Posts Tagged Business
Using Twitter for customer testimonials
When reading customer testimonials on websites I sometimes wonder how genuine the words are. There is often no way of knowing whether the quote even came from a real person, whether it was unsolicited or how old it is. As a business owner you have to keep these testimonials fresh and remember to request new ones from customers and clients. Despite these problems customer testimonials feature on many sites and can really help to reassure people before they purchase.
When we launched Perch, just over a year ago, we used Twitter extensively to get the word out and to respond to our potential and new customers. Drew and I have been using Twitter socially since not long after it launched so it made sense to promote Perch that way. As people started to buy and use Perch, they began to post nice things to Twitter and so we added them as favorites for the Perch account on Twitter, over time building up a large list of nice comments from our users.
When we launched the recent redesign of the Perch website we used the Twitter favorites as a way of putting testimonials on the site. In the footer of the Perch website is one of our Perch birds tweeting a tweet drawn from that list. These display randomly, so as a visitor moves around the site they will see a variety of different testimonials. Each tweet links through to that status on Twitter – so the testimonial is verified as being from an actual person. On Twitter you can see the date it was posted, so it is possible to tell how old this testimonial is. In addition the visitor is able to click through to the grabaperch account or search and see all of the mentions of Perch – not just the ones we really like!
You can get your favorites from the Twitter API. What you should avoid however is having something running on your site that gets the favorites every time someone visits. Instead, use the API to pull back the favorites and store them locally (in MySQL, another database or a text file) and then display your latest or random favorite from that data store. Twitter is often unresponsive or very slow and that will effect your site if you do this in real time.
Using the favorites list to add content to your site gives you a very simple way to add moderated Twitter content to your site. High profile sites have had problems in the past by displaying content based on a hashtag, as then anyone using that hashtag can get their thoughts displayed on your site. By using favorites you keep control and choose what goes into the list. Although you have chosen which Tweets go into your favorites, the visitor can use Twitter to find out more about you and the person providing the testimonial. This is a very open and transparent way to display testimonials and I believe this makes them far more useful to a potential customer or client.
Spec work for web developers
As a company edgeofmyseat.com don’t need to do a lot of responding to tenders. We sometimes help our design agency clients with their pitches but it is fairly rare for us to get a RFP direct to us. However, when we do get sight of these documents – perhaps because we have been approached directly to do development work for a company that already has a designer on board – I am often very surprised at the amount of work they expect us to do at a very early stage. Just to be able to have the “opportunity” of pitching for the work.
The main issue I have with these tenders is that they directly ask, or at least insinuate, that what should be submitted is an entire proposal for the development of the application. They often ask large numbers of very detailed questions about technology, approach and the finer points of how we would recommend certain features be implemented. To fully respond to these documents would take a couple of days of time for a senior developer – if we were to really do our response justice – essentially a couple of days of free consulting for the company putting out the tender.
As far as I am concerned this is as much spec work as asking design agencies to pitch with concepts. So when we are asking to put forward a proposal for these jobs, then our response tends to be a polite “no, thank you”. Even when the work looks interesting and very much the sort of project we could do well.
If an agency is spending a lot of time responding to tenders then they have to recoup that cost somehow, in our case it would mean having to charge a higher hourly rate for all jobs to cover the non-billable time used in responding.
In addition to the amount of non-billable time these proposals will consume, this work is in reality free consultancy for the person or company requesting the tenders. They can start the process with very sketchy ideas as to how their application should work, get 10 companies to present their concepts and suggestions and take all that knowledge, research and understanding with them to the final build – without paying a penny. When your input is ideas and experience it would be very difficult to prove that the information came from you, it isn’t the same as someone stealing a design concept. There are the occasional instances where an agency could cry foul over an idea that was so unique it would have been unlikely to have also come from another source, but these are unusual. This post from Solid State Group makes for interesting reading.
When it comes to clients with whom we have an existing relationship we are always happy to discuss ideas and approaches prior to a project beginning – that is all part of a good business relationship. However I will not give away days of consultancy to every company who turns up with a large document and a distant promise of a profitable job.
We have found that often these vague proposals expecting a lot of work are because the end client does not have a clear idea of what they want to do. With projects we have taken on we have found that a good approach is to suggest an initial stage of consultancy work. We work with the client and their designer to come up with a specification for the work, often producing wireframes of functionality; making suggestions for approaches and technology; essentially bringing our experience as developers to their ideas. At the end of that process that work is handed over to the client – along with a quote for our development services if we were to continue and build the project. However if they decide to then take the work elsewhere, there are no hard feelings, we have been paid for our consultancy work and we would hope that our years of experience will help to get the project off to a good start.
As I mentioned at the beginning of this article we are fortunate in that most our our work comes via long-term partnerships with the design agencies we work with, or from people who have already decided that we are the company they would like to work with. I know that many companies do get a lot of their work via responding to tenders and I would be interested in hearing how other people manage responding to RFPs, and balance that with billable work, and not giving away a lot of consultancy time for free in the process.
Keeping an eye on cashflow – accounts and bookkeeping for web businesses
It seems obvious that cashflow and accounts are important elements of running a business. However when you first start your business, bookkeeping and accounts isn’t something you easily get excited about – unless perhaps you are starting a business as an accountant. If you watch the television programme ‘Dragons’ Den’ you can see how many would be business owners and current business owners have a very poor grasp on basic accounting principles. This post describes how I, as a business owner, have dealt with bookkeeping over the years and finishes with some ‘top tips’ based on my experiences. I run a business in the UK so some of the references in this article are UK specific, however if you replace VAT with ‘local tax’, I’m sure a lot of these tips hold true everywhere.
I was very fortunate when starting edgeofmyseat.com because I was helped by The Prince’s Trust and one of the things they do is set new businesses up with a business mentor. The monthly meetings with my mentor ensured that at least once a month, I got my accounts up to date and could talk about my cashflow, where I expected money to be coming from and where I was spending it. This was one of the most valuable things that The Prince’s Trust did for me as a new business owner. The mentor sat me down and made sure I realised that while I might be great at doing the work, if I also didn’t keep my eye on cashflow, the business wouldn’t succeed.
In my first year running the business I operated as a sole trader, I did all my own bookkeeping and end of year tax return. As the business grew we become a UK Limited Company and registered for VAT and at this point I took on an accountant. By the time he had been through our accounts he had saved me more than his fee, as there were various things I wasn’t claiming for that I could do. However I still continued to do the day to day bookkeeping, using my accountant for occasional advice, and also the end of year returns. Almost eight years on, I still do all of our bookkeeping and despite it being something that could be easily outsourced, I would rather devote some time to this and know exactly what is happening financially on a daily basis.
I am often asked what software we use for our accounts. Up until very recently I used Quickbooks, while Quickbooks is a very capable small business accounting package it doesn’t run on the Mac or Linux, and also takes some experience to understand how to use it. When Drew McLellan became a Director of edgeofmyseat.com it became clear to me that we needed to explore alternatives to Quickbooks that would enable him to become more involved with the finances of the company. In the time between me setting up the original accounts in Quickbooks in 2001 and Drew joining the company in 2007, several online accounting and invoicing applications had been launched and we eventually selected Xero as the application that fulfilled our requirements best. I could (and probably will) write an entire post about that transition but it has made life far easier for me as the person who does the bookkeeping and for Drew who just needs a quick overview. I would very much recommend Xero from our experiences so far.
Business cashflow tips
Know your financial position
If you run a business the financials are your responsibility. Get help when you need it but don’t outsource to the extent that you don’t know your financial position. If you don’t understand something that your accountant or bookkeeper is doing, ask them. Make it your responsibility to have a decent working knowledge of the books.
Have up to date details of your position available, in an easy to understand format
When I was using Quickbooks, it was very difficult for Drew to understand our financial position. I had spent years learning Quickbooks as the business had grown and I understood what was happening, however without that knowledge it was hard for Drew to just get a quick overview. With our move to Xero, Drew can now login and see the overview and reports so both Directors of edgeofmyseat.com are up to date with our position at any time. If you do outsource this side of your business make sure you are getting frequent management reports, and that you understand them.
Get professional advice
I do my own bookkeeping, but I wouldn’t dream of doing my end of year accounts on my own – I know my limitations! A good accountant should save you money as they will be up to date with current legislation. They should also be able to help you set up your accounting software to make day to day bookkeeping easy, and in a format that will make their job at the end of the year straightforward.
There are other places where you can obtain advice, business organizations such as the Federation of Small Businesses and Business Link in the UK offer lots of helpful advice on financial issues. If you have a good relationship with your bank they can be a port of call – but a lot does depend on the individual bank and branch.
Set aside your personal/company tax and VAT as you receive it
Ideally you should have a separate account to transfer the portion of every payment that is VAT (if you are registered) and the percentage of profit that will be tax to as you receive payments. Most business bank account providers can also give you a linked instant access savings account. I find that having the money in a different account stops me seeing it as available cash! If you don’t have a separate account make sure that you always know what amount of the money sat in your account is earmarked.
Chase unpaid invoices
An organized system for creating and tracking invoices means that you know when invoices become overdue. Don’t be shy in chasing invoices – if you have done the work then you should be paid for it. It is a sad fact that many businesses purposely avoid paying until they are chased for the money, and will delay as long as possible. Have a set procedure that you use to chase and enforce your invoice terms. In the UK the Better Payment Practice campaign site has lots of practical advice for chasing payments.
Don’t leave things to the last minute
Leaving end of year accounts or VAT returns to the last minute causes two issues. Firstly, you are more likely to make mistakes or forget to include things if you are running up to the deadline. Secondly, if you have made a mistake somewhere and find your VAT or tax bill is a lot more than you were expecting, you have no time to find the extra cash. I try and keep our books up to date each month, so I have as long as possible to sort out any issues before the accounts have to be finalized and outstanding tax paid.
Conclusion
The above are some of the suggestions that I have for keeping up to date with the figures in your business. If you have any other tips please ad them in the comments. Also, I’m planning to write a few articles on business related issues based on my own experiences, so if there is anything you think would be interesting to know – let me know and I’ll see if I have any ideas on the subject.
Starting your own business during a downturn
It is certainly shaping up to be a tough time for a lot of people right now. Several friends have found themselves unemployed and I’ve seen a number of people mentioning on Twitter how they are considering starting their own business. From my own experience I would encourage people to go for it – even from the early days I have felt more secure as a business owner than an employee. I am the first to know about any potential trouble spots and can do something about it myself rather than hoping my boss will. Starting a business at any time seems quite scary, as we enter a recession even more so, and as someone who has been through that process I wanted to share my own tips for starting up with nothing.
When I started edgeofmyseat.com in September 2001 the web industry was also in the middle of a crisis. The dot com boom was crashing and the market seemed to be swamped with out of work web designers. However we have gone from strength to strength as a company and I believe that the tricky start I had has been important to our success. Sometimes the best lessons are learned through dealing with adversity.
Conventional wisdom is that you should have a pot of money saved – around 6 months worth of salary – before taking the leap and starting up for yourself. If you’ve just found yourself unemployed you might not have that luxury – I only had the next month’s expenses covered when I started up. It certainly focuses the mind! Even if you are fortunate enough to have some cash in the bank, try and see it as your contingency fund and act as if you need to make enough to live from day one of your new business or freelance life.
Spend on only what is necessary
You don’t need much to start out as a freelancer or small company. A computer with appropriate software (which you may already have – even if it isn’t the shiniest and newest Macbook Pro), somewhere to sit and work comfortably, an internet connection and a phone.
You can do without a load of printed materials. When I started the company the only printed materials I had where some cheap business cards. These days getting nice and inexpensive business cards is easy – check out Moo.com. Even today we have business cards and printed letterheads – no compliment slips, leaflets, folders etc.
However, don’t scrimp on essentials
Your computer might not be the newest but it needs to let you do your job. If you need to use Photoshop and it takes half an hour to launch or crashes every hour then it is false economy to battle on as the hours you waste soon add up to a lot of money if you could have been doing chargeable work during that time. Learning when to economise and when to invest in equipment is a vital part of starting out on your own. For a few days keep a tally on the mount of time you spend waiting or rebooting. You can then work out when your investment in a new machine will pay for itself in time saved.
If you are sat at a desk all day essentials also include a decent chair. Back problems can leave you unable to work for weeks. I’m not suggesting you go out and get an Aeron, but shop around for a decent adjustable chair, you can often get really good deals in office stores on ex-display or end of line stock.
Promote yourself on the cheap
We have never advertised in the traditional sense. Instead I have always used the things that I’m good at to raise the profile of the business. A well written article for a busy site, that covers one of your levels of expertise, can be worth many expensive adverts in magazines or a fortune spent on Google AdWords. Think about ways you can raise your profile by putting in some time – writing, starting a podcast, spending time helping people out on mailing lists and forums or offering to speak at a local event are all ways you can promote yourself and help other people too.
I believe the key with this is to never treat what you are doing as purely an advert for your business. Write, speak or answer forum questions in the spirit of community and in sharing knowledge, and do the activities that you enjoy doing, where you can offer something.
Make sure everyone you know is aware of what you are doing
This bit I’m quite bad at, self-promotion not being one of my strong points. If you are already involved in the web community – on Twitter, on mailing lists and forums, have a blog or personal site – make sure that you let those groups know about your new business or freelance status. You may find that people you already know have work to offer or contacts they could introduce you to. It is worth being specific about what you do so that people know you are the person to come to if they need someone for that type of work.
Keep an eye on cashflow
I never wanted to be a bookkeeper but part and parcel of running a company is having a decent understanding of what happens in your accounts. I’d advise any company to get a good accountant to help with the year end accounts and advise on tax issues, however think seriously before outsourcing all of your bookkeeping. I still do all of our day to day bookkeeping, and find that checking into the accounts several times a week keeps cashflow at the front of my mind and prevents any small problems becoming big ones. It also saves us money with the accountant as I can send him neat up to date accounts to check and make adjustments to rather than a pile of invoices and a shoebox full of bills!
Chase unpaid invoices promptly
I find it really difficult chasing money from clients with whom I have a good working relationship, but it is one of the necessary evils of running a business. Have payment terms and stick to them, don’t feel bad about asking for payment when it goes overdue. If you’ve done the work it is your money! In times of trouble companies often use freelancers for a interest free loan, getting work done and then delaying the payment for 2 or 3 months. You are not the bank so don’t let your clients treat you like one.
The Better Payment Practice Campaign website has a lot of helpful information about getting paid and what to do if a client is not paying. A lot of this is UK specific – but some of the general points are true wherever you live.
Get Networking
If your target market is other businesses then getting out and talking to people can generate a huge amount of interest. Check out your local Chamber of Commerce and the local papers to see if you can find local business networking events. Some groups will charge for membership as well as for the events themselves but usually will let you attend a couple of sessions as a guest before joining.
My experience of networking is that I very rarely meet anyone at an event who becomes a client however, a few weeks or even months later I often hear from someone who has been told about us by someone from an event.
My top tip for networking is that you should never go out there and try and sell your services, instead just chat to people. Usually the first question anyone will ask is “what do you do?” so be ready to answer in a way that describes your company and services clearly and memorably. Then find out what they do! You will meet some nice people, perhaps find out about services and products you can use, and also spread the word in your local area about what you offer. If you work alone, networking groups can also be a really great way to discuss business issues in general with other people, and many groups have speakers who come in to talk about business related issues. You can get some good advice from these groups in addition to any contacts you may make.
As with online networking and promotion it’s all about give and take. If you become part of networking or local business groups, and try and help other people by referring them on to people or being willing to share your knowledge, you’ll soon find that people want to help your business as well.
Look for opportunities – even if they aren’t very glamorous
Starting a business in a downturn might mean that there is less really interesting work to go round. When I started out a lot of companies had found they needed to lose or trim down their web teams, and when their applications started to run into issues or need additions made they were looking for freelancers to fill the gap. I spent a good part of the first three years I was in business fixing up other people’s code. Definitely not glamorous work but it taught me a lot about web development and paid the bills until people started commissioning new work again. A lot of the clients who initially came to me to fix up old applications then came back and hired us to develop new ones, so it’s wise not to turn away opportunities too quickly, especially if you aren’t already swamped with exciting work!
So these are my suggestions for starting a business or going freelance during a downturn. I’d love to hear more suggestions in the comments.
