-1s don't have to be strictly business. It's always good to take a more professional tone with someone you're just getting to know, but it's also great to "touch base" with close referral partners. That can be an office meeting, but it can also be meeting for drinks or going to watch a game.
Come to serve, not to sell.
"Show, don't tell," works as well for networking as it does for storytelling. Someone who spends their entire time networking telling everyone how great their services are is off-putting, and has not yet earned enough trust to make those claims believable. Someone who shows that they are a competent and honest individual, by helping others within the group, commands respect.
One of my favorite things in networking is when I identify someone who would be either a good vendor or customer for one of my clients. Without a word of self-promotion, I'm empowered to benefit two businesses within my networking circle. Though it doesn't result in immediate business for my company, I still consider it a win-win, because it benefits my client, and it helps me to make a good connection with someone who could be a future client or referral partner. By referring them to each other, I am demonstrating my value to both.
Serving others also gives them a great opportunity to return the favor. No one enjoys 1-way relationships; you have to show a willingness to put others' needs before your own, and the right people will honor that by sending business back your way. However, that does not mean you help others only with the intention of getting something in return. Which leads to our final point...
Be real.
There is this tendency in new networkers to act like they have everything together, all the time. And while you do need to be professional and not falling apart during a networking meeting, it is also okay to be honest about business challenges you're facing. Keeping a perfect veneer can be very unsettling to the people you meet, and you will find that you form better bonds when you allow people to help you.
No one has it all together, and people recognize that. You will never lose business just because you're human. If you do, it's not business you really want to have.
Getting Creative at Getting Out of the Office
Having a comfortable office for business meetings is a great resource. It's very convenient to have a consistently available place to meet with potential clients, employees, or referral partners. However, it's also great to get away from the workplace at times.
Meeting someone away from the office can offer the benefit of a neutral territory, where people can lower their defenses and engage in more genuine conversation. Where you choose to meet can also give others a better understanding of yourself and your company culture.
When scheduling your next business meeting, consider some variants on these classic choices.
Eating Establishments
Everyone knows the standbys of a coffee or lunch meeting. (If you're particularly adventurous, you might go for an after hours cocktail.) But meeting over meals doesn't have to be limited to a cafe or sit-down restaurant. If you want to make a meeting memorable, start at a food truck, or grab an ice cream cone. Weather permitting, you can walk and talk as you enjoy your snack. Many people feel awkward holding face-to-face conversations with people they don't know well, particularly if they are eating in front of them.
Walking side-by-side helps avoid nerves over eye contact, and can put shier people at ease.
Quiet Spots
Most big cities have plenty of co-working spaces available. (We have a plethora of great ones in Raleigh.) And they are fun places to hang out, even if you don't have someone to meet. Many extroverts (myself included) like to be out around people while we work, even if we're working independently.
If you don't have official co-working spaces in your geographic area, there are likely still plenty of quiet places to meet. Many libraries have meeting rooms and tables which can be either reserved or used on a first-come/first-serve basis, as do some bookstores. If you don't need somewhere with table space, consider a walk around a museum, or other cultural center. (In Raleigh, the JC Raulston Arboretum and Botanical Gardens comes to mind.) Anywhere peaceful and open to the public can be a good meeting location.
Active Meetings
For decades, business deals have gone down on golf courses and racquetball courts. But if you're looking for an activity to get your heart rate up, you're not limited to those two options.
Assuming you're of similar cardiovascular health, going for a run is a great meeting option. Running is always more fun with a matched partner. Other sports which work well for 1-on-1 are tennis and basketball (so long as you don't get too over-competitive).
If those are too strenuous, a brisk walk through the park (maybe hunting some Pokémon?) is a suitable choice, as well.
If you keep an open mind, you can find meeting locations off the beaten path, which will leave an impression. As long as both parties are comfortable, you're able to converse, and it's a hospitable environment, anywhere can be a good place for a meeting.
3 Questions for Defining Your "Ideal Customer"
Whenever I'm networking and have spoken to someone for more than a few minutes, the question I most dread comes up. No, not, "What do you do?"
"Who's your ideal customer?"
I feel like that's hard to answer, so I normally make a joke of it and answer like a dating show contestant. "Oh, someone who's a good listener and open to change."
But it's not entirely a joke, because, though I do tend to serve businesses of a certain size, I also do want clients to both listen to me and implement suggested improvements.
If you're having trouble defining your ideal customer, ask yourself these three questions.
Can I help them?
Most businesses, particularly in the B2B or professional service realms have a certain scope within which they're comfortable. For instance, if you have a professional cleaning service, maybe you don't have enough cleaners to pick up a contract with a large office complex. On the flip side, maybe you don't do residential cleaning, because those jobs are too small for the revenue gained to cover the expenses they require. So your ideal customer is somewhere in the middle.
Or, maybe a certain company just has requirements which are out of your wheelhouse. If you are a business attorney and someone contacts you for divorce representation, they're not your ideal client. You might be able to get some business out of them, but if it's an area in which you aren't experienced, you're probably doing a disservice to you both.
Do they want my help?
Remember my date show answer about wanting a client who listens?
There will be certain clients who, though you could help them, aren't interested for whatever reason. Maybe they're a brand new business and they're not ready to outsource any services yet. Or perhaps they're a larger business who can't be convinced you have anything to offer them.
Maybe you've found that clients in certain types of businesses are less receptive to outside advice, due to the specifics of their industry. Or you haven't gotten your foot in the door with that industry yet.
None of this is to say that you can never work with these types of clients. However, for the purposes of referrals, they are not your ideal clients.
Do I want to work with them?
It's a fact of business that certain customers are not worth the hassle. Maybe they want to pay you bottom rates, but they require 100% on-site work (and their office is on 3-Mile Island).
Maybe they've had multiple failed business ventures, and stiffed their vendors on unpaid invoices when they closed shop. Perhaps they are unethical in their dealings with employees or customers.
If a client is going to be a lot of work for little return, or if they could bring down your reputation just by association, they're probably not the client you want to pursue first.
Again, someone being a "no" to one (or all) of these questions isn't a reason to absolutely never pursue them as a customer. However, when you are in a networking situation and only have minutes to describe who you're looking for, use these parameters to describe your "ideal" client.
How much are you paying for your free lunch?
"There's no such thing as a free lunch." Anyone who has taken even the most basic economics course has heard it. But what does it mean, exactly?
The "free lunch" idiom is frequently used to simplify the concept of opportunity cost, in that, even as you accept a free lunch, you miss out on other opportunities during that period of time. Investopedia defines opportunity cost as, "The cost of an alternative that must be forgone in order to pursue a certain action. Put another way, the benefits you could have received by taking an alternative action."
It's a fairly basic definition and it's one that most business owners understand...in theory. However, for many entrepreneurs, the desire to keep costs low can cycle into a "do-everything-yourself" mentality, which, in turn, lends to missed opportunities.
To better illustrate this issue, consider Janice, professional photographer (and fictional entrepreneur we created for this example).
After experiencing a great deal of amateur success, Janice has decided to become a professional photographer full-time, and open her own studio. She determines that her new business needs the following things:
- A photographer
- Photo editing
- Someone to answer the phone and schedule appointments
- A website
- Bookkeeping
None of this looks too hard to start with, and Janice figures she can handle most of it. She's got the photography and photo editing skills already and, until she can afford to hire a receptionist, she can just take business calls on her cell. There are plenty of places online where anyone can build a free website, and she can keep track of her own business financials throughout the year and figure it all out with TurboTax in April. For a great photographer and hard worker, this shouldn't be any problem.
Of course, things don't go as simply as Janice has predicted. Her phone rings with appointment requests while she's in the middle of sessions and, by the time she calls the prospective customer back, they have already booked with someone else. Her shoots run long because she has to change backdrops, arrange props, etc. by herself. Her days are so busy she has to stay up late working on photo editing. The website she built is...okay, but comes across as generic and slightly amateurish. She's not entirely sure how her bookkeeping as going because, with everything else going on, it's been the last thing on her mind.
On top of all that, she's started to notice that her business needs some things she hadn't planned for, including:
- Photographer's assistant
- Studio cleaning
- Basic legal documents
For the sake of comparison, let's assume Janice continues to do all of this herself. Let's look at how much money she is saving.
Receptionist - $9/hour
Website - $500
Bookkeeping - $500/month
Photographer's Assistant - $12/hour
Cleaning - $8/hour
Basic legal documents - $300
It looks like Janice has saved her business a lot of money through her strenuous efforts and "can-do" attitude. However, we have to factor in the opportunity costs.
Let's take a look at what each of these things Janice is doing herself, each "free lunch", cost:
Receptionist - Missed income from lost appointments; positive word-of-mouth; professional image
Website - Lack of professional image; loss of referrals; missed income
Bookkeeping - Missed deductions; increased risk of audit
Photographer's Assistant - Shoots take longer so fewer of them can be scheduled, leading to missed income
Cleaning - Time and energy diverted away from more profitable activities, such as photo editing and networking
Basic legal documents - Increased legal vulnerability; loss of time
So, when you weigh all the opportunities to genuinely build her business which Janice has lost while she was busy doing everything else, how much money did she really save?
Now, this isn't to say that you should farm out every task you dislike (particularly early on, when small businesses are susceptible to cash flow woes). However, it is key that, before committing yourself to something outside of your wheelhouse, you measure the benefits of DIY versus outsourcing. In many cases, the opportunity costs will be greater than you think.
Nice Guys Finish First
Anyone who knows us here at The Bookkeeper knows that we’re a pretty friendly bunch. That extends to all aspects of our lives, most notably in the way we do business. We do not care for the cynical “nice-guys-finish-last” mentality, which opines that success requires selfishness and back-stabbing. We firmly believe that kindness and goodness take you farther in business and in life.
Not buying it? Check out our tips on how to make niceness work for you.
1.) Be nice when you network.
You may have also heard this phrased before as, “Don’t be interesting; be interested.” People remember the people who make them feel important, much more than the people who are just trying to look important. Imagine that you’re out at a networking event and you meet two people in identical fields.
Person A bounces around the room like a ping pong ball, making his introduction (really more of a pitch) so fast he doesn’t hear your name when you respond. He’s already moved on to his next scripted paragraph, explaining why his company is the best and how you need him for your business. He shoves a business card in your hand and tells you he’ll see you at coffee next Tuesday morning. (Did you agree to an appointment? At this point you’re so overwhelmed you’re not even sure.) Before you can open your mouth to say that Tuesday isn’t a great day for you, he’s spotted another mark over your shoulder and is striding off.
You may meet Person B later in the night. He has the same profession as Person A, but never mind that; he really wants to hear about what you do. And he actually listens when you tell him about your business. In fact, he knows someone in a complementary field who could be a really good referral partner for you; would you mind if he introduced you two? At no point does he try to sell you on his business. If you express interest in enlisting his services, he’d certainly love to follow up with you, but he lets you make the first move. Overall, he seems like he is genuinely just there to help.
So, who would you rather do business with? The nice guy, right? And if you want to work with nice guys, then everyone else probably does, too. So be the nice guy.
2.) Be nice even without the potential of reward.
You really can’t fake niceness. People can smell insincerity a mile away and we’ve all known that “friend” who only seems to come around and be helpful when they want something. True kindness is a way of life.
Here’s a real-life example (and, I won’t name names, because he’d be embarrassed if he knew I wrote this about him): I know someone who is an expert with a certain type of software. (We can call him C.) A friend-of-a-friend he’d been introduced to a week or so earlier contacted him one day about a glitch he was experiencing with the program. This man wasn’t a client, nor even a close friend; just someone he’d met once. But he spent a good part of the day emailing with the guy and trying to find out the source of the problem. They found a solution, the problem got fixed, and C forgot all about it.
A month later, the man he’d helped shows up at a networking meeting. With no prompting, he spoke up and gave C a huge kudos, and encouraged anyone who was looking for those type of services to go to C. He even said, “This is the man you want to do business with.”
He didn’t have to do that. C never said, “Sure, I’ll help solve your problem, but you’d better get me some business out of it.” He did it just to be nice. And would do it again, even if the favor hadn’t been repaid.
Because, when you’re nice, you…
3.) Do it for you.
Legendary basketball coach John Wooden once stated, “You can't live a perfect day without doing something for someone who will never be able to repay you.” This can be especially true for those of us who go into business for ourselves. Entrepreneurs and small business owners can get a bad rap, as being either bloodthirsty financial sharks or paranoid penny-pinchers. But cynics aren’t the ones who start new businesses. Optimists and dreamers are the ones who launch new ventures and, while everyone would enjoy making a lot of money and becoming very rich, it’s rarely the main goal. People go into business for themselves to do what they love, to create something new and exciting, and for the freedom of being their own boss.
To look at it in (literally) black-and-white, take perennial Christmas favorite “It’s a Wonderful Life”. You can take the role of one of two* important characters in that story: nice guy and town hero George Bailey, or the miserly Mr. Potter. Only one of them is happy at the end of the movie.
* Okay, three important characters if you count Clarence. But we’re just saying you should be a nice guy; no one is asking you to be an angel.
