Mike Taber runs his own consulting business and also writes, markets and sells a financial compliance auditing software tool for use in the banking industry. This tool saves customers a lot of time by automating the drudge work involved proving PCI compliance with laws such as Sarbanes Oxley passed after the collapse of companies like WorldCom and Enron. Mike blogs at singlefounder.com. Mike runs MicroConf with Rob Walling and also runs Micropreneur Academy with Rob Walling.
Mike talks about the ups and downs of consulting life and why he tends to either do consulting or do product development and marketing and how the two do not sit well together.
This particular talk has been rather had to notate as so much of this talk has adlibs and references to parts of the talk that it doesn’t sit too well as text. Thus I’ve tried to give a flavour of the talk. Listening to this talk is probably best.
Hope is not a strategy
MIke starts his business with $10,000. After doing doing 8 weeks of work he has $35,000 of invoices. Then the contract is cancelled and he is informed that the invoices will not be paid. He is $35,000 out of pocket.
Hope is not a strategy. Do not assume things will fall into place. They do not always.
Have a backup plan
Always have a backup plan. Not just for your data. But also for your software and for your business.
Learn to negotiate and know the bounds of negotiation
If a deal is agreed too easily maybe you accepted too low a price. Try to identify the upper and lower bounds before negotiating.
Mike relates a story about his success then failure in 2008. You can learn a lot from failure.
- Don’t buy fancy offices, waste of money.
- Hire if you have to no, not because you can.
- Overheads are too high. Leaves you exposed to economic downturns, should they happen. 2008!
- Mike lost all his consultancy work as a result of the 2008 wreck.
- He racked up lots of credit card debt to stay in business. Went from $80,000 profit to $90,000 on credit card. That is $170,000 swing from profit to debt. The debt was on his credit card (not ideal) because banks would not finance anyone in this time period.
Big deals are luck, not building a business. Do not confuse landing a big deal with the idea that your business is growing.
If you have one revenue stream, obsess over it. Monthly revenue is better than one shot payments.
Mega Corp Clients
The size of your clients is irrelevant compared to size of cheques they write.
The pain point the customer has is what is relevant.
Don’t take on expenses that you cannot mitigate. For example: Office expenses, Employees, Leases.
Know when to quit
Sometimes hard work isn’t enough. Reorganise or quit.
Last ditch efforts
Don’t invest in last ditch efforts. Last ditch efforts are called that for a reason. Do not double down on something that may or may not work. You could be investing in a failure.
Maybe its time to walk away before you double your debt level.
Backtracking is OK, if you can correct course. Just because things have failed does not mean you cannot be a success.
You need to plan, possibly back track a few steps then start again.
Don’t forget why you started the business.
Mike stopped consulting and started working on the AuditShark.com. Consulting was killing him. Consulting brought in lots of money but he had no life.
“What is Mike currently working on?”. Mike is currently working on AuditShark.com which checks 300 compliance points on computers in small banks.
“How did Mike deal with the debt?”. Deal with debt by biting off small chunks at a time, not thinking about the overall figure.
“What things did Mike do wrong?”. When I hired a developer I didn’t set him working developing – I had him make sales calls. Bad idea.
Tomorrow I’ll post Noah Kagan’s talk.