Monthly Archives: September 2016

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Write an Effective Business Letter

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All writing is about the intended reader (that is, the audience).  Whether it’s a book, song, movie, opera, website, marketing brochure, grant proposal, or fundraising letter, the one priority for the writer to keep in mind is that the intended recipient matters most.  Writing is a basic means of communication and we have many reasons to choose to express our thoughts or requests in writing, rather than verbally.  Usually, we write to make our thoughts official, to communicate with someone whom we do not know, or to communicate with a large number of people.

We write to express our point of view or to make a request.  We may write to persuade the reader to take a particular action based on information that is presented or to consider a new perspective and modify his/her opinion.  In other words, writing is selling. Writers will benefit from the following guidelines:

  1. Purpose: Why are you writing?
  2. Audience: Who is the reader (audience)?
  3. Outcomes: How can you persuade the reader to care about your subject or request?

The first question is actually about you, the writer.  What motivates you to write? Are you in search of funding for a project that you would like to advance and so you must write a business or grant proposal? Might your objective be to write a sales or marketing letter that will be sent to those who you feel are potential customers for your product or service? Are you producing content for a website or other promotional material that will communicate your expertise to potential customers and give them the confidence to contact you? You will be an effective writer only when you develop the self-awareness and confidence to acknowledge what you would like your written material to achieve, so that you will choose vocabulary that reflects your intent.

The second question ensures that you tailor your message and vocabulary to resonate with your intended reader or audience.  The successful writer will consider the point of view of the reader and craft a message that is likely be understood and accepted by that reader.  If it is a proposal that you will write, then you must address the interests of several stakeholders who will be able to speak favorably or unfavorably of your request.  Grant applications and business proposals always include financial information as well as operations and marketing information, for example, to satisfy those three important decision-making constituencies.

The final question addresses the perceived benefits that the reader or audience can expect to derive from what you have written.  Here, the writer must tightly focus on the readers’ priorities and preferences and consider the outcomes attached to the expression of the thoughts or creative expression, or the relative value of your request.  What will be in it for the reader if s/he buys your book, devotes time and money to attend a performance of your music, or approves your grant or proposal?

The writer is advised to utilize a communication style and vocabulary that are familiar and reassuring to the reader or audience,  as a way to build confidence, encourage acceptance and approval and result in mutual success.

Thanks for reading,

Kim

 

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Exit Strategy: The Retirement Plan

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According to the Bureau of Labor Statistics, 15 million Americans were self-employed in 2015. That’s 15 million talented, ambitious, disciplined and self-confident citizens of our nation who’ve taken charge of their professional and financial future and they (we!) are to be congratulated.  According to the Bureau, self-employed business owners and Freelancers represent 10.1% of the population and they are surely the Talented Tenth.

Now for the bad news—self-employed professionals are not eligible for employer-sponsored benefits of any kind, unless they employ full-time workers and are therefore compelled to provide certain benefits that they would also receive.   Otherwise, the 15 million self-employed do not receive paid sick time, holiday time, vacation time, or employer cosponsored health insurance or retirement benefits.  In addition to the self-employed, there are many more millions who work in traditional employment on a part-time basis only, making them unable to receive employer-sponsored worker’s benefits.  Income inequality, anyone?

Let us consider the retirement fund matter, one of the two benefits issues that workers are able to self-fund (health insurance is the other).  If your finances allow you to set aside money that will be used to support you when you’re too old to work,  you will be wise to do so ASAP.

Examine your spending patterns.  How much are you spending on items that you want, but don’t need?  I don’t recommend that you deny yourself all gratification—we all deserve little luxuries every now and again—but some activities and purchases might perhaps be scaled back, allowing those funds to be redirected to prudent investments.

Budgeting a limited income is stress-producing.  Even those who work full-time may be forced to under-fund their retirement accounts, despite the employer matching contributions.  Wages have stagnated for 30 years and living expenses have done nothing but increase.  As a result, many of us are unable to save enough money.  Many elect to utilize money they’ve managed to save for a down payment on a house, rather than saving for retirement.  Financing one’s life 20 or more years from now must take a back seat.

According to the Government Accountability Office,  in 2015, approximately 50% of Americans had no retirement account whatsoever and 29% of those age 55 and older had neither retirement savings nor a pension.  Social Security is not a good fall-back option. The average monthly pay-out to retirees is only about $1294.  For the overwhelming majority, that’s not enough to carry one through more than half a month.

I consider the retirement picture in the U.S. as both a looming national emergency and a national embarrassment.  Corporate governance laws enacted during the administrations of Ronald Reagan, Bill Clinton and George Bush (son) that brought us globalization and the transfer of good paying jobs to other countries, in the process destroying for all time the ability of so many American citizens to earn a comfortable living employed in benefits paying full-time jobs, is the primary reason for this crisis.

The computer age has done the world no favors, either.  So now you can play with Snapchat on your Android while on break at your $12/hour job.  Yes, there have been magnificent technological advances that have helped in many fields, medicine comes to mind.  But are those benefits worth the livelihood of millions?  That’s a good question for the ethicists.

If at all possible, please start a retirement account.  Here are two options for Freelancers and those who work part-time at one or more locations:

myRA is a starter retirement account created by the Department of the Treasury. There are no fees associated with opening a myRA account and you can decide how much you’d like to contribute each month, according to your budget. Automatic withdrawal contributions can be set up through your bank account or paycheck.

If you change jobs, the myRA account is not affected. If you must take money from the account, there is no financial penalty to pay and no additional taxes are taken out. Like a Roth IRA account, myRA is funded with after-tax income. The maximum annual myRA contribution is $5500 and $6500 for those age 50 or older. The maximum amount that can be held in a myRA is $15,000.  Once the $15,000 limit has been reached (or before, for that matter),  the balance can be rolled over into a traditional retirement account.  https://myra.gov

Self-employed 401(k) profit sharing-plan (Solo 401 [k]) is funded with pre-tax dollars.  You can make contributions as both an employer (because you employ yourself) and as an employee (because you are employed by your sole proprietorship or single person LLC entity). Wearing your employer hat,  one contribution can be up to 25% of annual net profit, or $33,000 ($39,000 if 50 years or older) per year .  A second contribution of maximum $18,000 annually ($24,000 annually for those 50 years and older) can be made while wearing your employee hat.

Better still,  it’s possible to hire your spouse as an employee under this plan and s/he can contribute in the same way as you do,  meaning that your spouse can also contribute up to $53,000 ($59,000 if age 50 years or older) per year .  Open your Solo 401(k) account before December 31 if you’d like to make a tax-deductible contribution this year.

Thanks for reading,

Kim

 

 

 

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Doing Business As

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To forge a successful career as a Freelance consultant requires courage, resilience, possession of marketable skills, relationships with people who are willing and able to help you get hired into one money-making opportunity or another, an affinity for selling, the discipline needed  to set goals, a talent for big picture thinking and setting strategies, and an understanding of human nature and motivation. The ability to attract good luck and dodge bad luck helps, too.

Precious few Freelancers are able to just “go to the office” everyday and take on the usual work.  In order to generate an acceptable number of billable hours, we understand that multiple revenue streams must be created and that we must learn to recognize the marketability value of segments of our overall skill set and learn to  package, promote and sell those segments to prospective employers, as well as target clients.

Take my revenue streams, for example. When asked, my short form elevator speech is that I’m an external consultant who provides business strategy and marketing solutions to for-profit and not-for-profit organizations. What that means in reality is that I’ve facilitated strategic planning meetings at not-for-profit organizations; edited a book and also served as its photo editor and project manager (it was published by the sponsoring organization); developed curriculum for a series of 90 minute sales skills training workshops; periodically teach business plan writing; and was made a staff writer at an online magazine targeted for women entrepreneurs.

Yes, I continue to do the business strategy and marketing assignments, but the fact is that there are always assignment gaps and I’ve learned to branch out and offer related skills that enhance my brand as they allow me to make some much-needed money.  In my experience, it is the ability to leverage your additional competencies that help a Freelancer to create and sustain a profitable business venture.

My friend Adela is a busy educational consultant who works with college bound high school juniors and their parents to first identify suitable colleges for the student and next to navigate the application process.  Her business seems to be quite lucrative, yet she nevertheless teaches Spanish at a local college (Adela was born and raised in Mexico and came to the U.S. to attend Harvard University).

Jackie, a friend of many years, launched a small, full-service fitness center that became very successful in that highly competitive market.  Yet Jackie has continued to teach fitness classes and train clients at a large downtown gym. Why? Not only does she earn a few extra dollars that a mother of four can always use, but also gets to observe sophisticated fitness center management from the inside and also receive instructor training in new fitness techniques that she can evaluate for inclusion in her own gym. Sometimes you can get paid to research the competition!

My friend Carole toggles between Freelance marketing for technology companies and corporate positions in that sector.  She’s a Lotus alumna who’s also worked for tech giant EMC, distinctions that command respect and open doors in the tech industry.  In between corporate gigs, Carole goes out on her own to develop marketing strategies for tech start-ups.  A couple of years ago, she was offered a position as director of marketing at one of those start-ups, but when the inevitable reorganization occurs, she’ll re-enter the Freelance life.

Now you, Freelancer friend, what else can you do to create additional revenue streams for yourself and if possible, enhance your skill set or obtain useful competitive information?

Sometimes an opportunity that is outside of your brand and strictly for cash-flow may present itself and I suggest that you discreetly take it anyway.  As long as running into prospective clients is not a danger, if time and energy allow, a pragmatic Freelancer understands the necessity of promoting cash-flow whenever possible.  Build up your retirement account, or use the money to attend seminars that provide professional development and potentially good networking.  It’s all about doing business as a solvent and successful Freelance professional.

Thanks for reading,

Kim

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Fixing Your Epic Fail

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You’ve got to know when to hold’em, know when to fold’em. Know when to walk away, and know when to run.   “The Gambler”, written by Don Schlitz and made famous by singer Kenny Rogers

The Horatio Alger story remains the ultimate creation myth of the United States. Start out penniless.  Be clever, ambitious and ready to work very hard.  Recognize opportunities that others ignore.  Have the courage to take risks.  Summon the self-confidence and determination to stay the course in the face of disappointment.  Succeed wildly.  Make millions of dollars.

The most admired American heroes are the success stories, the big money makers. Paul Allen and Bill Gates, college drop-outs who pulled all-nighters to build Microsoft.  Madam C.J. Walker, a widowed young mother and one-time laundress who in 1906 created a hair care product in one of her wash tubs, out-maneuvered endemic sexism and racism, and became America’s first female and first non-white self-made millionaire (her line is now at Sephora).  Madam Builds an Empire

Striving is the template for life in this country.  Never give up.  Just do it.   However, quiet as it’s kept, certain dreams simply will not pan out because they cannot.  Some ventures are ill-conceived.  Some are very good, but the resources to launch them are not available.  For others, the timing is wrong and one either misses the market, or is too far ahead of the curve and prospective customers do not yet have the desire for the product (or service).  In these instances the smartest action is, sadly, to scrap the dream and walk away.  It is so painful, humiliating, even un-American.  Success is our brand and the whole world knows it.

One of the biggest questions we will encounter as we build a life is, when do you hold on tight to your dream and keep pushing forward through rejection and disappointment and continue to invest time, passion and money into an idea that might be doomed (or not) and when do you give up?

Failure, at some point, is inevitable.  It is demoralizing and damaging, if only to the ego.  It undermines self-confidence.  Repeated failure unravels and destroys a life.

According to behavioral psychologist James Clear, who studies and writes about performance and creativity, failure can be classified in three categories:

  1. Failure of tactics
  2. Failure of strategy
  3. Failure of vision

Clear categorizes Failure of Tactics as Stage 1 and identifies it as HOW mistakes are made.  According to Clear, Stage 1 Failure occurs as a result of poor planning, preparation, or execution.  The Vision may be sound and the chosen Stategy reasonable, but operations issues bring it all crashing down.  His remedy for Stage 1 Failure is to:

  • Examine the process of product and service delivery (service packages, sales distribution, quality control and customer service, usually)
  • Identify system failures in the sales process/ buying process as articulated by customers and employees.
  • Adjust systems and practices that impede an efficient and desirable customer experience and employee efficacy and morale

Stage 2 Failure results from a Failure of Strategy and Clear calls these WHAT mistakes. Stage 2 Failure occurs when the chosen strategy is unable to deliver the desired results.  Since there is no way to know in advance which of your presumed reasonable products, services, or proposals will succeed until there is a beta test, Clear recommends that after due diligence has been done, roll it out and monitor the progress.  His remedy for Stage 2 Failure is:

  • Launch the beta test quickly
  • Do it cheaply
  • Revise rapidly

Throw it up against the wall and see what sticks. If your strategy isn’t doing the job, have Plan B ready and give your concept another try.  Keep costs low to minimize the financial strain of do-overs.  Ideas are meant to be tested, it’s all about trail and error.

A Failure of Vision constitutes Stage 3 Failure and it reveals the most basic reasons of WHY the plan failed. In this scenario, the purpose for taking the action was poorly understood.  Was there no measurement of demand for the product, service, or action taken? Did you overestimate access to target customers? Did you not acknowledge that you’d rather not commit the time and money necessary to build the business or carry out the initiative?

Some of us fail because we get pressured into taking certain actions by those whose motive is to continue a tradition or to exert control.  In these scenarios,  actions are taken to follow the expectations of others, rather than one’s own priorities and preferences.

For example, the brother of a good friend, because he was the only son, was expected to take over his father’s highly successful business.  But according to my friend, her brother was not cut out to run a large and complex business.  He lacked the necessary drive. Unsurprisingly, her brother eventually crashed the business.  Their father spent more than a million dollars trying to bail out his son, but the business went bankrupt.

If you’ve done your homework and can be reasonably confident that your vision is sound and you’re willing to invest your time and money testing Stage 2 issues (launch strategy) and perfecting any Stage 1 challenges (operational glitches), then ignore those who would dissuade you to abandon your vision.  Maybe you’ll never be wildly successful, but if you feel compelled to do what you can to realize your dream, then carry on! Avoid Stage 3 Failure in this way:

  • Determine your priorities and purpose and be clear about what you’re willing to do to make it a reality
  • Identify and stand by those parts of your dream that are non-negotiable
  • Accept that there may be naysayers

Thanks for reading,

Kim