Archive:
November, 2010
Attention Canadians (and Americans)! FreshBooks now supports the fellow Canadian company and popular gateway, Beanstream. Using Beanstream takes the pain out of getting paid online so you will get paid faster and even automatically by using the magic of FreshBooks recurring billing.
We’re happy to add support for Beanstream because you, our customers, have repeatedly asked for it. Between their straightforward monthly pricing, flexibility to cancel any time with no penalty, and their great customer service they are a great fit for any small business growing their business online.
Are you Canadian or an American looking for a great online payment provider? Sign up with Beanstream. If you have any questions, you call them toll-free at 1-888-472-2072 any day of the week during business hours. They’ll help you get you setup right away. They can even get a merchant account if you need one!
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For more posts like this one, explore the FreshBooks Developers Blog.
This chart makes me very happy and thankful for one of our teams. At FreshBooks, we track all sorts of statistics, release by release, and this chart compares two important numbers — Velocity and Bugs. Velocity is the amount of work that gets done in each release (every two weeks). Bugs is the number of issues introduced into production, per release. These issues are dealt with as a quick “hotfix” right after the release. To measure our success over time, we keep a record of every mistake we make so we know how well we’re doing (the goal is zero Bugs).
What’s the trend?
You can see that there is a pretty clear correlation between the two — every time Velocity goes up, so does Bugs. That’s normal. But the great thing about tracking numbers like this over time is that it allows you to observe trends in your own process. What we see here is fantastic — while we’ve been steadily increasing Velocity over the past couple of years, you can see that the average number of Bugs is steadily DECREASING.
We’re doing more in each release, but we’re making fewer and fewer mistakes.
What’s the secret?
Meet the FreshBooks Quality Assurance team (QA). These folks work closely with the development team. They test new features, run regressions every release, build and maintain a massive automated test suite that exercises the FreshBooks web UI, and even copy-edit all the text that appears in the product. Their job is to make sure we can all be confident in FreshBooks.
What about developer testing?
Now, our developers are not a careless bunch. They write their own tests for every function they create (“unit tests“), to make sure it does exactly what they expect it to do (and nothing else!). But the biggest problems in software quality are not “unit testing”, they are “integration testing” — what happens when you connect one piece of software to another? A modern web app includes dozens of different bits of software all talking to each other behind the scenes, so integration testing is a critical problem.
How do you solve this critical problem?
This is where our QA Team comes in. They run an environment that exactly duplicates our production environment (actually, they have more than one), along with all the little installed bits and pieces that make a web app like ours work. They investigate every change to see if it does what it is supposed to, and ensure that the change has no unintended impact. They use various automated test suites to affirm that everything which used to work in the past still does. The process it topped off by all the instinct-driven “this is probably going to break” activities that are the hallmark of a great QA team.
Having a team dedicated to finding your mistakes is a necessary part of any serious software group. When you’re building something, you want it to succeed, and so it is very difficult to overcome the mindset of “it probably works”. QA exists to perpetuate the mindset of “it probably doesn’t work.” To that end, our QA team has been steadily building up its capacity to test all the work of the FreshBooks development team. We’ve been hiring and growing the team, which has certainly helped, but the development team has been growing at the same rate (or faster), so the ongoing improvement shown in the chart above is due more to better processes and better automated testing. It’s why we’re so thankful for our QA team.
For more posts like this one, check out the FreshBooks Developers Blog.
Guest post by Rick Duncan and Scott Morrison of the Bauhub.
Welcome to part two of the series “The Future of Freelance”. The first part, titled “What Do Client’s Want”, focused on the challenges faced by our clients and how we can help to address them. This post addresses the challenges Freelancers face head-on every day.
Only one person gets paid?
It’s getting interesting out there. As discussed in our last post, we have arrived in a world where clients have increased pressures placed on them, which translates into new pressures on us.
These pressures have also started to cause a fundamental shift in the freelance market itself. Crowdsourcing, overseas outsourcing, and stock content are all applying pressure on an already squeezed industry. It’s clearly benefiting some but how do we compete against it?
Undervaluing our product. A major pressure on our industry is the growth of sites that offer competitive or spec creative services. One term referenced frequently is ‘crowdsourcing’.
Wikipedia defines this as:
“Crowdsourcing is the act of outsourcing tasks, traditionally performed by an employee or contractor, to an undefined, large group of people or community (a crowd), through an open call.”
Sounds like an interesting idea right? The problem is in practice we all need to make money. Many sites have cropped up offering clients an opportunity to post projects and request that a multitude of people submit their ideas, some even with fully finished concepts. Once all the concepts are submitted the client reviews them and chose the one they wish to use. Only this one person is paid for their work.
< small pause to let the insanity sink in >
I challenge you to go to your lawyer tomorrow and provide them a problem that needs to be fixed. Then, tell your lawyer that you’re going to send the same brief to 99 other lawyers so you can compare them all, review, and choose one and pay them. What do you think your lawyer will say?
Freelance creatives (and many big agencies) are participating in these practices every day in varying degrees. As an industry we need to rally for a total boycott of this practice. Push back and simply refuse to compete for bid that require work for free. Proposals are required to outline accurate work scopes and give clients a clear sense of what they are paying for. However, when we cross the line into a world where the expectation is that the majority of the concept submitted will be in vain and uncompensated, we devalue ourselves and our work. We are smart, trained professionals. If we don’t value our work, how can we expect others to?
Overseas. We must acknowledge that there are some very talented freelancers in India and Asia. They’re great, smart people doing good work. They are earning an honest living just the same way we are. The challenge that freelancers is that, due to local economic circumstances in countries such as India or China, the rate at which these talented people are working is FAR below living wages in North America and Europe. You may charge $30-60 an hour but it’s being offered for $5-8 an hour.
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“Cash flow is the movement of cash into or out of a business, project, or financial product.” – Wikipedia
Great, but what does that mean? From a practical standpoint, it’s the “into or out” of a business. So for your (very) small business, it’s the revenue (invoices) coming in and expenses (utilities, staff, contractors etc.) going out. But that sounds a lot like profit. The difference is that profit is over a set time period (quarter, year etc) while Cash flow is having enough money coming in to cover the money going out at any given time (a set date).
For example, when it comes time to pay your contractors, do you have enough money from paid invoices to pay them? Simply, it’s all about having cash on hand, or access to cash. For example, one backup to organic cash flow (invoices in, expenses out) is a line of credit, or a working capital loan. However, loans cost you more money, so it’s best to keep it organic.
How do you improve your organic cashflow?
The best way to improve your cash flow is to shorten your receivables (get paid faster) and extend your payables (pay bills later). Consumer oriented products and services do this the best as they require payment up front for services or products. For example, Dell.com. When you order from them, they take payment right away so their days of receivables are zero. After payment, they order the required parts from their suppliers on a set payment term, build it, and ship to you. Since they buy products on contract (with terms) from their suppliers, they can delay payment for a while after they have received cash from a consumer. This allows them to have cash coming in before it even goes out.
But how does this work for your service-based business? First, have a schedule of all your due incoming invoices (payment) and outgoing expenses (payout). This way you can predict when you’ll be running lower on cash and can prepare against it. Second, invoice early and often! Have payment schedules built into your contracts, so you can get payment throughout the project, or at least at each deliverable. This will require strong client satisfaction through constant communication with your client, not just a contract. Keep updating them through the project so they’re satisfied and will pay. And lastly, follow up on outstanding invoices – take the time to follow up via email, phone and everything else. It’s worth doing it once a week or month so you can get more cash in the door.
How else do you improve your cash flow?
High fives to MailChimp today. They just launched a $1 million integrations fund. They are paying small amounts to startups to fund development on their API. They don’t want equity. They just want you to do it. Awesome.
If you can believe it, when FreshBooks, MailChimp, BatchBlue, Outright, and Shoeboxed started The Small Business Web nearly two years ago most companies I talked to still thought that APIs were crazy talk. They would say to me, “Why would we give away our data?”
Of course, in hindsight, that’s a stupid question. First, it’s not your data. It’s the customers’! But more importantly, integrations drive sales of your software. At FreshBooks, we found using a single integration triples the conversion rate from free to paid.
It’s awesome to see MailChimp putting their money where their API is. The most common question The Small Business Web faces today isn’t should we have an API, but why should I build on yours? Good on MailChimp for boldly answering that question.
Guest post by Gregg Barash, President & Founder of Myndbend Multimedia, Inc.
Being self-employed means you wear a lot of hats in your business. Over 10 years, I’ve been a project manager, account manager, developer and marketer. Through all these roles, I knew I was being inefficient and unorganized. And as an entrepreneur, time was my biggest constraint (not money). But, I wanted to take on more clients, build applications to sell and grow my business.
Change was needed. It took a lengthy overhaul to get things under control, but we quickly found ways to spend more time on profitable activities.
1. Put the existing processes on paper
First thing to do is to understand your process. We put every single step of processes on “paper” – regardless of how ridiculous it was. This allowed us to get clinical about everything we have been doing, giving us a full grasp of each process and who was involved.
2. Identify areas for improvement
After getting a process on paper, it was easy to identify the problem areas. For us, it was three problems:
- Wasting time – Most of our time was misspent on non-value-added tasks that ultimately did not have any bearing on our customers’ satisfaction such as compiling time sheets, which lacks any profit potential.
- Communication breakdown - We had a lot of confusion about “who does what” resulting in duplicate work or client requests falling through the cracks.
- Patchwork client documentation – Our invoices lacked detail and were being challenged by clients. Sometimes the client found errors, but the larger issue was the time taken to put together all the detail. It delayed our ability to pay our staff.
3. Set objectives
Fight the instinct to get overwhelmed, and use your new knowledge as empowerment. We established objectives for each area of need (primarily operations and finance) and prioritized them. This way we could improve one by one.
4. Invest time and money and put in the process in motion
It was obvious that we needed to simplify our processes and find tools to help. After comparing some tools, two solutions proved instrumental in helping us finally find our equilibrium:
- Zendesk – It allows us to standardize and manage our sales and support inquiries. It also helps with assignments and responsibilities, and keeping roles clearly defined. The wiki feature helps us provide process and procedure documentation to the team.
- FreshBooks – It simplifies our team time tracking, invoicing and processing payroll. The invoicing feature (in combination with direct deposit services provided by our bank / payroll vendor) makes billing for time faster and more accurate. Clients no longer challenge our invoices.
We also invested time in building two widgets that allowed us to take better advantage of these solutions:
- ApproveTime, a Zendesk and FreshBooks time tracking widget bridges the two applications to make capturing billable time seamless.
- Time Tracker, a Google Gadget for FreshBooks allows our staff to log their billable time while using Gmail or iGoogle.
Before our overhaul, our senior staff spent 100% of their time reacting to client urgent requests and issues. Now our process allows our senior staff to focus 100% of their time on our value-add development. We have more satisfied clients, more clients and we can even build applications to sell.
How have you simplified or improved your business to get more revenue?
Gregg Barash is President & Founder of Myndbend Multimedia, Inc., a Web presence provider offering development, design and content writing services.
Interested in writing a guest post for Fresh Thinking? Please contact John Coates.
I was recently asked by a friend, “do you have a social media strategy?” I replied, “No, we actually have a relationship strategy.”
All definition discussion aside, we build relationships with customers. That simply requires going where our customers are. And it’s why we started using things like Twitter – customers were there asking questions about our products, so we responded.
People don’t understand social media; they think it’s “new”. The truth is, social media is just like any other channel of communications you maintain with your customers – it’s exactly like telephone, and email, it’s just that most businesses haven’t learned to see it that way yet.
To help change some minds, do you know where we do way more relationship building? It’s talking on the phone, then chatting through email, and finally exchanging cards at conferences. We even take our customers out for dinner to take the conversations offline. We monitor Twitter, have a Linkedin and Facebook page, but all three produce comparatively less interaction with our customers. We look at the the whole picture, not getting caught up in new technologies, buzz words or definitions.
Twitter’s most important use for us is as a barometer. Almost everyone at FreshBooks uses search on Twitter to see what customers are saying. So thank you to everyone that Tweets, it makes us smile and motivates us to continue to serve you. Twitter search does provide a great way to get a small sample of what people are saying about you on and offline, but it’s just one way to listen to your customers, don’t forget the time tested and old faithful ways to make your customers happy, like having dinner, or getting on the phone.
We just crossed an amazing milestone! Now, over 50 partners have built on the FreshBooks platform. From mobile apps to accounting systems to CRMS, FreshBooks customers are getting more done every day through our partner integrations.
At 50 add-ons, we’re one of the most integrated members of The Small Business Web. We’ve learnt a few things along the way. If you’re thinking of building a platform, here are some lessons we’ve learnt from working with so many partners.
1. Mind your own business!
People always ask us why we spend so much time promoting other companies. We simply know that integrations sell more FreshBooks. Add-on partners make the FreshBooks experience that much more compelling, so we work very hard to support and promote them. Our partners’ success is a key part of our business.
2. We want to be the best partner you’ve ever had
We strive at FreshBooks to be the best partner you’ve ever had. We are always willing to give partners time and energy, help them through problems, create opportunities for them, and above all else treat their customers with great respect.
3. Be the best partner we’ve ever had
Of course, partnerships are a two-way street. You also need to strive to be the best partner we’ve ever had. That means you’re open to feedback, willing to do your part in marketing efforts, and –most importantly– help our customers when they come calling.
4. Ultimately, put the customer first
Great partnerships are win-win-WIN. We win, you win, but most importantly, the customer wins. Build an add-on our customers like and then treat our customers with respect. Then we’ll do all that we can to help share that with the rest of our customers.
If you’re not up for building something that helps out our customers, then this probably isn’t the best channel for you. We can and do reject add-ons that aren’t up to standard. In a few cases, we have pulled add-ons that fail to meet our expectations of a partner after we’ve listed them.
5. Hustle!
And of course, you have to promote the platform itself. Only you know all the pains your customers have, and so only you can convince potential partners they have an opportunity working with you.
So, how about it? There are still plenty of business problems to be solved, and 2 million FreshBooks users to make happy. If you’re interested in getting in on the action, visit our API docs to get started.
Stanford’s Entrepreneurial Thought Leaders podcast is one of the favorite listens of the FreshBooks team. Each week, they release a new interview or talk from an entrepreneur, investor and everyone else in between. It’s very focused on the technology space, but there are nuggets for everyone.
To give you an idea of the quality and breath of speakers, they include Mark Suster, a serial entrepreneur; Larry Page, co-founder of Google; Mitchell Baker of Mozilla Corporation; and Stephanie Tilenius of eBay (PayPal). I highly recommend you explore this podcast so you can listen and be inspired during your daily commute or time at the gym (you still need to exercise as an entrepreneur).
Bottom-line, these talks are inspiring and helpful to get your business started. We also like the intro music…
Starting a web-based business in Canada? And your primary market is in the US? No problem. FreshBooks has been at it for years. However, there is whole whack of things we wished we knew when we first started. It would have saved us a lot stress, time and money.
The good: Customers
As far as we’ve ever been able to tell, customers are not affected by the fact that we are located in Toronto, Canada. We’ve never had a complaint, possibly because we bill in USD. However, Canadian customers take notice as they are also billed in USD. This sometimes results in a phone call saying “why are you charging me different amounts every month?” and “Why do you charge me taxes in USD?” Once we explain, all are very understanding as internet commerce standard is USD.
It really comes to down to one point: if you have a great product, borders will not get in the way.
There are however two hiccups. First, which sometime dings (literally) our US customers, is a bank charge called an “international” transaction fee on top of FreshBooks’ price. FreshBooks takes no cut from this fee at all and it is because we’re located in Canada. The other hurdle is that sometimes a credit card does not allow customers to use their credit card for international payments. This causes their transaction to fail. In almost all cases, the customer needs to phone their credit card provider and give FreshBooks the okay.
The good and bad: Banking
FreshBooks has a number of bank accounts. Our primary account is a Canadian merchant account in USD funds, which allows us to receive any VISA/MasterCard transaction. However, to accept American Express cards in US funds, we needed to get a US based bank account. This requires a few items; US Tax Identification Number, Employer Identification number and US address. For FreshBooks, we setup a corporate entity in Delaware through the help of a company that specializes in this, CSC, and therefore got a setup with a Chase US bank account.
Since then, we’ve heard you can avoid this. Harris bank and others ones like it, do not require a US address. Thanks to Red Couch Industries for the tip. However, you will need a US Tax ID. You can get this by setting yourself up as a foreign corporation in the US (we did not know this before) by filling out an SS-4 and by calling +1-215-516-6999 to get an Employer ID. Easy.
The rarely bad: Partnerships
In most cases, we’ve never had a problem in a partnership with a group based in the US. We typically use our Canadian entity. However, for some partnerships, the partners want a US entity to have a contract with. Since we have a US entity (see above), it’s not been an issue. So if you are planning to do a lot of partnerships, you’ll want explore becoming a US entity.
I hope this helps you setup business in Canada. For legal, taxes, and accounting, we highly recommend you get professional advice as it greatly depends on your business. And do not be afraid – it’s ok to stay here! Please share any other tips you have about running your business in Canada below, we’d love to hear them.
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