Friday, October 10, 2008

Don't Waste Time

Time is worth more than money. More specifically, YOUR time (as a business builder) is worth more than money. Hands down!

People often focus only on saving money when they should be thinking about saving TIME.

Each thing I do while working IN my business I say to myself, "How can I do this faster? Can I pay someone else to do this so I can put my time on more important things?" I don't think for one second, "How can I do this cheaper?" I think, if I spend money on this product, how much time will it save and how much will that time cost me? If I hire someone to wash this wall, how much time does that save me?"


Because once your business has grown, YOU will not be doing all the jobs you think you are saving money on. In other words, at some point you will be having to pay someone for THEIR TIME. This can vary according to the skill. Let's look at how much skill versus time cost and then think if you are really saving money.

Rates in my city (Windsor, ON Canada)
1) General Labour $8 to 10/hr
2) Skilled (construction) $15 to 20/hr
3) Professional Services $30 to $100/hr
4) Exec, Visionary $250 to 500/hr

Ok, let's say you are a #4 doing the work of a #1. In eight hours you are actually losing $3,920 (8X500=$4,000 minus 8X10 = $80)

Now as regards to products saving time. I use a spinner to wash paint rollers. It saves about 10 minutes of cleaning and cost me $20. Let's say it has saved me 100 hours over the life of the tool. That tool will have saved me $180 of labour I would have paid someone to wash rollers the old fashion way. The same could be said about buying a photocopier instead of running to a store to make copies.

Always consider time; do not just focus on money.

And always remember, each time you are trying to save money by doing something yourself, it is likely costing you 100 times more than you thought. Your time is worth a fortune as the business builder!

Answer A Question, Get A Prize; Business!

I have been considering selling my home recently. Another similar model just sold down the street and I thought I would call the agent that represented the seller (don't get me started on the ethics and tactics of R/E Agents).

I had one question for him, "How much did the house sell for?"

He called me back quickly and I asked the question. He started into a spiel about how real estate is priced and he would have to see the house, blah blah. BUT, and this is the part that surprised me, he blurted the price it went for and explained in detail why it went for what it did.

I was shocked. Not at the price it went for (it went for exactly how much I predicted, I know the market). I was shocked that he answered my question.

Most agents I know will not do this. They figure they have a potential client on the phone and want to reel them in. But what most agents do not factor in is the sophistication of their clients.

For example, I know the real estate market in my city. It is my business to know. I know what RENTS, what Sells and why it Sold or didn't sell. In the case of this house, I merely wanted to know if my prediction was correct and base the sale of my own house on this. In other words, I just didn't have the data I required and he had it.

I didn't have an agent in mind (I don't have luck with many agents as my business is sort of anti-agent oriented). But I do have an agent in mind now. Why? The guy answered my question. He tried to figure out the sophistication of my real estate knowledge and didn't try to hard sell me on evaluation BS.

Lesson, answer your potential client's questions (even if you think you should not) and get their business. Honest, down-to-earth conversation always wins me over. How about you?

Employees with Profit on Their Brains

A company owner is constantly thinking about profit.

A manager is thinking about how to make sure those profits become a reality and how to increase them using a system.

A typical employee thinks about their paycheck at the end of the week (in other words, anti-profit).

How do you get them all to think of profit?

Profit sharing. This means that the better the company does, the better the employee gets paid. True capitalism.

But I know what you are saying, "Why give up the gold?"

Because the more people focus on the gold, the more gold is made -- thus increasing your share of that gold.

For example:

Say your share of the equity of a business is 100% and your profits are 100K at the end of the year with no profit sharing. That's 100K no matter how you look at it. Now let's give up 25% equity to the employees (managers and workers). Those same employees will work harder and have a much keener eye on profit and likely double your profits. So now your share is $150K/year for doing nothing but share the pie.

I'm sorry to tell you this but people work for their own agenda. They do not think to themselves, "Gee, I wish I can make my company more money today even though I only make minimum wage (or average wage)." They have different goals in mind and it is the way it should be.

Think of it this way. Say a company was a doorway. The goal of the company is to keep that door open. If you have one thousand people walking through this doorway (employees) each with their own goal (to get where they are going), both parties get their goal met (the companies door stays open and the employees get where they are going.

Profit sharing makes this easier for them to reach their goals and you to reach yours: MORE GOLD!

'Lookin Busy' and Other Bad Traits!

My fiance was recently telling me a story about a group that is investigating her work performance. She said that each time they come in she has to look busy or lose her job.

Why do people think that looking busy equals productivity and thus profit.

Let's take her example. She operates a machine that produces thousands of products per hour. She makes sure things are humming and the company makes more money when the machine is running smooth than if something is wrong. Her functions are as such:

1) Make sure the machine is running correctly
2) Loads new programs to vary the product
3) Supervises the loading and loads support material (boxes, bag rolls, etc.)

In other words the machine is automating many functions and she is making sure the machine is doing it's job (the machine's boss!)

So in my eyes, if she is 'lookin busy' the company is actually losing money from product not being pumped out. In other words, if she is busy, somethings wrong with the machine. She should be standing there watching a well oiled machine do ITS JOB!

My old boss used to tell me, look busy when the big-wigs are around but any other time, if you need to sit and think, do it! There was times I would interview people, times I would write documents, but about 25% of the time I had to just sit with headphones on and THINK. It made the company more money doing this action then ten or even a hundred people looking busy.

Don't relate 'busy' to action. Action is the key here. If things are getting done what does it matter how it gets done?

Wednesday, October 8, 2008

I’ve Got It. You Need It. I’m Selling It!

Doesn't that just say it all?

It's what business should be. You found a product or service to sell. You know the customer that needs it now and you happen to have just what they are looking for. Talk about the perfect storm.

Some people will say, "That's a dream. Most businesses do not run on this concept."

Yes they do. Successful businesses better be following this day in and day out.

Take for example the IPOD. Apple is the only one that has it. You likely (at least think) you need it. And apple is selling it. Samsung is not selling it. A majority of people want an IPOD, not a copy. So you don't really need what they got. Samsung is selling it but likely not for long or at a super reduced price.

The idea is to have a monopoly on a product/service in order to take advantage of GOT/NEED/SELL.

I have often had this debate with people. Why can't I just sell what everyone else is selling? Because once this happens it is considered a commodity and the one with the lowest price is going to win (which is a NO WIN BATTLE IN THE END). If you are new to business you will not likely win in a price war. Why would you want to?

In other words, if you were selling MP3 players would you want to be Samsung or Apple?

Monday, October 6, 2008

Start a Business That Matches Your Lifestyle.

I have recently come to the realization that I hate:

1) Being on call 24 hours a day.
2) Having to deal with petty problems (I love the big ones believe it or not).
3) Giving a client long-term service (I like to do any job in under two weeks or I just get bored).

So what did I do? I started a business that requires me being on call 24/7, I have to deal with broken toilet seats and irritating tenants. The service I give is in one year periods and some renovation projects go into many weeks of arduously long hour days.

Why am I doing this to myself? I hate waking up each day to this. So I have decided to make changes to the business model to adjust to my lifestyle, or else, why would I be in business?

I have changed:

1) My hours to 11-8. These are the hours most people call me anyway. Weekends are mine. I do not work weekends for any reason now. Any major emergency could be dealt with by calling 911. Any minor can wait.
2) I just don't deal with petty problems now. I either assign them to someone that can handle them faster and easier than I can or just refuse to deal with pettiness (such as tenants asking me to clean their kitchen for them; true story!).
3) Give a client a valuable short-term service and charge heavily for long-term service (which I can pass onto someone else). I am a sales/marketing person and can be in and out within a few days and make 10 times more money. Why would I continue to give long-term, capital draining services for next to nothing?

By doing the above I have found something very important to me; I can live life the way I want to and still keep the business I love.

Never Do Nuttin', Always Do Somepin'

In my last post I mentioned the bad times the business is going through due to economic factors. I also mentioned if you do not become aggressive, you will perish. This is perhaps the biggest action I took that could have pulled things out in and by itself. And yes, it's my fav -- marketing!

I began to do what no one else was doing.

History, my two biggest marketing methods are in this order, custom lawn signs and free online classifieds (newspaper ads are expensive and useless and yes I have benchmarked the newspaper ads against online ads).

This year I was not receiving calls. It was so slow I decided to take action and do something no one else thought of. I hand-wrote some property detail signs. Cost, about $1.50 per house (my lawn signs are $25 each). It listed all the information someone would ask about a house on a HUGE sign and posted them in each house.

Then I made some smaller hand-written signs and posted those all over the target area. Cost, about 25 cents each. Just a generic sign. I also posted a list of all my properties everywhere I could find. Stores, posts, wherever. The city took some down but who cares.

I was the only one out there with advertising that was not just a FOR RENT lawn sign. People saw my number all over.

Something magical happened. The signs I had in the two HOT areas started getting calls. I would tell them to have a look at x property, y property, etc.

I then decided to do open houses for the rentals. I would sit at the hottest properties all day and put signs on my truck and lawn to come in. This didn't work all that well but at one point I decided to do something different. I would walk around the general area looking for people and give them a flyer of all the houses. In other words instead of sitting there waiting for people to come to me I went to them. The houses began renting this way and each person I was aggressive with referred me to others as well. Why? Because I was the only person that they could get a hold of to see a place.

In other words, I was the only person out there doing something! I was the only one adjusting with the times.

Can you imagine thousands of places sitting empty and the Landlords are only relying on one or two marketing methods (that are not working this year!)

Find out what no one else is doing. Do it. Do anything and it will work!

Slow Times Require Quick Changes

The economy is tanking everywhere. Real Estate is down to 60 cents on the dollar. Stock Market is shaky. Things are bad and getting worse.

It is hitting my business and once again I have made a mistake that may kill the business.

History, normally I would rent every place I have during the months of June, July and August. The closer it gets to August the quicker the pace. It would get to the point where I would be begging Landlords for more houses to fill. However, this year it was bad. Houses that used to fill up in a day are sitting half empty even after three months. Not good at all!

It got to the point that Landlords were calling me more than perspective tenants loading my voicemail asking me what was wrong. What can I say? I did everything the exact same as last year where I was EXTREMELY successful filling everything. The economy is bad. School attendance is down. Everyone is looking for a deal and holding out for that deal. People are not making as fast a decision as they were last year. Little comfort for a Landlord that is facing a half or even almost fully empty house for the school year.

So I sat down and began to analyze it. What went wrong?

Then it came to me, "I NEVER ADJUSTED WITH THE ECONOMIC CLIMATE. I never took advantage of it.".

More fortunes will be made in the next couple months than all fortunes before it. People that adjust and see the glass half full will benefit. I always remember the saying, "Buy when they cry, sell when they yell." It is so true. Normal people run away when they even hear the fact that things may get bad. Rich people run to the chaos.

Back to my business. Once I realized this I began the changes.

1) I stopped wasting time on actions that where not helping the situation. For instance, I cutout unnecessary services such as staging apartments and focused on making sure they were clean.

2) I stopped wasting time on bargain hunters. They were literally taking up my entire day and in the end I was not making anything from them. I began to tell people in the beginning, the Landlords have discounted the price according to the climate and WILL NOT discount anymore. Most time-wasters would walk and save me hours to deal will REAL customers.

3) I aggressively looked for business and actually was surprised about how effective this was (more on this in a future post). I began handwriting signs, posting them everywhere I possibly could. I would go up and down the street and talk to everyone looking for tenants.

4) I focused on my strongest (and most money making) skill, sales. You can always see when someone wants something. If I didn't see the glow from them, I moved on. If I saw it, I would not negotiate and waste time. Take it or leave it. The price is what it is. And 99% of the time they would take it.

The other thing I know I did wrong was I didn't adjust my moral thoughts on the business. I have always tried to fill places for Landlords. It was how I built the business reputation so quickly. But it was not possible this year to do that because of the climate. However, I knew I would do my best and that's what I could offer them.

What I should have did was taken on 100 times the Landlords I had with the caveat, "I cannot guarantee a full house but I can guarantee you will not be sitting with an empty house like everyone else is."

The perceived service would not have been as high as it was but neither is the ecomony.

Remember fortunes will be made NOW by people that can adjust quickly to changing times, even a change of business morals may be needed to get through it.