As the Owner, Can I Pay Myself Too Much?

Posted by JasonBlumer on Feb 21, 2018 in

Owner pay is tricky to navigate. There is no right way to pay yourself as the owner. And there are no magic formulas. But great books like Simple Numbers, Straight Talk, Big Profits give us some guidance as to how to pay the owner of a growing business.Greg Crabtree, the author, makes the point that “you get paid a salary for what you do, and you get a return on what you own.” That means you are not guaranteed a salary unless you fulfill a job and do work for the company. On the flip side, as the legal owner, you may get distributions out of the profits, if you’ve had a good month. So your salary should be commensurate with the job you are doing. Further, your company should be paying you while still remaining profitable. As an example, if you are the CEO of a million dollar…

Who Is In Control?

Posted by JasonBlumer on Feb 15, 2018 in

We business owners think we know who is in control in our companies. The people who own the company are in control, right? We’re in control!Not necessarily.I was speaking with an agency owner recently, and posed a question about some level of control they had over a decision they were trying to make. I asked if they could fully make that decision. They said they could. But I didn’t think so from the conversation we had just had. So I asked them in a different way by posing a scenario that sounded like it would be difficult to pull off. Then the agency owner stated an emphatic “No, that could never happen. The employee wouldn’t go for that.”This example above is a common example of agency owners (or any business owner) believing they have full control over the growth decisions in their company, when their empl…

Making Decisions Around Health

Posted by JasonBlumer on Feb 8, 2018 in

As I consider the foundational components or requirements to scale a service-based company, one thing I would list is ‘Owner/Partner Health Activities.’ The more my partner and I grow our firm, the more important this becomes. I’m not only talking about working out at the gym, though physical health is a component. There is more to health than the physical aspect. Most Google searches for components of health reveal 6 main health components: PhysicalSocialEnvironmentalEmotionalSpiritualIntellectual/MentalIt truly is difficult to maintain all of these as you grow a business, but it’s important to keep these in balance when you can. As in any growth-related goals, I think a healthy way to seek balance is to pick the top 1 or 2 health components that you are currently struggling with. Then seek some balance in those areas from people you trust, or even a business or life coach where you’ll feel free to ex…

The Strategy of Software Choices and Migration

Posted by JasonBlumer on Jan 31, 2018 in

We help our clients make software choices. We are a virtual firm, so all software is browser-based, with the preference of integration between the accounting product, the payroll product, the bill payment product, and some type of digital paper capture product. We’ll often help clients make initial software choices, but our firm can also consult with our clients on migrating from one product to another.Accounting, payroll, workflow, bill pay, and digital paper capture software choices are our wheelhouse. Here are the key considerations creative agencies need to consider when making software choices: What is the result? You need a consultant that knows what the products will do, and the results of using and integrating these product together. How will your team have to adapt to these new software choices? You need to know how these products will ultimately disrupt your team, and their workflow.How will the client be…

The Strategy of Calendar Work Blocking

Posted by JasonBlumer on Jan 25, 2018 in

Seeing, moving, and supporting virtual firm work can be challenging. This can become harder when you don’t use other tools to see work move (like time tracking). Our firm hasn’t tracked time for about 7 years so we can’t rely on time sheets, and the reporting that goes along with time tracking, to see and support the movement of virtual work.We don’t believe in using time as a measure of creating prices, because we don’t believe that time accurately reflects value. But one thing tracking time can bring to an agency is a view into capacity management, sometimes called resource planning. We don’t price based on time, but we do need to measure our team’s workload, capacity to take on more work, or their own assessment of feeling overwhelmed with work. Time is not a resource that can be created, meaning there is a set amount o…

Protecting Your Front Door

Posted by JasonBlumer on Jan 18, 2018 in

I often refer to the front and back doors of your company. The front door is where new clients enter. The back door is where they exit, i.e. where you fire clients or they leave. It’s often true that business owners (especially service-based businesses) won’t fire clients, and thus they never use the back door. But using the back door is one of the keys to your company remaining successful. If you have the wrong clients, then you have to use the back door to move them out, and remain a healthy firm. But firing clients is awful. So many leaders just won’t do it.If the back door is not used the right way, then the key to remaining a healthy company becomes protecting the front door. If you struggle to remove the wrong clients at the right time, then you have to be careful who yo…

The Rhythms of Growth

Posted by JasonBlumer on Jan 11, 2018 in

The larger your company gets, the more important the rhythms of growth become. Why? A smaller company run by a founder can generally be run out of the founder’s head. That is, with a spreadsheet or two, they can keep track of a few clients, their needs and how much those clients owe them. But the larger a company grows, the more complex the movements become. There is more of everything. More work, more money, more processes, and more people. Eventually, the founder of that company doesn’t know all that is flowing through their own company, and they have to rely on other people to manage a lot of the movement.How does the founder keep up with it all? Typically, they start implementing meetings to check in on things, and keep track of all that is moving through the company. And the easiest meeting to set is one…

Pricing is a Human Activity

Posted by JasonBlumer on Jan 3, 2018 in

I like to talk about pricing. Different than billing, I believe pricing is a healthy way to ask for money from customers. The benefits include: Asking for money before you perform the service, which allows the client to make a judgment about the value of the service they are buying,Putting the service provider in the place of convincing the client of the value of what they offer before they have a chance to prove it with service, which allows the service provider to practice sales,Being creative with the perception of value of what you do, and how a client could pay for it (whether up front for a discount, or monthly drafts, etc.),Creating new services that could bring new value to a new market, thus creating new opportunities for additional profit.There are many other benefits to pricing but those are just a few we’ve experienced ov…

Trust Among Partners Moves Work Fast

Posted by JasonBlumer on Dec 28, 2017 in

My partner and I follow the model of Visionary/Integrator found in the book Rocketfuel. You can take the test here if you want to find out if you are an Integrator or a Visionary. I’m a high level of Visionary, and my partner is a high level of Integrator. As a Visionary, my brain tends to think big thoughts, while it can get bogged down in smaller details (but I can move work fast when I need to). On the other hand, my partner’s brain moves incredibly fast (sometimes I ask her to slow down). She can also have visionary ideas, too, but looks to me to develop those.We both have specific jobs in our companies, and they are defined by our Visionary/Integrator roles. These defined roles keep us in our lanes so we don’t step into the other partner’s lane. And since our work…

Merry Taxes and Happy New Year!

Posted by JasonBlumer on Dec 26, 2017 in

The Tax Cuts and Jobs Act was passed on December 20th, and the President is signing the bill into law today. We want to give you some perspective about it and how it will change your tax bill in 2018. It’s a big bill and, depending on who you ask, this may or may not be a ‘tax cut’ for the right people. But we’ll avoid the politics and stick with the topics that will help you know what to do next. Read on, and Merry Taxes!There are a number of tax changes related to families and kids, but we’ll focus more on the strategies you need to know as business owners. But before we get to the strategies for business, let me list a few key changes for individuals: Starting with the current 15% tax bracket, the tax rates have been lowered for individual taxpayers. As an example, t…