Time to forge a new path…

It was a year ago this month that my business partner passed away from cancer. To say the past year was stressful would be an understatement.

Bill and I were good friends and business partners for almost 40 years. I miss him every day.

But life goes on. The fog is lifting, and the paths ahead looks bright. The big question is “Which path to take?” After much soul searching, the new path becomes clearer each day.

When a colleague recently inquired about my future plans, I gave this answer:

After much consideration, I’m winding things down here. I’ll soon be 70, so I decided to kick back. Twenty years ago I’d be a bit more motivated.

Been referring consulting jobs to several younger guys which is working fine. Still doing training, which I really enjoy (and which pays well.)

However, I limit myself to no more than one class a month. In the old days it was not unusual for each of us be on the road 30-40 times a year with consulting and training projects. Lot’s of fun, but I don’t have the energy for that anymore.

Still tying up a few loose ends, but ready to move on. I’ve been doing the JumpToConsulting blog for about five years, and plan to ramp that up.

I’ll be doing a presentation “So You Want To Be A Consultant” at the IEEE EMC Symposium in Ottawa in July, which I may expand into an on-line class. There is a book in the wings too.

My overall goal is to slow down and enjoy life. Goof off more. Travel in the RV. Spend time playing with the dog and the grandkids.

Bill’s passing was a reminder that life is not infinite. We had a great time with our business, but as a recently retired consulting colleague said, “It’s time to forge a new path…” That idea appeals to me too.

So how about you? Is it time to forge a new path in your life?

My consulting business was only one of several paths I forged. And I am happy to share my experience here, in the hope that it may help others forge – or at least explore – their new path as a consultant.

© 2016, jumptoconsulting.com. All rights reserved.

Avoid Tax Audits… Keep Your Books Clean…

Just finished gathering my annual tax information, so taxes are on my mind. It gets shipped out tomorrow to my accountant, who (as a consultant) will do the financial magic.

Years ago my accountant advised me to keep good records and to keep them clean. One never knows when one might be audited. Sometimes it is purely random, and sometimes it is the result of an abnormal condition that flags your return. .

According to a recent news article, 1 % of IRS tax returns are audited. It is slightly higher for small businesses. It seems some business owners can’t resist the temptation to fudge the numbers, either through questionable deductions or hiding income.

My advice — do NOT do this! An audit can easily cost you thousands of dollars — fees, lost time, and lost revenues. And while you can deduct the legal/accounting expenses, you can’t deduct or recover lost revenues — they are gone forever.

Furthermore, once you fail an audit, expect to be audited again. I know one small business colleague who learned that lesson the hard way. His audits went on for several years.

More advice — use a CPA! Even if you can do the taxes yourself. Nothing like having a CPA (Certified Public Accountant) sign your tax return for credibility with the tax agencies. Or at least signal them that you have a professional tax advisor in your corner.

To keep the costs down, I keep my own books. Nothing fancy here — I used Quicken for years. Although a simple check register system, it can generate various reports. Such as the P&L (profit and loss) statement, which my CPA uses to prepare my taxes.

My CPA has helped in several other ways. Setting up a chart of accounts, sharing general business advice, filing other reports, and providing vetted referrals for insurance and financial management. It has been money well spent.

If you do get audited, don’t despair. I’ve been audited twice — once by the IRS, and once by the great state of Arizona.

The IRS audit was supposedly “random.”

The conversation went something like this:

Auditor – Which is better for you? To come into our office next Tuesday or next Wednesday?

Me — Neither. But can my CPA handle this? He prepared the return.

Auditor — Uh… yes… I guess that would work.

I suspect the audit was not random at all. But the issue got resolved, whatever it was.

End of audit.

The Arizona audit was supposedly due to high medical expenses one year.

The conversations went something like this:

Auditor – I need to verify all your medical expenses.

So I sent copies of all the bills.

Auditor – Now I need to verify all your insurance payments.

So I sent copies of all the payments.

Pretty sure the auditor thought I did not save these statements. I also included a list of expenses I had missed — a couple of drug charges, plus mileage for the various medical appointments.

I then asked if I should file an amended return to get money back.

End of audit.

Thanks to a CPA, clean books, and good records, I passed both times. And I didn’t lose any sleep over either one. In fact, it felt pretty good to put a stop to any fishing expeditions.

Keep your books clean too — it is just good business to do so!

© 2016, jumptoconsulting.com. All rights reserved.

A political rant and “thought experiment”…

‘Tis the political season, and all the mudslinging, lies, outrageous proposals. Not sure about you, but it makes me weary, and even a bit concerned. What really scares me is that so many blindly buy into all the political BS.

Maybe it is time to put this in perspective with a little rant. Allow me to share a thought experiment from an engineering consultation twenty seven years ago.

It was 1989, and I was doing an engineering class for the Kuwait National Petroleum Company. It was in between the Iran/Iraq war and the invasion of Kuwait. I worked with a great bunch of Kuwaiti engineers, and I hope they all survived.

Another US company was teaching a class at the same time at the same training center. Since we were housed together and shared many meals, I got to know my colleagues. As veteran travelers, they shared their insights and perspectives.

One of the trainers grew up in the Netherlands, and emigrated to the US as a child right after World War II. He told chilling stories of the Nazis rounding up Jews, not realizing at the time that he would never see his childhood friends again.

He had been a naturalized US citizen for many years, and one evening over dinner he posed this interesting thought experiment:

Suppose I take 100 unconditional US visas to any city in the world. I stand on a corner and offer them to anyone who is willing to return in an hour with only a suitcase and their family. In return for giving up their current citizenship, they will become US citizens.

How long will it take to get rid of those 100 visas?

Now, suppose I take 100 unconditional visas for any other country in the world. I stand on a corner of any city in the US, and make the same offer. Give up your US citizenship to become a citizen of another country.

How long will it take to get rid of those 100 visas?

This is not meant to wave the flag or brag on the US, as there are many other fine countries in the world, and many people change their citizenship.

But it does serve to put in perspective what we have here in the land of opportunity. I’ve known many immigrants who took advantage of those opportunities, with the US much better off as a result. Some are even consultants.

So maybe it is time to stop bitching, and start showing some gratitude. And maybe it is time to start acting like adults in the voting booth!

End of rant.

 

© 2016, jumptoconsulting.com. All rights reserved.

Do you sell like an engineer???

This post is for my fellow geeks. It was inspired by a recent post at LinkedIn Pulse titled “Do You Buy Like an Engineer? Probably Not.”

The author points out that many A/E/C (architectural/engineering/construction) firms stumble in their sales efforts when they assume their clients think just like them.

If the client is another engineer, that may be true. But if not (such as a government entity or even general management), there can be a serious misfire.

She points out that engineers are different. We engineers know that – see this post. 🙂 But she also points out that one must adjust the sales message to the client.

Here is my comment:

Very good article, and excellent comments. As a consulting engineer (30+ years) and former sales engineer (10 years), I agree.

But the reverse is true. If you are selling to engineers, you better give them details. If you try to “fluff and bluff” they will eat you alive.

As a young engineer preparing a capital equipment request, I was advised to limit the digits to two for managers ($20K, not $19,767.55.)

The joke was their brains could not handle larger numbers. But I quickly learned managers had a broader view. Both views are often needed.

So I use different approaches for engineers and managers in my business dealings. Your point is well taken – one must adjust the sales message to the audience. Don’t talk French to a German.

Thanks for sharing your insights!

Selling consulting services is all about communications. It is NOT about manipulation, like “overcoming objections” — how I hate that term!

Rather, it is having conversations about client problems and/or aspirations, and helping craft appropriate solutions. Like being a doctor or architect — not just another peddler.

But you must speak the client’s language. That was the author’s original point.

© 2016, jumptoconsulting.com. All rights reserved.

Some comments on travel expenses…

Had a recent inquiry on how I handle travel expenses. Here are my policies:

  • Travel expenses are billed at cost – no markup. Some consultants mark up the travel, but I feel this is cheesy.
  • Air fare purchased is normally refundable/changeable. Saves problems if the schedule changes.
  • Out of town travel time is billed at one day anywhere in the continental US. Keeps it simple. Overseas travel time is negotiated, usually two or three days.
  • Local travel time is billed portal-to-portal for less than a full day. Four hour minimum. No extra travel charge for a full eight hour day.
  • I make my own travel arrangements. If the client does, they are subject to my approval.
  • A $2500 advance is required prior to any travel. Lost money once on a bankruptcy – won’t happen again.

These details are included in my “Terms and Conditions” – a  single page of boiler plate attached to quotations. Here is the verbiage:

Expenses – All expenses will be billed at actual cost, with no markup. These expenses include all travel costs, test lab and subcontractor fees, and other expenses incurred for the client.

State or local withholding taxes, if applicable, will be treated as an expense and added directly to the invoice.

Travel – Travel time is charged at our regular rates, as follows:

-Local – No travel charge for full day consultations. For less than a full day, time will be billed portal-to-portal.

-Out of town (Air Travel) – One full day labor is added to consultation fee for travel within the contiguous 48 states.

-Outside Contiguous United States – To be determined.

-We normally make our own travel arrangements, but if made by client, they are subject to approval. Overseas travel is “business” class.

Hope this helps.

© 2016, jumptoconsulting.com. All rights reserved.

Follow your passion… NOT…

Too many “entrepreneurial” bloggers suggest you simply “follow your passion.”

Unfortunately, that alone is not enough. You better be able to make money at it! Here are two stories that illustrate the point:

The Ice Cream Store…

At a professional meeting some years ago, one of my colleagues said to ask Dick about his ice cream store.

“Ice cream store?” I responded. “We’re a bunch of consulting engineers. What’s with the ice cream store?”

“Just ask,” he responded with a twinkle in his eye.

So I did. As engineers, we often like to twist our colleagues’ tails, and I was pretty sure that was what this was all about. But it turned out there were some valuable lessons in the story.

Dick told how his daughter had long wanted to have her own business. Being a good dad, he agreed to help her. With stars in her eyes, she decided to open an ice cream store. Not a franchise, but an independent store, that she could decorate and run how she saw fit.

How cool is that?

Unfortunately, this was her first business venture. No customer surveys, no location research, no marketing of any kind. Build it and they will come, right?

With some luck, the store was moderately successful. Enough so that soon a second ice cream store opened up down the street. Another would be entrepreneur with stars in her eyes also thought it was a cool idea, and jumped in.

The net result. Neither store now made enough to break even. Within a year both stores went bankrupt.

There are a couple of lessons here:

  • Make sure there is a want or need for your products or services.
  • Make sure there are some barriers to entry.
  • Make sure there are enough customers able and willing to pay.

Just because it looks cool, doesn’t mean it is a viable business!

Roto-Rooter isn’t particularly cool, nor was our consulting practice. Like Roto-Rooter, we fixed problems that others did not care to handle.

And while our consulting practice was not as cool as an ice cream store, we enjoyed it — and we made a darn good living at it.

The Country Doctor…

In an earlier post, I told of my great-uncle’s medical bag, and how a few simple tools coupled with the right knowledge and experience saved lives in the early 1900s. His medical practice spanned a half century. A successful professional consulting career.

His first passion, however, was music. As a young man, he dreamed of being a concert violinist. But he realized the odds of making a decent living playing the violin were not good.

So he made a career out of a second passion. Healing people through the practice of medicine. Music became an avocation, not a vocation.

He found great satisfaction in both. He was an accomplished physician, and also an accomplished musician. Thanks to his decision, he lived life well.

I heard this story years later from his wife, my great aunt, who was also his nurse. Since he passed away when I was young, I hardly knew him. But I always found his decision to be very wise. Find something you like to do, AND with which you can make a living.

You can always make a hobby of other passions.

So before you quit your job to follow your passion, make sure there is a need, there are barriers to entry, and there are clients willing/able to pay. Otherwise it is just a hobby.

© 2016, jumptoconsulting.com. All rights reserved.

Are you an Ambivert?

Here is a reply I left on a LinkedIn discussion, titled “Are you an Ambivert?” The post was by Dr. Travis Bradberry, the co-author of Emotional Intelligence 2.0.

In his article, Dr. Bradberry challenges the conventional pigeon-holing of personalities as either introvert or extrovert. Rather, he points out that most of us are a combination of both traits. Furthermore, those traits may vary depending on the situation we are in.

He shares research showing those in the middle are often more successful, as they can better relate to both ends of the spectrum. He also points out that this flexibility can be learned through increased self-awareness.

My comments follow:

Great article! Please let me share a personal story,

Forty years ago I moved from engineering to sales. As most engineers are introverts, I was a bit concerned. After all, Dilbert is a documentary.

At a business workshop, we had to do short self-assessment. On a scale of 1-10, where 1 was an introvert 10 was an extrovert, I came in with a 4.

The instructor then asked for a show of hands for those ranking 8 or greater. His comment was, “Most of you are in sales, right?” I was crushed – thinking I was a round peg in a square hole.

Then he asked, “Any sales engineers here?” My hand went up alone.

He said, “You’re a 4, right?” I was amazed. Then he continued, with a grin, “You engineers just can’t get the needle above 5 no matter how hard you try.”

I stayed in sales engineering for about 10 years, and then started an engineering consulting practice which I ran for the next 30 years.

So thanks for finally pointing out I’m an ambivert. I always just assumed I was an engineering misfit 🙂 Who knew?

In my experience, most consultants (both management and technical) trend slightly toward introversion. After all, we’re thinkers and observers. So don’t let being an introvert stop you from making your JumpToConsulting.

Besides, if you are interested in consulting, you may well be an ambivert anyway!

© 2016, jumptoconsulting.com. All rights reserved.

How we sold 130,000 books in one day…

For many years, this was a “trade secret,” but now the story can be told.

Simple — we gave them away — for FREE  — as a supplement to a leading engineering magazine. And did it ever pay off!

The original plan was a twelve part series in Engineering Design News (EDN) in 1994. The editor would not run it until we had six articles ready to go. Fair enough. So I wrote one article a month – after all, we still had an active engineering consulting practice to run.

Upon submitting the first six articles, the editor suggested bundling them all together as a book supplement to the magazine. At first, I balked. The initial strategy was a year long exposure (one article a month). Drip marketing…

But the more I thought about it, the more I liked it. So I agreed, and even offered to help procure advertisers. EDN jumped at that offer — we were in a niche market, and we knew the key advertisers.

We contacted those we thought would be most interested, and ever so gently twisted their arms. Those who did sign up later thanked us. Original copies still sit on bookshelves.

The supplement immediately went into reprints. In 2001, EDN asked us to update the material, and then they did subsequent reprints. I added two chapters and updated the a time-sensitive chapter on regulations. The rest stayed pretty much the same.

In 2005, EDN decided not to continue with the reprints. So they returned the copyright, and we then offered printed books for sale on our website and for handouts in our classes.

Several thousand copies later, we added a PDF version for download. Although not free, both versions continue to be popular.

When the original book hit, the phone rang off the hook. Overnight, it propelled us from a small local consulting firm to one of national prominence in our field.

The book ruffled a few feathers – a few complained it was not technical enough. But I was not writing for the academics or experts. Rather, I was writing for the design engineer who had just encountered his or her first electromagnetic interference problem — and a likely candidate for our services.

Overall, our first book* was a great (if somewhat accidental) success. We were paid a nominal amount for writing it, but not nearly enough to pay for the time. In retrospect – I would have done it for free, given the exposure it gave us and the business it brought in.

Some additional information. I’ve been mixing “I and we” for a reason. While I wrote the bulk of this book, my late business partner (Bill Kimmel) edited and added his comments.

At the same time, he was writing a book on medical devices, which I edited and added my comments. Later, we collaborated on a third book. So both names appear on all three books as co-authors.

Writing a book is a big challenge. An even bigger challenge is getting it into the hands of prospective clients.

Realizing our primary business was consulting — not writing — we elected to give away our first book. It was a huge marketing successes!

P.S. In addition to the books, we wrote over 200 technical articles (for free,) and published a free client newsletter for over 20 years. It has all been a lot of work, but also a lot of fun. And it greatly enhanced the visibility and credibility of our consulting firm.

Don’t be afraid to share your expertise – for FREE. The pay off is there!


* Read the first chapter of the “EDN Magazine Designer’s Guide to EMC” here.

© 2016, jumptoconsulting.com. All rights reserved.

What excited you at ten years old???

You’re intrigued by consulting, but you’re bored with your job. The idea of the same old grind has little appeal. So what else might you try?

Ask yourself, “What excited me at ten years old?

Many of you pursued a career that really didn’t interest you, but did it because it was the “right” thing to do. Maybe there was pressure to follow a parent’s footsteps, or maybe you were simply advised to “be sensible.”

If you are considering a JumpToConsulting, take a look at what once REALLY excited you. After all, if you are going to make the jump, it might as well be fun. Here are two stories:

A survey of engineers…

Many years ago, my late business partner mentioned how he was intrigued by a science fiction story about a machine that could think. He was ten years old. This eventually led to a career in Electrical Engineering. He also mused how disappointing it was to find out later that computers were really dumb. But he was still hooked on engineering.

My experience was similar. At nine years old, I build a crystal radio. Hearing the local radio station in the headphones was pure magic. Like my business partner, I was hooked. I later got into ham radio, and ended up as an Electrical Engineer.

Based on this observation, we started surveying our clients and students. When asked when our fellow engineers (both men and women) first became interested in things technical, it was often around ten years old. The answer was consistent hundreds of times.

A ham radio story…

In the mid-1990s, I had a client who was also a radio ham. Both of us had recently jumped back into the hobby, so whenever we met, we discussed our latest radio adventures.

One day I asked him, “Why is the appeal of this hobby, anyway? It is really kind of dumb. Why spend hundreds or thousands of dollars to talk to complete strangers, when you can do the same thing for free on the Internet?”

He thought for a minute, and then replied, “You know, when I sit down to the radio, it only takes five minutes and I’m ten years old again. It’s the magic.”

So what excited YOU at ten? Can you turn it into a business? Give this some thought if you are contemplating a JumpToConsulting, or any other career change.

P.S. Maybe you were lucky, like me, and discovered a passion early. Only later did I realize how many people did NOT follow a passion–often to their regret. But is never too late…

© 2016, jumptoconsulting.com. All rights reserved.

Happy New Year 2016…

Welcome to a brand new year! Most years I am a bit sad to see the old year end, but this year I am happy to see 2015 out and excited to see 2016 in. The past year has been rough — but life goes on. Even in sad times, life is a grand adventure.

To put things in perspective, here is a list I received from my financial advisor (a fellow consultant.) Fun to read. It compares life in 1915 to life in 2015 — lot’s of changes in the past 100 years. I added a few of notes of my own.

In the Year 1915… (when my father was 3 years old…)

  • The average life expectancy for men was 47 years (now 76, and 81 for women.)
  • More than 95 percent of all births took place at home.
  • Only 6 per cent of Americans graduated from high school (now 81 per cent.)
  • Only 14 per cent of homes had a bathtub.
  • Only 8 per cent of the homes had a telephone.
  • The tallest structure in the world was the Eiffel Tower.
  • The American flag had 48 stars.
  • Fuel for cars was sold in drugstores.
  • The maximum speed limit in most cities was 10 mph.
  • The average US wage was 22 cents per hour.
  • Sugar cost four cents a pound.
  • Eggs were fourteen cents a dozen.
  • Coffee was fifteen cents a pound.
  • Canned beer had not been invented yet (Official “birthday” was 1935.)
  • The average US worker made between $200 and $400 per year.
  • An accountant could make $2000 per year. (Financial consultants did well.)
  • An engineer could make $5000 per year. (Technical consultants did even better – Thanks to Edison et al, engineers were giants in those days 🙂 )

Is this the year to hang out YOUR consulting shingle? If so, start NOW to make it a reality. Don’t wait 100 years. If you are already consulting, congratulations!

Either way, hang out here and I’ll share more ideas on how to start, build, and maintain your small consulting practice. Check on Mondays for the latest post. 

Happy New Year from Uncle Daryl!

© 2016, jumptoconsulting.com. All rights reserved.