Introduction and Interview by David Wagstaff
This interview with Dr. Bednard is part of a series of articles from entrepreneurs, compiled with the goal of providing other business owners and soon-to-be business owners with a realistic view of what it takes to run a business and some of the challenges commonly faced.
I first learned about Dr. Bednard as I was reviewing applications for the Entrepreneur’s Network. I noticed Tim was in Michigan. We have an office in Michigan (and New Jersey), so that caught my attention. Even in an increasingly virtual world, proximity matters in many businesses. Even though in our financial business consulting business we work with clients all over the country, local customers are often more likely to choose our firm.
Then I notice he has his Ph.D. and works with small businesses as a consultant. As a fellow business consultant, I wanted to learn what he does, because just like doctors or attorneys, there are many specialties within the world of business consulting. As I investigated further, I saw Tim also works for General Dynamics as a cost estimating specialist and he also does similar work with small businesses. In our financial business consulting practice, we mostly help clients understand drivers of profitability and develop specific strategies and tactics to significantly grow profitability. These can include pricing strategies, understanding product or customer profitability, and understanding key business expenses or general business opportunities. We also prepare cash forecasts and proforma (forecast of revenue and expenses) budgets.
Overall, my assessment was that part of the work Tim and clarity Fi perform is similar, but Tim is more specialized. Even when our services overlap, we use fairly different approaches to solve client financial business questions, such as product pricing.
This all raises a couple of common business questions:
What to do with competitors: Tim could conceptually be a competitor. Do I worry about helping a competitor in some way? In my 25 years of experience, it is fairly rare for me to be concerned about someone being a competitor.
I have worked with many small businesses in my financial consulting practice and I cannot think of any situation where we lost to a direct competitor, and it’s actually very rare to compete with a direct competitor. Most small businesses find someone they are comfortable with and hire them.
Small business financial consulting is not that large of an industry, so generally I view people as potential partners. In fact, that’s where the conversation went with Tim. Is there some way we could work together? I get that Tim has some specialized experience that might be useful. If we won a project with a large firm and they needed an expert in cost estimating, I would likely call Tim. I frequently hire people with specialized skills to help out on projects.
Legal documents when working with potential competitors or business partners. If Tim and I were to work together, I would have him sign a non-compete agreement for clients, since he is in the industry. I would not limit his ability to work in the industry; it would be more specific to the clients we work with.
Tim would sign an intellectual property agreement, as we have some financial models, forms for gathering information, and other proprietary information that I view as our intellectual property. He would also need to sign a confidentiality agreement. As a general rule, I have contractors and employees sign these types of agreements.
It should be obvious that in some other industries, a competitor could be a risk. Across multiple industries, my general experience is that it’s better to embrace people in your field, much like Brynne Tillman discussed with her Peer Group meeting that she organized to discuss industry trends and changes. That’s a great practice.
Side note for those who haven’t heard, the Entrepreneur’s Network will soon be offering Peer Advisory Group Meetings. Contact me for more information.
Tim’s challenge is reaching potential customers. While I have found several sources over the years, including customer referrals, previous customers returning with a new venture, referrals from friends, networking, SEO, pay-per-click, and content marketing, I agree with Tim – more small businesses have a need for services but are often unclear how to find the right expertise.
I have seen many businesses try to raise the issue with their CPA, but generally that’s not the role of the CPA. In my experience, small and mid-sized CPA firms, typically don’t do the consultative work that’s necessary to solve client challenges. CPAs do an excellent job of preparing tax returns and auditing client financial records, but most are not prepared to do customer studies, market studies, or engage with employees to find the root cause of the client’s challenges.
1) What led you to become an entrepreneur?
I became an entrepreneur because I thought it would be exciting and rewarding to use my knowledge and skills to help other entrepreneurs on their quest to realize their dreams. Owning my own company has long been a dream of mine, I grew up wanting to own a restaurant. As I grew older, I saw that the market is saturated in every area, and the failure rate is high. So I kept on looking for something interested me, and was not in a saturated market. About 11 years ago, I recognized a need that many small business owners have for someone to teach them how to properly price products and services using a cost estimating system. Having a cost estimating system in place will also give a tremendous tool, which can be used to make many business decisions. I found a very specialized spot in the market that is largely overlooked by business schools, and has very few resources to help entrepreneurs. So I am trying to create products and services to fill that gap.
2) A brief description of your business and what are your aspirations for it?
My business helps business owners make financial decisions including expansion, product and service offerings, setting sales goals, establishing breakeven points, pay raises and benefits for their employees, design to meet cost and price objectives, and much more. Because of this need, I started developing programs specifically for small businesses.
My business is both a publishing company and a consulting company. I have written several books, created many spreadsheet templates, and filmed instructional videos about small business cost estimating that are available via my website. The consulting side of my business is focused on helping entrepreneurs create flexible cost estimating systems. As a consultant, I try to be a teacher as much as a hired expert; my goal is for the entrepreneur to understand how the estimating system works, so they can expand and modify the system on their own as their business grows and changes over time. They can retain my services as long as they would like, but I actually try to work myself out of a job; instead of giving someone a fish, I’d rather teach them how to fish. Since 2007, I have been very busy earning a Ph.D. in Business Administration, writing books, creating an online, instructional program, securing many copyrights and starting Small Business Consultants LLC.
3) What things have you done with your business that you are proud of or work really well?
I have accomplished many things, but the one I am most proud of is the high level of customer satisfaction I have achieved with my business. The pride is because, I am teaching skills to Entrepreneurs which can have significant impacts on the profitability of their businesses. I am helping them understand their cost structure, teaching them to account for all of their costs and to roll it up into the prices. The look on their faces when the light bulb goes on, and they understand is incredible; it gives me a personal sense of joy. It’s like watching a kid open presents at Christmas.
4) What were some of your biggest challenges along the way?
The biggest challenge for me has been reaching potential customers, and letting them know how my online program and consulting services can help them. While many entrepreneurs struggle with knowing if their prices are profitable, very few know where to go for help, and most are unaware of the incredible benefits a cost estimating system can provide to their businesses. What I do is very specialized, and not many people provide this type of service to small businesses.
5) Have you overcome the challenges? If so how?
I’ve had the most success working with small business incubators, because they are a magnet for Entrepreneurs who are looking for all kinds of assistance. Because of the specialized nature of my services, and because very few people know that I offer this service, I have to explain what I do, and how I can help their clients. But once I explain to Entrepreneurs what a cost estimating system is, they immediately recognize the importance of it, and that they cannot run their business as successfully without one. I’ve also found that working groups on Linked In provide a forum for Entrepreneurs looking for assistance and solutions.
6) What have you learned and what would you like to share with other entrepreneurs?
My advice for Entrepreneurs who are marketing unique skills is to decide who is the target market; it may be a small number of individuals. After you identify the target market, try to identify organizations that may already be working with large numbers of these individuals, such as small business incubators. Market to these organizations and through them to reach the target market. If your products and services are unique, then have patience. Having unique skills may mean that a market does not currently exist, so you will have to develop a market. Have faith in yourself, as well faith in the value you offer to customers, and know that the road is not easy.
To learn more about what a cost estimating system can do for your business visit www.smallbizpricing.com and look us up on Facebook by the name Small Business Consultants LLC (the LLC is important, or you’ll be on an Australian Facebook page).
Social media handle: pricing, cost estimating, entrepreneur.