Friday, August 19, 2011

A Good Resume

This is another blatant plug for one of my businesses, but I wanted to explain how I got into it in the first place.

My wife is British so we spend a bit of time in England and Europe. As a member of the European Union, a UK passport will get her into Europe as citizen. Our kids, although born in Ontario also got UK passports as her offspring. That’s another small business advantage for another post in the future.

Back to the story… in the 1980’s, just after we were married, my wife needed a new resume to apply for Canadian jobs. Being the one-man, John Wayne, can-do-anything, kind of guy (and probably a cheapskate too) I said I would write her resume for her. I was a geologist in the mining business at the time and my resume had been reasonably successful so a simple clone would work for a registered nurse too… right?

Wrong! She applied for quite a number of positions with it and got no response. Of course, I insisted it couldn’t be my resume writing skills! My wife suggested to me several times that she should get one done professionally. Eventually, I relented and she hired a resume writing service to get it done. This was BI (Before Internet) so I can’t recall how she contacted the resume service. Nevertheless, she used the new resume a few times and was hired in an RN position in a few weeks.

The moral of the story is you should outsource certain things to professionals. The cash cost may seem high, relative to whatever financial filter your brain has running at the time but the net cost is inconsequential when you achieve the objective. You may have read the Four Hour Work Week by Timothy Ferris who is a proponent of this idea. As with everything there is a practical limit. His suggestion of outsourcing apology notes and birthday cards your wife exceeds my limit. The same applies to small business. You need to use unconventional wisdom judgement to decide what you should outsource and what you should optimize with in-house talent to make it a strategic advantage.

It may have taken me awhile to learn this lesson but I apply it effectively to my business affairs today. I leverage their skills to achieve my objectives. And while I'm on the subject, don’t be afraid to pay people what they’re worth. An Earl Nightingale quote comes to mind; "Some people want the fire before they put wood in".

Oh, and here's the blatant plug. A few years ago through one of my Toastmaster associates, I connected with a couple of HR professionals who write resumes everyday. So I started a business (Brock Resume Services Ltd.) that is essentially a mechanical admin service for me. I contract out the resume writing to these young ladies. They get all the glory, do all the work and I pay them most of the revenue. I own 100% of the business, run the website, do the marketing, billing and financials. My admin staff from my bigger businesses handle that in a blink. With a smaller share of the revenue, I only need to pay the few annual expenses. I must say, it doesn’t earn much and I give it a corresponding amount of focus. At some point (specifically before the next recession) I will pay more attention to it. Obviously it needs to be grown and positioned to get a better share of that “resume-writing pie” during the next layoff frenzy. In the meantime, if you need a quality resume for a fair price have a look at our service.

Sunday, August 14, 2011

A Three Legged Stool - Your Empire

I’m sitting in Stonewall Manitoba as I write this. The inscription on my grandfather’s tombstone is “As you are now, so once was I, As I am now soon you must be”. In the end we’re all going to die. Before that point, most people simply want to be successful or live a good life while they’re on the planet. Now the definition of “success” or a “good life” is philosophical so I won’t go there, but I can say you’ll need some sort of financial resources to accomplish it. Zig Ziglar use the expression “Money may not be the most important but it ranks right up there with oxygen. And I want to comment on that aspect of being successful. I call it building my empire.

We all know that sitting on a three legged stool has less risk of falling over than balancing on a unicycle. Why is it that the bulk of people are quite willing to allow their financial balance to hang from a single thread? Having one employer is the riskiest proposition to choose financially. There was a happy time after the “serfs & lords” era when employees could work for a lifetime with one company and retire in relative comfort. I get the sense that is not true today. I can tell you from many personal experiences back when I was an employee how shattering it is to be laid off. Invariably, it is in an economic downturn when another job is hard to find. Recessions happen with relative frequency and you’re at risk every time. I talked a bit about this on my Three Types of Work post.

On the revenue side, even as an employee, you need to develop your income streams. Get more of them for starters; do not rely on a single employment position. That is like a stool with only one leg. Of course, being an entrepreneur I always recommend starting a part-time business because you only have so much time in a day. Trying to get a three legged stool by simply by having more employee jobs simultaneously will kill you. With a second income stream from a business, it becomes a two-legged stool; still a struggle to balance but better than one. Even an employee can do moonlighting in a separate business on the side part-time.

IMHO, starting a part time business has a key advantage over simply doing more of what you do at your first job. That is education. You can learn a lot of the basics about being in business by running a low risk part time venture.

Of course once you have the first one stabilized, you should add another and so on. Like a stool I’d say three businesses is a minimum for stable minimum risk lifestyle. After you learned how to get the first one running smoothly, you’ll realize the subsequent ones are a piece of cake.

You may ask “How much do I have to do?” The lesson I’m trying to drive home is you can start businesses with your own sweat, but for you to grow an empire for retirement you need ventures that can operate without you being there. Some people call them passive income; some people simply make the distinction between being self-employed and being a true business. That is more of your education. I’m in my fifties and I didn’t even think of this point until I realized I had to get resources (physical, human, and financial) working for me.

You should also be diversifying your income streams to make your stool more stable. If you can, spread your sideline business(es) around geographically, across different industry verticals and in different sectors. For example, working for an oil company, saving your pension in your employer’s stock, investing in other oil companies, and opening a moonlight business servicing oil wells is still only one leg on your stool. If oil prices drop you are facing problems on every front exactly like the single thread employee

It may seem counter-intuitive to move out of your realm of expertise but sometimes that one expertise is just not in demand. This can be hard to see sometimes, you think you are diversified but ultimately they are just variations on a theme. You may have your financial investments in 6 different sectors, but when a stock market crash happens all of the sectors go down… even good stocks and that’s a topic I’ll talk about in the future. To me discussing the relative merits of a sector that only dropped 10% rather than the 30% of the overall market is like re-arranging deck chairs on the Titanic.

I read “The Snowball” by Alice Schroeder; a biography about Warren Buffet. He was adamant that diversification was just limiting your potential profit. He may have a point but personally diversification fits me better.

Remember you’re looking to solve somebody’s problem, so instead of looking for opportunities to make money for yourself look for other people’s problems. They are easier to find… the conventional people are always grousing about something. Just start a business to solve their problem and Presto! They shove money in your pocket. That is the real opportunity.

I will talk about my experiences starting a consulting practice in a future post. Some people choose to add employees for their consulting practice as a way to evolve a self employed practice into a business. That can work as step 2 but I saw that as simply strengthening one leg of your stool not adding another leg. It works well for some people particularly if your service is recession proof or regulated. However, in my case, I started with IT consulting, then launched a Private Health Service Plan administration business, followed by a purchase of a vinyl wholesaling business, then launched a web based resume writing service and most recently diversified into real estate rental properties. I had a couple of flops in there; US car importing and a travel agency. I’m still working to digest these 5 businesses to maximize their potential.

You should dream big, but don’t make it an excuse not to get started. Don’t wait for the home-run opportunity – if you happen to stumble onto one, then that is great. Just keep adding legs to your stool; each one can contribute. Not everyone becomes Bill Gates but there are plenty of us plain-Jane entrepreneurs who do quite nicely on a collection of mundane enterprises. You should consider building your empire too.

Wednesday, August 10, 2011

US Real Estate Investing

In 2007 the signs of the financial meltdown of the decade were becoming apparent to practitioners of unconventional wisdom. A recession was coming. However, Canadians were still talking about their house prices going to the moon and their "wealth effect" had them making US real estate investments in vacation properties. The price collapse occurs in 2008 and suddenly the pundits are saying you should never invest in risky property in the US. Property owners take a bath along with mainstream Americans. Wallets snap shut. Fast forward ahead 18 months or so and property developers are now advertising beautiful sun belt properties at very low prices compared to Canadian homes. Wallets open again and Canadians become the largest investors in US real estate.

As I write this in mid 2011, it occurs to me that these buyers are being taken to the cleaners for the second time in the same recession. The assets they are purchasing are non-income generating. An asset that costs money in taxes, maintenance and insurance must be supported by revenue from somewhere else. For those who intend to reside in them for significant periods and already have a reliable source of revenue to pay those expenses then that is fine. Some retirees may fit the description. Otherwise, these properties are just another boat anchor. They are not investments because they are not revenue generators.

With that dirge of a preamble, I have to say I am still quite positive on US real estate. My 3 business associates and I believe now is a good opportunity to procure some quality income generating assets at modest prices in the United States. We currently own a few houses, and an apartment building. We are shopping for more. I would like to outline some of the logic why we are investing at the same time I’m fearing other Canadian property buyers are going to hit a wall.

Primarily unconventional wisdom draws a distinction between an investment and a place to live. The famous (or infamous) author Robert Kiyosaki has this as one his basic themes. In fact, I would sum up his entire published collection as “Do not buy assets unless they generate income”. We all need a place to live so buying a nice house in which to reside is a reasonable trade-off for a non-income generating asset. Almost everyone has an income stream to carry it. However, buying a second non-income generating property, calling it an investment, and then expecting it to appreciate in capital value is a forlorn hope in my opinion.

Recognition that tenants generate the income from a rental property is the key difference. Tenants are temporarily or permanently in life circumstances where their income is not sufficient to own property. In North America, tenants make up a minority but significant percentage of the population. In Europe, they have a better perception of renting and tenants are more common. Remember that turnover is probably the biggest variable expense for property owners, so you want long term tenants. It follows that the property you purchase should be in a location that meets the needs of tenants.

This is where unconventional wisdom comes in. The percentage of tenants is one of the first measures to judge a neighbourhood. You should be looking in areas where that is a high percentage of tenants to increase your customer base. Remember, also, that access to transit, proximity to schools, shopping and jobs is more important than pools, patios and granite counter tops. Tenants do not have the money to buy nor do they expect the extras. They are looking for basic, clean and safe accommodation.

There is a long window of opportunity for multi-unit properties in mainstream America right now while this recession drags on. We are buying in Dayton, Ohio and that is a long way from the sunbelt. Look on the US MLS for multi family investment properties and you will be astounded at the low prices in absolute terms not just low relative to the market value of your home in Canada today. I encourage you to consider buying income generating assets at rock bottom prices.

Monday, August 1, 2011

What are some good marketing strategies that have worked for your online business?

None of my suggestions to follow are going to generate a nickel for you tomorrow. In fact, they are all going to cost you money in the short term. Unconventional wisdom says marketing campaigns are investments not sales tactics. Here goes:

1. The biggest one of is the primary business model. I presume your offering is designed to be solving the potential customer’s problem for a fair price with quality customer service. Once you have that, you need to be searching and exploiting any natural or engineered advantage you have over your competitors. Because in the end, it will be three things that sustain you for the long run through thick & thin. Those three things are related; word-of-mouth, repeat sales and referrals. You will never have any of them if you don't have a good product, superior customer service and a fair price.

2. Next, the biggest online strategy that worked for me is I started by paying someone with some design talents to design & build the website. I have skills in general business and technically delivering what my business sells but that doesn't mean I have any of the requisite sense of colours, shapes, images, cosmetics, visual flow, user friendliness or general creativity to bring the site to life. I still authorize the textual content but we hired somebody to create the gift wrapping. I'm still getting positive feedback on the first site design 4 years later.

3. After 6 months of doing DIY search engine optimization (SEO) and tinkering with the content to try to get noticed, the next big leap was paying somebody else to do SEO on the site. There is a minefield of substandard people & offerings in this area. Most of my junk mail is people trying to sell me this stuff. I ignore all of those of course. So unfortunately, finding someone who truly does know what they're doing; is up-to-date; and does it for a fair price is a challenge. Be skeptical of the tinkerers, posers, cheap ones or expensive ones. Similarly you shouldn’t be cheap… this is a niche area and people need to be compensated for niche skills. I selected Convurgency out of Ontario. I found them by lurking on my favourite entrepreneurship online forum (Red Flag Deals) and reading everyone’s posts and questions around SEO. I hired him based on the quality of his responses to user questions. The payoff after he completed his work, however is consistently top or high Google organic search results that last for a long time.

4. Next you need to read up on related "exposure-to-SEO" marketing, so you can manage entries in all the appropriate directories, Better Business Bureau, Industry Canada, professional listings, free and paid directories, customers & vendors and other linked resources. These are a cornucopia of little efforts that can consume an enormous amount of time. Nobody said this was easy (or if they did they're either lying or haven't been doing it for a sustained period). No single one of these will make or break you but collectively they add up to exposure and a consistent brand.

5. Blogging & forums. You need become an expert in specific areas so you can offer your help & expertise. You need to lead the way in some cases so you can accrue some scars of experience. Get off the computer, go out there and try some ideas & things, get burned and learn from your mistakes. Once you have something to say maybe somebody besides your friends will listen. I think it's called getting some street credibility. Come back to the computer and your blog or forum entries will generate interest, respect, a following and then maybe a sale... way in the future. These are investments of significant time with no guarantee of a return. This is advertising in the pure sense. This blog is my attempt at that. I already mentioned my favourite forum.

6. Twitter. I haven't embraced this fully across all my websites but intend to in the near term. We added it to our vinyl wholesaling operation, Write On The Wall to start because there are new designs coming out daily. It seemed to make sense there. I think Twitter is here to stay as a medium. The mainstream media use it now as a source of late breaking news and information. The Japanese tsunami of March 2011 was a real eye-opener for me about the impact of Twitter. Again I think you need to have some credibility as a reliable or expert resource of useful information to gain any real marketing value. (i.e. what I would describe as being truly "followed"). You can blather on about nothing and tweet to a million followers but reflect no benefit to your business.

7. Of course, you have to bow down and feed the great Google. I don't necessarily like it but they are the keepers of the gate to search engine results for now. So start with an Adword budget you can afford to sustain and put time into managing that campaign. I plan to hire someone to do this for us as it is a daily tinkering chore and a never-ending job. It frustrates me that I have to continually change my websites to retain Page Rank when there is really no change in our business. It is really change for the sake of change. We have a perfect static website but Google diminishes it because content isn’t fresh. It costs me to fix something that isn’t broken.

One thing I would suggest you avoid. This is a personal preference because I'm a devout fan of unconventional wisdom. Don't put revenue ads on your site. It is short sighted income. If you are (or want to be) a quality business offering a professional business service with integrity and soliciting quality customers, then don't dress up like a Las Vegas tart.