Monthly Archives: April 2017
That’s what partners are for…
Two years ago this week my good friend and business partner of 40 years passed away from cancer. Time has softened the pain, but the sense of loss is still there.
While I generally recommend against partners, our partnership worked very well. We often mused about why it worked, when we had seen so many others fail.
Were we just lucky, or was there more?
Upon reflection, here are seven reasons:
(1) Respect – Neither of us tried to “boss” the other – it was a partnership of equals. We respected opinions, even when they were different. We checked our egos at the door.
We recognized the old saying, “If two people agree on everything, one of them is redundant.”
(2) Maturity – We were both in our 40s when we went into full-time consulting. We had achieved a level of business maturity. Not saying you can’t consult at a younger age, but a few gray hairs (or even no hair) can actually make age a friend.
As the late Howard Shenson said, “The forties are a good time to start consulting. By that time, you know what you are good at and like, and what you are poor at and don’t like. The secret is to focus on former, and ignore the latter.”
(3) Experience – We both brought unique experiences to the firm. Although we were both Electrical Engineers with similar technical experiences, Bill had management experience and I had sales/marketing experience.
As such we complemented each other in those two critical areas. Over the years, we both learned a LOT from each other as well.
(4) Honesty – Having both been burned by unscrupulous colleagues in the past, we pledged never to do that to each other. Nor to our clients. Integrity matters.
We followed the Golden Rule, “Do unto others as you would have them do unto you.”
(5) Longevity – For ten years, we worked together part time. So by the time we went full time, we already knew we worked well together.
We knew each other’s strengths, so we could take advantage of them. We also knew each others jokes 🙂
(6) Humor – Very important, we shared a sense humor. Often mildly cynical, neither of us took things too seriously. We joked and laughed a lot — even after the occasional disaster.
Our wives would often shake their heads as we rehashed some of those disasters.
(7) Support – On more than one occasion, we backed each other up – with very little notice.
When Bill lost his voice midway through a class, I was on a flight that night to rescue him. When my mother-in-law had a stroke, he jumped in and rescued me.
No apologies were ever needed. As Bill was fond of saying, “That’s what partners are for…”
So what final advice can I offer on partners? Proceed VERY carefully — I’ve seen too many cases turn into disasters. Use the seven reasons above as a checklist.
But I’ve also seen successes. My attorneys, my accountant, my financial advisor, and my doctor are in small practices and enjoy the camaraderie and support of congenial partners.
Like a good marriage, if you can make a partnership work, it can be wonderful. But like a bad marriage, the disasters can be devastating.
P.S. With Bill’s loss, I decided to cut back on the consulting. His passing was a grim reminder that life is not infinite. But I have great memories with my business partner, and would not trade them for anything.
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Setting up your team of advisors…
As a consultant, you’re offering your expertise as a more efficient way to do things. Follow your own advice, and hire the expertise you need.
Years ago a new consultant (and fellow engineer) was grousing about how much trouble he was having with a fax program on his computer.
My response was “Why spend time on that when you could spend that time promoting your practice? Just go buy a fax. ” Sheepish, he agreed.
Done things like that myself. It is an easy trap to fall into, particularly when starting out and the budget is tight.
Here are my recommendations for setting up your professional team. Over the years, I have acquired eight that have all proven valuable to my consulting business.
(1)Attorney — Seek out an attorney who works with small businesses. If you brother-in-law specializes in divorces, move on. Better yet, ask him for a recommendation. If you don’t have a BIL, ask business colleagues.
That is how I found my business attorneys (MN and AZ.) They handled incorporations and also acted as “statutory agents.” The latter means they kept track of the annual corporate filings, for a very nominal fee.
They can also be very helpful if you are threatened with legal action. Yes, it happens, but having your attorney respond often nips things in the bud. (The voice of experience…)
(2) Accountant — Like your attorney, find an accountant who works with small business. I strongly recommend a CPA, which is very helpful if you are ever audited.
In addition to preparing your taxes, your accountant can set up your chart of accounts, and can handle payroll reports, retirement plans, and more. Trust me, it is worth it, and it leaves you free to pursue your business.
Accountants are also a good source of referrals to other specialists like financial planners (how I found mine.)
(3) Banker — As you should establish a separate business bank account, so should you establish a business relationship with a banker. The latter is very helpful if you ever need a loan for equipment or a vehicle.
While I’ve been with the same bank for many years, I’ve seen individual bankers come and go. As a result, I suggest an occasional short visit just to stay in touch.
(4) Computer — Unless you are a computer consultant yourself, find someone who can advise you and bail you out when thing go awry.
For years, we used by late business partner’s son for our PCs. When I recently switched to Apples, I found a local Apple consultant who was worth his weight in gold.
He accomplished in two days what might have taken me two months. Money well spent, and he is available if I have additional questions or problems.
(5) Internet – Planning a web site? Or have one that needs upgrading? Hire a web designer to both design and maintain your site. If you are blogging, you still provide the content, but you web consultant handles the rest.
Just today, I had a small problem with one of my sites. A quick email resolved the problem. Who knows how much time I might have spent trying to figure out what went wrong?
(6) Insurance Broker — Sooner or later, you will need business insurance. As a minimum, you’ll need “General Liability”, and perhaps “Professional Liability” insurance. If you have a business vehicle or commercial office space, you’ll need insurance for those too.
While your personal home/auto/life agent may be able to help, I’ve found a broker very useful in locating specialized policies for business.
(7) Estate lawyer — Even if you are young, it is never too soon to think the unthinkable. A sad example is the entertainer Prince, who died suddenly without a will. Not only is there infighting among relatives, but his philanthropic wishes will likely never be realized.
Ask your business attorney for a recommendation — and then meet with him or her!
(8) Financial planner — Last, but not least, add this member to your team. Time flies by, and suddenly you are looking at retirement – or worse, wishing you could retire.
Although many people fancy themselves good investors, unless you are willing to put in a lot of time and energy, I suggest professional help.
My recommendation is for a fiduciary whose fee is based on your assets under management. That way there are no conflicts — both of you are on the same team.
I found my financial advisor through my accountant, and could not be more pleased. I often joke that even when the market crashed, he lost less that I would have lost.
But the losses were on paper, and thanks to his advice, I am now very well positioned in my retirement. Which allows me time to spend on the JumpToConsulting project 🙂
So those are the eight members of my team of professional advisors. An now, the standard disclaimer – this post is educational only and does not constitute professional legal or financial advice.
But do seek out that professional advice — you will not regret it!
P.S. As an aside, most of my advisors are in small practices themselves – often one or two people. I prefer that — they provide a perspective often missing from larger firms.
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Urgent vs Important…
Got this from a newsletter to HOA (Home Owners Association) board members. Struck me as such a good idea I decided to share it here.
It is called the Eisenhower principle. In a 1954 speech, US President Eisenhower said:
I have two kinds of problems: urgent and important. The urgent are (often) not important, and the important are never urgent.
Eisenhower recognized one must be effective as well as efficient. We need to spend time on the important things — not just the urgent ones. To wit:
- Important activities have outcomes that lead to achieving our goals.
- Urgent activities demand immediate attention, and typically involve somebody else’s goals. However, the consequences of not dealing with them can be critical.
To use this principle, list all of the activities you need to address, no matter how unimportant. Next, prioritize the activities (1-10) Then put each activity in on of the four following categories.
Schedule activities based on the following:
- Category I – HIGH urgency and HIGH importance — DO IT NOW
- Category II – HIGH urgency and LOW importance – DELEGATE IT
- Category III – LOW urgency and HIGH importance – SCHEDULE IT
- Category IV – LOW urgency and LOW importance – DUMP IT
Eisenhower was highly productive his entire life. Prior to being the 34th US President (1953-1961) he was the Supreme Commander of Allied Forces in Europe (Five Star General), served as President of Columbia University and was the first Supreme Commander of NATO. And he still found time to golf and paint.
This simple tool is useful to both you (as a consultant) and your clients. Thanks Ike!
P.S. Visited the Eisenhower Library in Abilene KS last year. Well worth the visit if you are a history buff like I am.
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It’s not enough to solve problems…
Got this pearl of wisdom over dinner with a client.
A fellow engineer who had become a director for a defense contractor, we were discussing how engineers were attracted to solving problems. He paused, and said:
“It is is not enough to merely solve problems. We must anticipate them as well. Something I always emphasized to engineers working for me.”
Although I had never heard it stated that way, I realized he was absolutely right.
This insight applies to consultants as well!
— Thanks Bert Newman (who eventually started his own firm in retirement.)
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