Referral Etiquette Part II

There are three groups where one can find and groom good referral sources:  clients,  colleagues and friends/family.  Good referrals begin with good relationships.  In addition to providing excellent services that fulfill client expectations, developing and maintaining solid professional and social relationships is paramount. The ability to clearly and succinctly describe the services you provide,  your typical clients and the problems that your services solve is also important.  Finally, be willing to make the first move in the referral game.  If you initiate referrals,  you are likely to receive them in return.

Know what you want
Before going off in search of referrals, think about what you’d like to achieve when meeting prospects.  You’ll want more than some fuzzy idea of how you like to meet people in a particular industry.  Clarify which job title is likely to be the hiring decision maker for your service and the usual goals or business challenges that drive the need for your category of service.

Then you can be clear and precise in your referral requests and will be able to craft the right introductory pitch.  Moreover, clarity will help associates to think of you as they themselves network.  You and your friends and colleagues  can then function as a referral network  for one another

Know who to ask
If you’ve worked for a client on two or three projects and have developed a comfortable relationship with your contacts, let them know that you are always looking for new business and can they recommend someone with whom you can follow up? You may not receive an immediate answer, but the seed will be planted.  Also, there will be no pressure on the client to give a name if they prefer not to do so.

If a referral is made, be sure to get approval for using that person’s name and confirm that if asked, that person feels they know you and your work well enough to provide a good recommendation.  Make it easy and comfortable to refer your services. This approach also works for obtaining referrals through social relationships.

Follow up within one month
While your name is still fresh within the mind of the referral source,  make the call or send the email and get the ball rolling.   Do not let the trail go cold and squander the opportunity.

Failure to appropriately follow up on a referral is deadly.  It happened to me a couple of times and I shall not forget it and I certainly will never refer either of them again.  In fact, I severed ties with both parties.

In one case,  I referred a young lady who launched a bookkeeping business when she was my student at the Center for Women & Enterprise business plan writing course.  A restaurant owner friend of mine  was desperate for that service and I was happy to make the connection.  For reasons that will forever baffle me, the bookkeeping entrepreneur was always too busy to follow up, despite confirming that she looked forward to meeting a prospective client. The young lady was unmoved by urgent emails sent to her by both the restaurant proprietor and myself. The restaurant owner forgave me, thank heaven, and we remain on good terms.

In the other case, a woman with a 20 year career and an MBA called a potential prospect too hastily, before I could confirm the other party’s interest in her services.  I suggested that MBA lady check out the website of someone whom I had literally just met and let me know if she saw some alignment.

If things looked promising, my plan was to invite the prospect to likewise peruse the website of MBA lady.  If all agreed,  I would make the connection. Unfortunately, MBA lady took it upon herself to contact the prospect, whom I had met a mere three hours before,  claiming that I had made the referral! I was furious. The prospect did not love it and has been cordial but cool to me ever since.

Thank your referral source
Remember to thank your referral source ASAP. Even if business is not done,  it is wise to let your source know that you appreciate their confidence in you and respect their generosity. Whatever happens,  let your referral know the outcome.  Referrals are vital to the survival of your business. They are a special favor and should not be taken lightly. This simple courtesy will encourage more good referrals for you.

Thanks for reading,

Referral Etiquette Part I

I love to connect people.  If I can bring people together and set them on the road to doing some business, then I am a happy girl.  Just last week I was able to connect Dave and Denise.

Denise was my former student in the business plan writing course that I teach at the Center for Women & Enterprise  Denise is a smart cookie:  a  no-nonsense, ex-Lotus,  seasoned professional who was savvy enough to see a need within the small business milieu for the competencies she had honed in the corporate sector and disciplined enough to successfully transfer those competencies into her own business venture.

At CWE,  Denise wrote the plan that launched her tele-sales call center business.  Denise sets up permanent or temporary call centers for organizations that require an inside sales force.  She works with business owners or department managers to discuss the product/service that will be sold,  works with that person to articulate key selling points and benefits,  advises the owner/manager on how to run the call center, trains the tele-sales staff and is available for follow-up advice.  She has a good business.

Dave is a colleague in a Cambridge Chamber of Commerce sponsored networking group  Dave works with businesses that are looking to upgrade their telecommunications systems,  or better integrate those systems with other IT functions. He is often brought into a workplace that is relocating or making space changes within its current location.

Dave’s challenge  is lead generation.  Experience has shown him that personal outreach, rather than direct mail or email campaigns,  is the best way to find prospects.  He had wondered if  it would be more efficient to hire one or two part time sales people to make calls and pre-qualify prospects for his follow-up.  After pondering the notion for a few months,  he announced his intention to pursue that strategy at our monthly networking meeting.  I immediately suggested that he speak with Denise and sent him her contact information, urging him to use my name.

Dave contacted Denise a few days later. They met for coffee and discovered that they know a few people in common.  They also confirmed that Dave’s inside sales force plan is likely to reap the desired benefits.  Both parties emailed to thank me for the referral and let me know that they will work together on the lead generation tele-sales project.

So  my referral was successful.  You can do that, too.  Next week,  I’ll give a few useful tips that will help you create winning referrals,  whether you give or receive (the idea is to do both!).  Until then, remember that  people do business with people they know and like.  They do  more business with people they trust and respect.

Thanks for reading,


Survive and Thrive—Price to Profit

Let’s segue into the pricing thicket,  which is where accounts receivable begin,  if you think about it.  I confess that I struggled with pricing.  I offer an intangible service and I knew of no way to find out what my competitors charge for similar services.  Clients pay what they think we are “worth”, but how is that determined?

The received wisdom is that clients are very price sensitive  and that they are more so in this economy.  Fear drives many Freelancers to price conservatively,  yet experts advise against that practice.   Many of us need a smarter pricing strategy,  because we’re probably  leaving money on the table.  We  just don’t know how much.

Pricing that is based on what competitors charge,  hoping that number will allow  you to cover costs and turn a profit (“cost competition”),  is what almost everyone does when they can figure out their competitor’s prices.  However,  pricing specialists  warn that this is unwise,  because that price will not reflect your value to the client.  In fact,  prices that fall below a certain threshold can even steer prospects away from a business.

If prices are perceived as too low, clients will suspect that the service delivered must be inadequate.  In a service business,  delivering the service and meeting (or exceeding) expectations are the overriding factors— not money.  The money is always negotiable when it is demonstrated or perceived that the service will deliver the desired results.

What competitors charge is important,  but that should not overwhelm your pricing strategy.  Ideally,  price should accurately reflect the client’s perception of the value of  the deliverables.  But what might that be? Different customers can have very different ideas about what a service is worth,  sometimes based on their ability to pay.

It is therefore worthwhile to develop pricing strategies,  rates and service packages for different categories of clients,  e.g. corporate and nonprofit rates,  with service packages tailored to meet each group’s typical needs.

Think counter-intuitively.  People pay for what they value.  They pay a premium for what is perceived as high quality,  expert,  reliable and trustworthy.   A good reputation, excellent credentials,  impressive client list and referral from a trusted source also influence the price that clients will pay.  If you are holding several of these cards,  you can charge more and clients will be happy to pay.

A useful counter-punch for gaps in your bona fides is your marketing message.   Make your intangible service appear tangible to clients/prospects.  Describe your service as providing deliverables that will produce measurable outcomes.  Make it easy to understand what you do,  so that clients can relate your value to their business problem and can picture themselves as the beneficiary of your unique solutions.

When setting prices,  it is better to err on the premium side.  This will position you as higher quality and will support profitability.  Furthermore,  clients probably don’t know what your competitors charge unless they’ve hired for your category of service recently.

So what if you’re totally in the dark about your industry pricing norms?  If you have money to spend,  hire a pricing consultant.  If you don’t have money to spend, visit   Click products & services,  choose a category,  find a vendor,  click terms & conditions and peruse price and service lists used by firms that bid on federal contracts.  Also, you can learn what clients think of your pricing,  scope of services and delivery of services with a follow-up evaluation survey.  You may be surprised to learn that if you tweak a couple of things,  clients would be willing to pay more for what you do.

Thanks for reading,

Wheel and Deal—Fast Cash

I recently heard about a company called The Receivables Exchange.  The company hosts an online real-time auction of accounts receivable and invites businesses to sell outstanding invoices to raise money quickly.  The auctions enable businesses to sell their  receivables to bidders in the global institutional investor market.  Sellers are paid the auction value of the receivables and thus gain access to working capital.

According to The Receivables Exchange,  typical sellers have more than 60% of their working capital tied up in accounts receivable and are therefore limited in their ability to take advantage of important opportunities or otherwise expand their businesses.

Collecting receivables has become an adventure for many business owners and Freelancers,  as we all know.  Customers may be asking for extended payment terms.  Big corporations that can well afford to pay on time have sometimes adopted the mean-spirited practice of paying their small business vendors in 45-60 days,  or even longer.  This can put businesses  in an ugly cash flow bind.

The Exchange can make available  badly needed capital to (certain) businesses that cannot obtain traditional financing or cannot wait out a credit approval process.  The Receivables Exchange can give access to a quick  infusion of cash when it’s needed most. The process is similar to factoring,  that old-school trick used to raise cash fast.

In factoring,  receivables are sold to a financial institution at a pay-out rate that is usually between 75-80% of  face value.  The 20-25%  held back is called the reserve. The quality of receivables determines the reserve amount,  as does the historical average turn-around time of invoices.  In other words,  if big companies like Verizon or CVS are the receivable accounts and they tend to pay within 30 days,  the reserve percentage will be lower.

Cash is usually sent in 5-10 days.  There is no credit check.  Once the receivables are paid up,  the business owner is paid back the reserve,  minus a factor fee of 2-5%.  Additionally, there is a fee of 1/8 to 1/15 %  assessed for every day past 30 days that the receivable is outstanding.  It’s a heavy hit to take,  but money is quickly raised and with few questions asked.  Moreover,  the factoring company assumes the risk of customer default.

When evaluating whether or not factoring makes sense for your business cash flow challenge,  do your homework.  Ask your accountant for a recommendation and then check references.   Make sure you understand those numerous fees.  Liquid Capital is a well known factoring company.  You might also visit the websites of the Commercial Finance Association or the International Factoring Association.

But now there is a marketplace where receivables are sold to the highest bidder.  As a result,  it is often possible to obtain more favorable rates than factoring.  This option is not available to everyone,  however.  To be eligible for membership,  the business must have minimum annual sales of $2 million,  must have operated for at least 2 years,  must be registered to do business in the US and can have no tax liens.  The app. fee is $500.00. Sign up online to become either buyer or seller

The Exchange is no scam.  In January,  Bain Capital gave the New Orleans based company $17 million in financing.  In our credit challenged business environment, there is plenty of upside potential for the company.

Thanks for reading,


Facilitated Meetings Get Things Done

At certain times it is advisable to bring in a professional to facilitate,  or conduct,  your meeting. The facilitator guides meeting participants through a specific agenda and employs techniques that assist participants as they work to identify key issues,  analyze problems,  discover opportunities and organically create strategies,  decisions,  actions and time tables that will lead to resolutions that participants understand and accept.

According to Michael Wilkinson,  author of “The Secrets of Facilitation” (2005),  examples of appropriate times to call in a professional meeting facilitator are:

1). An important issue has been detected or a major problem has surfaced.

2). The solution to a vital issue is not apparent and deeper understanding and analysis of  the problem are required.

3). Buy-in is needed for a solution to be successful and it is likely that the required solution will need the acceptance of key stakeholders.   A change in behavior or methods may be necessary,  without which the solution will fail.

When a professional meeting facilitator is called upon to conduct your very important meeting,  time and money are not wasted.  The facilitator works with the meeting convener to select the best participants for the meeting, who become the planning team for the issue at hand.

Who are the team leaders of departments that will control decisions likely to be made? Who are the team leaders of departments that will be impacted by those decisions? Who are the pivotal team members in those departments,  those most likely to formulate strategies,  implement actions and/or live with the fall-out? These factors impact the selection of planning team participants.

Once the convener has worked with the facilitator to choose the team,  the facilitator conducts brief,  individual interviews with them. The facilitator explains to team members why they have been invited to participate and what the convener would like to achieve in the meeting.  The facilitator then asks questions of participants in order to gauge alternative viewpoints regarding the history of the issue,  resolutions attempted and failed,  possible barriers to resolution and factors that may be critical to creating resolution.

The facilitator shares this data  with the convener and together they create an agenda for the planning session and also determine how much time will be needed to work through it and arrive at solutions. The convener then schedules a mutually agreeable meeting time and confirms specifics in writing,  ASAP.

If pre-meeting data need to be generated, the convener either assembles the data or assigns the task to the appropriate staff.  In advance of the meeting, the convener sends the agenda to the planning team,  along with data that must be reviewed.

At the meeting,  the facilitator gives an overview of the process the team will use to examine and analyze the issue and create solutions and then reviews the agenda. The facilitator also gets agreement on meeting ground rules:  e.g., no surfing of electronic gadgets,  no interrupting,  no “opting out”, etc.

The facilitator then goes about the work of conducting the meeting.   He/she asks provocative questions that will stimulate thoughtful analysis;  leads the team in brainstorming useful ideas;  generates enthusiastic participation;  and captures participant responses on flip charts,  for documentation.  The facilitator motivates the team to delve into the issues and devise solutions.

Where there is disagreement over an approach to a problem,  the facilitator works to find consensus and accommodation.  Solutions that emerge in facilitated meetings work because the key stakeholders are always present.  Their perspectives and priorities  shape and create the  solutions that arise and therefore they buy into them.  They own them and they value them.  As Michael Wilkinson has pointed out,  an effective decision = the right decision x commitment to the decision.

The facilitator transfers the decisions,  actions and follow-up from flip charts to Word documents and sends that info to the convener ASAP,  who then disseminates to the team. Additionally,  the facilitator may reconvene the team for a half day meeting in 45-90 days,  to ensure that team members are following through,  allow the team to measure the impact of solutions,  make necessary alterations and maintain project momentum and commitment.

In professionally facilitated planning meetings, business objectives are invariably achieved and implemented in a timely and cost effective manner.

Thanks for reading,

Let’s Call The Meeting To Order

“Do we have to have this meeting?” How many times over the last 10 years have you made that statement? Probably countless times. You were surely justified.  Most meetings waste time and money because they are called for the wrong reasons.  They have the wrong people in the room;  too many people just want  to hear themselves talk;  they drag on forever;  and worse,  either no decisions are made or if they are, they are never enacted.  Meetings are torture!

In my corporate days,  I worked for a Fortune 100 that imposed so many meetings on the staff that they may have violated human rights treaties. Those people would call a meeting and first decide how long they wanted it to be. Then they would either expand or contract an agenda to fill the allotted time. Yikes!

Meetings were unproductive,  mind-numbingly boring,  seldom addressed relevant issues, typically brought forth no decisions,  rarely produced follow-up actions and absolutely never ended on time. They were brutal.

The money and time wasted on senseless meetings by US businesses is now being calculated by an online company called Meet or Die  They chose about a dozen industry categories,  factored the length of the meeting and the job rankings of who will attend and then estimated the cost of the meeting to the company.   If you spend a lot of time in meetings (or are a serial convener),  please check out this site.  It will give you pause.

A company with 100-500 employees that holds a day long meeting with just 5 mid-level employees present will spend an average $3000.00 to conduct that meeting in-house. Team Leader,  ask yourself—will your meeting produce results that are worth the resources expended? Are you guaranteed to accomplish what you set out to do? Will the actions and decisions that surface be implemented?

So what goes wrong? The biggest meeting killer is the lack of a clear purpose.  What does the convener aim to do in the meeting and why? The second meeting killer is the agenda. The meeting agenda should reflect the purpose.  Furthermore,  it should not overflow the time scheduled for the meeting.  The idea is to provide a framework to identify and define  key issues; discuss and analyze those issues; and resolve those issues through decisions, strategies, action plans and follow-up.

Moreover,  it is critical for the convener to bring the right people into the meeting.  Identify the stakeholders and decision makers for the issues at hand and schedule a mutually convenient date and time frame needed to carry out the meeting agenda.   Decide if any participants would be best suited to take ownership of a particular agenda topic and review with that person.  Make sure that appropriate background materials are emailed in advance for participant review.

During the meeting,  encourage participation from all attendees.  Do not let people “hog the floor” or,  heaven forbid,  behave disrespectfully by attacking,  sarcasm,  texting, interrupting or other dysfunctional behavior.

There will be room for alternative viewpoints on how to approach and manage key issues and that is healthy.  After all,  you called the meeting to get input about concerns and possible solutions.  Just remember that the meeting convener is responsible for ensuring good behavior and establishing an atmosphere of positive energy and thoughtful dialogue that will promote analysis, sound decision making and problem solving.  The convener should also keep the meeting flowing by moving through the agenda and staying on time.

Lastly,  the convener should review all decisions reached and actions planned;  review who will take ownership of implementing those;  establish an accountability follow-up schedule;  and in a timely fashion,  email meeting minutes to document it all.

There you have it,  the secrets to running an effective meeting.  Next week, we’ll talk about when it makes sense to call in a professional to plan and run a meeting for you.

Thanks for reading,

Fishing At C- Level

Gotta be a big game hunter like Teddy Roosevelt.  Gotta find high level decision makers who can green light projects and not string you along.  Gotta bait the hook and fish for C- level execs,  so you can close some deals and pay some bills.  Oh yeah!

OK,  so how to do it? Let’s start by looking at the size of your C-level’s  organization.  If your client sweet spot is companies with fewer than 100 people,  you are likely to find the CEO, CFO, Executive Director or Development Director at a Rotary Club or Chamber of Commerce event.  If you’re fishing in organizations with 100 – 1000 + employees,  you may also find C-levels at Rotary and Chamber meetings,  but you’ll have more luck at university sponsored business forums or prestigious networking association events.

In general, when looking to meet C-levels in larger organizations,  it is wise to attend marquis events:  special speaker programs,  awards luncheons and industry specific programs.  C-levels rarely attend holiday parties or networking breakfasts (except for those sponsored by their prestigious networking group and those are usually private).

What if you need contact names and titles? Sometimes,  you can find company leaders on the website.  Other times,  you can call the main number and ask to be transferred to the head of a certain department.  You can also try to meet someone from the organization at a conference or  networking event and chat them up.  Such encounters may or may not pay off.  Employees may fear pissing off a C-level by revealing the name.

You can also use  ZoomInfo, which is a resource discussed in The ROI on 2.0 posting of December 8, 2009.   For a fee,  ZoomInfo will allow you to basically access a company organization chart and find out who leads which business unit.

Once you get specific names and titles,  then internet search,  read the ZoomInfo profile,  LinkedIn profile and anything else you can locate to determine where you might find those people and what their hot buttons could be.  Where might they go to meet peers and network or stay current on industry and business issues?

When you attend programs where targeted C-levels might be found,  skillfully devise the set-up.  Arrive early.  At the check-in desk,  scan name tags to learn who will be in the house.  If you see a name tag that’s on your wish list,  prepare an ice breaker.

I’ve found that comments about the speakers and program focus are excellent conversation openers.  Also, take notes at the program.  This will allow you to 1).  pose an intelligent question during Q & A,  which is wonderful for visibility as it encourages conversation with others,  including the speaker;  and 2).  can segue into a conversation with your C-level at the break.  Oh, and try to sit with this person at lunch.  However,  I caution you to not be too obvious.  Do not appear to stalk.

Remember that your C-level is also there to network and has an agenda.  If you are lucky enough to sit at the right lunch table,  relax and join the conversation.  Everyone will introduce themselves and there will be some mild talk of business.  You will meet a few more C-levels who may be good prospects.  Think relationship building and not selling.

Now for the ask. You need follow-up with your C-level.  Follow your instincts on the flow of your interaction.  If the program is short,  you’ll have to act fast.  In a day long program,  you may want to approach at the afternoon break.  Whatever the timing,  tell  C-level that your product/service has the capability to impact specific success factors or other business concerns that he/she is likely to have.   Ask if the need is being addressed and who might your competition be?  Request an appointment in or out of their office to discuss mutual alignments.

Be calm and professional,  get your point across and don’t arm twist.   No matter what happens,  you’ll learn whether you have a chance with this person and organization or not.  If not,  well,  you’ll know and will waste no further time on pursuit.  In 6-12 months,  you may cross paths again and maybe get another chance.  If yes,  you are on your way—don’t blow it! Focus on big picture outcomes and benefits and make your best pitch.

Thanks for reading,

Man Up and Lead! Part II

Now on to the opportunities.  Finding these lovely gems is often random.  We must train ourselves to recognize them,  for they are not necessarily sitting beneath a neon sign. Usually they are more like truffles,  hiding under certain trees and available only under certain conditions.

Once we figure out how to recognize opportunities,  the next step (very important!) is to learn how to maximize them.  This step will  involve both courage and creativity. You may have to take a calculated risk.  So many people mishandle or outright squander golden opportunities because they lack the vision,  the foresight and the guts to play a good hand for all it’s worth.

While you’re hanging out and doing business as usual,  it is vital to always be on the lookout for the gems.  It is likewise vital to prepare your organization to receive them, because fortune favors the prepared.   So what might that entail?

As we all know,  it usually takes money to make money.  So ideally, have at least a modest cash or credit reserve on hand that will allow you to pay an expense related to serendipitous good fortune.  As always,  network to cultivate and maintain good relationships,  since who you know (and who knows you) is essential to the process.

The arts organization of which I spoke last week will hold a big splashy event in September 2010.  They will repeat the template of an event that was done in 2005, with great success.  Despite the weakened economy, I feel confident that the September event is a good opportunity that will both make new friends for the organization and bring in $10,000 + in revenue.

Then there is the other opportunity,  one that was brought to us by our board chairwoman.  She told us of a charming documentary film made in 2008 that tells the story of a NYC postal worker and his librarian wife who built a world class art collection on their very limited budget. The board chair proposed that we show the film in Spring 2010 to act as a lead-in to our September event.  The event would be free,  to reward current supporters and attract new prospects.  The board loved it and I took the lead on finding a venue,  preferably free or cheap.

On a whim,  I emailed an acquaintance who is a former trustee at a local museum.  Would they donate space to a small nonprofit?  She agreed to make a call on my behalf and give me a contact name.  To my great delight,  I obtained donated screening space and, the sweetest gift of all,  a museum curator to both introduce the film and do a Q & A session at the end.  Hot damn,  I hit the jackpot!!

Alas,  there was a little catch.  We must pony up for a few related costs:  projectionist fee, ushers,  security,  clean-up crew, etc.  To accept this offer,  the organization must pay about $1400.

I emailed the board chair and gave her the good news / bad news scenario.  What to do,  I lamented? Perhaps I should keep looking.   She agreed.  But when the sun rose again,  I caught myself.  I emailed the board chair and told her that we must accept this game changing offer.  It was much too good to refuse.

However,  all this transpired before news of the $60,000 hole in the bankbook was revealed.   Our chairwoman went from being cautiously positive to near total opposition. I understood her fear,  but knew that we could not succumb to it.  The ED (who I feel concealed our money woes and exacerbated our problem) was totally negative—but he is always a wet blanket!

Especially in light of the cash crunch,  the organization needs to quickly raise its profile to both energize current donors and attract new and bigger check writers.  To show the film in a venue that is merely serviceable adds no value.  Our golden opportunity would be squandered due to shortsightedness and fear.

Halleluia, I am thrilled to report that the board gave the museum proposal a ringing endorsement.  One person even recommended that we go farther out on a limb, as he phrased it, and host a small pre-film reception. The board voted to spend $5000 on the event.  The board chair gave her blessing and the ED came around.  Hurrah!!

The lesson of this tale is no doubt obvious to you, dear Reader.  Practicality and caution are useful traits;  but one must not allow them to morh into fear and paralysis.  As steward of the business,  one must develop both the acumen to  recognize opportunities  worth pursuing and the courage to utilize same.  We must understand not only what we can afford to do,  but also what we cannot afford to NOT do.  We’ve got to man up and lead!

Thanks for reading,

Man Up and Lead! Part I

I’ve been on the board of a small arts organization since 2006.  I love the organization and its unique mission; I really like the founder, who is a painter and 88 years young;  I appreciate that I’ve been able to lend energy and creativity to a wonderful organization;  I like my fellow board members.

The downside is, we’ve got money problems.  We’ve also got a couple of marvelous opportunities, at least one of which will be realized.  The other faces an uncertain fate.

At a committee meeting last Wednesday,  our executive director announced that the organization has a $60,000 budget shortfall.   With some creative cost-cutting,  he feels that the deficit can be reduced to $40,000.  How did that happen? In September,  his financial report was cautiously optimistic.  In November he said little about money, except to note that he expected a certain level of donations to be received.  Now,  as of January 1, we’re rather deep in the hole.  Ouch!

In truth,  the signs were there.  Examination of past balance sheets reveal distressing losses in our investments and income.  For reasons I do not understand, the full board does not view monthly P & L statements;  we receive only 6 month “condensed” statements.   There is insufficient documentation of expenses, e.g.  a couple of lump sum categories called “personnel” and “outside fees and services”.

Why the finance committee (and the executive committee) has allowed the ED to be so cavalier with the financial records, I will never know.  Why the full board sat in meetings for years with eyes glazed over while he droned on about budget projections,  expenses and donations received and expected—well,  I should have questioned it,  but I was hesitant to rock the boat.

However,  in November ’09 I questioned the “outside fees and services” listed on the P & L and I was given a flip,  off-hand answer that went something like oh that’s for accounting, insurance…and then he drifted off.  I was not pleased with the answer.  No other board member pushed the matter.  But once again my intuition was on target because here we are,  running out of money.

The ED has not spent wisely,  his budgets are a fairy tale and the board (including myself) allowed him to get away with it. The organization’s founder enabled the ED’s bad behavior by writing checks to cover previous shortfalls.  She claims that habit is over,  but I don’t know.  There is a board meeting scheduled this month and I plan to ask a few pointed questions.  I hope that others will join me.  The meeting will be very interesting.

So what is the lesson for business people?  Do not delude yourself about money.  The picture may not be pretty, but going into denial will only hurt you in the end.  Keep accurate financial records and take the time to examine and interpret them.  Use your financials to guide your business decisions.  Cash flow is the level one warning system.  Are the bills paid on time? Is making payroll a struggle? If your business has been cash strapped of late (especially with credit so tight and costly), then look to trim expenses where practical and  renegotiate payments wherever possible.  Next week,  we’ll talk about opportunities.

Thanks for reading,


May I Have This Dance? Partnering Possibilities Part II

How might one brainstorm and evaluate  expanded services that may or may not involve taking on a partner to a greater or lesser extent? One might start by asking the clients.  As I’ve mentioned many times before,  establishing  relationships that  make communication comfortable for both parties  is so very important.

Speaking with those who are not clients,  but who work  in or are familiar with your target industries,  can also yield some bright  ideas.  In my January CEO forum,  Carole gave me a great tip on how I can expand my strategic plan facilitating services.  Carole’s  husband works in the NFP sector and has been through more than one strategic planning process that has not delivered the desired results.

Carole clued me in on helpful extras that should increase the likelihood that decisions agreed upon in the planning process will actually be implemented.  Demonstrating to clients that I am available to offer follow-up that will keep them on track with their plan could be an excellent selling point.  I won’t need a partner,  but I will make referrals  for required services that are outside of my domain.  I will surely incorporate Carole’s suggestions  into subsequent client meetings and proposals.

Before introducing a new feature to a client,  imagine yourself working in that client’s business.  What  need does your company fulfill?   Envision the big picture and place your services within it,  to get a good idea of where your contribution fits.  Will additional services allow the client to achieve objectives in a more effective,  less expensive, timely or streamlined way?

Although decision makers are timid about spending money these days,  a decent percentage will open the checkbook if perceived value is there.  Moreover, one stop shopping is in vogue and you may be able to work that to your advantage.  Do you have the resources and expertise necessary to deliver those services on your own,  or must you link with another Freelancer or small business?

Be careful about the sphere of influence that each partner will have,  particularly when those involved have the potential for overlap.  No one wants to confuse clients with a power struggle.   Be clear about who takes the lead and who makes the decisions in each aspect of the project.

It is also imperative to really know the business practices of a potential partner.  I recently had an unfortunate incident when I was invited to be a last minute replacement in an unpaid speaker’s program.  This was not a partnership in the classic sense,  but a collaborative venture nonetheless.

After the organizer successfully separated me from $200 to help cover program expenses for what was sold to me as a quarterly program featuring the four speakers on board,  she proceeded to recruit new speakers for the series, without consulting the original roster.  I eventually deduced that the new recruits were not required to pay $200 to join the roadshow,  as had the original crew.  If that was not enough of a slap,  the organizer decided that I would not speak at the second program!

I was not pleased with the bait & switch, to say nothing of the unilateral decision making and I requested that my investment be returned.   After some patronizing and stonewalling,  the organizer eventually mailed a check for $100.

No,  nothing was in writing.  I naively thought that a contract was unnecessary for a $200 transaction with someone I thought I knew!  Moral of story:  protect yourself and leave nothing to chance.

To sum up,  collaborations,   joint ventures and partnerships can be long term or ad hoc. Specifics of duties, authority and expectations should be in writing (an email may suffice).   If a formal partnership (or merger) is formed,  obviously the attorneys and accountants get involved.   Again, know who you are planning to dance with!

Thanks for reading,