Mahar Enterprises, Inc.

Support Forum Up & Running

It is official – the new Online Support Forum is up and running.

I realize that actually GETTING clients and associates to migrate their topics and our working relationship onto “yet another internet interface” may not be the most convenient thing (let’s face it – we all have enough login screens to navigate in our lives).  Why then would I create a “Forum”?

It has benefits for everyone (existing clients, visitors, consultants and me).

* CHEAPER access to my services (and the services of my professional associates)

* EASIER FOR ME – I aim to somewhat centralize my customer service and support (while documenting it for others who have similar questions).  Some days I get 150 emails and “some” (cough) emailers still insist on excluding the content of the original message.  Want free advice?  Post it publicly and get free advice (where I don’t have to rely on my memory to know what I told you last).

* Access to information and services that you may not even know are available through Mahar Enterprises, Inc.

* CONSULTANT AWARENESS - a place for the many faces who have stayed behind the scenes for far too long (and some new faces who hope to be part of your “answer bank”).

* SEARCH ENGINE RELEVANCE – I’m not going to publish 500 pages of web content for all the crap I know how to do, just so a search engine can find me.  It’s gratuitous and confusing.  The more conversations that take place on the forum, the more “words” are associated with everyone – use it accordingly (as a client or a contributor – registration is free).

I hope you find it useful.

Everything starts somewhere.  However humble the beginnings, the Support Forum is officially “open”.

(a permanent web link lives in the black footer on  every page of our site – “SUPPORT FORUMS” – look down)

Cheers & Thanks,
Mark

Off-Shore Companies

Why are larger U.S. Corporations moving off-shore?

Simple – the COST:  Migrating off-shore results in a ”Net Tax & Maintenance” cost of 20-22% Net Income Burden…as opposed to the highest corporate tax rate in the world (35% U.S).  As not all corporations qualify for government handouts (in the the form of tax incentives) and many lack the administrative infrastructure to lobby or apply for these subsidies, the simple alternative is to level the cost of doing business with one simple word, “geography”.

Are you considering establishing an off-shore enterprise?

At a 22% Net Burden, this still may not be the most favorable solution for some small companies (because the federal tax code may have more favorable advantages if you “qualify” for the ever-growing list of things that Congress sees fit to exempt from the tax code).   Congress has what some would call a bad habit of attempting to “steer” business towards their intended centralized design for a consumer economy and your cost of eligibility may be less than the cost of migrating. 

Another consideration to keep in mind is that once income is abroad it typically must stay abroad (for tax compliance).  Measuring compliance against an Owner’s compensation plan/exit strategy, there may be additional considerations to increase Owner’s W2/Personal taxable income (adding personal tax liability or averting that new liability with added personal retirement infrastructure).  There is an inherent cost of establishing or protecting income reported through W2 as opposed to Scheduled earnings.  That is a good conversation for your tax professional. 

SERVING THE RIGHT MASTER:

I am personally an advocate for a 15% Corporate U.S. Tax and removal of all federal tax loophole/subsidies through a simplified tax code (the two must happen in tandem or there will continue to be losers on both sides of the job creation argument).   There is a third argument of solvency but, candidly, “government spending” (more aptly, “restraint from spending”) is a discipline that can’t be cured by the tax code – that is a whole other topic.  For the topic at hand, it is my personal opinion that legislators should not punish enterprise or pick who is and isn’t relevant in a free economy.  Until such time as Federal Legislators enforce an environment that is friendly to job creators and doesn’t reward select companies for a central solution agenda, Mahar Enterprises, Inc. is happy to help less agile small companies legally move their corporate presence off-shore (or any other strategic alternative).

A simplified tax code would change corporate burdens (requiring the services of fewer accountants and lawyers) while increasing tax revenue to the Federal Government.  I want to see it happen and I remain hopeful that all previously migrated corporations will return to their domestic roots.  Until then, I have an obligation to my clients (and other countries have more realistic tax rates for relatively low cost of migration).

ASSET MIGRATION:

Some might aspouse the virtual fluidity with which “holding companies” can transfer their assets in this technological and patent-driven market (given that many holding companies are a “paper change”, rather than a physical operational relocation).  I would point out, however, that the U.S. Patent and Trademark system is an important infrastructure to intellectual property holders, which provides a laundry list of protections (along with an abundance of practically “institional” legal precedent for domestic properties and rights-holders)…all of which may pose a higher migration risk to ”intellectual property holding companies” (Mahar Enterprises, Inc. included).  We would be happy to do a cost/risk assessment in conjunction with your legal and accounting team to assess any impact that migration may have on your intellectual property, but the point here is not to sell ourselves – the point is “we highly recommend an indepth evaluation of your intellectual property” (even if you hire someone else, please do it before even entertaining an off-shore decision)…and to weigh those considerations against the alternative.

COMPLIANCE:

Depending on your resident state, off-shore corporate compliance requires a “real” office with human beings, duplicate equipment, a board room, payroll infrastructure (sometimes all payroll processed through the foreign entity) and in some cases “on-site executives” (legally empowered executive level management; CEO, VP and/or COO to be resident to the foreign corporate headquarters rather than the domestic market area). 

Off-shore income reporting does not mean “hidden income”.  Sheltering a corporation on foreign soil should only be entertained for legitimate enterprise, in order to achieve a lower (and compliant) liability than the alternative.  If your intentions are to avoid reporting income, you won’t be in compliance with U.S. or State Law anyway.  Two jurisdictions already monitor your compliance for fraud and liability (State & Federal), with a dizzying tax code and redundant regulations.  Why compound this scrutiny and penalty by adding the jurisdiction of a third government entity?   If you are breaking U.S. Law, it doesn’t matter where your company is “based”.  Don’t be an idiot.   If you are, however, seeking a legitimate option it may very well be the best option.  Consult an accountant…then a lawyer.  At that point you’ll be equipped to budget for a migration support system (like ours) or consider the alternatives with a keen eye on risk assessment and life-cycle.

CONSIDER THE ALTERNATIVE:

There are tax incentives that may exist outside your industry (as a simple line-item deduction).  Some of these things simply require you to think “outside of the box”.

Example:  Did you know that if you produce a documentary about your company or leadership (or industry), with the intent of packaging it for retail or distribution (as a “Movie” or “Production”) that you qualify for a tax credit in many states (in addition to Federal Tax Credits)?  Do you have to advertise?  What is your advertising budget?

In some cases, this single “line-item deduction” (no schedule) essentially becomes an advertisement (one that people could foreseeably PAY to view or that a Network pays you to air) can off-set your tax liability for less effort/expense than migrating your company off-shore.  Not only does it feel more patriotic, but you have to advertise anyway.  Why not turn your tax credit into a potential piece of intellectual property? (with a potential revenue after it serves it’s initial dual purpose of advertising and tax exemption)

Packaging affordable alternatives is what we do…and that one example obviously creates four tiers at which there exists potential recoupment of investment (Tax Exemption, Marketing Savings, Licensing, Retail – to say nothing of the proper presentation resulting in branding from a social responsibility standpoint).  No smoke and mirrors.  These and countless other creative domestic solutions are available right now, through Mahar Enterprises, Inc. as part of our proprietary “passive marketing strategy” and we would be pleased to offer you an assessment.

Regardless – Through any alternatives you might consider, there should be a sequence of qualifiers – Compliance, Cost, Savings, Life Cycle.  Humbly, I would submit to you that the life cycle of foreign profits is “tax light” (foreign wealth accumulation – for tomorrow), whereas the life cycle of strategically executed profit is “tax neutral” (domestic economic agility – for today).  You don’t have to be a uniquely qualified, lobby-backed or administratively savvy corporation to exert your inherent agility…you just have to be proactive and compliant (domestically or abroad – whichever the case may be). 

“How” you use an asset or resource can be just as beneficial in reducing your liability as “where” you do business. 

Simply put: Geography isn’t everything (it is just one thing).

CONSIDER THE SOURCE:

We do not offer legal or accounting advice.  As either a partner in your migration effort or as a partner in your domestic strategic solution (passive marketing strategy or other proposed alternative), our role is to provide you with a compliant model – identifying any obstacles to achieving ”integrity” for your intended life-cycle (as advised by your legal and accounting team, in conjunction with our resources).  Please seek legal and accounting advice prior to engaging our services. 

We also have a “horse in the race”, as they say – we want your business.  Our opinions on this topic are inherently biased.  I personally believe that there is nothing immoral or unpatriotic about averting the blatantly selective tax grab that has been perpetrated by congress (and at the hands of lobbyists).  If congress didn’t convolute the marketplace, dilute the natural order of supply and demand, attempt to buttress failing industries (and their failing leadership) or incentivize failure, U.S. Corporations would have no reason to pursue a more clear and predictable alternative.  I’m a capitalist (just as my clients are).  We are here to earn your business and we have a perspective.

Business is conducted aggressively when it can be forecast with even the smallest certainty (there will always be risk-takers who see a straight line through even the most dynamic conditions).  Congress, however, has effectively fogged the eyeglass of many otherwise savvy and risk-willing corporate leaders…removing all sense of depth-perception from the marketplace.  The maxim that “perception is reality” is only true for business in the sense that perception as view of the market is what drives business decisions (and business brings ideas into reality).  Sometimes the importance of sequence (linear concept) gets lost with politicians (politics is inherently philosophical – consisting within a theoretical sphere of implications…not a mostly linear science as business is).  Congress would have citizens believe that a social consciousness is what creates perception/reality.  I would argue that social consiousness only impacts demand, whereas “supply” is a device of the business community.  As congress pushes on one, the business community will continue to find ways to AFFORD the risk required to pull on the other (supplying an idea with it’s birth into reality by leveraging resources – leveraging risk).

As I type this, the Federal Government is half-way into the fiscal year without an approved budget, while adding to a record deficit and essentially debating the constitutionality of financial insolvency as the debt ceiling caps for a fourth time in as many years (if that doesn’t demonstrate an abandonment of linear thinking, sequence, and consequence, I don’t know what else to tell you).  This is the hobgoblin of philosophy…just as the quest for agility is the hobgoblin of enterprise.

Corporate Migrations are a device of congress and a pragmatic risk assessment to many corporations.  Politicians set the game.  Corporations follow the rules.  At Mahar Enterprises, Inc. we only work with clients who are interested in following the rule of law (and I personally still think this is the greatest nation in which to launch a business).  It is because of our patriotic domestic interests that our focus on risk assessment and a life-cycle are weighted in ”domestic agility” …and drives the bias of our recommended services (it keeps JOBS and REVENUE domestic…while migration does have benefits for some, but not all, corporations).

Our/my perspective should not be the only perspective you seek in a consideration to “spend your way out of tax liability” (and I would point out that this statement feels counter-intuitive for a reason – listen to the little voice in your head).

Be proactive -  exit strategy, life-cycle and domestic agility are far more important than lowering your tax burden (and you can design to achieve all of them with the appropriate strategy).

This is one opinion from one source.   Thanks for visiting.

Mark Mahar,
President

What if…

What if:

…your products and services provoked your customers and associates to celebrate their relationship with you (and you celebrated your relationship with them)?

…you believed enough in the value of your products and services that you could confidently make a profit without sales tactics (and you understood why it was valuable)?

…owning your company and serving your customers actually filled you with as much satisfaction and a general sense of achievement as your High School Graduation Day (Owning your first New Car, a Wedding Day, a Major Promotion or even the Birth of a Child)?

…owning and operating your business felt like you “hit the lottery” on a monthly or weekly (even daily) basis?

…a business transaction had the power to enhance lives (even your life) and those transactions were for “your products and services”?

…your ethical behavior and business savvy was rewarded with expedited market access, investor/lender support, consumer trust and business growth (instead of losing ground to your less ethical competitors)?

…you had a constant flow of new ideas and innovations within your company and the means to achieve them?

…your company became the center of gravity for momentum and innovation in your market or your region (your field, even your industry)?

…your company and products were “cool”…and “fun”

These are the types of companies we help our clients build.

Mahar Enterprises, Inc. IS that type of company.

We work with some of the most noble, innovative, creative and ethical individuals  in the country (some are famous and some you’ve never heard of before).

Success starts with your motives.   Motives aren’t discriminatory.  ANYONE can be successful with the proper motivation.

If your goal is to simply to make money you can become a “curiosity” worthy of national headlines and charge people for your own personal “freak show” (it isn’t very tough- companies and individuals do it daily- punch a nail in your face,  get a “male boob job” and join the talk-show circuit, while  spouting your “psychic conversations with aliens”…bang you’ve got money, haters and fans the world over [worse since the advent of YouTube]).

If you want to build something that will bring you joy and success, time for your family, freedom from the trappings of social trends and cultural upheaval, you have to believe in something noble.  Riskier still, you have to believe in your personal ability to make it a reality (and trust other people to adhere to your vision).  If you believe in something noble, believe in yourself, and possess the ability to exercise good judgment, we want to help you!

Creativity is FREE (we throw away more great ideas on a weekly basis than some of the most well-funded companies will have in a year).  The real cost of entrepreneurial success is “conviction”.  We know what it takes to marry conviction with what is possible.  That is our value (assurance that you aren’t wasting your time on something that our extremely talented team would have thrown out).

• Our endorsement is cause for your commitment to yourself.  We are the catalyst to your convictions.

We bend over backwards to help companies and products succeed.

We have a special place in our hearts for anyone who is contributing to curing what presently ails American popular culture:  “Good old-fashioned fun”.

Free Online Education

Free online educational resources:

We’re not affiliated with their site in any way, but Marc & Angel courteously compiled a list of places for you and it is worth checking out.

“12 Dozen Places to Educate Yourself Online”

http://www.marcandangel.com/2010/11/15/12-dozen-places-to-self-educate-yourself-online/

…happy clicking.

Discounted Rates for “exposure”

For more than a decade I have dealt with hundreds of independent artists. I have found them to be what I consider the most generous people in business. Why? As “wage earners” they are the most willing people I’ve ever met to immediately “discount” their services in exchange for “exposure”.

Unfortunately, many of them misinterpret “exposure” (and misinterpret their own value).

I am writing this article for one reason and one reason only: Night Clubs

If you really examine the night club owner & manager mentality (or have worked on the night club circuit), you’ll find that it is the default position of club owners & managers to assume that they are doing a band or artist a favor by giving them “exposure”. (See my recent article on “Valuing a ‘service’” – and figure out your rate vs. what the clubs in your area actually pay). Really? Exposure? Let’s examine the argument of “exposure” from a reality that club owners completely ignore:

1. Having something like a musical act in a night club provides a venue with FREE marketing in every “event listing” available in the region (print, web, “night out” services, etc…). If they didn’t have an act at their club they would not qualify for this FREE advertising.
2. 98% of “club venues” (my guess – not statistical data) in New England have downsized so much to make “survival” practical that their maximum occupancies are under 200 (and many in the Boston area have occupancies under 100).  Not for nothing, but more people visit the websites of the artists I work with on a daily (even hourly) basis than can fit in those clubs – and they don’t have to leave the house for that audience.
3. Most venues have countless televisions and other crap going on in and around the venue…all of which make it nearly impossible for a musical act to garner the attention of the small attendance they have.   After competing with TV’s, juggling bartenders and scantilly clad “jello shot” girls…how many of those people can the band actually connect with to accomplish their mission of “selling a CD”, “Getting a Mailing List Subscriber”, or “Getting a REAL booking”.  Entertainment is about “connection” (and that’s why it is losing ground – not because people don’t appreciate good music but instead because venues insist on bombarding patrons with everything BUT good music).
4. Entertainment keeps patrons in the venue longer – is intended to enhance the mood (which should result in more sales).  If it doesn’t result in more sales there might be a different problem.  Hiring a band for one night…or trying a “steady Wednesday for three weeks” is about the weakest attempt possible at resolving attendance and patron spending.

Note: It takes 200-225 people for the “door” to be “equitable” (for even the most affordable professional band – that includes even the sacrificial perspective of a club date with a small cover charge).

In addition to the claims of “exposure”, many clubs want the artist to “bring people through the door” (of course – that’s the whole aim of having an “attraction” – to attract).  There isn’t an artist I know who doesn’t push to get people through the door – that’s their goal…but clubs regularly put the demand of attendance squarely on the ARTIST (instead of relying on marketing and advertising)…without providing any marketing support.

My favorite phrase from club owners is “and you’ll get paid on top of it” (as if their offering of $75/head is the icing on some glorious cake [ignoring that the artist is also the farmer, baker and waiter for this little confection]).

I would like to examine that “who’s job is it?” thing as well:   Why exactly would someone discount their rates by a substantial amount (the overhead and margin they rely on to pay for things like marketing and advertising) if they still have the responsibility of doing the marketing & advertising? Remember – a club is offering “exposure”…and they get a discount because they are providing it. (right?)

1. A club owner could negotiate to have Elvis Presley himself do a surprise comeback “I’m still alive” special in their otherwise dead night club on a Thursday night for $600…but if nobody knows about it what value is gained from paying Elvis $600? NONE - you’re gonna have an empty club and you’ll cry to Elvis’ manager that you can’t afford to repeat the event next month because “the math just doesn’t seem to be working”…or the so-called “promotion” doesn’t seem to be catching on.  (I love that whole “we tried it, without really trying it” thing that club owners bail with)
2. With rare exception it is MARKETING (not artists) that drive attendance – if you’re hiring a band with a huge mailing list it is because you want butts in seats.  That makes perfect sense…but club managers need to acknowledge that they aren’t hiring an artist in that case – they are hiring a marketing promotion. $300 is not enough for a marketing promotion (even if you do get free advertising in all the local event listings).
3. Even if an artist can rationalize that they are taking a serious wage cut in order to achieve an important component in their career plan (like email lists or subcribers to their YouTube channel or plain old “networking”)…those things are a device of the audience that is IN ATTENDANCE.  The AUDIENCE is the clubs selling point for exposure…so it is the CLUBS responsibility to provide the audience (and the artist’s responsibility to KEEP THEM THERE and GET THEM TO SPEND MONEY AT THE BAR).

WHAT DO CLUBS DO TO ACTUALLY PROMOTE ARTISTS? (apart from hiring a band and relying on them to spread the word).
HOW EXCLUSIVE TO THE ARTIST IS THEIR MARKETING? (is the band just filling a slot on the club’s weekly 80′s night and nobody knows the band’s name?)

If you are a nightclub manager reading this (and are the exception to the rule), you have my sincere appreciation for including “artists” in your legitimate “promotions”. I’ve known a few managers like you…but only a few. To the rest of you: Stop pretending to be “ambassadors of exposure” for artists and just admit you’re too lazy to engage in professional marketing efforts (and sadly, a local band with a mailing list is better at spreading the word about anything than you will ever be).

THE QUESTION

What then is the real benefit of performing in a night club? There are benefits. It is up to artists however to determine if those benefits are worth discounting their rates (in some cases by 90%).
This article may come off as a financial rant but it really boils down to time and energy (time is money and every artist needs to inject efforts into their “career” where it really matters…where it really has a return on their investment).
When considering a club date, here are the “decision questions”:

• Does the date satisfy my “survival rate” (see my last article on “Valuing a ‘service’”).
• Does the marketing, advertising and audience reach justify the discount (can you buy the marketing for less [perhaps you already have that many people visiting your website and need to get better at converting them to customers]).
• Is it a paid opportunity to rehearse or is it an underpaid commitment to fill a room? (especially when the part of your wage reserved for marketing was discounted to the club owner already)

If those things exist (and the need exists in your career)…GO FOR IT!

REALITY

I’ve worked with many clubs on promotions (and negotiated with countless others to no avail). Club owners don’t understand the concept that a musician should be making more than the “jello shot” girl does in tips. They don’t view it as hiring a one-night promotion (or understand what it is a band is truly trying to promote)…and they certainly don’t appreciate that “music” is a trade just like any other.

As you endeavor to spread the word about your talents, it is true that club dates can be a PIECE of your income and marketing strategy but it should not be your WHOLE strategy. Making it on the club scene just means you succeed in conquering the lowest rung on the income ladder at the paltry average of $100/night (plus tips if you’re lucky enough to have a gig where tips are part of the customer culture).  If you work 365 days/year that’s $36k before taxes.  That may be fine for a garage band composed of members who all have a full-time day job, but it does not a “career” make.  Just food for thought: A good waitress or bartender makes more than that.

Your income strategy should include other opportunities for “exposure” which can result in real revenue:

• Mailbox Money (licensing, royalties, digital downloads, retail sales, merchandise)
  • STUDIO TIME DRIVES MAILBOX MONEY (let me repeat that, “STUDIO TIME!!!”)
  • Song Contests / Music Reviews
• A good website (where you can attract those 90 visitors who might see you in a tiny night club)
• Private Engagements (where you can be paid to perform without the burden of “marketing”)
• Contagious Materials (videos, content and art that can be “shared”)
• Agency, Brand & Promoter Relationships
• Self-Produced, Ticketed Events (where you take the risk and actually get compensated based on the success of your promotional efforts)

That may mean your investment should be in home recording gear or video editing or hiring a camera man for your club dates…or saving money to rent a venue (“four-walling” as they call it) but it doesn’t mean you have to surrender to the illusion of “exposure”.  If you do take a club date:

Sell CD’s, get email addresses, plug your upcoming dates, website, youtoube page, etc…and know your rates off the top of your head in the unlikely event someone says “can you perform for a private engagement?”. 

An artist/band that can sell 10,000 CD’s can make a really decent living.  If you can do that in a club THAT is where you need to be.  If you can’t…welcome to the reality of the music business - invest yourself in your “career”. 

BOTTOM LINE

As an experienced promoter / producer – If I had to choose between booking a band for a club date at $500 and a charitable event for $300 I’m going to choose the charitable event. If you have to ask why you’ve missed the concept of “exposure” and you’ll continue to be a victim of people who use that word as a weapon to undervalue your contribution to THEIR business.

Very best,
Mark

PS. There is a distinction for NY artists about the term “club dates” – for the purposes of this article, a “club date” is a night club venue promotional night (not ticketed but maybe a cover charge).  It is not meant to describe private engagements (or as many NY musicians generally refer to club dates – as any ”non-concert” performance).

Valuing a “service”

One constantly shifting factor in a service business is finding that magic “happy medium” between the divergent concepts of “cost” and “worth” (what it costs your business to be useful to a client and what you think your clients are willing to pay for something useful).

In today’s economy, keeping a steady workload can sometimes force you to abandon both of those considerations in favor of approaching the problem from a more survivalist approach: “How cheaply can I afford to offer my services?”

Before you undervalue your services for survival (or undermine the market your competitors have established FOR YOU), let’s take a look at the cost of doing business.  In this example I’ll break down a Owner/Operator service business (Self-Employed “wage earner” as opposed to “business owner” who employs many).

There is a dramatic difference between earning a wage and owning a business – I’ll discuss that in another article.

In either case “time is money” as they say – so I’ll start with wages (and some assumptions):

• Assumption 1: Let’s say you’re a billable independent service provider w/$15k in supporting equipment and/or software (musician, photographer, videographer, graphic designer, web designer, writer, analyst, etc…).
• Assumption 2: You don’t have any employees and your business operates with the least amount of overhead possible.  Whenever something gets out of your area of expertise you hire other subcontractors to help you pick up the slack.

TIME: For this example I’ll use a $50,000/year salary as a baseline (rough national average).

For a W2 employee earning $50k/year it would cost the employer about $65,000 per year (taxes, benefits, insurance, etc…).  Sole Proprietors are not W2 employees but they do still have liabilities on their earnings and a responsibility to their retirement planning, all of which will likely make their costs about the same.  That means if you want to earn $50k/year you have to bill $65k/year (that is the base pay multiplied x 1.3).  Want $100k a year? Use $130k for the math.

MATH:

• $65k/52weeks = $1250/week
• $1250/36hours = $35/hour

Why 36 hours?  Even if you work a 50 or 60hour work-week it isn’t all billable to a client – you own your business and you don’t charge your customers by the hour to do your own books, deal with your accountant, plan your marketing and advertising, pay your bills and bid jobs, etc…  It is reasonable to assume you will burn at least 10hours a week that you aren’t paid for.

Using the above math we have established that your survival as a “wage earner” (not a business owner) requires you to bill for your time at a minimum of $35/hour and for a minimum of 36hours/week (assuming all client expenses are reimbursed at exactly what it costs you).  That’s the cheapest you can work (before factoring in anything like additional equipment, job materials, insurance liability on subcontractors, etc…).   It doesn’t matter if you work in your business (or on your business) for 60 hours each week – you still have to bill at least $35/hour for 36 hours (or $1250/week).

OVERHEAD / SUBCONTRACTORS:

To determine whether you are charging the appropriate markup on subcontractors/vendors, you simply need to determine three things:

1. Does the difference between what you pay your vendor and what you bill your client equal your minimum rate after factoring in the amount of time it takes to manage/communicate with that vendor? ($200 in markup in a situation that takes you 10 hours to coordinate the work of your vendor only equals $20/hour).
2. Can your subcontractors/vendors provide services at lower rates than you presently charge your client? (if there isn’t any built-in margin you will want to either raise your rates to create a natural margin or value a quote using #1 to calculate the margin)
3. Is the perceived value of what you can provide by using a vendor or subcontractor worth the “perception” it has on your rates? (if you charge a customer $35/hour but your graphic person is charging $100/hour what is the perception of your talents to your client?  This is how you determine whether you quote a “project” or an “hourly rate” because the perceived value of a project may be completely different than the perceived value of your time).

ASK YOURSELF (do these assumptions match your business):

1. Can I bill 36hours/week in my field? (If not, you need to divide your weekly target by however many hours you can actually bill to a client).
2. Can the clients that I have access to afford my rates?
3. Can I deliver my service reliably at this rate? (and have client successes result in more work)
4. Is my rate too affordable (this is a perception…and is mostly based on the market you work in – sometimes pricing yourself too low can actually hurt your ability to be taken seriously)
5. Am I valuing the cost of my education?
6. Do I have more than $15k in equipment?
7. Are you above or below “average”?

In Short (this example):  The least you can charge is $35/hour.  The most you can bill is 36 hours.  Is that a value for a useful service?  Is that enough to survive in your world?

PERSONAL TAKE:

At Mahar Enterprises, Inc. our base rate is $65/hour (which is based on my personal baseline for all consultants).
The only time we charge more is when we can’t handle a scope of work with our existing pool of talent (or when travel is required).  Travel changes everything – if only because most of the expense of my business is the equipment, software and technology which all live in my office (it isn’t as mobile as I am personally, people still need it in my absence and it has to be “duplicated” at a cost that is always applied to the job at hand for my clients).  We have established a few services which are budgeted lower because we have made them more efficient (and in some cases they even replace “advertising”  – a cost we would otherwise incur, so we can afford to apply the savings to that service).

Our competitors charge $250/hour for some of the services we provide.  We have chosen to undercut the market so aggressively because the concern of “perceived worth” is less important to me personally than is actually “delivering something that any client can afford” (and doing it better than someone who charges so much more).

Because our core services are either “Delivery” or “Management”, we can remain focused on the simple cost of “our time in delivering the service” (and not worry about the perceived value of what we are delivering).  Vendors worry about that, not us.

Each business is different.  I value services based on my ideology of “removing handcuffs” from business owners.  Everything has a cost.  We operate on the most basic “Cost +” mentality rather than the value method our competitors and clients use (their method being more of a salespitch or rationalization which says, “this saves you $X so it is worth $X”).

Let’s be honest: If it doesn’t save you money or make you money it’s not worth doing.  The perceived value and the cost are two different things.  I couldn’t care less what someone says a service is “worth”…all I care about is that my clients can afford the “cost” (and that the cost is worth incurring).  In answer to that question we’re always the most affordable and creative solution so I don’t have to defend the perception of “value”.

TO BE CLEAR: We don’t always recommend the “Cost +” approach for our clients in THEIR BUSINESS because the reality is that successful business revenue models rely on exploiting “perceived value” (in my business, however, I’ve reserved perceived valuations for PRODUCTS…not SERVICES).  For the purposes of Mahar Enterprises, Inc. we’ve simply shaped our perceived value as “the most affordable solution for a truly necessary service” (rather than demonstrating “return on investment” in order to emotionally provoke clients to choose us over our competition).  I personally find it easier to clearly say to business owners “once you decide something is necessary to your business, we are without question the most affordable place to get it done properly”.   That approach may or may not work in your business but it works for mine (but I am also a business “owner” instead of just a “wage earner” – as mentioned, I’ll discuss the distinction in another article).

Feel free contact me to schedule a valuation study of YOUR RATES.  We can do it under an hour, in real time and it costs $65.  We conduct our services with complete confidentiality.

Regarding MY VALUE: I look at it this way - if a client doesn’t feel it is worth $65 to formally dissect their rates/business and gain access to some really candid/helpful advice, they might as well stop shopping consulting services in general because my competitors start at $150/hour….and I already gave them free advice (above).

Doing business is easy…but only once you’re valuable and useful…as an enterprise.  That starts with “rates”.

- Mark

UPDATE: 9/24/11

After 11 years of operating with minimal overhead and providing all services exclusively with in-house talent, our workload has required that we add production personnel and programmers (all of whom are $100/hour or more).  As a result, we’ve been forced to modify our rates.

Beginning October 1, 2011 our 2012 rates will go into effect at $130/hour (which is a 30% margin on contractors, and includes use of all production facilities at our disposal [no room rental fees for any production, taping, broadcast or commercial media]).

Fix Your Business in ONE DAY

Tonight, as I often do, I sat in on a webinar for another company (assessing how they are communicating “value” to their customers).  I walked away from the night’s duties and began to prepare my formal notes when it occurred to me – “Here I am again…about to run through the same things I seem to communicate to almost every client”.  Here it is – for you:

If you want to fix your company – FIX IT.

If you want to grow your company – START GROWING.

If you lack relevance in your market – BECOME RELEVANT.

If you lack a competitively priced product or service – CREATE IT.

These aren’t budgetary line-items or optional marketing strategies for contemplation…they are decisions.  You make decisions for a living.  Make a decision.  The only thing capable of changing an object in motion (or at rest) is the outside force.  YOU ARE the outside force.  If it does in fact require investors, a credit line, a supplier or some other business infrastructure that’s fine…but make the decision you are going to do it.  I can’t help anyone who is still measuring whether something needs to be done.  If I’m talking to you…it means something needs to be done – let’s DO IT.  (or do it without my team - but make a decision)

Lots of people call me with great ideas (some really great ideas!).  We talk about their ideas and their market, etc…but ultimately most of my client conversations migrate towards a discussion about the obstacles that are in the way of their success/ideas.  Many obstacles are real, tangible, mechanical, practical, etc…but I would be remiss if I didn’t tell you that the vast majority of my phone conversations end on one note: Motivation (confidence)

Every business owner, sales rep or entrepreneur that I speak with about an obstacle has, at the core of their obstacle, a problem with motivation (they call me about a problem and it is because that problem has depleted their motivation, mojo, ambition, confidence, capital, etc…whatever shakes them enough to realize that they need someone else’s help).  It isn’t that they lack the ability to overcome the problem, but rather that they view certain things as obstacles to their “process”.  Ambition is a “process”.  If you lack a sincere passion for your products and services, why would anyone consider your product (let alone your service) over your competitor’s?  Why would you dig in a little deeper and work a little harder for your own success if you don’t feel like you’ve got the answers (or confidence that you are doing it right)? 

Before you talk to me:  Is there anything that is killing your process?

1. You are good (possibly amazing) at what you do and you believed that once or you wouldn’t be doing it.  What happened?

2. What you sell has value in the marketplace and you believed that enough at one point to entrust your living to it (and to “sell it”).  What has changed?

3. A purchase is a decision.  You need customers to make a purchase.  Your attitude about what you sell is 90% of the obstacle to gaining consumer trust.  Do you have the right attitude and track-record to be trusted?  Do you know if your customers/clients trust you?  Do YOU still trust you?

The only OBSTACLES in business are emotional.  The rest of the problems in business are simply awaiting an outside force (that force doesn’t have to be you, but the upside is “it almost always can be”).  Remove the obstacles and you will change your business – immediately. 

My job is to get it done as swiftly, cheaply, creatively, clearly and contagiously as possible.  It is your business.  The “decision” as to whether or not it needs to be done is yours alone.   I can do some wildly amazing and profitable things for pennies on the dollar but I can’t decide the target for you.  I make the target affordable…I don’t label the target.  Only you know what you “need” from your business.  There isn’t a slick enough marketing strategy or a rich enough backer to bring you to wealth if you don’t KNOW what is in your way.

OBSTACLES:  Every business owner or salesperson knows the things in their business or environment which “tick them off” (or deflate them enough to create obstacles).  What ticks you off about your business?  Don’t lie to yourself – you know EXACTLY what it is.  If your answer is “capital”, start reading from the beginning [if your answer is still "capital" start reading from the beginning].

Business Owners can identify problems…that is what inspired them to go into business in the first place.  You saw a problem and then you saw a solution…and you were inspired! (obstacles be damned, right?)

Maybe you need to talk to me in order to zero in on it?…but, maybe you don’t.  Maybe you just need to remove the obstacles that are preventing you from being excited about your business again.  If you don’t know what those obstacles are I’d be happy to chat with you about it.  If you do know what they are…what are you waiting for?  Fix it…or pay someone to fix it for you.  Problems don’t go away just because you can label them.

The things that weigh us down come in all shapes and sizes but we don’t carry them…we are simply tethered to them.  We tow them along until we give up and ultimately just exist in the radius allowed by our tether (our own little sphere of complacent market posture and cash-flow).  The weight of a business problem can only crush you if try to pick it up and carry it yourself.  Don’t do that…and stop dragging it around too.  It can only keep you stationary if you are unwilling to cut the tether.  Cut the tether and the weight is powerless to hold you back.

You can fix your business in ONE DAY if you can be honest with yourself.  Identify the thing that ticks you off…and eliminate it (write the check, cut the cord, suffer the blow to your dignity [if there is one], get your hands dirty again [if you need to] – do what you are the best at doing…whatever the answer is).  Standing still is the surest way to fail.

NOTE: I learned how to develop websites because “not being able to communicate” (what I happen to think are important and valuable business concepts, to deserving and hard-working entrepreneurs) really ticked me off.  I communicate for a living.  A communicator without an audience becomes something else.  I will gladly admit that I was losing my sense of personal relevance and feeling like a broken record…and settling for my tethered little sphere of irrelevance.

I’m here to make life easier for business owners and introduce great ideas to the world (in the form of products, services & art)  - that’s what I’m passionate about.  I saw the problem with my “web world’ and I fixed it, with a decision –  my sales are better for it too. 

Fix it.  Do it.   Obstacles be damned. 

Necessity is the mother of invention.  That is only a useful maxim once something is deemed “necessary” (that is your decision – what is necessary?)

We can work on the solution together…(if you even need me at all).

Best,
Mark

Social Marketing (Facebook, etc…)

Everyone in the web world is talking about the value of social websites as a catalyst for your business.  It seems every business is now jumping into the Facebook and Twitter pond.

If you do decide to start a Twitter feed or a Facebook fanpage for your business, there are a few things that you should keep in mind about social behavior in formal social forums.

1. The art of using social sites for promotion is a fine balance between promoting on YOUR PAGE with inpunity (and despite apathy), while not subjecting your followers/fans to gratuitous personalized mail and newsletters (particularly not “calls to action”).  Social means social, it doesn’t mean “accept my delivery, read it thoughtfully, then take action”.  Don’t expect “action”, simply expect exposure.  Fans, Friends and Followers will click on your “internet channel” if they feel it is worth viewing. They are not subscribers or another inbox for your marketing – save that stuff for your newsletter/mailing list. 

2. Shame (or something like it) shows up in the strangest places.  Somehow, a sense of social dignity can surface and becomes a measure for restraint – it can become an emotional obstacle whenever a free promotional opportunity is actually “called one” (or acknowledged as one).  This is worthy of note because any breakdown of the “social illusion” prevents an otherwise proactive person from engaging in even the most convenient of free resources/interactions (but, for some strange reason, if it doesn’t look like an “advertisement” people are willing to abuse it as a resource and interact gratuitously).  Figure that one out?  I’m not here to explain audience psychology, I’m just telling you what the organism does.

3. The best social marketers are kind of in denial and engage in the act of promoting themselves passively (“Just hopped on a plane for another trip to Florida for the pet food client - ugh – I’m gonna be beat tonight”).  People are more apt to “pretend not to promote themselves” than they are to actually OPENLY promote themselves (or their business).  Over the years I can include myself in this category on more than one occassion (so I’m not minimizing anyone or their human psychological weaknesses…I’m simply being honest).  Psychology is part of Dr. Bell’s acumen – I’ll leave that one for him to elaborate on.

The point is:  Engage in social marketing by simply being SOCIAL (and the marketing will take care of itself).  Approaching it from the other direction is a strange violation of “social forum etiquette”.  I don’t know why.  That’s just the nature of the organism.

If you don’t believe me, you can try the same test I did when this awareness occurred to me:

I posted a status which said, “Today I’m inviting anyone who wants to tell all of my facebook friends about their business or product to drop a mention.  Right here, right now – plug it, promote it, pitch it.  Go!:”

ONE REPLY – one person posted their company with a link - out of hundreds of artists, business owners, etc… Why?  Because I actually called attention to a social marketing forum – I labeled it what it actually was.  I’ve said “hello facebook” before and gotten 15 replies with a bunch of “thumbs up”.  Don’t try to understand it, but do be aware of it.

People on social networks (even the ones who are there to promote themselves) are not openly willing to admit they are there to promote themselves…and everyone has a sort of “anti-social trigger” that kicks in the moment something stops “pretending to be social”.   This can be an advantage or a disadvantage to your personal style, depending on how you structure your communication with your “friends & fans”.  In any case, don’t expect action – simply expect an audience.

REALIZE:  social networks are inherently narcissistic environments - momentary digital soap-boxes for the user (it’s all about them).  Most people are instinctively uncomfortable acknowledging that their facebook or twitter account is really “all about them and their ego”…it is psychological evasion on a really basic and NORMAL level (it’s not a mean acusation, it’s just the truth – no harm in having a place to call your own and no harm in having instinctual defense mechanisms around your natural interest of having an audience).  We have an ego and it feels good to feed it (particularly when it feels more like interaction than soap-boxing).  That’s part of what makes us human.  Again, Psychology is part of Dr. Bell’s world – ask him?  I don’t know.

The upside is that if you are equipped to invest yourself in your friends/fans/followers (by acknowledging THEIR world instead of just broadcasting through your own) you will fast become a welcome part of their day.   I will openly admit that I’m more apt to broadcasting something that I’m promoting  in the moment than to actually invest in the effort required to be personally relevant in the lives of hundreds of people on a daily basis (the latter being a passive effort to encourage and approve of them/their ideas, personally).  I try to engage personally with a couple people each day (on THEIR posts, not my own).  Most often I poke fun at myself, as if facebook really is “all about me”.  Everybody has a personality trait (I lead with volunteering as the butt of a joke).  The goal here is to empower you with my perspective, for whatever value it has. (maybe none?)  I don’t know - most of my facebook friends are actually my real friends…not some fanbase I’ve built up.  To each his/her own.

When I hit my own wall of time & energy on a social level, my formal default mechanism is “motivational quotes” (typically related to business).  This month I plan to cycle between quotes in revolving category fashion:  “Learn”, “Teach”, “Love” & “Honesty” (my way of enforcing my business philosophy and ideas about life’s opportunities).  Even if I do reach someone with my ideas or thoughts I’ll likely never know about it – that’s the social component and it requires a willingness to simply “contribute”.

We’ve all got our bag and we all want to promote it.  Don’t over-promote on a social network and you’ll never run the risk of being considered “baggage”.

Happy “socializing”.

- Mark

PS.  For the record: I would NEVER get away with this flavor of expression on Facebook or Twitter – know your forum and adhere to it (this more corporate blog format on MaharEnterprises.com has relevance as well – you’re reading, after all).

Success & Failure

Anyone who tells me they have tried and failed gets the same response: “Congratulations”

It isn’t that I’m insensitive.  I just happen to see great value in failure (and people who learn from failure).  One doesn’t become an expert marksman or a genius inventor without failing more times than they succeed.  If you can still walk, breathe, eat, crap and clothe yourself after a failure, what have you really lost?  Your failure isn’t going to eat you…it just smacks you around a little.  You’re not dead – you’re smarter. 

I would also like to reassure potential clients that I have never failed for a client (I actually have great track-record).  I have, however, had countless failures as a result of things I took on myself (or with a team that was willing to test the waters with me on an “idea”).  I openly admit it though – The thing I’ve personally invested most in is “failure”.

Some of my greatest ideas and efforts resulted in my most expensive failures.  I simply consider it tuition (paid to “The University of Mark Mahar” – I’ve rung up quite an acumen from that institution).

Those failures - which I funded myself or that our team has tested at our own expense - are precisly what every MEINC client is getting when they hire  us.  Our consultants are chosen for their failures as well as their successes.  Cumulatively, we’ve achieved some wildy incredible things for pennies on the dollar (or that others said simply couldn’t be done at all).  We didn’t get there without failing.  Companies don’t typically admit their failures, but I see no reason to hide behind them.  It is this willingness to punish ourselves (in order to improve the chances of success) that our clients NEVER have to be a “test case”.

For every product, service or licensing deal that feeds me, there were 20 before it which took food off my table.

Similarly, every dollar of exploitable value that our team sees in distressed properties (real estate, planes, businesses, brands, commodoties, etc…), exists because of how the product of failure/adaptation equals success.

As a business owner, inventor, artist, etc…you have probably tried and failed more than you want to admit.  Is there not value in those failures?  You are good at what you do because you can run across the minefield of your industry or craft (at a full sprint – doing in a matter of seconds what would take someone else several intense and fearful hours).  Why is that?

With rare exception, success is just a collection of failures which are put to good use.  Failure is an opportunity to learn. 

I try to learn something every day.  I embrace failure.  Failure is my friend.

Failure is wisdom.  Learn, adapt and succeed.

In business, the easiest manpower recipe for success is to rent someone else’s failures (and rely on them to make it look easy).  That’s why we hire experts.  That’s how we make it look easy.  That’s why our clients hire MEINC.

As an apprentice Carpenter (15 yrs old) I learned a valuable lesson - There is no such thing as flawless work.  The important thing is to achieve a flawless looking result.  It is how well you adapt to your inevitable mistakes that makes you a craftsman.  EVERYONE makes mistakes.  Not everyone knows how to dodge the big ones or salvage the small ones (or hide the irrelevant ones).

The point of all this is that no MEINC client should ever feel shame in communicating a failure.  The fact we’re talking about it means we’re about to resolve it (learn from it and adapt to it…closing in on success).

(Failure+Failure+Failure+Failure)       = Success
(Learn+Communicate+Adapt)

1. Know the difference between an excercise and a mission.

2. Always treat an exercise like a mission or it isn’t worth the exercise.

2. Never treat a mission like an exercise unless you’re prepared to throw a whole lot of resources at it. 

3. Communicate (failure & success – allowing people to learn and adapt).

Either way, congratulations are in order.

-Mark

Thinking sideways

Sometimes the answer is right in front of you, but most of the time the answer is right next to you.

Lateral thinking is an important part of business agility.  While many businesses only think in terms of “forwards and backwards”, the business world is multi-dimensional.  Many business owners only measure along one axis.  The pitfall of operating a business on one axis is that your problem-solving skills are reduced to one axis (your intellect becomes a product of your practice).

Rockets travel a trajectory (and very few businesses are like rockets).  A business can’t travel on a straight mission line.
Business is more like sailing - traveling from one point to another requires a series of course corrections – tacking left, then right, then left again.

Maybe you’re stuck with 1,800 branded racquet balls from a past event because of a quantity typo on the production order?  

Thinking forward and backward makes that error a net loss…by creating “garbage”…all because someone hit the ”zero” key one too many times. 

Thinking sideways provides for creative “recycling”. 

Example: Charge another client a discount rate to add their logo to your overstock and give them away as promotional items (branded stress relievers?)…and use them to market the stress-relieving component of your business (product or service).  You have to advertise anyway, right?

Nothing is garbage until it is completely destroyed. 

Gardeners, for example, appreciate the value of thinking sideways (because recycling is part of their craft) – what one person considers “waste”, a gardner would consider “fertilizer”.

Maybe I should make an illustration of a guy in cover-alls standing under your business with a bucket? 
Nah – I think you get the picture.

Mark