Sunday, February 24, 2008

Don't give up your day job

Don’t give up your day job, well not unless you value your time correctly.

This is a basic commercial post this time, the focus is on how you value your time.

What do you need to earn for the year. There are two figures to consider here;

Your annual ’turnover’’ from fees and your specific ‘’take home’’ before tax. As a simple rule of thumb those of you comparing your income equivalent in a day job should look at an annual turnover at least double your potential professional salary. In most cases it needs to be double plus + 25% the 25% factors in lean running costs.

You should then divide the grossed up figure by 100 days and you get close to your day rate. As you play with this you can start to get clear on what you need to earn as a benchmark each time you sell what you do.

See if you can follow the calculation below:

Example: Peter the profit guru!

Peter can earn $145,000 a year working as a business development manager for a major financial services firm.

Double his day job equals $290,000 in fees (2 x $145,000)

Lets then add the 25% (25% of turnover) for a lean operation running costs.

He now has a calculated budget turnover of $362,500

Divide this by 150 saleable days a year equals a day rate of $3,625.

Now here is what usually happens!

Pete or any other guru moves out of a day job and starts to think all I need to do is replace my salary – seriously bad move!! They then divide this by around 220 days a year.

That’s seriously hard work for very little money. In Pete’s case he would have a day rate of approx $650!

Don’t let anyone tell you that your day rate when compared to an employee is way too high. The on costs and base costs in a business will smash you every time. As an aside smart doctors share resources to drive down the base costs.

If you don’t value your time correctly 3 things will happen

  • You will find yourself earning lots and taking home nothing.
  • You will work way too hard and not have any time to develop new business
  • You will constantly think you should go back to a day job

In a practice based income business model take-home is king not turnover!

So pay yourself first and don’t sell yourself cheap!

Monday, February 18, 2008

How to become an expert in your field in ten books or less!

You can’t polish sandshoes! The only way to achieve a high gloss sheen on a pair of shoes is to start with quality shoes. The same applies for expertise. You can’t manufacture a GURU!

Experts are created through quality thought. They are not just manufactured through marketing.

Here is a useful five step thinking process for developing expertise.

  • Get ten books on your chosen area of expertise.
  • Read them all from cover to cover.
  • As you read them ask yourself the questions; YES BUT and YES AND.
  • Take note of your YES BUTs and YES ANDs in a journal as you go. This forces you into original thinking and stops you from becoming a ‘me too’ expert.
  • See if the disparate bits and pieces you noted in your journal form an overarching context. Take some time to think about this context and see if you can expand your thinking in that area.

This process is similar to the PhD literature review process where you read everything you can on your topic and then choose an unexplored dimension.

There are many ways to approach the development of expertise. Few of these avoid good quality thinking.

Sit down, read, discuss and experiment with what you know. Create original perspectives on topics that people need to know.

Friday, February 15, 2008

The Experts Dilema

For some reason lately we have been seeing more new Thought Leaders who work in the personal development field. I don’t read anything into this. It is probably just coincidence. It has however outlined a major issue that all Thought Leaders face. We call it the ‘Experts dilemma’.

Ask an expert on clocks “What’s the time?” and they will give you an essay on the history of the clock. Why? They love clocks and they feel that to truly understand time you need to appreciate how time is calculated, calibrated and orchestrated. The thing is, the person who asked the question, just wanted to know the time. Maybe once that need is taken care of they too will fall in love with the clock too. In the meantime don’t bore then to death with HOW just let them know the outcome.

This dilemma is compounded when experts start to argue that their way is better than the way of others. Once again the client doesn’t care.

  • If you have to educate me to sell me you have a flawed sales and marketing model.
  • If you need to experience it first to buy it then you have flawed sales and marketing model.
  • If clients who have bought it already can’t sell it then you have a flawed sales and marketing model.

So what can you do…

Stop giving away the value by educating in the sales process. Create diagnostic questions that allow people to realise the benefits of fixing what you fix. Then stand with confidence and say “I can help with that if you would like?”. When they say “yes” have a simple value proposition and instant proposal ready.

Stop selling the HOW and start selling the WHAT you can do for me.

Saturday, February 2, 2008

What you think of me is none of my business

I just finished a few days with a friend who was feeling that I was not valuing our relationship as much as he thought I could. We had a great chat and reached a greater level of communication. He was open and honest about his feelings plus he also gave me a chance to communicate my feelings. All good!

So, what's your point Matt?

Well you see, the whole relationship thing had been going on in his head for months. At no point did he get on phone and call me about his feelings. He actually started a whole dialogue in his head about what I would say and what I must have been thinking.

It reminded me of the saying;


I want to twist that a bit and say,


So here's the thing…

Stop creating stories in your head about what may or may not be true. Don't assume that you know what is going on in my head, and as friends, lets make sure we agree to check in frequently about what we think may be going on.

Years ago I sat in a room with a lot of information experts. We were in awe of the presenters ability to build a business from a set of index cards. His idea was that you would keep a persons name and contact details on a 6x4 index card and track how often you contacted them. He also used the index card to record personal details such the name of their first born child and star sign.

I met with this presenter again just the other week and we reminisced about the good old days when you had to manually track names. He reminded me again of the three secrets to a good list.

Today we have customer relationship management software such as ACT, or on-line database management like to do roughly the same thing but the secret remains the same.

Secret 1: Contact your contacts often

Secret 2: Know something about your contacts

Secret 3: Create value in the exchange

The card system works. The customer relationship management software works. Just using your email address book to start building a list works.

So list who you know and start sharing value.