Cal Tingey's Business Blog

Your Price is Not High Enough

Cal Tingey — Sat, 19 May 2012 15:50:00 GMT

I remember when I started a new company in the Due Diligence field. I spent time developing a unique process for analyzing investments in limited partnerships. As a result of this process my company was able to provide a powerful report to the group that organized the limited partnership and a different report that was equally as impressive to the broker/dealer selling the limited partnership investment.

Excited with my creations I took my business to market and began selling. To my surprise the first 15 sales presentations were stopped by the objection, “Your price is not high enough.” This surprised me since my firm was charging substantially more than our competitors were charging. I didn’t know what to do – should I offer a money-back guarantee (this wouldn’t solve the problem that we weren’t charging enough), or should I charge even more? Not wanting to lose a sale I offered to double the price.

Doubling the price was all I needed to close the deal at our current price.

Why did I get the objection that my price was not high enough? Because each prospect could clearly see that the benefits far outweighed the cost. In fact, in their minds my promises of what I could deliver was so superior to what others in the marketplace were offering that the prospects thought I was lying or that my price was not high enough.

If you are not getting the objection that “your price is not high enough” then your prospects don’t understand the true benefits of what you are selling. Remember there is no such thing as “too expensive.” There in only the belief that the potential gain from something is not worth the cost.

Solo 401(K) Plan

Cal Tingey — Sat, 12 May 2012 13:40:00 GMT

A solo 401 (k) allows you to defer up to $17,000 of compensation to your account, plus and extra catch-up contribution of $5,500 if you’re age 50 or older plus you can do a profit sharing contribution up to 25% of compensation with a $50,000 annual maximum (for 2012). The plan can be set up to allow loans and hardship withdrawals. Contributions are discretionary. Therefore, you can cut back on your annual contribution, or skip it entirely if your business is having a bad year. You can roll over funds tax-free from another qualified plan if you previously worked somewhere else.

Despite these benefits, there are some potential drawbacks:
     • If your business has employees other than yourself then they may have to be
         covered under the plan.
     • You have to deal with the hassle and cost of running the plan. However, now
         that there are many big players offering the solo 401 (k) the costs have
         plummeted – think $100 set-up fee and $50 to $250 to administer the plan.

If your business is unincorporated, you can deduct contributions for yourself from your personal income. If your business is incorporated, you can deduct contributions as a business expense.
The deadline to open up a new plan is December 31 or fiscal year-end. These plans are worth exploring if your business is making money.

Are You an Intruding Pest or a Valued Resource?

Cal Tingey — Sat, 05 May 2012 15:49:00 GMT

Intruding pests contact prospects and customers with these introductions:

• “I just happened to be in the area, so I thought I’d stop by.”
• “I’m just calling to see how things are going.”

Valued Resources contact prospects and customers with these introductions:

     • “I found this article and thought you’d be interested in it.”
     • “We have this new product/service and I wanted to share this with you,
         because it can…”
     • “One of my customers is looking for a company like yours to provide them
        with ______, and I wanted to make sure it was something you could
        provide for them. Would it be alright if I make an introduction for you?”

Try to provide something of interest or value and you’ll always be considered a valued resource.

Can You Help a Brother Out? Rats Rescue Trapped Friends

Cal Tingey — Sat, 28 Apr 2012 12:01:00 GMT

Scientists at the University of Chicago were stunned when rats worked tirelessly to rescue a trapped friend. Scientists placed a rat inside a clear tube that could only be opened from the outside and then placed another rat in the cage that was free to roam. The free rat surprisingly chose to figure out how to open up and free their caged friend.

Here’s what is amazing, the rat who was able to roam free would open the tube for the contained rat again and again seemingly in response to their trapped friend’s distress. Once the rats learned to free their trapped and agitated friends, they did so almost immediately in trial after trial. Their behavior was clearly deliberate. When the tube was empty the rats ignored it. When stuffed rats were put in the tube the rats ignored them.

To make sure the rats weren’t responding to some immediate social reward, the researchers changed the experiment so the trapped rats were freed into another separate cage. Again, the rats freed each other. Then the researchers provided the rats with the opportunity to eat chocolate treats first, but the rats usually chose to free their friends and then share the chocolate with their liberated friends.

This amazing experiment shows that rats are effected by the emotions of other rats. These rats responded to an instinctive urge to make their compatriots feel better, just like chimpanzees and some cetaceans do. Empathy is a powerful motivator. That is why some people start businesses to help others, that is why some people choose to leave corporate positions to run a non-profit, that is why our tax code allows for donations to be written off, and that is why many businesses are turning “green.”

The Abhorrence of Uncertainty

Cal Tingey — Sat, 21 Apr 2012 21:07:00 GMT

We hate not knowing. When we are faced with uncertainty we fill in the gaps of knowledge with fear. Colin Camerer conducted research on subjects hooked up to an fMRI machine. Camerer showed that the subjects exhibited increased activity in the amygdale, a center of fear, anxiety, and other aversive emotions, when they were presented with conditions of uncertainty.

Filling in our knowledge gaps with fear taints our evaluation of the risks associated with not having all the pertinent knowledge. But it is interesting that when people voluntarily take a risk, they tend to underestimate it. When they have no choice but to take a risk, they tend to overestimate the risk.

Risk is risk, whether the person takes it on by accident or on purpose. Fear is what changes our perception of that risk.

Consider the entrepreneur who quits her job to start her own business vs. the reluctant entrepreneur who lost her job and then strikes out on her own to make ends meet. The risks are the same, but the attitudes of each entrepreneur are different. There is optimism in the entrepreneur who quit her job and fear in the entrepreneur who lost her job.

Fear is a motivator. We can let it drive or we can have it sit in the passenger’s seat. I say, take the wheel back and drive fear where you want to go.

The Best Investment Advice

Cal Tingey — Sat, 14 Apr 2012 14:04:00 GMT

When I graduated with my MBA the job market was not very robust. This wasn’t a concern to me because I was planning to be self-employed. But my plans were challenged when a large corporation made me an offer that tested my plan of self-employment.

Needing a second opinion and perhaps a wiser perspective on my options I called my dad and asked his opinion. In essence this was his advice, “You’ve got no mortgage, no kids to feed, and all you have to your name is a piece of paper that says MBA and a huge mountain of debt. You’ve got nothing to lose if you go into business for yourself and fail. But 15 years from now you’ll have a mortgage and some kids to clothe and feed. Starting your own business now will actually be easier than 15 years from now. If you want to be an entrepreneur now is the time to do it.”

I took his advice, turned down the comfortable corporate job offer, and started my own business.

Sometimes the best investment you can make is not in gold, but in your own dreams.

How to Fail at Sales

Cal Tingey — Sat, 07 Apr 2012 12:03:00 GMT

You’re going to fail as a salesperson if you say, “I’ll send you some information. If you have any questions, just give me a call.”

You’re going to fail as a salesperson if you say, “If I don’t hear back from you, I’ll give you a call.”

You must finish each prospect contact by setting and agreeing on a goal for the next step. Both you and your prospect must know what is expected and when the next contact will be.

The value of setting a next contact goal is that it makes the next contact much easier and it gives you an opportunity to service the prospect in a personal value-added manner.

Hire Your Kids and Get This Benefit

Cal Tingey — Sat, 31 Mar 2012 14:58:00 GMT

Sole proprietors or husband-wife partnerships can hire their kids who are age 17 or younger and the pay to their kids is free of FICA tax.

If you have a single-member LLC (SMLLC) you can hire your kids age 18 and younger and the child’s wages can be exempt from FICA tax if the one-person LLC has chosen to be a “disregarded entity.” (An LLC is taxed as a corporation, partnership, or sole proprietor depending on the elections made by the LLC and the number of members. A single member LLC (SMLLC) will be either a corporation or a single member “disregarded entity.” To be treated under federal law as a corporation, the SMLLC has to file form 8832 and elect to be classified as a corporation. An SMLLC that does not fill out form 8832 will be classified as a “disregarded entity” which is taxed as a sole proprietor.

Sales Call Goals

Cal Tingey — Sat, 24 Mar 2012 15:51:00 GMT

Before you call or approach a prospect, you should be asking yourself, “What is the desired outcome of this call/visit?” If you can’t come up with a good answer then perhaps you shouldn’t call.

Not all sales calls are for the intent to “close a deal.” Some legitimate reasons for contacting a prospect are:
          • Qualify an opportunity
          • Make a presentation
          • Get a decision regarding…
          • Negotiate a contract
          • Get a purchase order, or
          • Determine who the decision maker is

Are You Always Right?

Cal Tingey — Sat, 17 Mar 2012 12:47:00 GMT

Being right is one of the most universal human addictions. We spend an extraordinary amount of time on proving our “rightness.” Like me you’ve seen people take ridiculous stands in order to protect their rightness. I’m sure you’ve also witnessed people ignore glaring proof and focus on the one piece of evidence that supports their “rightness.”

As a boss and business owner are you always right? Those who are always right shut down creativity, ignore options that they didn’t conceive, and inhibit discussions that might expand their choices.

How many pennies have your seen in your lifetime? 100,000? 1,000,000? Take a look at the pennies below and determine which choice is the correct depiction of a penny.

Many times we think we are right, but often we are only partially right. Don’t let your rightness stifle your employees or team. Always be willing to admit that you don’t have all the answers.

By the way the answer is A.

What Role Do You Identify With?

Cal Tingey — Sat, 10 Mar 2012 14:13:00 GMT

The Stanford Prison Experiment – arguably history’s most notorious and controversial psychology experiment – produced powerful and unsettling insights into human nature. This experiment was conducted by Stanford researcher Philip Zimbardo. Here’s how it worked: the study randomly assigned 24 middle-class college-aged males recruited via newspaper classifieds and pre-screened to have no mental health issues or criminal history, to the roles of prisoners or prison guards in a hyper-realistic simulated prison environment.

What was witnessed was a devastating manifestation of the human capacity for cruelty and evil, so powerful and dehumanizing that the researchers had to end the two-week experiment after the sixth day. The participants began to identify with their assigned roles so deeply that their behavior and entire personalities morphed to meet the expectations of the respected roles. Check out these quotes from two of the participants:

“I really thought I was incapable of this kind of behavior, I was really dismayed that … I could act in a manner so absolutely unaccustomed to anything I would ever really dream of doing. And while I was doing it, I didn’t feel any regret, I didn’t feel any guilt. It was only afterwards, after I began to reflect on what I had done that this began to dawn on me and I realized that this was a part of me I hadn’t really noticed before.” Mock Guard

“I began to feel that I was losing my identity, that the person that I called Clay, the person who volunteered to go into this prison … was distant from me, was remote, until finally, I wasn’t that. I was 416, I was really my number. And 416 was gonna have to decide what to do.” Mock Prisoner

The experiment was essentially about how authority and power dynamics affect our capacity for evil. But it also demonstrated how we can be affected by the roles, titles, and labels that we are given – by society, by our peers, by our parents, or even our partners’ expectations. But the most powerful personas are those that we give ourselves. As soon as we see ourselves as a “prisoner” or a “guard” (or a success, or a failure, or a genius, or a victim, or a demanding boss, or a pushover boss, or a benevolent boss), we begin to act as one.

What role do you identify with? Make it a positive role that allows you to succeed.

Do You Cause Stress?

Cal Tingey — Sat, 03 Mar 2012 19:10:00 GMT

A state trooper pulled over an elderly woman driving 20 miles an hour on the interstate. “Ma’am,” he said, “it’s against the law to drive just 20 miles an hour on an interstate.”

“But the sign says the speed limit is 20,” she replied.

“No ma’am, that’s the route number. You’re driving on Route 20. And by the way why do the other three ladies in your car look so stressed out?”

“I don’t know,” she replied, “unless it’s because we just came off of Route 119.”

Sometimes we cause stress for those around us. Is your misperception causing you to act in a way that is putting stress on your employees?

The Type of Question No One Talks About

Cal Tingey — Sat, 25 Feb 2012 19:04:00 GMT

You’ve heard of “Closed end questions” where the respondent answers with a Yes or a No – “Do you like ice cream?”

You’ve heard of “Leading questions” where the respondent would feel ridiculous answering with anything other than the answer you are intending – “You can see why this safety feature is important, can’t you?”

     Have you heard of “Umbrella questions?” Umbrella questions are designed to provide you with additional information. Umbrella questions can be used by salespeople, customer service people, or anyone trying to get more information. Here are some examples of umbrella questions:

          • “Why?”
          • “Will you tell me more?”
          • “Can you give me another example?”

Umbrella questions will get your customers talking. As they talk you’ll gain more knowledge about your service, about what your customer wants, about how you can improve.

Burn Your Bridges – Smart or Stupid?

Cal Tingey — Sat, 18 Feb 2012 12:52:00 GMT

The phrase “burn your bridges” comes from an old military strategy. If the bridges were burned then there would be no retreating. If there is no retreating then failure is not an option.

Well, sometimes failure is an option just as defeat can happen.

I’ve seen committed business owners “burn their bridges” and keep marching down a path that will result in defeat. For some reason they believe this adage and put all their resources toward a battle that they will eventually lose. And when they lose they take solace in the fact that they were fully committed.

Perhaps a better strategy is to contemplate ahead-of-time the retreat bridges for your strategies. There are only so many factors you can control, which bridges you have access to is one of them.

Early Morning Voice Mail

Cal Tingey — Sat, 11 Feb 2012 13:42:00 GMT

Benjamin Franklin said, “Early to bed and early to rise makes a man healthy, wealthy, and wise.” I agree. In fact, since I was 12 years old I’ve been getting up at 4:30 in the morning. At age 12 it was so I could be to the paper station for my paper route at 5 AM. At age 16 it was because my job doing cement work in Phoenix, Az started at 5 AM. In college it was so I could study uninterrupted.

(My college roommates changed the saying just a bit. Their version was, “Early to bed and early to rise, while your girl goes out with the other guys.”)

If you’re wise and get up early here is a tip for making good use of those early morning hours before everyone gets into the office. Spend 10 minutes per morning calling clients and contacts. None of them will answer their phones since it will be too early in the morning, however, you can leave a voice mail. This is a great way to keep in contact with people.

Calling early in the morning shows you are driven, means that you will be able to get in 3 to 5 calls each day and leave a message just keeping in touch, and doing this will build momentum for the day.

Adaptive Case Management and When to Implement It

Cal Tingey — Sat, 04 Feb 2012 12:37:00 GMT

Traditional business process management (BPM) works well with a defined, structured process that can be documented into rules. This can be clearly illustrated in a production process; however, most work is does not follow a predictable path.

Adaptive case management (ACM, also called dynamic case management) takes a different view, one in which the case rather than the process is the focus.

Adaptive case management is better suited to tasks that do not have a particular sequence of activities or that may require ad hoc actions. In an innovative environment most processes are neither completely structured nor completely unstructured – they are a blend of predictable and ad hoc processes.

Adaptive case management allows for agility. Agility in this case means the ability to respond in a nonstandard way. Properly implemented adaptive case management empowers employees to solve problems and the outcomes are results that are appropriate for each case.

I predict that we will be hearing more and more about adaptive case management as healthcare workers implement it into their protocols, as companies begin to adapt it to their customer care processes, and as governments use it to tackle issues of a diverse constituency.

Cracking the Code

Cal Tingey — Sat, 28 Jan 2012 15:40:28 GMT

If you don’t know what a QR code is you’re not alone. Think of the QR code as a new take on the bar code. These graphic squares feature a two-dimensional bar code that can be read by a special app installed on a smartphone or a tablet equipped with a digital camera. (QR stands for Quick Response.)

The QR Code is translated by the app on the smartphone or tablet to do something; it could be dial a phone number, deliver a PDF, or access a website. The best part is that all this activity can be monitored to find out how successful the QR Code is.

Here are 3 sites that I like to use for generating a QR Code:

http://qrcode.kaywa.com/
http://www.qrstuff.com/
http://www.beqrious.com/generator

QR codes are just starting to catch on and many businesses are just now learning about them. Why are they so important? QR Codes are important because they deliver pertinent information RIGHT NOW.

Personal Change

Cal Tingey — Sat, 21 Jan 2012 12:35:00 GMT

It’s a new year and many people are setting new goals. It is wonderful that people feel like the New Year is the time for a fresh start. Here are some things you should consider when making personal changes:

• You must know what you want as an end result of your efforts. To begin
   you don’t need to know every step, but you must know what your desired
   results will be.
• You will need to do more than just work harder. What you do is actually
   more important than how hard you work at it. Your level of effort doesn’t
   matter as much as the kind of effort you put forth.
• You will have to take risks. Most people equate risk to danger or potential
   loss, but in this case risk equates to different. The risk of not doing
   anything is more damaging to reaching your goals than the risk of not trying.
• You cannot be deterred by failures. Risks often result in failures, but failures
   can help you. Failures are really feedback that let you know that your method
   or your process didn’t work. When you get that feedback, take another
   approach to reaching your results.

Make a change even a little change; you’ll find that momentum will build and pretty soon you’ll be moving quickly to the results you want.

Looking to the Future While Looking at the Past

Cal Tingey — Sun, 15 Jan 2012 21:04:23 GMT

The Roman god Janus is the god of beginnings and transitions. He is usually depicted as a two-faced god since he looks to the future and the past. Because Janus looks forward and backward he watched out for gates and doors, as well as beginnings and endings.

The month January is named after the god Janus. January is the door to the year – we consider it the beginning of the new year, filled with promise. I suggest that we consider where January got its name and begin the new year by looking forward as well as backward.

Ignorance of the past may be psychologically blissful, but repeating the errors of the past can be expensive. Take a look at the mistakes and errors of the past year and note what you learned from them. As you plan for the new year make sure your strategies avoid those errors and mistakes and capitalize on the knowledge you gained from those errors and mistakes.

Remember that Janus looks forward and backward. Promising solutions in today’s business world requires that you look to the past and then to the future.

Social Media and Your Business

Cal Tingey — Sun, 27 Nov 2011 01:28:00 GMT

     Social media is here to stay and many businesses are wondering how to handle it. Those that block it are removing themselves from the conversation and those that embrace it will want to structure policies around it.

     An effective social-media policy should:

1. Explain the scope of prohibited activities – no defaming the bosses, harassing co-workers, or revealing company secrets.

2. Clarify which employees are affected by the policy. For some employees using social media might be part of their job, other employees you may want to limit their use to on breaks or outside of work.

3. Describe any monitoring system in place – who uses it, and how.

4. Explain the penalties. What can the employees expect from the enforcement of the policies and what consequences might they face?

5. State that your social-media policy is not intended to interfere with protected activities or infringe on employee rights.

     Before you go an implement a strict ban on social-media activity, please know that social networking, in certain contexts, may be considered a protected employee activity.

     For example, when employees seek to improve their working conditions via social-media applications, their blogging may be protected under the National Labor Relations Act, even if such activities are prohibited by company policy.

     Further, before you rush to take adverse action against an employee blogger, make sure not to violate anti-retaliation or whistleblower laws.

     In addition to social-media bans, employer monitoring of employee Internet activity may result in antidiscrimination violations under Title VII of the Civil Rights Act or the Americans with Disabilities Act, or the Age Discrimination in Employment Act. An example of this would be finding information on social-media sites and using that information to evaluate employees.

     There may also be certain state laws that may protect an employee’s use of social-media applications as “off-duty” conduct.

     There are tools to monitor social-media activity, but if you feel like you need to monitor your employee’s social-media activity you might have a bigger problem than social-media. You might have the wrong people on your team.

Copyright 2011 Cal Tingey