Image courtesy of entophile (http://www.flickr.com/photos/41060081@N03/)

Chad and I made the decision to change WebMedley from an entrepreneurially run company to a professionally managed company. The change will be positive for our clients, teammates, and for us personally. This post explains why we’re doing it, what’s involved, and how we’re going to share the details of this journey.

Why Make The Change?

The company is about to reach its third birthday under our ownership. When we bought the company (2008), it was in need of a serious resuscitation — you can call it a turn around job, if you like. Here’s what accompanied the business we purchased:

• Crazy books: some clients were being billed incorrectly or not at all
• Too many servers for the true volume of client need.
• Two content management systems. One was three years out of date and no longer being developed or serviced. Some clients want to stay with older systems — which is fine — and those who want to be current can now do so.
• No vision for what the company could be.
• From the end of 2008 until mid-2009, we cleaned up, transferred data, upgraded, etc…and turned it into a profitable company. From 2009-now, we grew the company through sales efforts and wonderful word-of-mouth referrals.

We find our time is spent wearing too many hats. This isn’t uncommon in small businesses. Everyone chips in when work needs to be done. When a company is in growth mode, this must occur and it helps everyone working together touch multiple parts of the business.

It could continue to work for us if we didn’t want to continue to grow and improve. It would be fine if we just wanted a general marketing company: one that paid everyone enough to live a simple life in Lexington KY. We’d turn into another local <10 person ad agency and coast into mediocrity.

And if we wanted that, I wouldn’t be writing this post.

When I was in my 20′s and had my first company, TransDigital, I got to ride the dot com wave. Everyone wanted web sites, systems, etc. We had good cash flow and were profitable. So I did what any 20-something would do: had fun traveling and spending. If I had used some of that cash to hire executives with more experience than me, I might still be traveling! Lesson learned.

This time around, it’ll be different and better.

We know we should focus our time on tasks we both want to do and perform with excellence. Am I the best HR manager? No. Who is? Let’s find him/her to work with us so we can do what we do best. Everyone in the vendor, company, client food chain will be better off for it.

One last answer to “Why?”: because I don’t want to look in the mirror in 2012 and be in the same place I’m in now. I want to be better.

What Does the Change Involve?

A change like this is subtle at first.

We started by interviewing for an operations person, a Chief Operating Officer (COO) for WebMedley. Chad and I reviewed what we want to do and what we are good at. Then we compared the list with what must be done in order to operate as is and where we want to go. It was quickly apparent neither of us want to run the day to day operation of the company and weren’t going to be good at it if we continue to grow. Time to find someone who wants to do it, is good at it, and has a demonstrated success in the ops area.

Luckily for us, someone was looking for just the right opportunity.

After a number of meetings, discussions about structure, spending, and vision, we agreed to pull the trigger with our new COO.

In less than eight weeks, we have a plan for the rest of 2011 and a project workflow that improves on what we were doing. More checks and balances to ensure our clients get a great experience and our team enjoys it. There’s more, but it’ll do to know these major parts for now.

Everyone inside the company will have more accountability, but its matched with empowerment. Everyone also has a financial interest, meaning bonus, if they hit their personal goals. And another one if the company hits its overall goals.

We’re on the lookout for sales hunters, graphic designers with web experience, and account managers.

Everyone becomes more efficient. We have a great culture. That can lead to hanging out together and talking about life, friends, family, etc. This won’t change. What has changed is the output of each person in fewer working hours. Why? I’m not sure. It’s just happening.

One of the personal changes is that I have to remember not to be involved with everything. When people inside the company bring me questions, I need to help them by asking only questions back. How does this help? It helps someone think through their original problem (opportunity ;^) ) and arrive at the solution on their own.

There’s a weird phenomenon going on inside my head: I’m accepting the change quicker than I thought.

Conclusion

Everyone should benefit from the changes.

It’ll be a fun ride.

I might have learned something since I was in my 20′s.

Chad and I have a goal: in six months we have transitioned from wearing too many hats to wearing only a few. It is our responsibility to work with our clients and mentor our team so everyone has a great experience with WebMedley.

photo © 1910 Fylkesarkivet i Sogn og Fjordane | more info (via: Wylio)

The online marketing business has seen excellent growth in 2010. Online ad spending continues to set records. One in four pages viewed on the web in the US are now at Facebook.

People are looking for alternatives to traditional advertising. Online marketing certainly fits the need. Why? It’s generally less expensive than traditional media and can be tracked using a variety of tools. This isn’t to say one should forego traditional media outlets (TV, print, radio). Integrated marketing using all of the methods is generally the best place to start and then one would refine as results arrive.

We’re expanding our online advertising options to include local media and niche site ad buys. For instance, WebMedley already offers online ad management for facebook, Google, and a few other well-known sites. The expansion allows us to help our clients buy online ads at local media sites like WTVQ, WKYT, WLEX, Smiley Pete’s sites, and more. If the client operates in a particular niche market and local ads do not fit, then we’ll seek out blogs and forums applicable to the niche. For example, if our client sells Ford Mustang parts, we’ll find sites like http://www.allfordmustangs.com/ to place ads.

This move makes WebMedley Lexington’s first and only independent, full service online media buying company. There are other firms placing ads through a third party service and outsourcing almost all of the work. Not us. We use the tools that sites like Google offer, but the work is performed by WebMedley staff and tracked using some third party and home grown tools. We analyze all the data and make recommendations based on the analysis.

Keep an eye out on the WebMedley blog for the full service description and official news release.

This change helps us increase service to our existing clients and will grow the business through new clients in need of help. Instead of a client managing 3-10 online media outlets, the client can work directly with us and we’ll manage the buys, changes, and analysis.

Thanks to everyone who provided input and advice related to this decision. I’d name names, but some requested anonymity.

It’s been a wild summer. The world recession seems to be in the process of ending – people are starting to go out and spend money. Our WebMedley clients are reporting their businesses are seeing improved sales and more traffic on their sites.

This post is the first update in some time. Since the last one, I simplified the blog (new design) and added in a few plug-ins for facebook and Twitter. Both add ins are free – another reason we love using WordPress.

We’ve launched about 20 web sites, 20+ social media pages for clients, and helped them receive millions of impressions for the ads. If you know me well, you’ll know we don’t measure by impressions – we measure by sales. But the word “millions” sure does sound good, huh?

If you’d like to stay in touch with everything we’re doing at WebMedley, you can sign-up for our internet newsletter or join us via facebook.

What’s coming up this fall? Quite a bit.

WebMedley will be officially 2 years old (10/1/10) under our ownership.

The new Coach Calipari web site will launch (in about a week). It’ll be a great new site – incorporating feedback from viewers while using the latest Net tools to enhance the experience.

We’ll have specialty t-shirts out – only 500 made – and release them in a series.

The WebMedley designed silly bands will hit the shelves this week.

Two more guys in the office get married (already had one this summer).

We’re slowing down growth. I’ll talk about this a bit more in the WebMedley blog, but here’s the gist: we’ve done a good job turning the company around, establishing a firm foundation, and now we have to really knock it out of the park to get ready for the next stage. We’d like to offer two distinct levels of service and we’ll need a smooth machine with referral-happy clients to do so.

I’ll leave you with this – one of the greatest motivational scenes from a movie.

Timeline:

Early 90’s – I establish my personal account at Fifth-Third

Late 90’s – I establish my first business account at Fifth-Third – just a checking account. In a few months, people started telling me I’d need a line of credit for operating expenses. At the time, I didn’t know I would ever need one, but I talked to Fifth-Third about it. They declined since I was 23 and didn’t own a house. A National City (now part of PNC) guy heard about it and gave me an unsecured line.

2001 (approx) – opened another business account for Dotson Ventures (my consulting company)

2004-5 – after I sold the business, all accounts stayed at Fifth-Third.

2008 – opened 2 new business accounts for WebMedley.

2009 — 1/12 – I apply for the line of credit. The application includes all 2008 financials, current A/R, personal financials, a description of our business, the industry, etc..

1/16 – declined for an unsecured line since the business is less than 24 months old; my branch manager is applying for a secured line and an unsecured line for Dotson Ventures. There is a bit or irony here…Dotson Ventures has no plans for revenue in 2009 and beyond. So if it is the entity that receives the loan, the system Fifth-Third uses is asking to be gamed.

1/20 – Dotson Ventures is approved for an unsecured line at half the amount we want – but its a start. The funds are available in 24 hours so that is one nice thing.

From that date until 2/5 everything was OK. Then, for some reason the Fifth-Third rep did not know, my line was reduced. When I asked my local folks, they got it fixed.

And its not just Fifth-Third who has issues. When I called my personal Banker at National City, she met with me and got the process started. They Nat. City folks sent me an even longer Personal Financial doc to fill out. I filled out most of it except the numbers – since I provided them in the documents in my loan package. These were returned to me a few times and I chose not to fill them out.

Why wouldn’t I fill them out? Because I’m the client and I already provided all the info they needed. They chose not to fill it in. To me, that says that they do not want the business. It may be that they do not want to take on liability by writing anything on the form or its a “test” to see how interested I am in getting a loan.

Finally, a manager at another branch heard about it and called me to make sure things were handled. He should be given a raise.

One thing they let me know is that the bank will never loan money to me to buy another business unless I have enough free cash flow to pay the whole loan from our main company. To me, this says: “If company A is buying company B and its easy to integrate and has monthly subscribers, we still think B could fail and you’ll owe us the loan amount.” While it is a possibility, the likelihood is small and that attitude will not help any growing business. We owners go to banks because we’re risking our assets (which guarantee the loans) to grow.

Today is 3/17 and they told me I’d have an answer on how much the line of credit will be.

It’s 3/18…Nat City called and will not grant the line of credit due to “new formulas in calculating free cash flow”. The local branch manager did offer to connect me with some community banks that may work with me. I let her know I’d be happy to talk to them and hope she can put me in touch with banks that make decisions locally. And, she did say she’d love to have our regular checking business, but knows that would only happen with the loan.

So, now what?

Well, it seems I’ll wait for another few days to hear from 5/3 and look at some other banks.

8/20/09 — 5/3 has no money so they cannot increase our line. It would be much cheaper for us to pay a bank than to pay the guy’s we bought the business from. So, I’m now looking at two other banks.

September – I was introduced to Traditional Bank through a friend. The experience has been 180 degrees from any other bank. They’ve taken care of a line of credit to allow us to pay off the original owners of WebMedley, to get a mortgage to buy our office condo, and even called to check on things a few weeks after we became clients. I highly recommend working with Traditional.

So what did I learn?

1. Banks are not required to have the same level of customer or personal service as other companies because for the majority of account holders the banks hold the power. They hold the power b/c they have the money.
2. We are a relatively small account to large banks (and probably small ones)…for now…
3. Local banks trump national banks.
4. The entire process (rigmarole) is known by my entire office. So, who will my co-workers bank with in the future…Hmm, I wonder?

As a result of the decision, Traditional Bank now has two of our bank accounts, a commercial mortgage, and our merchant processing. We have recommended them to other area entrepreneurs.

Service matters.

Zig fell a while ago and has some balance and short term memory loss. He did not let this slow him down though.

Learning…he always learns and tries to learn…described his time in the car listening to other speakers.

You can get whatever you want in life as long as you spend time helping others get what they want.

When he was in school, he did not excel. He passed though. Never read a novel. He founded a center for ethical leadership.

His first job was in Fifth Grade at a grocery. His boss did not allow him to speak with any grammatical errors.

Learned you cannot make a good deal with a bad person.

He never worries. Its interest paid before its due. Always tell the truth and do the right thing and you don’t have to worry.

Funny one: “Read the Bible and newspaper every day so he knows what both sides are up to”

He and his daughter look at his recent injury and decided to write about it. Its a great way to make the most of the problem. His daughter reminded him about the things he repeated (due to the memory loss). He’s very good natured about the problem and I hope we all have the kind of support he does.

I’m paraphrasing this comment:

…when someone does not correct you, that person has given up on you…

I don’t want anyone to give up on me, my family, or any of my dear friends.

Jim Logan mentioned this in a recent post.

It got me to thinking.

Our project checklists and internal plans are all for the final result. But, its easy for people to get stuck in the tasks. “Did task X get finished on time? Check. How about task Y?”

We all need to keep in mind the tasks while never losing site of the purpose for completing them.

That’s all. Worth thinking about.

This is a copy of the original comment post:

I see different compensation schedules at each of my clients. They hire me to help them figure out the best method. Some believe there is a “golden rule” for how people should be commissioned. 

Every company, and sometimes department, needs a system that works for all the players involved in growing the business (business developers, outside sales people and some inside sales), maintaining the business (inside sales, service, and project technicians), and managing the business (administration). 

In all the years I’ve done this, I’ve never created one system that is a clone of any other. Personal and group culture and the company direction are the strongest factors involved in my work. 

The rest of this post is about general compensation. The next post will be sales-specific.

There are a few questions I ask when handling compensation:

1. “What am you trying to achieve?” Business owners may want to be the next Microsoft or they may just want a comfortable lifestyle business. Whatever is desired must be clearly stated and measurable in order to build a business around the desire(s). Are you trying to grow quickly and sell the business? Are you trying to lower client attrition by 10% this over the next 2-3 years? What is our strategic plan for the business? Always find out the timeframe with the desire, too.
2. “Who will help you achieve the desire(s)?” For the purpose of this article, let’s just consider people internal to the company. Typically, this is at least one sales person, a technical or delivery person, and some administration. Depending on the size of the business, this could be a team of people (General Mills requires hundreds of people to put cereal on grocery shelves) or just a few (look at our thousands of understaffed small businesses where everyone wears many hats).
3. “How will you communicate my desire(s) to these people in a way that creates incentive to help you reach the desires?” If I started a business tomorrow and told the staff my goals for the company are to get a million dollar house, a yacht, and fund a Hollywood movie, I doubt I’d see peak performance from them. However, if I let them know I’d like to grow the business to $20MM in revenue with a 10% net profit and a 5% profit sharing plan of which they are entitled to, then my result might be slightly different. (So far, we’re just dealing with the cash aspects of compensation and company mission.)
4. “How is each person on the staff compensated for his effort and for going above and beyond?” I start with this question to learn two things: a. how are people comp’d now and b. is everyone entitled to recognizable comp for being a superstar?
5. “Does each person have a piece of short and long term results?” This is key. Many businesses offer a salary, a year end bonus option, and “standard benefits”. Talk about boring the heck out of someone. Everyone should have a shot at short term compensation bumps (like a commission) and long term benefits related to the performance of the company (stock options, profit sharing, etc).
6. “Is the compensation plan clearly understood and achievable?” Everyone should be able to measure his progress and see/hear others who have achieved success with the same or similar plan. This is critical to buy in.
7. “What non-monetary compensation is available?” We need cash to pay bills and plan for retirement. We need more than this though. For some people, its recognition, for other ongoing training, and so forth. Personally, I love it when a manager and direct report come up with something together on a quarterly or annual basis such as “a five day trip to Mexico” or “extra time off to help rebuild New Orleans”.
8. “What is the risk to the company and staff is we a. exceed our projections, b. horribly miss our projections, or c. achieve our projections?” Compensation plans are wonderful when a business is being planned. They make sense then. What happens if your annual revenue plan was $15MM and you achieved $30MM or only $5MM? Is anyone grossly over or underpaid? Is the payment justified or easily understood?
9. “How often will we review the compensation plan?” This is important to do annually with new companies and every few years with established firms.
10. “Will you allow exceptions?” Does a recognized expert in your field who just accepted a position with you get a deal outside the normal compensation plan? Typically, they do. This is easy. But, what about the new hire who wants to work from him two days a week when others in the same employee classification do not have this luxury? How you handle these exceptions is key in maintaining morale.
11. “Are you paying for results or time?” I hope the answer is the former, but too often, I see its the latter. Changing company culture so the focus is on results is much easier when all staff have the benefit of short and long term compensation bumps. Otherwise, you could be hiring people who just need a job.

These are the questions I ask of managers and business owners when I’m engaged to review a compensation plan. My next post will be about sales commissions for staff.

Ricard is a Buddhist monk, but the book is not about Buddhism. It is about defining what happiness is, why we struggle with it so much, and what to do about it. He blends his personal experiences with scientific data.

In my own life experiences, I’ve found false happiness and true happiness. We all want things and everyone is familiar with the “you’ll never have enough” cliche. Ricard dives into these concepts and dissects them to help one understand true happiness.

There is no step by step guide to determining what you should do to achieve true happiness. The book gives you plenty of things to contemplate and advice on how to start though.

After reading this book, I plan to buy his others. For those of you who travel quite a bit, its a “read and return” book found in the Paradies shops in various airports. I won’t return this one though.