Author: Rob Broadhead

  • Success In The Bad Times – Profit From Chaos

    Success In The Bad Times – Profit From Chaos

    There are stories of leaders and entrepreneurs that always seem to do well. They can advance in the good times as well as the bad. For example, when the stock markets are going down, there are almost always stocks going up. Likewise, other financial systems will benefit from a market downturn. We need to identify and embrace the signs of chaos and downturns to make the best decisions. It may seem counterintuitive. However, we can ride the turbulent waves to success and profit from chaos.

    More Pain Equals More Opportunity

    The technology world is based on solutions. We find pain points and then craft ways to alleviate those discomforts. Entrepreneurs work in almost the same way. They build companies that provide solutions. In a perfect world, we would all be out of business. No one would pay for help doing something that they can do quickly and painlessly. Likewise, we do not want others to do things we like. There is no market for getting paid to go on vacation for others.

    All that is to say that troubled times bring opportunities. These are ways we can profit from chaos. There are unethical ways like price gouging. On the other hand, there are ways to further society, such as creating tools needed during changing times. A good example is the increase in mobile and remote work solutions during COVID lockdowns. Those problems existed before. However, the need was not as great.

    Find The Core Problems To Profit From Chaos

    Tough times may come from a myriad of events or situations. Each one of these is an opportunity. While some may be out of your sphere of control (e.g., global politics), but some may not. The best thing about these challenging times is that when you reduce great pain, even minor improvements are greatly desired. For example, when fuel is unavailable, then getting it to people even at higher costs than average is still a step in the right direction. The dynamics and numbers around solutions change when the environment is in flux. Thus, solutions that would be unrealistic in normal times can be exactly what is needed. There is also the momentum of a product to consider. Sometimes, a solution requires a groundswell, or momentum, to get off the ground before it has long-term viability. Maybe tough times and chaos are precisely what is needed to get that product off the ground.

    Your Chaos List

    An excellent way to take advantage of difficult times (whether on a global scale or within your organization) is to avoid throwing away ideas that are not ready for prime time. There are those ideas that we come up with and might even run up a flag pole that get shot down for a good reason. They may not be cost-effective, may not have a market, or may be too far out in left field. These are all reasons that can change in a heartbeat and may offer short windows for ideas to be implemented. Therefore, it is helpful to keep a list of those ideas that need a different time and place. Better yet, label or categorize ideas so it is easy to find the ones that need a specific budget or margin, as well as those that need resources that might come free amidst the chaos. These options may not require a full pandemic to become viable. Sometimes a short period of a business downturn is enough to free up some needed resources you are already paying for.

    The Fail Fast Approach

    A benefit of trying out ideas during these times is that they typically have a short window before things return to normal. You will know the viability quickly during chaotic times as those times will pass. You also will often have a higher risk tolerance as there is less to lose. When business is dead, it is hard to make things worse. That means it is a perfect time to take a chance on those riskier ideas. Think of it as playing with house money. That is not exactly the case. However, it is close enough.

  • The Value Of Re-inventing The Wheel

    The Value Of Re-inventing The Wheel

    A prior post discussed some of the challenges with using code generators.  One thing we did not cover was the value of re-inventing the wheel.  In particular, this holds true when we are learning problem-solving.  That means one of the ways to become better developers is to solve problems that have already been solved.  The objective is not so much the solution as the process.

    Skipping Ahead Without Re-inventing The Wheel

    Software developers often use frameworks and code generators to improve productivity.  They also can find ways to quickly code a series of common modules through libraries and pre-built scripts.  That approach is obviously a route to rapid development.  However, it also is a potential way to allow skills to rust from lack of use.  We can say we do not need to re-invent the wheel, there is no value in solving something where the solution is known.  However, that is not completely true.  There is value in analyzing a problem and finding a solution even when it is known.  We learn how to think in a critical and logical manner.  There are also repeated patterns in developing solutions.

    Repetition Across Solutions

    The idea of patterns emerging in problem-solving is not often discussed.  They tend to be a sort of obvious secret or maybe even common sense.  Nevertheless, we need to be able to apply these patterns to become better problem solvers.  The stories about Sherlock Holmes show some of these.  Sometimes it is all a matter of deduction, or maybe a process of elimination.  There are these sorts of solution patterns that can be used over and over in solving even very complex problems.  The more we are familiar with these patterns, the more we can combine them into new and complex solutions.  When we skip to the solution on common problems, as we do with code generators, we also pass on that learning opportunity.

    I think that persistence is often undervalued. That is another skill we do not develop when we take the shortest path to a solution. There is value in spending time banging one’s head against a problem while we try to solve it. We also can develop good habits as we struggle through those “simpler” problems. Think of code generators and frameworks as a way of pushing the cost of developing skills down the road. There are times that is needed. However, we may end up paying an exorbitant price in the future. That is not much different from pushing upgrades off to the future and eventually paying a huge price or even being blocked from an upgrade path.

    The Power of Persistence

    One of the traits of a strong developer is persistence.  We encounter all manner of obstacles that require us to persevere as developers.  These are well-known among us and range from simple headaches like a hard-to-find misspelling to magic numbers and complex configuration combinations.  Re-inventing the wheel can be a path to practice such patience and perseverance.  The benefit of these well-known problems is that we have ways to move us forward when we are blocked.  We get to go through the motions with a form of training wheels to help us get past steps that stop our progress.

    These are areas where practice helps us.  Thus, using tools that help us skip ahead on problems can remove that practice and the related benefits.  A similar example is a basketball player that skips free throws because they know they can make them.  We also have mental “muscles” that can be exercised to create muscle memory and better performance in other areas of problem-solving.

  • Payment Strategies – Finding a Comfortable Time Frame For You And Customers

    Payment Strategies – Finding a Comfortable Time Frame For You And Customers

    One of the challenges all consultants face is setting up payment strategies for their customers. There is a need to keep revenue flowing while providing a reasonable amount of time for processing invoices. That is not as much a problem when there are multiple customers and they pay regularly. However, it can be crippling to a business when bill payments (or payroll) are delayed due to accounts receivable (AR) issues. A small company or individual consultant can struggle with this. Thus, it is worth our time to examine some options.

    Not One Size Fits All

    Note that the discussion is on strategies and not a single strategy. I have found this to be one of the first steps in meeting your needs and your customers’ needs. One way to slice up the approaches is based on your trust or experience with customers. This approach provides more grace in payments to your established customers while limiting risk for newer ones. Payments terms can be based on AR age or AR total. Both of these are easy enough to track for even a small company and can be set in contract requirements.

    I find that both approaches are helpful in small consulting companies. Some projects generate minimal revenue month over month. That can lead to small receivables sitting on the books for several months. At the other extreme, large revenue items can be critical to cash flow. When they are not received on time, the business can struggle. That latter situation is often a challenge for small consulting companies or individuals due to the feast or famine nature of this business.

    Payment Strategies Based on Trust

    Trust of customers and their payment processes is most effective when it is based on past experience. Therefore, it is best to start all new customers with a tighter set of rules and then loosen them after they have gone through multiple pay cycles. I recommend a minimum of three complete cycles. One or two is too easy to be an aberration or just them trying to keep new accounts current. Then, as you see consistent invoice and payment cycles, you can adjust your requirements to fit cash flow needs.

    Cash Flow Is King

    We all want to sign contracts and get those billable hours flowing. However, we need to see the payments for those hours flowing as well. When planning payment strategies, you need to be aware of your business’s monthly budget/payables and related payment terms. There is often a delay of 30 days or more from invoice to first payment, which can cause challenges if you do not have reliable cash reserves. Take note of your bank’s deposit hold terms as well. Receiving a payment is not the same as those funds being available. That may seem minor. However, we can see fewer and larger deposits for some customers that trigger the hold rules. I have often seen this pop up when a customer delays a few payments and then catches up in one big check.

    Splitting Invoices And Pre-Payments

    Many companies are hesitant to be aggressive with payment strategies when they start. Therefore, they set and accept customer-friendly terms but can lead to struggles as the business gets off the ground. Nevertheless, it is easier to reduce restrictions and policies than add them. Therefore, the best time to take a hard-line stance is when you start a customer relationship.

    Multiple invoices and early invoicing can help with this. Some companies invoice immediately on receiving a signed contract. That can cut down the time to payment by weeks or more. Likewise, it is more acceptable to pre-invoice some portion of the project or request a fee to start work. This strategy reduces risk and ensures you have some cash flow from the time the project begins. It may not solve all the problems, but it is an excellent first step.