Would Warren Buffett Buy Your Company?

He is looking.  But is he buying?

"Buy wonderful companies at a fair price, not fair companies at a wonderful price." - W.B.

This is a tough question to answer honestly.  The truth is, of course he wouldn't buy my company as it is now, but if it were larger would he look at my company and say that it was a wonderful company he would like to own?  He would probably have a few reservations about investing in my company as it stands today.  


The moment this question came to me, I could see what needs to improve in my company to make it better.  I could see some things we do well, and some things we should do differently.  

Power of Video Marketing

If a picture says 1,000 words, then a video says 10,000; maybe more.  My company, H2O Pools, started our video marketing campaign last summer and it has helped bring in new leads, sell new work, and build our brand awareness.  


This is just one of the 3 professional videos showing some of our work.  

It is possible to spend a tremendous amount of money on a project like this, but it is not necessary.  We work with Brendan, the owner of RE Visuals.  
He is a one man show, and his work speaks for itself.  Plus, he manages to keep the costs down by doing all of his own videography and editing, as well as producing all of the music, which is original.  We didn't have to pay any royalty costs.  


I have seen videos that were done by large production companies, and they cost around $20K-$40K for a video of this magnitude.  There is a difference in the quality, but not enough to warrant a cost that is literally 10x what I paid.  


They videos get the points across, in a very short amount of time.  The viewers get a sense of what we are capable of doing and this builds an interest in our company.  I haven't ever sold a new pool solely from someone watching the videos, but I have gotten in the door because of them.  They took some effort and time to make, but the R.O.I. is well worth it.  


Whatever your small business is, there is a place for video marketing.  It makes a difference to have a pro doing the work, vs. shooting footage with a smart phone.  The professionalism translates into higher quality leads, and more profitable work.  

Invest...Family and Friends

Family, Friends, and You:

Daddy's Little Girl

Every business has its busy and slow times.  When things slow down, I make a concerted effort to spend time with loved ones and to do things that balance all the hard work.  

Home is Where the Heart Is

There are times of the year that I am so busy I barely see my daughter off to bed at night.  During the slow times, I try to get home early and spend quality time with my family.  It is very important to remember why we work so hard when it is busy.  It is critically important to take advantage of the time and do fun stuff with the family.  Otherwise, before we know it, our kids are off to college and work and we hardly ever see them.  Then they repeat the same patterns we modeled as they grew up. 

If you value your family, you will make them a priority.  Your business can suck the life and joy out of your home.  If you think your wife or children aren't involved with your business, think again.  Remember those tough days, when you had to deal with a major monetary loss, or a very difficult client?  If you are as human as I am, you probably brought your frustration home and unleashed it on your family.  Some people show their emotions and some hold it in.  Either way, your family suffers along with you as you fight your way to success with your company.  MAKE SURE you allow them the joy of having you home and happy once in awhile.  

Lunch With My Wife

Honestly, the last time I brought my wife lunch was three years ago when she was nursing our daughter at work.  While it is difficult for me to pull off now, with her new job location, it isn't impossible and I haven't done it.  This effort could go a long way in pleasing your wife (or husband), and it can make up for many long days away from home tending to your busy, busy company stuff.  

Hi Grandpa!

When I see my grandpa, I always think the same thing…I really need to see him more often.  I walked into my mom's house the other day, after work, and my grandpa was sitting on the couch.  It was such a pleasure to see him.  I know this is a cliche, but the grandparents aren't going to be around forever.  The slower times allow us to make an extra visit between holidays.  It sounds horrible when I read that last sentence, but that is what it has come to.  I usually only see my grandpa on holidays and that just isn't good enough.  As an American, I can say that this is fairly normal for many people in our society.  Especially, for people who's family is out of state or out of the country.

Old Friends

Do you have old friends that you have known for over 10 or even 20 years?  I have a group of friends from high school, and we usually see each other twice a year with ALL of the kids.  It is always a blast, but I barely have time to really catch up with any of them one-on-one.  

It is so rewarding to meet up with an old friend for lunch or after work, or at their house on a Saturday.  One evening I was at a customer's house very close to my friends Jessica and Desmond.  Jessica and I have been close friends since high school.  I stopped in, unannounced and stayed for an hour or so.  It was great!  They were delighted to see me and I got to catch up with them and their two kids.  It won't always work just dropping in on people, and some people prefer a call, but when it does work, it is reminds us of who are real friends are.  In our lives we may have just a few real friends.  It is always worth investing a few moments to connect with them.

Time for Fun

Put down the hammer and step away from the ladder.  Take a break and get a life!  What are you working so hard for if you never take a moment to enjoy your life a little?  You know who you are if this rings true.  Pause for a moment, and think about the last time you did something fun.  If you have at least one child, I can imagine it has been awhile since you did something, just for YOU!  At least that is how it can be for my self for periods of time.  It is ok to reward your self once in awhile for all the hard work that it takes to build and maintain a small business.  In fact, I believe that without some kind of release, the pressure can build inside our selves, and blow!  

For me, I try to find small things that take my mind off of work, for short time frames.  After all, the business takes most of my time and I need and enjoy spending time with my family, so there is little time left over.  Last summer I managed to get a small power boat.  I rarely have time to take it out, but when I do, I don't worry about any of my normal daily stressors.  I feel the breeze and smell the water.

The Budget

The Budget

The dreaded BUDGET...I hate doing this kind of work.  In fact, I imagine HELL is freezing cold, there are no beaches, the only food is MacDonald's, and all I am allowed to do is budgeting and accounting.  

Many businesses fail because the leaders don't have a good accounting system in place and they don't do a budget.  This has been my biggest source of failure in business.  I have tried to do my own bookkeeping, and I have tried to hire a friend as my bookkeeper.  Neither way worked.  I just would not do the work, and my friend didn't seem to know how to organize the accounting for a business my size.  And I kept her far too long after I realized she wasn't a good fit for the job, because I didn't want to hurt her feelings.  In the end, I did both of us a disservice, and hurt her feelings anyway.  

Hire An Accountant  


If you are not the nerdy type that gets turned on by crunching numbers and glaring at large spreadsheets all day, just find someone that does.  They are out there.  I remember my Accounting 101 professor at VA Tech.  This man was on fire for accounting.  He would jump around, shout and get so excited when he would balance a budget.  It was hilarious.  He was such a great teacher! I was so inspired by him, I actually tried to major in accounting.  That didn't work out, but what I learned was, some people are wired for this type of work, and they should be involved in my business.  

I hired a CPA, shortly after my bookkeeper friend graciously and voluntarily left my company.  He comes in for a couple hours every couple of weeks and confirms, and reconciles Quickbooks.  He charges a very reasonable rate, and the net cost is far less than carrying the salary of a full-time bookkeeper.  

Quickbooks online is a great tool for small businesses.  I have heard there are other systems, but most I have looked into are more expensive and more cumbersome to use.  Quickbooks has a budget tool that is easy to use and modify.  

Quickbooks Budget

For me, I have to schedule the appointment with my CPA first, then I get to work on the accounting.  The appointment gives me a deadline, and that forces me to do the budget and accounting work.  

If you are operating without a budget, then you are sailing in the dark, on the ocean, without a compass.  I know because I did it for years.  I always thought there would be more time later, but my company continued to grow, and time became less and less available.  


You need to know where every dollar is going in your business.  If you don't tell your money where to go, it goes wherever it wants, or worse, wherever everyone else wants it.  (Dave Ramsey, Financial Peace) It seems to disappear when there is no plan for how you allocate it.  A budget is a plan for your money.  It takes a ton of energy and time at first, but it gets easier and easier as you get in the habit of creating budgets.  Take advantage of the lulls, and work on this stuff.   


I have to credit Dave Ramsey for the lessons learned above.  Though I am not as articulate as he is, maybe the essence of what I have gleaned from him, will come through.  

"A budget is a plan for your money."

Make a List

Make A List

To counter these useless tasks, it is essential to create a to-do list.  For some people this comes naturally, but for people like me, a list is painful for several reasons.   I like spontaneity and a list seems to structure and limit my day. 

The reality is, a list allows me to narrow my thoughts and focus on important tasks for my life at work and home.  

Here is a typical list I would create:

1. Enter completed invoices into Quickbooks

2. Schedule doctor appt.

3. Blog for 1 hour

4. Go through old mail on desk

5. Call active leads

6. Complete proposals

7. Schedule lunch with my Grandfather

8. Go over active projects and update punch list items; Look at cash-flow and figure out when the next draws are due.

9. Look at budget for next month

10. Have employee organize inventory and clean storage shed and basement

11. Find church service for this Sunday

12. Plan Thanksgiving menu

13. Organize materials and videos for consulting gig

The next step to the list is to prioritize.  Dave Ramsey wrote about prioritizing a to-do list in his book Entreleadership, and it was the best and simplest method I have ever seen.  

First you label the items as "A" or "B".  The "A" items are ones that have to be done today, and the "B" items are the ones you would like to do today, but they can be done later.  Next, number each item in the "A" group starting with "1", for the top priority item, that has to be done first.  Follow with 2, 3, and so on for the rest of the "A" list with the higher priority items being lower numbers and the lower priority with higher numbers.  Do the same for the "B" list, by numbering by priority starting with "1".  

So your top priority item is A1, second is A2.  I personally write a list most mornings of anything that comes to mind as a brainstorming list, then label them "A" and "B", then number each item in the "A" group, and "B" group.  I then rewrite the list in 2 separate columns in priority order.  My finished prioritized list above would look like this:

A:

1. Complete proposals

2. Call active leads

3. Go through old mail on desk

4. Enter completed invoices into QB

5. Blog for 1 hour

6. Go over active projects

7. Have employee organize inventory and clean storage shed and basement

B:

1. Organize materials and videos for consulting gig

2. Find church service for Sunday

3. Schedule Doctor Appt.

4. Schedule lunch with Grandfather

5. Plan Thanksgiving menu

6. Look at budget for next month

I may never actually complete all the tasks on the lists, but I can see the progress I have made, which gives me a sense of accomplishment.  Furthermore, the list helps me move forward on the things that really mater.  

Surviving The Lull

Take it easy...

When I read books by famously successful business people I get inspired, but a part of me also feels lazy.   When I read Tony Hsieh (CEO, Zappos), Dave Ramsey, Richard Branson, or Malcolm Gladwell, I get the sense that when I don't make good use of my idle time, I am a loser! These guys are so wildly successful and inspiring, I can't imagine them sitting around watching Brothers and Sisters like I do every night with my wife.  I am sure these business icons have some down time and enjoy some form of entertainment, but from reading their books, you'd think wasting time was bread out of their DNA.  

In the picture to the left of the infamous Tony Soprano, we are reminded of one of his favorite expressions…"take it easy".  This is what he would say to someone that was getting upset as he would smirk cynically.  Not the business icon I had originally thought of, but he was a character that embodied the essence of balancing life with work.  

In any business I have ever studied or experienced, there are cycles of ups and downs.  For my business, the spring season is our craziest time of year.  One colleague of mine put it this way: "There is a finite amount of time to do an infinite amount of work."  In the pool business, in Northern Virginia, the spring season is when the action happens.  The summer and fall seasons are steady, and the winter is a ghost town.  

The question everyone asks me when I tell them I am in the pool business is, "So, what do you do in the winter?  Do you go on vacation?"

The reality of the pool business is not as glamorous as it may seem in the winter.  The first hurdle is making sure we have enough money to pay all the bills in the winter.  This requires saving money all year to prepare for the off season.  Most years, I have fell short of this principle.    

The way I have dealt with an extremely slow off season is to sell winter work.  We can do construction work in the winter, that pays for the rent, lights and payroll. I will address my personal strategy for selling work off season in future posts.

If you have ever been self-employed or a business owner, then you have experienced the phenomenon of sitting at your desk wondering what you should do or where you should start.  There are some days when the work is caught up and you have followed up on all the current leads.  You surf through Youtube, maybe write emails to some friends, or even watch a movie.  Some people clean and organize their desk and junk drawer, or clean out old files.  All these activities are meant to distract us from our business, or lack of business.  

In the next few posts, I will explore different approaches to surviving the lull.

Make a Statement Marketing

Look Into My Eyes

What Do You See?

The answer is: Beauty

Recently, I listened to the autobiography of Steve Jobs.  One thing I learned from him is to make beautiful things, and to make what I do beautiful.  The picture of Angelina Jolie above shows how beauty captivates people.  When you combine beauty with excellent products and services, you have a winner.

When I first picked up an iPhone 4, I felt the beauty of the design and it was a pleasure to look at it.  As a practical matter, I wanted to protect it from getting damaged.  So, like most people, I purchased a bumper protector and a screen protector for it.  After I put the bumper on it, it wasn't as beautiful.  I left it on the iPhone anyway, because I feared I would destroy it.  A few weeks ago, my daughter ripped the bumper off.  When I picked it up without the bumper, I immediately realized that the bumper ruined the iPhone.  It made it bulky and awkward in my hand.  It made it feel cheaper.  So, I have been living on the wild side, and using my iPhone without protection!  The experience is so much nicer and my iPhone fits in my pockets better.  

I am no Jobs, but I have constantly tried to improve my marketing and brand.  It takes time to develop and it takes making mistakes.  It also takes recognizing what works and repeating it.  My father taught me long ago that it is essential to send a direct mailer every spring and fall in our industry.  I still do it to this day, and I can honestly say, that every time I send out a flyer, it is the most beautiful one I have ever created.  I work with a wonderful printer, and together we improve our marketing materials every time.  We are never satisfied with what we did last year.  

It matters how your marketing materials look.  It matters what type and weight of paper you choose.  When a customer picks up your business card or flyer, the first thing they take in is how it feels in their hand.  It may only hit them on an unconscious level, but believe that it makes a difference.  Quality is paramount. 

Compare the bulk mailers to a direct flyer.  The bulk mailers are packed with the cheapest crap paper ads available, and 99.9% of them end up in the trash.  With an average post card, you get at best 2% call backs.  With the highest quality flyer possible, with relevant content and attractive design, you can stretch that to 3-4%.  More importantly, when they notice your materials, quality jumps out and sets you apart from all the other chumps out there.  

Don't be cheap with your marketing materials.  Especially if you sell a high-end custom built product like me.  Make a statement with everything your clients touch or see, and your efforts will pay off as profits and customer loyalty.  If you don't believe me, walk into any Apple store in the United States, and see for your self.  

Steve Jobs, may you rest in peace.  You changed the universe.