Special thank you to Jenny Lee for writing this. To my amazing Macinhome team, to the army of successful and compassionate coaches who put up with my shit for 6 years (and still going) at Executive Success Programs, Melanie Buffel of Money Coaches Canada… And hundreds more.
From this post on the Vancouver Sun page…
Lucas Roberts offered 80 free, personal, half-hour consultations as a way of ramping up business at his company, Macinhome Consulting. Photograph by: Gerry Kahrmann , Vancouver Sun
Today’s small-business lesson: First pay the CRA
Home and small-business tech consulting company owner Lucas Roberts offered 80 free, personal, half-hour consultations just before Christmas.
“I’ll pop in for 30 minutes (daytime, evening, or weekend) to check your Mac health and backup,” his email offer read. “No charge and no strings attached.”
He promised the visit would “make you smile and will free up an hour of your time every week. If I’m wrong, you get a pumpkin spice latte.”
He must have been slightly mad.
But fact was, Roberts’ business and personal finances needed a desperate turbo boost.
Although Macinhome Consulting, his eight-year-old, 14-consultant firm had been reasonably busy, “I completely avoided and neglected dealing with finances or paying taxes for 2½ years,” Roberts said. “I owe the government something like $60,000.”
The problem wasn’t lack of business but high living and poor money management.
“I was basically living the CEO lifestyle before having earned it,” he said. “I loved the high of being an entrepreneur and I think I was not in reality of the nitty-gritty of how the financials worked.”
“I only learned this a year ago: When you make $1,000 off a client, you only get $50 or $100 of actual spendable money. When I got $1,000, I’d go woohoo! $1,000! But half goes to the consultant, about a quarter goes to corporate taxes. Macinhome gets a quarter of it, then I still need to pay half of that to personal taxes. That’s not really including hard costs and rent, business insurance, all of the different costs for the company — memberships, web hosting, LinkedIn, Dropbox.”
A visit to a debt counsellor to consider bankruptcy just convinced him he was going to fight for his business. “I’m not going this direction, no way.”
He needed to raise up his revenue and business systems, and fast. That’s when he dreamed up his 80 free visits idea.
“I knew there was a ton of people that weren’t calling and a whole bunch of clients we were working with who weren’t experiencing the full benefit of what we can offer.”
Like many entrepreneurs who started out as a successful solo consultant, Roberts knew he could ramp things up if only he could clone himself. If he went out on the road, he’d quickly bring in sales his consultants could fulfil.
Unlike Roberts’ usual response rate of one or two every second newsletter, his Christmas offer yielded almost 100 replies in 24 hours.
“I was like, oh geez. The reality sunk in. I have 2½ weeks before leaving for travelling. I stayed up till four in the morning answering everyone and also setting up, for the first time, Web-based scheduling software,” Roberts said.
He massively underestimated the time commitment.
“Eighty visits, half an hour each, that’s 40 hours, I can do 40 hours. Dear God. Then I recognized Langley, Richmond, Surrey, Coquitlam. Now I need to figure out routing and scheduling.”
Roberts, 36, hadn’t been out on the road in over three years. A tech-head from childhood, Roberts had owned Macinhome since 2008.
It had been a roller-coaster ride.
Now his consultants are independent contractors who are paid only if customer feedback is positive.
He’s no stranger to crises. There was the time someone stole three laptops he was working on. One client was away in Mexico, didn’t have backup and lost “credit card and financial information, her photos and everything.”
“I took it on the chin. I bought her a new computer. I asked her for what music she likes. I bought on iTunes all the music she wanted. Twenty hours of setup, no charge. Photos — there was no way to get those back.”
Another time, “I was personally responsible for deleting someone’s entire database. To this day I have no idea where it is. I gave her unlimited consulting for life. After eight or nine times, she got to the point where she was begging to pay me.”
But back to the 80 free visits.
“I only got through 48 or 50 before I left for vacation. I’ve still got 50 more to go.”
Halfway through the pile, Roberts feels the clients he’s seen have a better understanding of what his company does — he’s helped many clients with small computer-related irritants.
“Everybody’s devices are full, everybody has too many photos and doesn’t know what to about them. No one is backing up. Everyone has problems remembering passwords.”
He’s found some unhappy clients who hadn’t complained, but nor had they called the company again.
“I was able to offer a credit, solve some things myself, really heal a relationship.”
He learned some of his checklists and systems to ensure a consistent customer experience needed improvement. Some weren’t being used and some didn’t exist.
People “who weren’t feeling super warm toward us for whatever reason are now referring people.”
The whole exercise cost Roberts five pumpkin spice lattes in Starbucks cards, and an anticipated 150-160 hours all told.
He’s sent out 10 or 15 quotes and has another 15 to write up. Some clients are considering monthly training, some wanted an extreme makeover.
“We’re now at only about $3,000 or $4,000 in billables, but have a whole bunch of quotes and monthly plans that are starting. I’ll know more in about six months what the total is.”
He’s anticipating $30,000 to $40,000 in total sales.
Today, Roberts’ GST is paid up, he has a payment plan with the CRA and bookkeeping is caught up. He’s watching his spending, has cancelled some subscriptions and memberships, and hired a money coach.
The best result?
“Learning our strengths and weaknesses with undeniable crystal clarity so I could make systems and do training and marketing to help us hit the next level. And all I wanted was more sales. That was like a bonus.”
“I’ve been through the trenches at this point. I feel like battle-hardened steel. A consultant will talk to me about this really big, serious problem. ‘Yeah, bring it on. I’m pretty sure we’ll be able to handle it.’”
Jenny Lee accepted one of Roberts’ half-hour consultations.
I have known Lucas since 2006, when he single-handedly set up systems for our new company, back when we had 2 nickels total to build with. You guys are SO lucky to have him. Some of the systems he set up are still running smoothly after 10 years, with less than 5 hours of tweaking.
Lucas- you are TOO good. For your own good.
And we will never go anywhere else.