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Thursday, November 6, 2008

Profile of an IT Entrepreneur

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 .

JM Kelly, The IT Entrepreneur

Thursday, September 18, 2008

Management Overdrive

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

Sunday, July 27, 2008

LLC or INC for Flipping Houses?

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

JM Kelly, The IT Entrepreneur

Saturday, June 21, 2008

The 800-lb Gorilla

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

Friday, June 13, 2008

How do I incorporate (form a legal entity)?

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

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 as they have a good reputation for assisting business owners through the corporate structuring process.
Good Luck!
JM Kelly, The IT Entrepreneur

Wednesday, March 26, 2008

Should I Form an LLC or INC.?

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

Sunday, March 9, 2008

There's no secret to "The Secret"

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

Saturday, February 16, 2008

Real Estate Investing: Transition Areas

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, , which is equally effective.

    Happy Hunting!

    JM Kelly, The IT Entrepreneur

    Wednesday, January 23, 2008

    Poll: Social Networks Help Your Biz

    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

    Wednesday, January 16, 2008

    How to Choose a Great Recruiter

    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

    Friday, January 11, 2008

    Headhunter or Recruiter? Some are a dime a dozen.

    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

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