Business Strategy , , , , 11 Comments

Business Planning Resolutions for 2012

by

This week we’ll consider where you’d like to take your business,  what you’d like it to look like and how you’d like it to operate.  Every journey has a destination or goal.  The journey of your business should not be random;  it deserves careful thought and planning.  Reserve some quiet time to think about the journey of your Freelance venture.  You may want to start by reviewing where you’ve been.

Which kinds of clients and assignments give you the most fulfillment?  Which let your talents shine and/or bring in the most money? What competencies have you learned along the way?  What has taught you to become wiser and more confident?  What were your successes and what would you like to do better next time,  or maybe avoid altogether? Take stock and make a plan for the New Year.

Resolve to develop business goals and strategies

This sounds obvious,  but we all know that it’s very easy to get totally caught up in just trying to find clients and get paid,  getting tunnel vision.  We become like the hamster in a wheel,  busy–busy running in circles,  without giving adequate thought to our actions and following a road map.  As a result,  we can be going nowhere fast.

Start this year by nurturing yourself and taking time to reflect on what has transpired over the past year or two and acknowledging how you feel about it.  Did you set goals for your business? Were they realistic for you?  Which goals did you achieve and how did that occur?  Re-evaluate the direction it makes sense for your business to take and brainstorm strategies that you can enact  (alone or with the help of colleagues)  to bring it there.

Planning is the only way to create a successful business venture.  Set your direction and develop SMART goals :  Specific, Measurable,  Attainable,  Realistic and Time-bound.  Next devise strategies,  the path you will take to reach the goal.  Follow through with action plans  (with dates attached),  to keep you moving forward and on schedule.  Revisit your goals in three months and assess what is working,  what needs tweaking and what should be jettisoned.

Resolve to reaffirm your business model

The business model is the framework by which the business functions as a business:  the products and services that are offered;  by what methods,  in what location and by whom products and services are delivered to customers;  how the business will attract and retain customers;  the length of the sales cycle;  and how and when payment for products and services will be made.  Is your business model operating effectively?  In 2012,  take steps to ensure that your operation functions like a well-oiled machine.

For Freelance consultants,  the system of outreach to potential clients is often a sticking point.   Periodic review should be given to the products and services offered and how they are packaged,  presented, delivered and priced.  Talking with trusted clients is a good way to get feedback on your business model.  If you’re a LinkedIn member,  visit the Answers Forum and put questions out to your peers.  You will likely receive much useful information.

Finally,  review how you typically obtain clients and prospects.  Do you solicit them  (and how that happens),  do they find you  (and how that happens),  or do colleagues make referrals and introduction?  Which method has the best conversion rate?   What is the profile of organizations that have become your best clients over the past three years? Use what you learn about all of the above to buff up your business model and set the stage for a more profitable 2012.  New Year’s Resolutions will conclude next week.

Thanks for reading,

Kim

Administrative , , , 2 Comments

Business Finance Resolutions for 2012

by

Happy New Year!  Thank you for coming back in 2012.  The New Year is here and the time is ripe to take a fresh look at how you can bring more revenue and profit to your Freelance business.  The purpose of this blog is to inform and inspire readers to create the conditions that will generate a successful and rewarding Freelance consulting career.  Let’s get the ball rolling and look at how effective financial management promotes that goal.

Resolve to skillfully manage cash flow

Cash is king and cash flow is the life blood of every business.  Nothing flows unless the cash does.  Cash flow management means knowing how much money is expected to enter your coffers and when those checks are expected to arrive,  along with knowing how much money must be paid to creditors and when those checks must be sent. 

Even if you show a profit on your P & L,  it’s possible to have insufficient cash in hand to pay monthly bills and other accounts payable.  We all know that working as a Freelancer can be a cash flow nightmare,  so it’s vital to get arms around the accounts receivable,  or else sleepless nights will haunt.

Cash flow management actually begins in client meetings.  Once your project fee has been addressed and agreed upon,  diplomatically state that 15% – 20%  is paid at contract signing and that invoices are payable upon receipt.  Payment schedule for the balance will depend upon the length,  type and cost structure of the job. 

Whatever you do,  don’t allow more than 35%  of your fee to be payable at project conclusion  (unless it’s a small job).  Take steps to discourage the client from preserving his/her organization’s cash flow at your expense.  Write payment terms into the contract,  right along with the scope of your work,  deliverables and start date.

Resolve to get paid what you are worth

Establishing value and getting paid for same is the goal in every service business,  whether it’s teaching piano or being a nanny.  Your pricing strategy should reflect the value that your services bring to the client.  Needless to say,  pricing supports  cash flow and revenue.  To identify an appropriate fee range,  pricing experts recommend that you focus on four factors:

  • The perceived value of the services your provide
  • The demand for your services  (and your reputation as a purveyor)
  • What’s involved in the delivery of your service  (time = production cost = the Freelancer’s cost of goods sold)
  • Your mark-up / profit margin

Resolve to create and analyze the basic financial statements every quarter

Freelancers have a good idea as to how we’re faring financially,  because we either have the desired amount of money in the bank or we don’t.  We either have jobs in-house or we don’t.  We have either big jobs in or small jobs.  Like a balance sheet,  your bank statement provides the snapshot of your financial picture at a given moment.

There’s nothing like creating and then actually contemplating and analyzing one’s cash flow and income  (profit & loss)  statements to truly grasp your true financial picture and most importantly,  receive clues as to what would be advantageous for you to do about the business model,  sales and/or marketing segments of your consultancy.  Smart business decisions are invariably data-driven.

As you analyze your financials over the years,  you may identify regularly occurring busy periods and decide to hire temporary help or bring in a Freelance sub-contractor,  to give you another pair of hands at those times and allow yourself to make more money. 

Slow periods will likewise be identified.  You’ll be encouraged to find a way to either stimulate business during those times by incentivizing clients to hire you,  find temporary work,  find classes to teach (if that’s one of your competencies),  or engage in prospecting,  networking and professional development activities.

Next week,  I’ll return with more business-themed New Year’s Resolutions for 2012.

Thanks for reading,

Kim

Professional Development , , , Leave a comment

The Road to Freelance

by

Many established professionals consider leaving the world of traditional employment and launching a Freelance consulting career.  The growing lack of job security,  as evidenced by the unemployment rate,  along with the increasing occurrence of toxic work environments endured by those who are working,  have caused many people to give serious thought to self-employment.

I’ve found much personal and professional satisfaction in Freelance nation but there are challenges.  Preparation is key and if you’re still on the job,  begin now to build the infrastructure that will support your transition.   Take the steps while on the corporate dime to sock away some cash and learn how to approach your business clients and contacts as an independent professional.  Learn how to package and sell your services and determine and negotiate fees for the scope of work you will perform.  Visit professional associations and meet Freelancers who do what you aspire to do and ask some questions,  especially on how to build visibility and credibility as an independent consultant in your industry.

Build your savings account

Aim to have savings that will allow you to cover your living expenses for 12 months.  You don’t know how long it will take to sign your first client,  or the one after that.  Freelancers,  especially in the beginning,  will need cash to float themselves,  especially if one is the sole or primary breadwinner.  Furthermore,  scheduled  projects have a nasty habit of being delayed or even canceled.

Start saving money now by eliminating those $5.00 coffee drinks.  Brown bag your lunch whenever possible and cut back on nights out eating and drinking by 75%.  Do not buy any clothing you don’t absolutely need and cancel any vacation plans.  Remember that in addition to paying for living expenses,  you may need to buy or upgrade technology hardware and/or software and will also need to pay for marketing materials  (business cards, website, etc.)  so that you can effectively operate and promote your business.

Business plan and business model

You must figure out how you will get clients,  select the services you will offer and how to determine your fees.  You must choose the marketing materials you will use and decide what they will look like.  You must define the best target client groups and know how to approach them and convince them to hire you for Freelance work—even if you’ve worked with them as an employee of you current organization.  Do you need to be accepted onto an approved vendor list in order to be considered for hire?  Discreetly ask questions of those you can trust to not rat you out to your boss.   Also get an understanding of the typical length of the sales cycle.

Additionally,  it is necessary that you assess the competitive landscape.  The presence of competition is good,  as it demonstrates the need for services you provide and shows that Freelancers are hired to fulfill those needs.  However,  you don’t want to be in an over-crowded marketplace,  unless you are a very heavy-hitter.

Finally,  summon the discipline to write a business plan.  A mission statement,  comprehensive marketing plan and basic cash flow and profit and loss statements will provide a useful road map to get you started and encourage you to examine what will be required to make your Freelance venture successful.  I wish you the best of luck.

Thanks for reading,

Kim

Professional Development , , Leave a comment

From Employee to Freelancer

by

Perhaps the handwriting is on the wall?  Is your intuition talking to you?  Anyway,  rumor has it that a few jobs will be eliminated and you suspect that your head may eventually be on the chopping block.  In addition to sprucing up your resume and LinkedIn page,  you wonder if perhaps you might go out on your own?  If you must face insecurity,  why not have it on your own terms?  You may be right.  Millions of Americans have done exactly that,  including your humble diarist.

If you’re still collecting a check consider yourself fortunate,  as tense as things may be at the office.  Having a job gives you two enormous luxuries: time and money.  I was not so lucky.  I tried for many months to get a job after losing my long-held corporate gig.  I knew nothing about how to Freelance,  although I had long harbored the desire to strike out on my own.  Unfortunately,  I had to learn the hard way.  It was an expensive lesson that continues to reverberate.  On the other hand,  I am in business and somehow manage to support myself.

Self-employment is difficult in any economy.  It’s necessary to work hard and work smart,  plus be resourceful,  resilient and rather lucky.  I know a few people who are making good money,  but I’ve read that a 30%  decrease in income is typical.  Freelancers must campaign and compete for assignments and there will be gaps. 

Clients are known to pay when they feel like it and collecting in 15 – 30 days is not always possible.  Furthermore,  there are many expenses that we must shoulder:  professional training seminars,  technology and office supplies,  retirement plan,  health insurance,  life insurance  (yes, we do need it,  even if unmarried and childless).  On top of that,  we have no paid sick days,  vacation time or holidays.

But if you’re trying to explore all income generating options because unemployment checks do not last forever and you wonder if your next employer might be you,  here are a few Freelancer start-up guidelines for you to follow:

Expand your network

It’s almost impossible to secure work assignments when you’re not well-known to potential clients and there are few who can give testimonials that will vouch for your expertise.  Growing your network is the most important step you can take in preparing to become a Freelance consultant.  Ideally,  you will consult in a field and specialty where you have deep expertise and credibility. 

Immediately begin to cultivate and solidify client relationships with those who can green-light projects you would want.  Identify professional associations that cater to consultants in your industry and also seminars that clients attend and get on mailing lists,  so you’ll know where to network.  Read industry blogs and other publications,  so you will be up-to-date with important issues.

Check your credentials

Be sure that whatever competencies and qualifications,  degrees,  certificates,  licenses and/or  insurance necessary to do business are in hand.  Whatever you don’t have and can get on your employer’s dime,  take steps to do so ASAP.   Otherwise,  consider professional development expenses as a 2012 tax write-off.  If nothing else,  the improved credentials might help you get your next job if you decide to hold off going out on your own.

More next week,

Kim

Administrative , , Leave a comment

It’s Time to Stop Procrastinating

by

It’s December 13.  Have you sent out your Christmas cards yet?  Well,  neither have I  (but I will).  I’m disciplined and organized and you know that to be true,  because I’ve faithfully published this blog every Tuesday morning since June 2009.  I enjoy writing this blog and I enjoy receiving cards from friends and colleagues every year,  but getting into the mood to write my cards takes some effort.  I will do it as always.  But first,  I’ll write this week’s post…

According to psychiatrist Ned Hallowell,   author of  “Driven to Distraction” (1995),  we mostly put things off because we are busy.  Most of us are working harder and longer these days.  Second,  we are prone to avoid what we consider to be drudgery.  But as we all eventually learn,  procrastination does not pay.  Avoiding the thing we hate does not make it go away.  It hangs like the sword of Damocles until the required work has been done.

The experts say that what we procrastinators need to do while we’re busy doing everything except what needs to be done is to understand why we’re avoiding the inevitable.  Research demonstrates that it basically breaks down into two categories:

1.   You’re faced with a task you despise and you’re unable to face it,  or

2.   You don’t know how to do what you need to do,  so you’re afraid to get started

We all put off doing what we dislike,  but procrastination cannot be allowed to rule one’s life.  To be a productive and responsible citizen,  to maintain positive work and family relationships,  we must train ourselves to put shoulder to the wheel and plow through onerous tasks when necessary.  Consider it character-building.

We can help ourselves by being honest about the kinds of tasks that we dislike and cause us to procrastinate and then figuring out which can be outsourced.  ( Would a virtual assistant write Christmas cards? )  You may want to hire someone to clean your apartment twice a month,  or send your laundry out,  or order your groceries online and arrange delivery.

Setting up a time table and schedule can help to get you started on what can’t be farmed out to someone else.  Use deadlines to motivate you to get cracking and get the job done.  Teresa Amabile,  co-author of  “The Progress Principle” (2011),  suggests breaking a project down into manageable segments and creating an achievable time table and deadlines for each.  These  “small wins”  make the project more manageable and less intimidating.  When faced with a task you have a history of avoiding,  put it in your calendar to tackle segments of it,  to ensure that you get the job done on schedule.  Post-it notes on your computer screen can work,  too.

It’s helpful to give yourself rewards for completing projects.  When segments of your project are completed,  maybe treat yourself to a nice hot chocolate and your favorite croissant at breakfast the next day.  When an especially important project is completed,  maybe a facial or a massage can be scheduled,  or perhaps even a weekend trip to a favorite place.

If your procrastination is caused by not knowing how to do something,  then get help.  Solicit advice from a trusted friend or colleague,  or do an internet search to get more information about how you can approach the project to learn what successful completion looks like and what you have to do to get there.  If you don’t have the required skill set,  recruit someone who does and make your project a team effort.

OK,  enough avoidance behaviour for me,  it’s time to face the music.  I bought a nice box of cards and holiday stamps back in November,  so I’m able to dive in and start writing.  My reward is a Christmas lunch party that’s in my calendar for December 14.  On my way to the party,  I’ll pass by the post office and mail the cards,  I promise.

Thanks for reading,

Kim

Professional Development , 20 Comments

Christmas Party Networking

by

Christmas season is upon us and your party invitations are in the mail.  My favorite part of Christmas is the parties and I usually have a good time.  Christmas parties are an excellent way to catch up with dear friends and meet new people as well and for those reasons they set the stage for networking.  Catch some Christmas spirit and be sure to wrangle two or three invitations (I’ll bet that will be easy for you).  As you add parties to your calendar,  give some thought to the following:

Guest list

Ask your host who’s likely to be in attendance to find out who the VIPs will be and decide whom you’d like to meet.  Do an internet search and peruse the LinkedIn page,  using what you learn to devise a savvy ice breaker plus a couple of questions that will allow your VIP to do what s/he enjoys most—talk about him/herself.  Ask the host to make introductions.  The party is social and not business,  so frame your approach as relationship building,  although it’s probably not taboo to talk a wee bit of business.  Go with the flow.  If it’s not awkward,  ask to get together after the new year to continue your business discussion.  In the second week of January,  make contact.

Respect the occasion

Be mindful that a Christmas party is a social event.  Even if the gathering is sponsored by a professional or business association,  dial back the all-business mode and get to know folks and let them get to know you,  too.  Refrain from treating a Christmas party as just another business meet ‘n’ greet.  Overt selling is to be avoided.

What not to wear

I belong to a club that hosts a black-tie optional Christmas party every year.  About half the men wear a tux.  A white dinner jacket with black tuxedo trousers is likewise very chic and appropriate attire.  A dark suit with tie is acceptable.  The ladies wear after-six formal dresses,  usually long.  A lady can also wear a tux  (work it like Marlene Dietrich).  Ladies should avoid showing too much cleavage or too much leg,  or wearing a very tight dress,  no matter how physically gifted,  when business networking is part of the agenda.

Moderate alcohol intake

 Last year,  I was invited by a friend to attend a Christmas party that was hosted by a prominent marketing company whose client list includes politicians who hold office at the state and federal level.  My friend has worked with the company off and on and he’d like to do more.   He complained that lucrative assignments had been withheld from him.   However,  as I watched him guzzle about six drinks in 90 minutes,  I wondered why they gave him any work at all.   His foolish behaviour also soured the introductions he made for me  (and I’m suffering for it,  because I don’t know anyone else to bring me back this year,  without the lush).   In other words,   make the most of your networking and pace your drinking.  Two or three drinks are all you need.  The idea is to relax and not get tanked,  or even visibly tipsy.  An unexpected VIP may walk through the door and you don’t want to look and sound ridiculous.  Moreover,  you don’t want to upset your host.

So far,  I’ve attended three Christmas parties.  I had a lovely time at each affair and I was fortunate enough to meet and enjoy the company of one person with whom I plan to follow up.  Two more parties are on my calendar and I intend to make the most of them.  

Thanks for reading,

Kim

Administrative , , Leave a comment

How to Hire an Intern

by

Perhaps by some miracle business has picked up and you need some help,  maybe for just a few hours each week.  You foresee that your need for help could last for some time and you’re ready to commit to a trial of at least six months.  You don’t have much money to spare,  but see that you’re probably losing money as you spend time performing certain functions that could  be handed over to less expensive labor,  which would allow you to focus on the vital aspects of client projects,  search for more billable hours and engage in other business-building activities.  Bringing on an intern may be the solution to your dilemma.

If you live in a locale with at least one college or university,  then you may have a source of interns to help you with business needs.  Interns can be a valuable resource,  especially for those who cannot afford to hire full-time employees.  With some planning,  a busy Freelancer can devise a win-win situation for both business and intern.

Plan to  offer a paid  internship.   Unpaid internships narrow your candidate pool more than you may realize.  In today’s economy,  many students must generate an income.  College has become wildly expensive and students and/or their parents often go into significant debt to finance their education.  Daddy may not be able to send spending money every month.

Paid internships provide a student with the tangible benefits of relevant work experience,  a reference for future full-time employment or graduate school application and a much-needed paycheck.  Moreover,  unpaid internships may present a legal snafu.  Strict federal and sometime state guidelines limit the hiring of unpaid interns to discourage student exploitation.  If you can find an intern whose financial aid package includes work/study,  the grant will absorb some of the hourly rate cost and save you money.

Start your search by thinking carefully about which tasks can be farmed out to an employee.  Be mindful that internships are not designed to provide businesses with low-level labor performed at low pay,  but rather to provide apprentice-level  learning opportunities.  Be realistic about what you can offer an intern.  Be prepared also to provide adequate instruction and supervision,  because you will be dealing with a young person who will need some guidance.

Next,  contact the school’s career services department or academic department that aligns with your professional needs  (e.g., communications or computer science or business).  Colleges are very eager to help match interns with prospective employers because that makes them look good.  Be ready with a basic job description and qualifications  (like web design or writing skills),  as well as what level of students you will work with  ( seniors, most likely). 

Remember also that students live on the academic calendar.  That means they disappear from about December 15 – January 15 for Christmas break,  they may disappear for a week during the April spring break and they may go home on May 15,  unless they can afford to stay in town for the summer or it’s convenient to commute in.

Plan to interview at least three or four candidates before you make your selection.  When you make an offer,  institute a 30 – 60 day trial period,  at which point you can decide whether the arrangement is working out.  Create the conditions for success by thinking through and communicating expectations clearly.  Discuss with your intern what s/he will be able to learn and be transparent about how performance will be measured.  Expect to spend time supervising your intern and maybe also explaining things twice. 

Empower your intern to show some autonomy and creativity once things get rolling.  Invite your intern to make some suggestions and offer opinions.  You never know,  you might learn something useful and you’ll show the intern that s/he is valuable. 

Always treat your intern with respect.  Assign meaningful work and provide the required training,  tools and follow-up to ensure that tasks are performed satisfactorily.  Offering an internship is your chance to mentor a young person and the rewards can be personal as well as professional for both parties. 

In the ideal circumstance,  your intern will give you the time to expand billable hours to such a level that you can offer to hire him/her full-time,  the ultimate win-win situation.  Good luck!

Thanks for reading,

Kim

Professional Development , Leave a comment

How You Say What You Say

by

If you want to get your way,  then you must be persuasive.  To make friends is to persuade,  to receive help is to persuade,  to get a date is to persuade.  To sign a client is to persuade,  to negotiate is to persuade.  To sell any idea,  product or service is to persuade others of its relevance,  quality and value.

The ability to communicate ones’ needs,  thoughts and opinions is a cornerstone of a successful life.  It is vitally important to know what to say and how to say it as you expertly customize the message for its recipient.

I do not advocate manipulative behaviour,  however.  The idea is to get what you want in a way that creates a positive outcome,  with all parties feeling good about the exchange and no one feeling bullied,  resentful or exploited.  Persuasion is about how we frame and deliver our desires,  proposals or assertions and we must be respectful of others.

Tone of voice,  that is delivery,  is a big factor in persuasive communication.  Anger,  sarcasm and condescension are unlikely to facilitate persuasion.  Delivery that is perceived as hostile causes those on the receiving end to become defensive and mired in reacting to your style,  losing sight of your content in the process.  You’ll be treated as if you are wrong even if you are right  and you will lose.

To inspire you to pay attention to certain aspects of your communication style,  I offer here a few suggestions that will lead you to improve your powers of persuasion:

Avoid  “always”  and  “never”

Substitute  “often”  and  “rarely”  instead.  There are many people who will reject a reasonable assertion out of hand,  without taking its full measure,  when you frame and present opinions in dogmatic,  absolutist terms.

Lead with the positive

When disagreeing with another’s point of view,  it is natural for many of us to immediately,  perhaps vociferously,  take exception to that opinion or interpretation of fact.  Whenever possible,  promote persuasion by finding some common ground,  some point upon which parties can agree.  Soften your rejoinder and offer up a soupcon of validation,  maybe like this  “I know some people feel that way,  yet based on my knowledge and experience,  I’ve come to view the matter in this light…”  Call it smoothly handling an objection.

Don’t complain,  but do explain

Rather than criticize and complain that someone is wrong,  tell that person what behaviour or action is preferred or necessary and why that is so.  Reframe your complaint or criticism as a request,  delivered respectfully,  perhaps in this way  “When you arrive late to our meetings,  it makes others feel that our sharing of information is unimportant to you,  that you do not value the process.  Is the time frame inconvenient for you?  What can be done to get you here on time so that all parties can be present to address important agenda items?”

Thanks for reading and Happy Thanksgiving,

Kim

Administrative , , Leave a comment

2011 Year-End Tax Planning

by

It’s about that time,  folks.  2011 ends in 7 weeks and it’s time to plan how to handle your taxes.  We all have to pay something  (except if you’re a multimillionaire or billionaire, in which case you pay nearly nothing!),  so before December 31 it’s important to enact a strategy that will work well for you.

Tax planning boils down to either accelerating or deferring income or deductions.  In other words,  do you want to report and pay taxes on more money or less in 2011 and do you want more or fewer write-offs?  The road you follow will depend on many factors,  including what you did last year,  how much money you will make this year,  whether you expect to make rather more in 2012 because a big project will start then,  or you expect to make rather less next year because an important project will soon conclude and you have nothing big on the horizon.

Take a look at your 2010 tax forms and 3rd quarter 2011 P & L statement to see what your financials say about your options.  What do fixed and variable expenses look like?  That will impact your decisions about deductions.  What does net profit look like?  That will impact whether you choose to accelerate or defer income.

If you want to accelerate income,  start by collecting outstanding receivables.  Pick up the phone or send an email and ask clients to pay ASAP,  or at least before December 31.  Tell them it’s a tax-planning matter (it sounds so much more dignified than telling clients that you plain old need the money!).  If you’ve got a contract in the works,  ask for a bigger retainer.

If you opt to defer income,  perhaps because 2011 has been a good year and you’re not sure what 2012 will bring,  then wait until January to collect receivables and ask for a smaller retainer fee.  BTW,  it’s possible to defer up to 25% of your income through your Solo 401K and it’s tax-deductible.

If you need write-offs,  scout for year-end deals on office furniture,  computers,  iPads,  office supplies,  software and whatever else you need to do business,  including enrolling in a course or attending a conference.  Office furniture,  computers,  company vehicles and other big-ticket items can be written off in a lump sum,  or depreciated over a period of years  (which is in reality deferring the deduction since it’s being spread out).

If you elect for fewer write-offs,  hold off on shopping until the calendar turns.  Alternatively,  if you are presented with office or business equipment deals that you cannot refuse,  then choose the depreciation method and spread out your deductions.

Speaking of deductions,  remember your retirement plan.  Solo 401K and SEP-IRA are funded with pre-tax dollars and are tax-deductible up to $16, 500.00  If you’re 50+,  the catch-up contribution feature raises the maximum to $22,000.00.  Remember the tax-deductible income deferral feature if you’ve had a very good 2011,  but expect to have a less lucrative 2012.

Further,  you might want to make an appointment with your accountant or business attorney and confirm that you are enrolled in the best legal entity for you.  Your exit strategy can impact  the legal entity you use.   For example,  if you want to take on a partner and eventually sell out,  or pass the business to offspring,   niece or nephew,  a different legal entity may be preferable.

Finally,  the end of the year is the time to assess what’s happened this year for you,  professionally and personally. Review your successes and challenges.  What will you do differently in 2012 and what will you continue to do?  Did you meet your financial goal?  Did you manage to sign a dream client or get a wonderful proposal approved?  What should you reach for in 2012?

Thanks for reading,

Kim

Business Strategy , Leave a comment

Protect Your Intellectual Property

by

Suppose you decide to do what I recently did and contact the managing partner of a consulting firm and propose that the two entities agree to explore the possibility of  forming a business alliance that just might become very profitable? Business is all about deal-making and every once in a while a Freelancer has to pitch a good proposal to the right prospect.  After all,  nothing ventured,  nothing gained.

But there is risk involved,  usually for the smaller entity.  Freelancers typically offer intangible services,  better known as intellectual property.  We trade on our expertise and judgment,  our brand and reputation,  that which distinguishes us from the pack and allows us to make a  living.

Engaging in a business alliance or joint venture usually involves the sharing of intellectual property by one or both of the parties  (in this case,  it would be me).  How can you protect yourself from unscrupulous operators who might decide to appropriate your valuable IP,  when you’re out there trying to be proactive and proposing potential business deals to parties that might be interested,  without getting ripped off  for the fruits of your ingenuity?

Denver attorney Susan F. Fisher defines intellectual property or trade secrets as  “any formula,  method,  or information that gives you a competitive advantage…anything that takes time,  money or effort to develop and that you don’t want potential competitors to know about.”  Most business alliances,  including licensing arrangements,  require a Freelancer or business owner to reveal trade secrets and other IP.

Protecting the coin of your realm is a top priority.  Surprisingly,  that can mostly be achieved by taking just a few simple steps that cost no money at all.  Step one is to identify your intellectual property or trade secrets as restricted material and therefore not available for general distribution.  Mark the material “Confidential” in big bold typescript.  Step two is to require a special password to access the document file,  to provide yet another level of security.

A third IP security measure is to unambiguously state in a letter,  or in the email to which the file of IP information is attached,  that said information is proprietary and confidential and that it is being provided as part of a business proposition in which you would like to be paid,  should the proposal come to fruition.

Instituting such safeguards not only protects IP,  but also demonstrates to lawyers,  judges and juries that you identified your IP as confidential and not for general distribution,  that you made it known that the information you shared was sensitive and that you intended and attempted to protect your IP,  should a dispute ever lead to litigation.

The ultimate level of security is to require that the party with whom you share IP sign a nondisclosure agreement.  The NDA provides formal legal protection of  your IP and trade secrets.  Furthermore,   the NDA specifies what information is considered proprietary and what is not and will also describe limits as to how the IP may be used and for how long the information must remain confidential.  In the NDA,  your attorney should request that all copies of confidential information that detail the ingredients of your  “secret sauce”  be returned to you at the end of that term.

So by all means,  be an enterprising Freelancer and pitch a good idea to the right decision-maker.  Just be sure to start the venture off on the right foot by taking a couple of no-cost steps to protect your interests.  I’ll let you know how things turn out with my idea.   I was invited to call the managing partner in early December to find out if he and his colleagues feel that we have something to discuss.

Thanks for reading,

Kim