Welcome to the September 3, 2007 edition of Carnival of the Capitalists, being published on September 4 in accordance with Monday holiday policy and my having been occupied by other things enough to enforce such a delay. Originally I signed up to host at my much neglected tech blog, Geek Practitioners, which was going to share a name with the new business. I did so in part due to a since abated shortage of hosts, and in part on the idea I could promote the new business.
Since then, I decided it would make sense to use the blog page of the new business site to host. It would introduce the business, even though a lot of the focus will be local, get a lot of links and mention, and highlight the fact that the business sponsors the CotC site hosting. Which isn’t as big a deal as it can be made to sound, but hey; cross-promotion and all that.
That gave me a list of things I’d ideally do beforehand. Change the template and spruce up the CotC site? Check! Er… not. Add mention of the sponsorship to the CotC site? Che- er, not. Complete the business site? Um… er… not. Oh well; that will give you reason to come back and visit again, right?
Then there’s the fatalistic-sounding fact that I am unlikely to generate enough new business revenue quickly enough to stay out of trouble, making this an opportunity to maximize the number of people who are aware that I’m interested in side or temporary work – or reason to render the business strictly a side venture – in a way that I never have since I started blogging in 2003. I’ve become a believer in multiple income streams. The original concept that led to Welcome to Help was for something to supplement the other business and its dependence on one oversized client. Heck, one might think running Carnival of the Capitalists for almost four years could have resulted in an extra income stream, however modest, but it remains voluntary. Thus the attempt to derive whatever benefit I can from self-sponsorship.
The entries included below are in the order received, except that the first one is a post of my own that I am pointing out, and the last three are posts I took the liberty of including unasked by the authors.
Pricing is the bane of my business existence, in part because I haven’t sufficiently internalized taking things “businessally” rather than personally, so I react too strongly to negative price perceptions on the part of those I shouldn’t want as customers anyway. A while back I wrote On Pricing at this very blog. You might find it interesting. Now on to the other entries…
Edith Yeung is promoting the idea that what you say becomes your attitude and impacts your success. It’s interesting advice for the entrepreneurial among us, and reminds me of my human resource management professor’s bizarre yet thought provoking rant against the word “just” as dangerously self-limiting or belittling. Disempowering Phrases Successful People Never Say is actually a followup, and in my opinion superior to, her earlier post 7 Phrases Successful People Would Never Say. Some of them are Yoda-like “do or do not; there is no try” in nature. Or, put another way, A is A. We’ve all been guilty of some of them, and I am not convinced they are all that bad, but item 5 on the second list, the one actually submitted to this CotC, hits especially close to home. Especially if you extend it to cover that more often I did think of that, but either you do something about it, or not.
Instigator Blog points out and elaborates on a useful list of 10 Questions Venture Capitalists and Angel Investors Are Going To Ask. Again, this is thought provoking beyond the obvious target audience for the post.
Trust Matters points out the classic scenario of alternate, informal leaders within an organization, the ones who make things happen or influence others all out of proportion to their official roles (been there, done that; I tend to fall into it without trying) in Social Network Mapping and Trust.
Sox First brings us Three rules to successful negotiation, which sound useful, logical, yet easy to forget in the heat of the moment. I find the first the hardest to internalize. The second and third tend to pair, because if you have the empathy for the third, the second is easy to employ.
Marketing Deviant suggests that creating radio ads can be useful, if you have the right target audience, and provides the basics of How to Create a Radio Ad. I’ve dealt enough with speech and recording on computers that I’d further suggest that quality of hardware, especially microphone, may matter more than you would expect. The same is true if you get into, say, guerilla marketing with video, hosting services for videos, and associated viral marketing to maximize views. That aside, I wonder how often radio is an overlooked option.
SavingAdvice.com slips in what could be considered more of personal advice than business post, yet Dress For Success is an interesting post with ramifications in the business world. Way back in the day, I read the original book of the same name, which overlapped significantly with how I actually tended to dress, at least in things like colors. There was a time I wouldn’t be caught dead in a T-shirt, even for casual, around the house and yard wear. Now I seldom wear anything else, yet I still appreciate the perpetual findings that presentation of yourself can matter, depending on environment. It will be interesting if I have to go on any interviews, be it for side or temporary work, or for something that renders the business side or interim in nature, as I am lacking in the right attire. Thus the subject has been on my mind.
How I Will Be Rich goes back to the basics of business advice, thinking about business structure in How to start a Business in California (Pt. 1), which is applicable outside California, in this case.
Queercents gets into the ever popular topic of pricing in Why Theater Tickets Are Expensive. One or two points might surprise you, but there are also more general truths about perception and the pricing of products and services.
Lip-Sticking has the vocabulary building question of the week: Are you a bricoleur? I read it initially as “bricolor,” rhyming with tricolor (rather than sounding French as it appears it must) but making less sense as a word. Find out what it means. I definitely tend to be one, even if I may wish otherwise.
Blog Business World discusses the joys and challenges of increasingly common virtual companies in Virtual Companies :: Long distance employees. A friend and former business partner of mine works for just such an organization, programming. Part of the set of ideas that led to my new business involved doing business nowhere and everywhere. To the extent I will need to supplement the business with other work, the virtual company concept would fit my lifestyle perfectly. It would seem to take the challenges of telecommuting and step them up a notch, while giving them a more welcoming environment.
Sam Dinkin at Transterrestrial Musings hit close to home with Fighting the Last Credit Card War, in which he takes to task the business tactics of card issuers, who by intentionally discrediting cardholders have discredited themselves.
Weekend Pundit takes on Minimum Wage Bunkum, an erroneous assumption we see time and again about the who and when of minimum wage employment. I found it intriguing that the inflation calculator (a fun toy) says my only stint at minimum wage, $3.10 an hour in 1979, would be worth $9.26 now (as of 2006; close enough).
I also meant to point out Rob’s (off-topic, but hey) computer post for its entertainment value, since he didn’t enter CotC this week. Just keep telling yourself that Switching To Mac is Great as you read the post and comments it attracted.
On another note, loosely associated with opening, I have changed the name of the “News” page to “Blog.”
It’s a fine idea to create a site based around blogging software. It’s a fine idea to use the logging feature for the traditional news page to be easy to update. However, I have been using this more like a blog, see merit in making it a blog, and know that company blogs are excellent alternatives to traditional news pages.
This is the “official” opening day. The tough part is having to put something on the site for plans and prices. All well and good that the official hourly rate is $90 for freeform work that is not part of a package plan or negotiated discount or flat job price, but most of the work, and certainly the initial work, is going to be discounted and packaged at X per item or set of tasks.
I’m also still working on organizing the office, and handling a certain level of ongoing distraction of having a newborn baby, two other kids, a dead car (the one I’d use for on-site visits works but is a pickup), and a recovering wife who can’t drive for at least two weeks. However, I have to start sometime. Nor do I expect there to be a huge flood of work the first week or two, though you’re welcome to surprise me.
The easy part is putting the phone number on the site. That was my personal demarcation between being truly open for business and being under construction. The site needs other tweaking besides, but mainly it’s about the phone and the offerings.
I won’t be particularly available the week of August 20, 2007, as we are scheduled for delivery of a baby on the 20th.
This is also why I have been holding off on throwing open the doors for business in earnest until after the new arrival.
Stay tuned for the official opening then, including the posting of pricing and plans, and a phone number rather than just an e-mail address (though that’s always at least as good a means of reaching me).
Pricing is arguably the trickiest part of kicking things off. I’ve agonized about it, both because I take too personally the negative reactions inevitable, well, pretty much from someone or another if it’s anything short of free, and because it obviously has to be sufficient to generate adequate revenue. At least, I think so, as presumably does anyone who has ever managed to stay in business an extended duration.
At one extreme you have low pricing that should result in massive numbers of customers, but may leave you broke, unhappy, disinterested, and with fewer customers than you might have expected due to the stigma of poor quality widely and not incorrectly associated with lower price realms.
At the other extreme you have high pricing that will drive most prospective customers away, possibly to the point of unprofitability, and had better be justified on the quality, value perception, and satisfaction side.
In between is a sweet spot, which will differ between type of business and even individual business.
In another incarnation. since 1996, the rate for most services at the business of which I was part was $80 an hour, unless discounted for volume, and for some services it was $100 an hour. In general, we were at the low end for the target audience, yet more often than not people were shocked by $80. Years ago I computed that the rate “needed” to be $95 for the revenue to be adequate, based on it being primarily one person, able to do a certain number of billable hours, needing to support overhead and keep current on technology. That would explain the tendency of the rate to settle in close to $100 at so many places, why ones that had been as low as $80 increased to as high as $120 and beyond, and why ones that offer piece rates can work out to be so high priced.
If you’re paying someone to work for you, you’re likely averaging $30 an hour plus benefits and such, so call it $40 an hour to employ someone. There are potential customers out there who would be loathe to pay $40 an hour and let you barely cover an employee. There are a lot of them. And what are you doing with the rest of that $99 for the hour, you mean old computer services firm?
Well, how about covering the pay during the time that’s not billable? How about covering training and hiring? How about overhead; the office, phone, management and administration, computers and software and gadgets for the business and for learning, the internet, the web site, sales and marketing so people hear of you and know they have the option of hiring you for way too much? How about enough profit to remain in business and capable of adequately servicing customers? Is it really worth getting an oversized bargain if the people giving them gradually go out of business, aren’t serious, or aren’t so good? If it’s a one-person shop with limited expenses, what, it should be so discounted that the one person can get by but never grow to more, perhaps can’t even keep up with changes in technology? Thanks, but not so much.
So, where are we? Too high and nobody buys. Too low and you’re not around long for anyone to buy, even if they take you seriously enough to buy. High enough and you can stay in business but might not make optimal money. Low enough and you can get greater volume than the competition.
All of which varies regionally, demographically, and by what exists for competition.
All of which varies based on the exact nature and quality of what you offer, what you can control for costs, and what you might emphasize besides price.
Getting in a car and going to a home or business, even close by, is worth more than staying at your desk and helping remotely, be it taking remote control of the computer, answering questions by e-mail or chat, or working with someone on the phone. Dropping everything and responding in an emergency is worth more than scheduling a task at a planned time or date. Plain, understandable English is worth more than heavily accented geek speak, at least to some. Responding outside of traditional working hours is worth more.
Prepayment is worth discounting. Predictability or contractual certainty is worth discounting. Proximity is worth discounting, versus charging more or precluding traveling greater distance. Limited self-help assistance is worth discounting.
All of this goes into my thinking about pricing and offerings.
As does the danger of expectations. That’s the danger of using low pricing as a hook and planning to raise them later. If you start out charging $50, you will offend way too many of your customers when you increase to the $90 you really wanted to charge in the first place. Does it do any good to establish a customer base, then turn around and lose or alienate it? Were those people who jumped at the low rate really the customers you wanted, if they have such a low opinion of you or the type of thing you offer? Better to start a little high, gain customers who appreciate you at that price, then realize the ideal price is a bit less and make them even happier by lowering it.
None of which takes into account varied pricing to get that last bit of marginal revenue or soak up spare capacity you’d not otherwise use, marketing with one-time specials, and that sort of thing. That’s distinct from a decision about what will be the day to day pricing.
Which leaves me? Still thinking about it, but generally decided on a base hourly rate that will apply to “other.” That is, where some other, lower price doesn’t already apply. That is, a price from which discounting or computation of flat rate offers can be computed. Thus it matters, even if it’s not what any customer ever pays. Beyond that, I have some idea about what will be discounted and packaged how, and that may be subject to experimentation, with a care toward the expectations problem, but without being ruled by it.
The text of “Why Us” is more or less finished, barring changes to formatting to make it look snappier and read easier. For now it’s about generating the content. I’m torn between concentrating on “Who We Are” or “What We Offer” next. The latter gets me into pricing, which is another post…
“How to Buy” would seem to follow logically after that. For now it’s more or less going to be about communicating with me and arranging to pay at the time of a visit, sending a check, or using PayPal to my account. As this takes off enough, then I can go all e-commerce and more formal.
That’s also going to be where the contact e-mail or form and phone number go, since once you’re there you’re presumably serious about and looking toward using them.
This is more commentary that “news,” I suppose, but where better to express the human side of this venture.
I came up with the idea for the page names based on question words like who, what, when, where, why, how. That seemed catchier than the alternatives.
I ended up confusing myself as to the distinction between pages named “who we are” and “why us.” What I’d imagined for an “about” page overlapped with “why us,” in that it conveyed background, skills, that sort of thing presumably encouraging you to hire us. Which right now means me. What I’d imagined for a “why us” page was similar; we have all this knowledge and experience, deeper than most geek types, while also heavy on customer service.
After discussing it with my closest advisor, I have to agree that the
about “who we are” page should regale readers with experience, background, the technical stuff in more depth. The hire us because we’re the coolest “why us” page should be more of a human-friendly marketing pitch, including perhaps, as of now, noting that you’ll get more personalized service than from the proverbial geek factory, as it’s one person, me, the same each time and all that. For now, anyway, but when it’s not, that’s the spirit of things I’d strive to retain, and the other people, some of whom are already standing by to deploy when needed, would continue to have me as mentor and backup. We’d have to get rather large and “corporate” to risk much change, and that’s a struggle any young company faces with time and size.
So off I go to compose material in the spirit of what it now seems each page ought to be.
Well, this is going slower than I might have hoped. I have the basic look of the site done, but writing the content is hard. Part of that is it means it’s time to make certain explicit decisions, and figure out some of the finer details, at least as they will be initially.
I’m naturally a bit distracted by the impending arrival of a baby in the house in a few weeks, but business must proceed regardless…
Please pardon our appearance as the site undergoes construction.
As you’ll see when the relevant content is added, we provide on-site support in part of southeastern Massachusetts, and hope to add more territory in the future. Beyond that, we provide support elsewhere within the limits of what’s possible without being there in person.
Stay tuned as the site grows…