The IT Entrepreneur

Laid Off: 15 Steps to Take if you Lose Your Job

2009-05-01T13:44:00.008-04:00

In today’s uncertain times, many people are finding themselves part of a nasty statistic, being one of the unemployed masses having to find work. This usually hits people who least expect it, and the task of finding another job can seem overwhelming.

Being an IT freelancer for a dozen years, over time I acquired the skills of being a “professional work finder”, if you will. For me “the end” was not usually due to a corporate downsizing, but rather, was in plain sight 3, 6, or 12 months over the horizon. While the techniques I used were successful in IT contracting, they will work in any industry and for permanent employment.

These are listed in general order or priority:

1. Control Your Emotions
While it is easy to get very attached to a job or role, remember that it does not define you. The position was the company’s job anyway, not yours, and you only worked there. There will be other work with other companies.

2. Settle up with your old Company
It sounds like a no-brainer, but it a hurry to get out the door (especially if you are emotional) you might forget to submit your last expense report, collect your books and reference materials, etc. Also, don’t forget your potted plant. They can afford to buy their own with the money saved by your departure.

3. Update Resume’, and Send it out Fast
Do this ASAP! Target 48 hours to have your resume’ updated and posted on the top five or so online job boards (i.e. Monster.com). If you have prior relationships with recruiters or headhunters, contact them as well.

4. Sign Up for Unemployment Benefits
I never had this opportunity, but if you are eligible, take the time to wait in line and sign up. This is not welfare; it is government sponsored insurance that YOU have paid into. Now it is the government’s turn to pay you…

5. Re-evaluate your Financial Position
By the time you get home, you have no doubt already done this in your head. However, take time to sit down and re-visit (or create) your budget. Separate your needs from your wants, and do without the wants for a while. The largest expenses are the mortgage (or rent), insurance, utilities, and car notes or other notes. Can these be reduced? What else can you eliminate?

6. Check the secondary or niche’ Job Boards and Help Wanted Ads Online
Sometimes leads are not as obvious or not listed with the big websites.

7. Search Targeted Company Websites
Always wanted to work for Google? Check out their employment page.

8. Network, Network, Network
This is arguably the most important step in the list. Networking includes not only recruiters and HR people; it also includes friends, family, former colleagues, casual contacts, and basically anyone who will listen.

Attend networking events and job fairs with resume’s and personal business cards in hand.

Post your need for employment on sites like LinkedIn.com and Facebook.com . I found my current position using LinkedIn, when a recruiter spotted my profile and experience!

9. Cultivate List of Recruiters, HR Consultants, and Agents
As you meet people along the way to your next position, be sure to put them in your contact list for future use.

10. Keep Track of The Process
* Leads
* Companies Contacted
* Resume’s Sent Out

11. Don’t Raid Investments, or run up Credit Cards
Sometimes this is necessary, but do so only as a last resort.

12. Keep Your Insurance
You are the most vulnerable now, as is your family or dependents. You might consider raising deductibles to lower your payments, but keep all of your insurance in full effect.

13. Get Some extra Training
Now is a great time to take a short course on some new skill or technology; plus, it’ll look good on your resume’.

14. Keep Yourself Occupied
Don’t sleep late everyday and watch TV, get out in the world. See #8 above.

15. Success is in the Follow-Up
Any good salesperson will tell you this; most folks are easily discouraged and give up. Follow up interviews with calls and a personal, hand-written thank you. Hiring managers are busy and distracted. The follow up could tilt the scales in your favor.

Good luck in finding your next job (or contract). Remember, creation is an act of shear will. If all else fails, start a new company with a great business model, borrow money in the company’s name, and conquer the world!

JM Kelly, The IT Entrepreneur

entrepreneur

A New Resolution: Help Others Succeed Financially

2009-01-11T13:48:00.007-05:00

This time of year, everyone has a resolution: lose weight, exercise more, call mom more often, etc. With the state of the current economy, most folks are resolving just to stay employed and keep their homes. You don’t need me to say just how scary things are now.

However, in contemplating what 2009 holds for me, I realized that I have much to be thankful for. While a lot of people are losing their jobs or homes, I am gainfully employed and in fact, looking for my next investment property (more than likely, a foreclosure). Hopefully, financing will be easier to obtain than what I hear in the news.

My resolution this year is to find more secrets of wealth building and protection and to share what I find. Call it “investment tithing”. The great motivational speaker, salesman and author Zig Ziglar once said "You can have anything you want in life if you will help enough other people get what they want."

It is this very reason that Internet social networks are all the rage now. Since I have many, many things in life that I still want, I’m going to be very busy in 2009 helping others.

May this year find you successful and prosperous…

JM Kelly, The IT Entrepreneur

entrepreneur

Profile of an IT Entrepreneur

2008-11-06T23:44:00.008-05:00

Last week, I had the opportunity to meet a true IT Entrepreneur at a Learning Tree course on Microsoft SharePoint. Dux Raymond Sy was the instructor of the class and he works for Innovative-e, a technology consulting and services company based in Atlanta.

More than “just” a consultant, instructor, and blogger, Dux is also a bona-fide author (not that bloggers like myself are not) with the recent release of his new O’Reilly book entitled SharePoint for Project Management: How to Create a Project Management Information System (PMIS) with SharePoint. Dux is a SharePoint expert, and has the ear of the Microsoft SharePoint developers themselves.

SharePoint is a tool used for storing and exchanging business files within an organization or group. It is a web-based project management tool, collaboration tool, data exchange, and repository among other things. This powerful tool is emerging as the Microsoft platform on which future Microsoft products will be integrated and deployed.

I admire Dux’ energy and stamina in all of the projects that he undertakes. I also highly recommend Dux’ new book, and wish him the best of luck with it.

Dux resides in the Washington DC area and can be reached through his blog at www.meetDux.com .

JM Kelly, The IT Entrepreneur

Management Overdrive

2008-09-18T14:52:00.003-04:00

If you are a sci-fi/horror buff like I am, you probably remember the Stephen King book made into a cheesy flick called “Maximum Overdrive”, circa 1986, where the machines of the world were suddenly possessed by a sinister force from outer space, whose sole purpose was to rid the world of mankind.

There is another sinister force which I have personally witnessed in companies of all sizes, this is the force of micro-management. Sometimes this is a corporate cultural phenomenon, but often it is a single person in mid-level management who makes life absolutely miserable for anyone working under him/her.

My theory on this type of management (in large corporations) is one where insecurity in ones’ own effectiveness or inability to trust underlings to do their jobs leads to constant surveillance. It also leads to employee resentment of not only the leader, but also the company and their particular job.

With startups and smaller companies owned by the entrepreneur, micro-management is more of a rule than the exception. Entrepreneurs are visionaries, and tend to trust their instincts more than their own people with carrying out that vision. Often times the entrepreneur can take his company only so far before having to hand the reins over to the leadership to take the company to the next level.

With large, established corporations, micro-management is usually the exception to the rule due to various checks and balances. Where it exists, however, it’s that mid-level manager who wreaks havoc on morale.

Here’s a great example:
In the throes of a large ERP software upgrade project, complex, over budget, and understaffed, a team of experts works diligently to meet project milestones.

Since the project has slipped on some deadlines, and communication with the business users is sometimes lacking, a daily priority conference call is established to “hasten” the project along. This, in conjunction with a daily project defect call with the software vendor, and the team is losing 10 man-hours of productivity per person, per week. Add this to about 5 hours for various other “touchy-feely” meetings, and each person is giving up 15 hours per week to meetings; meetings that take people away from their keyboards.

To make matters worse, the team’s micro-manager pays a visit almost every hour-on-the-hour, asking how much has been accomplished since his last visit. This incessant noise is akin to a 5 year olds’ constant questioning while on a long road trip, “Are we there yet? Are we there yet? Are we there yet?”, as if repeated asking will alter space/time, and deliver a quicker result. In fact, it has the opposite effect.

Unless of course the road trip is in a car named “Christine”, in which case the project was doomed from the start…

JM Kelly, The IT Entrepreneur

LLC or INC for Flipping Houses?

2008-07-27T17:16:00.001-04:00

As a real estate investor, I am repeatedly asked this question: “Should I buy property in my name, or in the name of an LLC or Incorporated company?” I have an LLC under which I own properties, but feel I should let an expert address that question.

I posed the question to Annette Coker, a licensed broker/realtor, and good friend.

Annette’s response:
“I have houses in an LLC and here are the downsides:
Financing is impossible to get, so you buy the home in the individual’s name and quitclaim at closing to your LLC.

There are other disadvantages, too. If you want to get a line of credit you will pay a higher interest rate. Also, homeowners’ insurance will be higher. As soon as you put real estate into an LLC, it becomes commercial and I personally think it’s a pain.

However, if you ever get sued, apparently the person suing cannot get your personal assets. I question that, too, as with the Internet and other technologies a person can find you even if you hide behind the umbrella of an LLC. It would all boil down to liabilities and the "corporate veil". An attorney could provide more insight into this…

No, I do not think the LLC is the best way to flip. It is questionable in my mind whether it is the best way to even hold long term; a Land Trust is another vehicle that may be more attractive than an LLC.

The primary difference between the INC and the LLC for real estate is that there is less accounting involved with the LLC, and tax reporting is easier (far less complex). Most people do LLC’s for real estate.”

Thanks to Annette for taking the time to answer this question. She can be contacted through her company, Chapman Hall Realtors Premier at http://www.chrpremier.com/

JM Kelly, The IT Entrepreneur

The 800-lb Gorilla

2008-06-21T17:24:00.007-04:00

We all know the metaphor about the 800-lb Gorilla, or the large customer who gets his way. Dealing with these brutes can be quite the challenge, especially given the delicate politics of the situation.

The vendor to the 800-lb Gorilla has many obstacles:

the signing of strict legal contracts, agreeing to long payment terms, satisfying tight delivery dates, and complying with the electronic delivery of business documents at a precise level of accuracy.

Because of the volume of "bananas" and magnitude of product replenishment, the Gorilla's appetite for efficiencies exists throughout the entire supply chain. From the procurement of raw materials, through manufacturing and distribution, numerous techniques are employed to streamline the process; Just-In-Time inventory is one example; Track and Tracing is another.

The Gorillas have their processes honed to a science... at least most of them do. Not long ago, I was assisting a small supplier to a large retailer in correcting some of their electronic documents. The documents were already in production, but the supplier started receiving charge backs (fees) from the retailer due to non-compliance.

One example of non-compliance was that the retailer required an ANSI X12 Inventory Advice. The supplier was transmitting the document as agreed, but a particular data element was not in the format desired by the retailer. My task was to research and fix the "bad" element. Sounds simple, right?

We fixed the inventory advice and wanted to test with the retailer. This spawned numerous calls through the business channels to ultimately obtain a "vendor hotline" number. Calling this number landed us in India, and the person on the other end had no idea what the electronic document was. Our case was escalated to level 2.

A couple of days later, we were contacted by level 2 (still offshore), but the person was proficient in X12 terminology. After explaining our intent, she gave us another contact who deals directly with testing. We called this number, only to get a message that the test coordinator was out of the office for the next two days. We are now one week into the task, charge backs are coming, tempers flaring, and no hope of resolution until after testing next week.

After about three weeks of playing electronic musical chairs, the retailer and the supplier are both finally satisfied; although my team and I (along with the management) are mentally exhausted. In this example, the need for efficiency created an inefficient process. A process fashioned by the very Gorilla who wanted efficiency in the first place.

Or maybe this Gorilla was more of an Orangutan? ;)

JM Kelly, The IT Entrepreneur

How do I incorporate (form a legal entity)?

2008-06-13T18:49:00.001-04:00

By now, I hope that you have made the conscience decision to legally structure your company. Doing so will help to limit your liabilities by providing for protection of your personal assets. It will also help reduce your tax burden and provide for the writing off of expenses with pre-tax dollars.

The ability to file ones’ own paperwork is now tremendously easier thanks to The Internet. Traditionally, you would have had to hire an attorney, legal secretary, or other legal professional to assist you (and you still can if you feel uncertain).

If you want to tackle the job yourself, you can save a few hundred dollars by doing so. The best place to start is with the Secretary of State in your home state. You can also form your corporation in other states that make the process easier; for example, Delaware is known as a corporate haven. From their website: “More than 800,000 business entities have their legal home in Delaware including more than 50% of all U.S. publicly-traded companies and 60% of the Fortune 500.” See the Delaware Secretary’s corporation division at http://corp.delaware.gov/

When checking the Secretary’s website (in any state), bear in mind that the name you have picked out may already be taken, so it’s a good idea to establish your name before printing up letterhead, creating advertisements, etc. The process takes only a few minutes, and most states will immediately issue your state registration number.

The next step is to go to the IRS EIN website and apply for an EIN (Employer Identification Number), which is similar to a Social Security Number, but for the business. Once on this page, click the “APPLY ONLINE NOW” button. You will need this EIN to open a bank account in the name of the corporation.

Other considerations:
You will have to decide which type of corporate structure is best for your business and your tax situation. If you are unsure, check with an accountant or CPA. I have found that for small business, the S-corp or an LLC is best. If you are a sole proprietor, then a single member LLC is a good choice, and allows you to file an extra schedule on your regular 1040 tax form (versus filing both corporate and personal tax forms each year).

If you are still unclear whether or not you can do all of the paperwork yourself, try using http://www.legalzoom.com/ as they have a good reputation for assisting business owners through the corporate structuring process.

Good Luck!
JM Kelly, The IT Entrepreneur

Should I Form an LLC or INC.?

2008-03-26T14:31:00.006-04:00

Corporations, or businesses that operate under a corporate structure, go back as early as the 1300s. Modern corporations are similar to those during the days of trade expansion into The Americas by countries seeking riches and imports from foreign lands. By forming corporations, partner ventures could limit their liabilities in the event of unforeseen circumstances: hurricanes, reefs, wars, pirates and so on.

Today, we have the same objectives (limiting personal liabilities) and the same mechanisms (corporate entities); only the reasons and structures have changed over the years.

In the United States and other countries, there are tremendous tax incentives to further motivate business owners to incorporate. Officers in the corporation can legally pay themselves a salary for part of their income, and then pay themselves a profit dividend at a lower tax rate for the rest of their income. Further, expenses related to the business are pulled out of the profit before taxes, another huge plus of the corporation.

For these reasons, it is my hope that you will consider forming a corporate structure to protect your business and yourself from liabilities and maximize your profits.

See also my earlier blog entry “We Don’t Need no Stinkin’ Corporation.”

In my next blog, I’ll expand on how to incorporate.

JM Kelly, The IT Entrepreneur

There's no secret to "The Secret"

2008-03-09T20:24:00.008-04:00

Unless you live in a cave, you have no doubt heard of the book and video entitled The Secret, which teaches that you can have anything you want simply by wishing for it (or asking The Universe for it).

Mystical and religious beliefs aside, the basis of The Secret, The Law of Attraction, has been around for centuries. The Law of Attraction states basically that "you get what you think about" and "like attracts like". There have been several books written on the subject, all of which are scrutinized by the scientific community.

Based on my personal observations, there are some truths to the claim. In business, people who exude negativity will, in fact, attract negative people. The same could be said of positive people, criminals, entrepreneurs, etc. The best method I have found to locate projects (i.e. work, food on the table) is by referrals. I would not get good referrals if people thought poorly of me, which they would if I were an ass.

The reason that there’s no secret to “The Secret” is because others have written about it before. One of my favorite books, the classic Think and Grow Rich! by Napoleon Hill, tells the secret of wealth accumulation told by 500 self made multimillionaires. Commissioned by the legendary industrialist Andrew Carnegie and taking 20 years to write, this book illustrates the parallels of people who built wealth for themselves out of “nothing but the power of their minds”.

Being scientifically minded myself, yet open to possibilities, I feel there are connections between human thoughts (energy) and the fabric of the universe. According to renowned author and physicist Brian Greene, everything we perceive is made of tiny strings of vibrating energy; everything including our bodies and minds, our thoughts, and of course, money and material objects. These tiny strings vibrate in a universal symphony to form our reality. Check out The Elegant Universe if this interests you.

Whether you believe in the Law of Attraction or not, it is hard to argue with the fact that a positive mental attitude goes a long way. Couple this with mutual cooperation for the purpose of achieving a common goal, and your business endeavors will stand a far better chance at success.

JM Kelly, The IT Entrepreneur

Real Estate Investing: Transition Areas

2008-02-16T17:11:00.002-05:00

For those interested in making money in real estate investing, now could not be a better time. The market is flooded with foreclosures and people in trouble with their lenders. As I've stated before, buying real estate for the purposes of renting or flipping can yield an enormous ROI if you purchase right.

What is purchasing right?
Purchasing right is about finding a "diamond in the rough," a home that needs enough work to discourage most folks who are shopping for a home, yet can be easily renovated for a few thousand dollars. Every foreclosed or short-sale home that I've purchased needed paint (inside and out), carpet, and new light fixtures. Some needed plumbing repairs or countertops. All properties were neglected; after all, if the owner had money to pay the mortgage, he could keep the house in good repair.

Look for the following in a potential investment house:

Good location

Highly motivated seller

Good potential curb appeal

Good "bones" -- structurally sound

Nice angles and other architectural features (not a bread box)

Slightly elevated (not a down sloping yard)

Lots of trees and foliage on street

A street with nice, winding curves, NOT a thoroughfare (no double lines in the road)

Not on an intersection. Listen for street noise. If you can hear it, so could any future buyers.

Always buy at 25 - 30% below comparables in the same area!!!

What is a good location?
Pick an area between new growth and old blight. I tell my realtor to look for a home with the above attributes strategically located between the newly built Starbucks and the first crack house... that is the fringe area where you will get the best deals with the most upside potential!

Finding "Highly Motivated Sellers"
To find a person, bank, or other entity who wants to unload a property, the best device to use is the "bandit sign" that you see by the highway. If these signs didn't work, they would not be there. I also use a lead gathering website, http://www.kellybuyshouses.com/ , which is equally effective.

Happy Hunting!

JM Kelly, The IT Entrepreneur

Hammered at Home Depot, again...

2008-02-07T17:31:00.000-05:00

It's well known by now that The Home Depot SSC (Store Support Center) in Atlanta underwent a "layoff" last week in which 500 employees (or 10% of the workforce at the SSC) lost their jobs.

This particular layoff affected me on a personal level, as I was working as a contractor at Home Depot until just last week, even though my contract was up anyway before the layoff was announced. I knew two of the people who were let go, both dedicated employees in their specific positions. During my stint at The Depot, I had a great time working there and was part of a fantastic team.

I know that the problems in the housing market have "nailed" Home Depot pretty hard as they attempt to remain profitable for the shareholders while simultaneously adding headcount to the stores. It is my hopes that the company will weather the storm of the housing market meltdown, and that the former employees can find more work quickly.

JM Kelly, The IT Entrepreneur

Poll: Social Networks Help Your Biz

2008-01-23T12:50:00.000-05:00

In a recent, unofficial poll posted by a member on the Plaxo network, the following results illustrate which social networks are being used by companies to grow their businesses.

The query was posted as "Which networking [site] has been more useful in improving your Biz?" Out of 320 votes, LinkedIn came out on top with 67% (215 votes)!

Here's the entire list of responses:

Linkedin - 67% at 215 votes
Plaxo - 13% at 42 votes
None - 7 % at 23 votes
Xing - 5% at 16 votes

All Others ....specified below... were 3% at 12 votes
Myspace - 2% at 7 votes
Facebook - 1% at 4 votes
Marzar - 0% at 1 vote

This poll confirms what I had suspected, that LinkedIn is more widely embraced by professionals for business reasons, while networks like Myspace and Facebook are more for the casual user for personal reasons.

While I think that these "casual networks" can be leveraged to market your product or service, I feel that many of the stories of companies successfully doing so may be hyped up. Still, viral marketing is a real technique that would behove any entrepreneur to try and exploit using a social network.

JM Kelly, The IT Entrepreneur

How to Choose a Great Recruiter

2008-01-16T23:48:00.002-05:00

When choosing a recruiter or "agent" to represent you to prospective employers, be sure to be selective and perform a little due diligence. Often, a referral from someone who has used the recruiter/agent is the best place to start.

Some companies have a preferred vendor list that they utilize when posting job requirements ("reqs") and the recruiting firms on this list will have exclusive rights to get you into that company.

Other companies will post reqs to the major job boards (Monster, Career Builder, etc.) and if you are listed with these job boards (and your qualifications match), you will begin to get bombarded by recruiters trying to place for the same position. If you are looking for work, this is not necessarily a bad position to be in. :-)

The professional recruiter will try to match you to positions that you are qualified for, that you are interested in, and that are logistically possible for you to fill. He or she may try to be a little persuasive. This is okay; after all, placements are how a recruiter gets paid and most people are resistant to change.

But if you are adamant that it's not a good fit, a great recruiter knows to continue searching and let you pass on the opportunity. After all, you may use him in the future or refer someone else who will. A great recruiter will pay you for referring a friend, too.

By the way, only deal with a recruiter who charges the employer, not you (the resource). Typically, the employer gets billed a percentage of one years' salary for a permanent placement, or an on-going percentage of the billable hours for a contract. This is a great bargaining chip for you, as you can negotiate a higher rate for yourself that comes out of the markup.

A recruiter acting as your professional agent is a great resource for finding work, be it contract or permanent. Find a good one, be respectful of his/her time and efforts, and you will have a profitable, symbiotic relationship.

JM Kelly, The IT Entrepreneur

Headhunter or Recruiter? Some are a dime a dozen.

2008-01-11T18:32:00.000-05:00

Headhunter, recruiter, agent, middle-man, whatever you call them, these professionals provide valuable services in every business sector. Whether in IT, engineering, pro football or waste management, you will find people who connect resources (people) with job requirements or contract work.

Unfortunately, some recruiters are "bottom feeders" whose only concern is putting two and two together for a quick buck. I have been burned by this in the past, trusting recruiters who falsely represented the work requirements to me or my skill set to the employer. Why one would do this is a mystery to me, as it only weakens their credibility on both sides.

Over the years, I've forged relationships with some really good folks, agents who will look out for my interest as well as their clients'. If you work in IT, email me and I'll gladly provide you a free list. If you know a reputable recruiter, I would welcome you to share who they are with me.

In my next post, I'll list the dos and don'ts when dealing with a recruiter.

JM Kelly, The IT Entrepreneur

10 Great Tips for “The Art of SEO”

2007-12-11T17:31:00.000-05:00

“The Art of SEO” (Search Engine Optimization) - this is a pretty funny term. There is no art to it, just a simple science that needs to be understood in order to drive people to your website. Let’s start with the basics.

1. Content. Content. Content.
Google gets the lion’s share of searches, so design your site with this in mind. Google is run by a slew of PhDs (many former NSA and DARPA employees) and they are all pretty darn smart. You can’t “beat the system” without consequences. As such, “content is king”.

2. Write with the reader or customer in mind.

3. Get as many people as possible to link to your site.
This will manifest the largest increase in your rankings. You can do this, too, by posting comments on other peoples’ sites and including a link to your site or Blog (called trackbacks).

4. Contribute something worthwhile on other sites and your comments will not be marked as spam.

5. Use a Google Adwords campaign to learn which keywords are popular.

6. Use the Wordtracker tool to learn which keywords are popular.

7. Publish content using the keywords you determine to be popular.

8. Collect email addresses and send out newsletters.

9. Make sure you pick an “SEO optimized” website or blog template.

10.Learn about the Google webmaster tools and use them.

Keep in mind that new sites are penalized because they do not have any “authority” in the eyes of the search engines (only time can change that).

I hope your efforts will drive many visitors to your websites.

JMK, The IT Entrepreneur

Pay Yourself First

2007-11-20T12:09:00.000-05:00

When it comes to wealth accumulation, nothing will serve you better than the concept of "pay yourself first". I had been using this technique for years before actually reading about it in publications by investment gurus like Robert Kiyosaki and Donald Trump.

The concept is that when deciding how to slice up your income (or profits) you should always set aside your savings first, before paying anyone else, any other creditor, and possibly even The Taxman. This concept is difficult for Westerners to grasp, as we are taught at an early age that "a good person" always works hard and pays their debts. The problem with this is that it teaches everyone to be good employees, and to work hard for everyone else except themselves.

Most people I know work for their mortgage company, GMAC, Visa, etc. and not themselves. There is always an obligation to repay someone if you look hard enough, and there will never be money left for you if you adopt this philosophy. This is why most folks work paycheck-to-paycheck, and can never seem to save any significant amount of money.

I'm not suggesting to ignore your debts! To do so would ruin your credit or land you in the pokey. I'm saying to fund your savings vehicles, mutual funds, 401K plans, etc. first or automatically each month. Then, pay the bills that will assess you a service charge or late fee, or that could impact your credit score. Lastly, pay everyone else.

I also refuse to set up auto drafts out of my accounts. I decide when and how much to pay a creditor as the money flows into my life; they do not get that luxury.

If you live in the US, have a Happy Thanksgiving. If you do not, then best wishes as we enter into the Holiday Season and New Year.

JMK, The IT Entrepreneur

Corporate Layoff: a Convergence of IT & Real Estate

2007-11-05T19:00:00.000-05:00

Last week, I received news that a former client (Bluelinx Corporation) had laid off many from their staff. I’ve heard that their target goal was pretty significant, but I don’t know exactly how many people have been let go.

This former division of Georgia Pacific is the US’ largest distributor of building supply products; the layoffs are no doubt tied directly to the problems in the US housing market and the slow down in new home starts.

I have several friends in the IT department there, and some of them are now contacting me as they start to network. Of course I wish them the best, and am diligently trying to help them with their search for new jobs.

My two points with this article are that:
1. No job is secure. Many of these folks had been with GP/Bluelinx for years, and were quite comfortable in their positions.
2. It is not a home builder’s or seller’s market, but one can infer that it is a buyer’s market.

Also, after years of observing companies like this who cut back to improve the bottom line, I know that all things are cyclical. One day, someone will realize that there is a ton of work to do and no one to do it, and resources will be hired. Contractors initially, then “permanent” employees. Of course we know that no one is truly permanent…

JMK, The IT Entrepreneur

A rant to: Finding a Job in America

2007-10-18T18:37:00.000-04:00

I often find myself in the position of explaining what I do (as an IT contractor) to Indian project managers, who will take that information back to India to bid on the backlog of tasks that I work on for various clients.

In the companies eyes, they can throw about three Indians at the project for less than they pay me to do it. Often, the US-based companies own stock in the offshore firms, or they are subsidiaries of the US-based company. This is their way of making the transaction invisible to its own employees. However, as a contractor for 12 years I can see through the facade.

While the consumer has the power to make purchases stamped "Made in America", he is blissfully unaware that off-shoring happens at many levels. My point is that the large corporations should be held accountable, or regulated, to curb the off-shoring of labor. You would be hard pressed to find a shirt or TV or cell phone that is actually made in America these days anyway...

Until something is done to curtail corporate behaviors, we as Americans will have to live with LEAD in our children's toys, ANTIFREEZE in our toothpaste and pet food, e-Coli in our vegetables, and vulnerabilities in our electronic systems (where are the servers housing your social security numbers?).

Unfortunately, both Democrats & Republicans make these issues political sticks with which to bash each other, but it's an American problem. If a child grows up mentally challenged because it chewed on an Elmo painted with lead, it is ultimately the corporations and politicians who are retarded.

Finding a Job in America

2007-10-18T12:38:00.000-04:00

Yesterday, I received this email from a relative. My response to it will be the next post...

Joe Smith started the day early having set his alarm clock ( MADE IN JAPAN) for 6 AM. While his coffeepot (MADE IN CHINA) was perking, he shaved with his electric razor (MADE IN HONG KONG). He put on a dress shirt ( MADE IN SRI LANKA), designer jeans (MADE IN SINGAPORE) and tennis shoes ( MADE IN KOREA).

After cooking his breakfast in his new electric skillet (MADE IN INDIA) he sat down with his calculator ( MADE IN MEXICO ) to see how much he could spend today. After setting his watch (MADE IN TAIWAN ) to the radio (MADE IN INDIA ) he got in his car (MADE IN GERMANY) filled it with gas (from Saudi Arabia) and continued his search for a good paying AMERICAN JOB ...

At the end of yet another discouraging and fruitless day checking his computer (Made In Malaysia ), Joe decided to relax for a while. He put on his sandals (MADE IN BRAZIL) poured himself a glass of wine (MADE IN FRANCE) and turned on his TV (MADE IN INDONESIA), and then wondered why he can't find a good paying job in A M E R I C A...

How to win at Monopoly: Buy Houses, Charge Rent

2007-10-06T12:03:00.000-04:00

Remember how to play Monopoly?

The object of the game is to purchase multiple properties, so when an opponent lands on your property, they have to pay you rent. This all time classic game is truly a mirror image of life. Controlling properties (homes, apartments, offices, etc.) gives YOU the upper hand in the game of life. After all, it will be you getting the rent check each month.

If you've done your homework, and bought your property below its market price, you will be cash flow positive. As an investor, you NEVER want to be cash flow negative. If you are cash flow positive on multiple properties, you will have a great second stream of income. This extra money can be put in savings, in the stock market, or into another property.

If you are "jonesing" for a new Lexus, first I would suggest a used Toyota, but if you must have that car because you've earned it, then pay for it with the extra income that you've managed to build. Avoid paying for it from your primary salary, and never ever lease!!! After all, who wants to rent? :)

Cheers!
JMK

Starting a Business: Step 2

2007-09-25T18:12:00.000-04:00

I changed the title of this tract from "Starting a Consultancy" to "Starting a Business" because the general principles are the same, and you might not want to be a consultant!

I have many friends with an IT background who have started everything from a flower shop to a cheerleader academy. Many of these entrepreneurs have more than one revenue stream, thus diversifying their incomes.

Step two in building your enterprise is to do your market research. This is the due diligence phase that requires you to step back from the intoxicating idea of your killer business and evaluate it from all angles. You need to know what your market saturation is, who your competition is and what they charge, how they source leads, where they get raw materials and so on. Ultimately, you need to know what you can charge for your products or services and be competitive while still earning a profit.

Creation of a business plan will be helpful, although it's a daunting exercise to go through, especially when using software to create it. I ran a consultancy for years without one; although in retrospect, it would have been helpful in understanding my business early on.

Starting a Consultancy: Step1

2007-09-14T23:01:00.000-04:00

People often ask me how I started my consultancy (usually, because they want to step into contracting for themselves). My response is always "I prepared first, then took the first step". The first step is, of course, the hardest and is more of a leap of faith than a step. However, if properly prepared, anyone can thrive in their new endeavour.

Build a Network (of People, not Servers) :-)
I started networking years in advance before striking out on my own. I went to trade shows, joined users groups, volunteered time for organizations, and so on. My goal was to fill my palm pilot with contacts, and collect a binder full of business cards. I still have that same information to this day.

When starting my real estate LLC, I used the same formula because it worked for me the first time. Now I have a collection of painters, plumbers, carpenters, etc. to use on my real estate flips.

It's a Buyer's Market for Home Investors

2007-09-06T11:24:00.000-04:00

If you have been reluctant to buy an investment property but are really interested in doing so, now is the time. Folks who are risk averse tend to shy away from real estate, yet will fund their mutual funds, stocks, 401k plans, etc. with all their spare investment dollars because of a sense of security.

For this very reason, many people were not able to retire after the technology bubble burst around Y2K which hit tech heavy funds hard. A result of the correction that ensued caused many to shift their investment dollars to other areas, such as real estate, which itself is now correcting due to builder surplus and over zealous lending practices.

Everyone knows about the US real estate bubble, or market correction in the US housing sector. It is common knowledge that home foreclosures are through the roof (see "Mortgages in foreclosure at record high") but the insightful see this as opportunity. If the market is flooded with a particular good, does it not become a buyer's market for that good? Economics 101.

While I believe that it is still possible to buy, renovate, and flip a property for a quick profit (even in this market), I personally feel that building a solid portfolio is wiser for many. After all, the properties I am acquiring now can be flipped for higher profit later when the pendulum swings the other way. The "trick" is buying at the right price so that a profit is made no matter when you sell.

A notable point:
the very first American millionaire, a German immigrant named John Jacob Astor, was a real estate investor (and landlord).

What's holding you back?

Neglected Properties = Big Bucks (a case study)

2007-08-29T12:46:00.000-04:00

The signs of neglect like bad paint, stinky carpet, holes in the walls or (heaven forbid) termites will turn off 95% of prospective buyers. All of these inflictions on a once beautiful home are purely superficial, and if you have the foresight to see beyond them, you can build wealth fast in real estate.

Put in a few thousand dollars, and this house will be a beautiful home again; your investment will increase in appraised value many times more than what you put into the repairs. Unlike "reality TV" shows like Flip That House, this I know from personal experience. Trust me.

Have a look at the following example.

I purchased this house as a bank pre-foreclosure at $35,000 below market value. Many of the houses in this neighborhood are built as cottages, and I saw tremendous rental potential for the property once it was fixed up. I knew it would be a cute rental home for a small family or couple, especially given its proximity to employers, retail shopping and restaurants.

The "Before" Images:

Ugly baby blue walls, stained carpet, damp smelling.

Termite and water damage. Sunlight is actually visible through the wall.

Termite damage on an interior door going into utility closet.

The backdoor, with rot and termite damage.

The "after" images:

Looks (and smells) much better!

Is this the same corner? No more sunlight.

No more termites, or damage.

The backdoor, much improved...

BEHOLD! The finished product.

{Now equipped with a tenant.}

Flipping Houses for Profit

2007-08-23T14:54:00.000-04:00

My true love is real estate. While I have enjoyed working in IT for many years, nothing gives me thrills quite like real estate. Finding the right investment property is like winning at poker or blackjack, and the adrenaline rush is just the same.

I have bought and sold both residential and commercial properties, and I am constantly looking for the next "diamond in the rough". Most people when looking at houses are evaluating them based on if they would live there. BIG MISTAKE! You want to find a house in a good location with good curb appeal and structural layout, but one that has been horribly neglected. Find this house, and you will make thousands (in any real estate market). However, you must buy it at the right price to do so...

In my next few posts, I will focus on how to find undervalued homes and turn them into personal wealth.