ID Thieves Bag Bernanke: Is No One Safe?

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“You’ve got to be kidding,” I said to my wife. “Incredulous. The Chairman of the Federal Reserve is the victim of Identity Theft. According to the Associated Press story, thieves got Bernanke to the tune of $2.1 million and the fraud involved at least 10 financial institutions.”

“Guess he didn’t have Identity Theft Shield, huh?”

I knew she was going to say that. I wanted her to say just that. As an Independent Associate of Pre-Paid Legal myself, I tell people all the time about their risk. But, people are people and they say what they say, like “my bank takes care of that” and “my credit card company covers me.” If that is what they want to believe and it works for them, great.

However, my banker and I had a chat when I opened Tommy Mack Organization LLC and it turned out that she has Pre-Paid Legal coverage as an employee benefit through her employer, or Financial Institution as they prefer. She had declined to take the Identity Theft Shield protection at the time she enrolled.

She got a letter from the IRS that claimed my banker owned them income tax on unclaimed wages. It came to be discovered that her ID was stolen and used by someone else to get work. She said that the FBI told her it could take 2 to 3 years to straighten it out. And just about everyone knows someone who has been a victim.

Back to the Bernanke case, the AP story quotes Brian Lapidus, “an identity theft expert with Kroll Fraud Solutions said it's not unusual to hear of high-ranking officials caught up by identity theft. His firm has worked with celebrities, senators and others who have been victims.” That company provides the PPD Identity Theft Shield product I recommend to my clients and friends.

The story also reports in small details the fastest growing ID Theft scheme – the synthetic person. “The scheme involved using stolen IDs, bank records, personal checks and other items to impersonate victims at bank branches, according to an affidavit signed by Postal Inspector William J. Aiello,” the article said.

How could organized crime be anything if not thrilled by ID theft? Other than plastic cards, what inventory is there in sets of numbers? It is impersonally personal as crimes go and a growing menace by all accounts.

There are other pretenders to ID theft solution; but they do not do what Kroll and Pre-Paid Legal Services can do – like have professional, licensed investigators go after the perpetrators. Go to my PPD website and look. PPD has been in business since 1972 and is publically traded on the New York Stock Exchange.

It would be an easy target to blame the credit card industry for facilitating ID Theft. It would be easy to suggest that the industry is actually legalized crime, but I will address that later. In the mean time, the PBS series Frontline did a revealing story about credit cards you may be interested in seeing.

I am sorry that Mr. Bernanke got bagged in an ID theft. But, if he is not safe, who is?

Take Out the Paper

When the United States began, the press meant newspapers -- the venerable Fourth Estate. Attributed to British politician Edmund Burke (1729 - 1797), that synonym for newspapers has been broadened to include all of the mass media. The press is protected by law from Congress, but it is not protected from business or technology. Despite pundits’ predictions to the contrary, radio failed to kill newspapers and television failed to kill radio. Neither is the Internet killing its media cousins. As newspapers across the country fail or fold, bad business practice in the present bleak economy threatens all of the Fourth Estate, and this in turn threatens the country.

The story of the failing San Francisco Chronicle is just one example of a major metro-area newspaper having been managed into the dinosaur museum of media. It took the paper’s losing $50 million last year for management to make a remarkable grasp of the obvious. Its last-ditch solution is to slash expenses and purge the payroll. "Our current situation dictates that we accomplish these cost savings quickly," Chronicle Publisher Frank Vega wrote in a memo to the staff. "Business as usual is no longer an option."

The New York-based Hearst Corporation bought the Chronicle in 2000 in a $660 million deal and has been losing money ever since. The paper is the largest daily in northern California with a paid weekday circulation of 340-thousand and a work force of about 1500 people. According to the Wall Street Journal, Hearst said it will seek "critical cost-saving measures," including a steep reduction in the Chronicle's staff. If it can't reach its cost-saving target "within weeks," Hearst said it will seek a new owner for the Chronicle. If it cannot find a buyer, Hearst said it will close the paper. Bankers say there are no likely buyers for the Chronicle.

The list of new exhibits to the dinosaur museum of media includes other inductees such as the Seattle Post Intelligencer and the Miami Herald. After 150 years Denver’s Rocky Mountain News is history. Tribune Company, parent to the Chicago Tribune and Los Angeles Times, has filed for bankruptcy. So has Philadelphia Newspapers which publishes the Philadelphia Inquirer and Philadelphia Daily Journal. In fact, 33 newspapers have filed for bankruptcy protection. The American Society of Newspaper Editors has cancelled its annual convention for 2009.

Mike Hoyt is the Columbia Journalism Review Executive Editor. He says such losses are sad because newspapers are very tied in with their community. “When a city only has one paper,” Hoyt said, "you lose competition, and you lose the edge, and you lose energy. Competition is good. It sharpens the news gathering, and the investigative reporting." Reflecting on Denver and San Francisco, Hoyt said, "The daily newspaper in a major metropolitan market is the voice of a city. It provides a civic forum that everyone can relate to and come together to talk about. And it can take on complicated problems, and be a watchdog for the community . . . You need big institutions to cover big problems and big situations."

In 1787 Thomas Jefferson wrote, “The basis of our governments being the opinion of the people, the very first object should be to keep that right; and were it left to me to decide whether we should have a government without newspapers or newspapers without a government, I should not hesitate a moment to prefer the latter.” Jefferson regarded a free press as absolutely essential to investigate and criticize the government. It bit him. The press vilified Jefferson during his presidency. Nor would he be the last.

A hundred-fifty years after Jefferson’s presidency, Harry Truman joined a long line of presidents who worked the press. “Once a week the President of the United States faces the free press and endures a barrage of questions,” wrote Anthony Leviero in the New York Times in 1949. “It is the biggest show in Washington. It is also a great institution, uniquely American. It has become a factor in our checks-and-balances system of government.”

Then there was President Nixon who, after two years of bitter public debate over the Watergate scandals, bowed to pressures from the public and the press to become the first President in American history to resign the presidency. “We saw a president toppled by a couple of reporters, Woodward and Bernstein, who inspired thousands of young people to take up investigative journalism,” wrote the late author and activist Peter McWilliams. “Then, after Woodward and Bernstein were portrayed in the movies by Dustin Hoffman and Robert Redford, tens of thousands applied to journalism schools.”

The peril of our free press is that it costs a lot of money and there is not much of that to support it. “Journalists are the watchdogs, and being able to shine a spotlight on corruption or scandal is vital to our democracy," wrote Mike Hoyt. However, the impact of the recession on newspapers ad-based bottom lines has to do with business and not journalism. It is just that there will be less journalism.

The worst advertising climate in decades killed the print version of the Baltimore Examiner free newspaper on February 15, less than three years after its debut. "This is very disappointing for all of us. Obviously, this is not what we envisioned when we launched the newspaper," ownership’s CEO Ryan McKibben wrote to Examiner staff. The company will now concentrate resources on an Internet venture where it plans to add space, new columnists and Web editors.
Maybe that is an example of good business management. What about the journalism?

“Half-truths, obfuscations and apparent deceit -- these are the wages of a world in which newspapers, their staffs eviscerated, no longer battle at the frontiers of public information,” wrote David Simon in the Washington Post about his experience as a newspaperman in Baltimore. “And in a city where officials routinely plead with citizens to trust the police, where witnesses have for years been vulnerable to retaliatory violence, we now have a once-proud department's officers hiding behind anonymity that is not only arguably illegal under existing public information laws, but hypocritical as well.”

Rather than solutions, there are modifications to the newspaper business failure. The Duluth News Tribune and the St. Paul Pioneer Press, for example, will work with the University of Minnesota's School of Journalism and Mass Communication on a half-million dollar project. The idea of folding newspapers into endowment projects or university systems is being floated. There is my dinosaur media museum. In the end, business is business – enterprise has a market to support it.

Unfortunately, business being business, markets contract and companies cease to be viable. GM is a looming example of a failed corporation and yet some of its brands will continue to be be produced. I suspect journalism likewise will survive the fall of the big corporations as a hybrid form of credentialed web-print production, such as blogging with a hard copy back end. I will not be convinced that blogging is journalism, however, until I see a White House Blog Corps.

Effective Delegation

An organization is defined as a structure through which individuals cooperate systematically to conduct business, and this is the purview of managers. It has been said that the best manager is the one who has the least amount to do. When you think about it, that axiom is true because a manager’s job is that of a coordinator inside an organization. To be effective, managers need to practice effective delegation.

The higher an owner or employee progresses in an organization, the greater their area of responsibility. There is a point at which the scope of their responsibility becomes larger than any one person can handle. That does not mean that they do not try, but another axiom says, “Don’t bite off more than you can chew.” At that point one must delegate authority and responsibilities to other people. Otherwise, meeting the needs of the business through proper performance is jeopardized.

Two major benefits of effective delegation are the distribution of the work load and the development of subordinates.

The best way to figure out what can be delegated and what should not is to identify the elements of the work at hand. From that identification the elements can be put in different classifications such as A, B, and C items.

· “A” items are the few duties that are the most important and cannot be delegated. Only you can perform them.
· “B” items are some duties that are important but not critical, so they may be delegated to someone other than to you.
· “C” items are the greatest number of duties that are necessary to the business but of lesser importance than the “B” items. These should be delegated.

In my practice I routinely teach owners, executives and supervisors the importance of learning how to manage through other people. To be successful it is essential to keep control by holding subordinates accountable for their actions. One must strike a balance. You do not get so close that you are looking over subordinates’ shoulders. Neither do you want to become so far removed that you do not know what is going on. The way to succeed at that balance is to develop a system for getting feedback.

I have worked in companies that had reports on reports and conducted meetings on meetings. I never liked it, so whenever I hear someone in business say that they hate reports and meetings, I empathize with them. However, what they are telling me is that the paperwork and the blabberwork have lost reason. Reports and meetings mean nothing unless they have the purpose of keeping you informed. The reports should provide you information at the right time. Meetings should permit dialogue on activities, accomplishments, and problems -- an important part of the communication process.

It is not so much that there are rules to follow as accomplishments to achieve. The first thing to accomplish is to make sure that subordinates clearly understand the tasks they must perform. A good practice is to have your subordinates describe what it is they think you want them to accomplish. You also need to make sure that employees have the skill, talent, and ability to perform their job. The last thing you want is to delegate a job destined to result in failure or frustration.

Another good practice is to allow your subordinates latitude in how a job should be performed. Your way is not the only way. Having said that, however, make sure that you provide all the resources necessary to successfully perform a job. Let your subordinates do the work, but make sure that you can provide them with help in getting the job accomplished if necessary.

Everyone wins when you make a habit of doing the following early and often:
· Delegate not only the menial, unimportant jobs but also the significant ones. Employees will see this as a vote of confidence.
· Remain accessible. Always provide a safety net for your subordinates. Be available as necessary, but avoid engaging in over-the-shoulder surveillance.
· When a job is performed well, praise the subordinates for their performance.

In my experience delegation is the hardest job that business owners and managers have to learn. They confuse delegation with giving subordinates many responsibilities but little or no authority. Success requires both the delegation of responsibilities and of the authority. Enough authority must be delegated to accomplish the following:

· To get work done
· To allow key employees to take initiative
· To keep things going in your absence
· To develop subordinates
· To establish accountability
· To free up management time for higher level activity

In that way your responsibilities and the needs of the organization are effectively met. The higher up you progress in an organization, the more important the practice of effective delegation becomes. It might seem contra-intuitive, but the old axiom applies. You want to be the manager with the least amount to do.

Who Is In Charge Here?

Whether you are a sole proprietor running a small company of family and friends or the president of a company that employs thousands of people, there is something called “depth of management.” It is similar to the military “chain of command” and can be diagramed in an organization chart. Research has shown that a supervisor is required for every three to five people performing a unit task. If there are three to five supervisors, they need a supervisor and so forth. The larger a company gets, the structure is more about managing the flow of information than the activities of employees, but supervision is supervision whether it is peoplework or paperwork.

A common problem for all is how they answer the question, “Who is in charge here?” An owner’s offspring is put in charge, a worker is promoted to supervisor, and a principal hires a friend or outsider. Negative repercussions can result unless those people who are put in charge of other people understand what being a supervisor is about. It is not about being “the boss.” Boss is not a job title or a position. Supervisor is a job title and the position is about getting a job done.

A supervisor is a person who is responsible for the work being accomplished by one or more employees.

The supervisor must have the ability to handle the function to which they are assigned and the ability to control and direct those employees whom they supervise, or subordinates. The capacity of supervisory personnel is largely dependent upon their personality, background, education, and work experience. Good supervisor are open-minded and alert to new ideas, allowing them to be flexible in handling varying situations that must be faced daily.

Successful supervisors display three main qualities: stability, decisiveness and understanding.

Emotional stability is essential. Good supervisors must be able to control her or his temper under all conditions, especially when the going gets tough. They must follow an orderly, well-planned procedure that is flexible enough to permit changes when necessary. Decisions must be handled positively and quickly because shaky and uncertain decisions will cost the respect of both subordinates and other supervisors. Subordinates who are made to feel that they are understood enjoy working under their supervisor's steady and dependable direction.

The qualifications for supervisors include impartiality, leadership, confidence and balance.

Supervisors must be impartial and impersonal, not allowing their personal likes and dislikes to influence their decisions. Good supervisors are leaders rather than drivers. Subordinates take pride in their work when they feel it is worthwhile. Supervisors must be able to train subordinates in their tasks and be able to instill a feeling of confidence in their abilities. A good supervisor also knows when to praise a subordinate for work well done as well as to correct a subordinate privately for unsatisfactory performance.

The responsibilities of supervisors share core attributes regardless of their company size.

· Accepting and understanding all duties delegated to them.
· Developing recommendations to modify tasks assigned to subordinates.
· Establishing coordination and discipline among subordinates.
· Evaluating the performance of subordinates.
· Training subordinates at all levels and developing selected individuals to become assistants and to assume the supervisor's duties when the need arises.
· Simplifying all activities to necessary essentials by eliminating marginal work and non-productive effort.
· Maintaining operating records of the quality and quantity of work performed.
· Planning, and rescheduling work to obtain improved workflow and increased production.
· Performing the operations within approved standards by attending to all assigned duties and acting on matters as they arise.
· Observing and practicing all policies.

The authority of a supervisor includes responsibility, jurisdiction, and morale.

Regardless of the delegation of duties to subordinates, supervisors remain personally responsible for the proper performance of all duties assigned to the position and to the organizational unit they supervise. Under no circumstances should the authority of any supervisor be destroyed by the direct issuance of instructions to personnel under that supervisor's jurisdiction by other supervisory personnel, regardless of the organizational rank of the latter.

The supervisor must have exclusive jurisdiction and authority over all personnel, equipment, and facilities for which they are responsible. Supervisors are entitled to the full cooperation of their own supervisor in the event that an employee is judged unsatisfactory and must be transferred or terminated.

All supervisory personnel are expected to develop and maintain a high standard of morale and production in addition to being fully familiar with all company policies. Each supervisor may make recommendations concerning subordinate employees. However, only a functional manager has the authority to hire, promote, demote, discipline, or terminate any employee within the functional section.

Supervisors share some core administrative and general duties regardless of company size.

· Achieving a well-organized, smooth running unit by making competent selections, providing sufficient training, and closely supervising assigned personnel.
· Securing effective, productive use of all personnel, equipment, and supplies in their unit.
· Building and maintaining employee morale.
· Operating their unit within established guidelines and budgets.
· Maintaining productivity and improving methods and procedures whenever possible.
· Providing proper maintenance, control, and proper use of all equipment, including a preventative maintenance program when applicable.
· Ensuring strict adherence to safety rules and practices at all times.
· Reducing potential hazards in the work place.
· Reducing wasteful use of resources.

Proper supervision is the prime activity for top management. Its agenda is to operate an organization productively and smoothly. Supervision is the way companies obtain the necessary coordination, cooperation, and communication required to succeed. Supervisors must always put emphasis on the details of doing a job, not just on accomplishing the end result. That is what being in charge means.

Broke Banks

If ever there was an industry that needs some positive public relations, it is banking. Bank failures have become common place. In Georgia, for example, there have been five bank failures in the last five months and the hits just keep on coming. Another fifteen banks are expected to go under this year, more than twice the number that collapsed there during the savings and loan crisis twenty years ago. Until last year, California had seen only 3 bank failures during the previous decade – in 1999, 2000 and 2003. According to the FDIC, California suffered 5 bank failures in 2008 alone.

Banking is a highly regulated business. Despite news commentaries that bankers got greedy as banks were deregulated and became corrupt, bank consumers have protection. In the recent case of IndyMac Bank, the third-largest bank to fail in American history, a run on deposits and rising defaults made Federal regulators seize it.

The mortgage loan portion of the banking business earned derision for being lax and, in some cases, predatory in its lending practices. Federal Reserve Chairman Ben Bernanke says that a sustained economic recovery may require additional bailouts of financial institutions. However, the business loan portion of banking has become the collateral casualty that threatens the country’s economic recovery.

As a business management consultant experienced in dealing with bankers on behalf of my clients, it is clear to me that business loan criteria are in flux. Even clients with excellent credit, strong assets and positive history are being denied new loans and are incurring decreased credit lines. New financing does not seem to be happening. Does that mean banks are not lending money to small businesses? They say that they are but that assertion is inconsistent with my clients’ are experiences.

Banks make money by selling the use of money, right? “If the borrower provides the bank with both a belt and a pair of suspenders,” Joe Nocera wrote in the New York Times, “the loan is being granted.” However, “[i]n addition to not making new loans, the banks are systematically withdrawing commitments and capital from the economy.”

So what about the Economic Stimulus Package of 2008? It is about tax breaks for businesses that spent money on property and vehicles last year while their credit lines were getting trashed. According to the Package’s press release, “This new legislation will not only benefit small businesses in a variety of ways, but it will also provide an economic boost to the entire nation.” Bold words in that generalization do not change the fact that “there are exceptions and additional requirements.” Tax credits for small businesses that create jobs sound fine, but it takes money to make the payroll to pay for the jobs to qualify for the tax credits.

Bank accountability is about to change with the new administration. Specifically, the government might force banks to make loans they would otherwise avoid. It is certain that the Obama administration wants to avoid more stupidity, such as those of the Bush Treasury secretary, Henry Paulson “who sold Congress on an elaborate strategy for shoring up banks and then shifted to an entirely different approach before he even got started.”

Meanwhile, forces for the benefit of small business—the largest aggregate employer in the United States -- are seeking the administration’s ear. The National Development Council wants a $75 billion small business stimulus package and a Cabinet-level position to coordinate federal resources for small businesses. Additionally, the National Small Business Association is seeking congress’s ear, asking for 25 percent of TARP funds to be aimed at small business lending and a mandate that 23 percent of stimulus infrastructure funds be contracted out to small businesses. Both are debatable requests.

Small business needs direct financial help to grow our pillaged economy and to create the jobs promised by the new administration. Tax credits alone cannot make job growth happen. The new congress and administration need to hear from us. We will have to make prosperity happen. They will have to help us.

Your People Inventory

Whether we like to admit it or not, we are you are in the sales business. Professional sales people know that there is something called the sales cycle. Think of the sales cycle as a circle that begins and end with prospecting. If you already have a client base, we are going to take an inventory. If you are just starting and looking for that first customer or client, we are also going to take an inventory.

Successful businesses maintain customer databases of various degrees of sophistication. The only difference between a customer and a prospect is history, a customer being someone who bought from us in the past. Satisfied customers make the best prospects. The more we know about our prospects, the better our opportunity for successful selling, and selling is the business we are in.

We want to create a prospect database that contains both quantitative and qualitative information. We will start with some initial questions about our prospects and work from there. We can always add more layers of sophistication as we develop our inventory. If you have existing customers, be as detailed in your answers as you can. If you do not have a customer base, look at who buys from your competitors.

· Who are your prospects?
· Where are your prospects?
· How many prospects are there?
· What do your prospects want from you?
· What do your prospects know about you?
· How much will prospects pay you?

Who are your prospects?

A prospect is anyone who needs what you are selling and can afford to buy it. Suppose you own a commercial cleaning company that does offices and retail stores. Prospect characteristics might include: people who own or manage buildings, have a budget for janitorial service, employ at least 5 inside people, have three lavatories, a kitchenette, a reception area, and a sales floor. They are serviced once a week after 7 P.M. by two people who and take 45 minutes on the job. Less than 10% are government accounts and about a third of them are retail operations.


Where are your prospects?

Prospects may be anywhere if we are selling online or by catalogue and delivering products by transportation we provide. Otherwise they usually live or work with a defined geographical service area, whether you go to them or they come to you. Assume you own a health club. Prospect characteristics might include: able bodied men and women, aged 35 to 55, who live within 13 miles of the club. Half of them want some training. Half of the men and a quarter of the women use free weights.

How many prospects are there?

This is referred to as market size. Do your homework and keep your estimates conservative because your projected sales will be based on your estimate. Whether your business is land based and dependent on traffic or it is web based and dependant in page views, you can search for and find data on the Internet. Another source of such data is your competition.

What do your prospects want from you?

Prospects want what you sell and they want satisfaction after they purchase. Regardless of product or service, prospects want quality, value and service. However, they want price as well, especially now. Warranties and guarantees enhance value and your prospects’ perception of quality. Sears Roebuck and Company understood the balance of perception by making the claim, “Satisfaction guaranteed, or your money back.”

What do your prospects know about you?

They know either what you tell them or what some else they know has told them. Professional sales people rely on an organized sales presentation to varying degrees. Such presentations contain facts about a product or service and the benefits to the prospect. The objective of the presentation is to build value and to get the prospect to start asking questions. When a prospect starts asking, they start owning.

How much will prospects pay you?

Prospects will pay exactly what they think the product or service is worth and not a penny more. Remember that price is relative to perceived value and to what similar products and services cost. That is called “what the market will bear.” Additionally, you want to be sure that you are not selling for a penny less than your product or service costs you. If a pizza costs you $10 to make, you do not want to sell it for $8.50. If that is all that the market will bear, find a way to make an $8 pizza.
Speaking about payments, prospects pay by check, cash or credit card upon receipt of your invoice or based on agreed, written terms. Otherwise they do not qualify as a prospect.

A sale is the process of turning qualified prospects into satisfied clients. The purpose of performing a people inventory is to be able to identify qualified prospects. Such identification helps us focus our efforts, streamline our marketing, and increase our sales – the business we are all in.

Make Your Message Clear

My hat is off to the entrepreneur who saw the intersection guy with the cardboard sign that said “Will Work for Food” and turned it into a business. Nowadays what intersection does not have the sign-waver with a professionally produced sign? “Mattress Sale,” “Liquidation Sale,” “Condos For Less” and the like must be working. They are everywhere. The messages are short and clear.

Let’s consider our “Will Work for Food” example. The message is clear. It is exposed to a lot of views. The prospect is well defined – people stopped in cars that have change or a couple of bucks to spare. The location is important, facing the driver’s side of temporarily stopped vehicles. The sign holders likely look as if they can do some kind of work. The “for food” bit suggests barter is acceptable and looks better than begging.

“Will Work for Customers” is our message. We can apply this message to finding customers and clients: a clear message, frequent exposure, clearly defined prospects and an organized presentation. I am concerned that many business owners make this more difficult than it needs to be. They think that their message has got to be more messagey, whether it is their business card or website, which is a digital business brochure.

Here are some tips on getting your message across.

Less is more

You do not need an hour long documentary when all you need is a half-minute commercial. If you start with five hundred words to describe who you are, what you do and how to get ahold of you (and I hope you do start with 500-words), whittle them down to fifty.

Use a pro

Unless you, your spouse, child, sibling or in-law is a professional – i.e., gets paid regularly for their expertise – do not think you can save money having them create your cards, brochures, websites, logo or signage. By all means let them help with the 500-words but that is it.

Organize your presentation

The key elements to keep in mind here are that you sell what you show and that you want your prospects to ask questions. When a prospect starts asking, they start owning. Do not interrupt them.

Expose your business

Carry extra cards with you at all times. The person standing behind you in a line, the person checking you out at a counter, anyone you speak to is one of two people: someone who is a prospect now or in the future or someone who knows another person who just might be a prospect now or in the future.

Remember your name

Unless your business is named “My Company,” always refer to your business by its name. In fact, go out of your way to repeat your business name at least three times when it comes up in conversation and you offer your card. Make repeating your business’s name a habit. Rehearse it.

Share some enthusiasm

With whom do you want to do business – someone who has got a job to do or someone who enjoys their work? While you are rehearsing your business name, do it with a smile. If it seems silly to practice in front of a mirror, my advice is Get over it.

We are all in the sales business whether we hire salespeople or not. That is why it is of utmost importance that we have a clear message and get it across to people as often as we can. The effort takes practice and consistency, to be sure, but the rewards are gratifying when we do. You will see them on your bottom line.

Practice or Business: What’s the Difference?

I have met many business consultants who are either working on a book or at least thinking about writing a book. I have known several who actually have a manuscript they tote with them from client site to client site. These consultants have two problems in common: having manuscripts does not necessarily make them writers and books do not sell themselves. The mental exercise of putting experience into words can be its own reward, but what it reveals is a personality trait that says those consultants would prefer a consulting practice to a consulting business.

There are two kinds of consultants: financial oriented people and management oriented people. Financial folks love spread sheets and can write love letters in Excel. They tend to have finance and accounting backgrounds; many are CPAs, others have MBAs, some have both. Management folks love organizational charts and can write sonnets as PowerPoint presentations. They tend to have corporate backgrounds; many have business degrees, some have MBAs. Others have been business owners and are former entrepreneurs. All are familiar with the relationships between finance and management.

Regardless of their orientations, consultants share one common trait – they dislike, or at least distrust, sales people as a group of slick-talking, promise-anything-to-get-the-deal, glad-handing, tap-dancing liars and thieves. What sales people think about consultants is similar, but that is not my point. The use of professional sales people to acquire clients characterizes the difference between consulting practices, which do not, and consulting businesses, which do. Neither approach is better than the other. The significance is the difference in overhead.

Other differences in overhead include advertising, depth and size of support staff, and location. They may have large corporate structures to serve corporate customers, such as publicly traded companies, that employ hundreds to thousands of people, generating many millions of dollars in annual revenue. Consulting businesses have greater resources than many consulting practices and may offer layers of specialty in the services they offer, such as proprietary software, IT, tax consulting and financing.

Consulting practices are more entrepreneurial in nature and structure. They may be highly specialized themselves, depending upon the orientation of the consulting staff they employ. They may also be general practitioners whose services range from QuickBooks to websites. Because of their nature, consulting practices serve entrepreneurial clientele, most often privately held firms, who employ less than a hundred people and generate less than twenty-million dollars in annual revenue.

From a consultant’s point of view it is not about the money. It is all about the work. As I have previously written, when I worked for consulting companies my clients ranged from restaurants to general building contractors, from convenience stores to slaughter houses, from liquor stores to RV dealerships. For anyone who wants to become a professional consultant, I recommend the experience with the caveat that the travel can be torture.

From a client’s point of view it usually is about the money, what they think they need and they think about the work that is performed. So what is the difference between a consulting practice and a consulting business? The difference is in the overhead and in the specialties. Change is the product that the client buys or is sold.