Building an Alliance

A friend sent me this article from Problogger on Blogging Alliances. It's an interesting read, and basically involves setting up a limited partnership. I think it can be a great idea, but it really depends on the people you have involved.

As we started our company years ago, we had 7 people, formalizing our "partnership", but informally deciding to share the work. That didn't work out, and we ended up buying out people until there were 3 of us left. We found that we 3 could share the work pretty well and we ended up with a nice company we eventually sold off some assets from.

There is some power in synergies, and if you can find a similar business that doesn't necessarily compete with you, sharing some knowledge and helping promote each other could work out very well. I think this is an interesting idea for small businesses, especially software businesses, that could write about the products and cross promote with others.

You still have to do a good job in your blogging, but this could easily help build business for each other, as long as you are willing to contribute to the efforts of others without worrying too much about equal benefits back.

Keeping a Reserve

One of the things that we track in our business on a regular basis is the amount of cash we have in savings. On a month to month basis we have a checking account into which revenues flow and expenses come out. However since those don't always match, we have had the need to dip into savings at times.

Typically we haven't sent money the other way. If we have exceeded our monthly spend by xx dollars, we've ended up distributing dividends to the shareholders. That's a month to month spend. However we have capped those, so if we had a few really good months I could see us putting some back into savings.

However with the current economy, we've struggled to meet our expense number, and as a result, the savings have been going down. That's a tough thing to swallow, and at some point we might have to close the business.

In making that decision (and we haven't made it) , there are a couple concerns. We have a lease on office space, as well as some short term fixed expenses. The lease has over a year to run, and if we shut the doors today, we couldn't cover the cost with savings. So our plan is to try and keep making enough revenue to meet that number in the short term.

However as we get lower in savings, we have to decide at some point what to do. We're probably still a month or two off from a big decision, and we are trying a few things to build some revenue in the short term. We also canceled plans for an event next year since we don't want to commit the capital now if we can't build up some sales.

Pricing

There has been an interesting series of pricing posts over at The Client Revolution. It's a legal site where the company charges fixed prices for certain work as opposed to billing by the hour. There is one on Jet Blue's fixed price and another one about a barbershop. They're interesting ideas, and I think they work well if you can drive some volume.

Sure you'll have people that take advantage of it. You have to ignore those people because someone will always look to game the system. And some of them will spend the time and effort to save money. Provided you can get enough people interested to try things, you'll make up for those few.

I sent it to my partners in the training business, and we're considering doing something like this. Sure we'll have a few people that want to train a lot, but if we could drive a couple extra people a month to try us out, even if they came back every month, it would be worth it.

Likely we'll try something like this with local people in Orlando. The dangers to us are that we'll have one person in a class, which can be a real money loser for us, depending on who teaches it.

An Incubator

I'm not sure how this works, but Springboard seems like a great concept for an incubator. I work for Red Gate, and I think they're a good company. However even for them this seems like a bit of a leap of faith. I guess they're assuming that none of these ideas are Facebook-like, and so they'll likely be products that Red Gate would eventually buy, or take some equity in and help the company grow.

I like it, and I like the trust factor. The Red Gate offices are large, plenty of space for now, and so I think this might not be a bad use of space. I know they helped out another company recently, actually traded some space for services, and they are a large sponsor of The Business of Software. They look to grow the right way, slow and with revenues, not looking for a big payoff, but rather a sustainable business.

There's a nice post about how this started, and if you're beyond incubator stage, think about attending the Business of Software conference. I won't make it this year because of two other commitments around that event, but it was one of the most inspiring events I've ever attended.

Changing Your Name

We're in the process of re-examining our brands at my company. We essentially have a holding company that then owns 3 other businesses and we're trying to decide if one of them is really worthwhile, or if we should merge it into another one.

It's a hard decision.

After all, we like our brands and the names. People have gotten to know us, I've passed out numerous stickers for laptops, included the logos in my writings and on web sites, they're fairly well known.

But well known enough? And enough to prevent confusion of the different entities? That's the question.

We're debating it, and it's not something that we've easily been able to decide, but in the end we decided that having two brands for two sides of the same thing isn't the way to go. So we'll change the names, announce it in our publications and move forward, hoping for the best.

We have decided to keep the old brands around. In some cases that means each different name points to the same content, which could be good or bad, but it will allow us to refer people to the new name somehow.

Just not sure how yet.