Are you killing your business? You might be running it into the ground without even knowing it. I know I’ve watched that happen from time to time, and I think to myself “Do you even know what you are doing!” No, not everyone is business savvy. Not even all business owners 🙂 Some of it you think ‘hey that’s common sense, what gives!?!’ but not everyone has common sense. So, what things can one avoid to ensure the health of their business?
Customer service? who needs that!
Your motivation needs to be ensuring that customers leave happy. Happy customers tell their friends how great your business is. Happy customers return and are typically good customers. Good customer service is a long term goal to strive for. The dividends are not immediately visible, and that is why some don’t make it a priority. Being nice is part of good customer service, but having your act together is the second vital aspect. Customer service can be challenging, but doable, I wrote a post how to do it well here.
Why provide poor service?
The dividends from good customer service can take time to see. But, it is a good investment. So, why do some provide poor customer service? One big reason is money. I know its sounds really weird, doesn’t good service make you money? Yes yes yes! but not immediately. Some people (and I’ve worked with them) have difficulty seeing the big picture, or long term business strategy. They focus on the sales today, and the numbers today. Not the ramifications of their decisions. Its selfishness and greed plain and simple. Is that who you want to do business with? No! that’s why it’s important to provide good service!
Yeah, it really does happen…
A competitor at big car company would send cars to the airport if the price was best there. This left the people who had a reservation for a car at a home branch, up a creek. This is a big reason why they are not the leader in their industry.
When I worked at big car company, there was (and still is) a very strong emphasis on your sales numbers for that month (and even day). It was not uncommon for my manager at that time to essentially ‘trick’ customers into purchasing the additional protections. This boosted his sales numbers for the month and made him rank better for that month. I knew another person who would walk away from a customer he ‘knew he couldn’t sell on’. He was promoted to assistant manager…let that sink in for a minute…
How poor service effects your returns
- It starts with reputation: My bad manager had a reputation of being a jerk. Local businesses did not want to do business with him. It wasn’t until I let them know we had a new manager that they were even willing to give us a chance!
- No good relationship perks: Before my bad manager became manager we had agreements with the local shops to not be charged storage fees in return for getting their customers set up in rental cars at good rates. When my bad manager made them mad, suddenly $120 a day storage fees started popping up. Yes, we had to pay them.
- No return business: All the business was new business, which is substantially more expensive. But, to my manager it was a fresh batch of people to con.
Moral of the story. If you want your business to succeed you can not be 100% focused on numbers all the time. Treat people how you want to be treated, plain and simple. Though you may make an extra buck today conning people out of their money, it will catch up with you.
Receivables?!? why worry about that!
Well, if you don’t get paid you’re out of business. It is vital that you get paid in a timely fashion; if you are not you need to start the collection process promptly! I know some people still do business with just a handshake (yes, they really do still exist). However, I always recommend doing business with a contract in place. A contract holds up in court, and handshake does not. Not everyone is good and honorable anymore. It’s just not how the world works.
Why business aren’t always on top of that?
Business owners are busy! This kind of stuff can escape them when they are focused on keeping clients happy, gaining new business, and doing a job they love! Many of them are smaller so business may not be booming yet. They may have to do everything in house, and there are only so many hours in a day. However, when you start turning a larger profit, you have a couple options.
You can do everything in house, do what you can each day. You will have ‘complete control’ over your company. No aspects of your business will end in the hands of someone untrustworthy, and you may end up like my excellent painter in my blog post here.
You can delegate. You can hire an accountant and/or bookkeeper to keep all your receivables and payables together. You don’t necessarily have to hire someone, you can even contract out the service. Many people have their own accounting companies. That is what they do! They keep all those numbers together, and make sure that your taxes are prepared and paid! You’re life will be so much easier! So…why don’t people do this more?
Delegating requires trust
I’m talking about fully delegating a task. Not hovering over someones shoulder while they do said task. That requires trust, and entrepreneurs pour their heart into their work! They don’t want it messed up by someone else, and I can’t blame them. On the flip side, not delegating will stunt the growth of your business. You can not do everything, everything is not anyone’s gift! It’s a surefire way to get burnt out! Focus on what you excel at, and (if you can afford to) delegate out the rest. Let the accountant do his or her job. Let the sales person work. You can now focus on why you opened up shop, doing or making what you love!
How to avoid getting burned
There are a number of options there. 1. you can hire through a temp agency on a temp to perm situation. You can request that the temp agency do the background screening (most do this automatically as part of the fee). The employee works for the temp agency, so if it doesn’t work out you let them know. This will alleviate some of the work on your end 🙂 2. There are a number of services you can use to do background checks, you can even contract that out to a company that focuses on that! Pay per background check. 3. Follow up on professional references. (References, not jobs, former jobs can typically only tell you if the person worked there and sometimes the dates.)
Running a business is hard work! It would be a shame for it to be torn down by some easily avoidable mistakes. I hope this helps your business reach its full potential!
I think I have been spoiled by Amazon. They have such amazing customer service and such an easy return policy. Recently we had to replace our HVAC system and man oh man I can’t stand the company that installed it. Initially I found them and they had sterling reviews. But over time I have come to despise them and their practices. They installed things incorrectly, wouldn’t take ownership of their mistakes, tried to skirt out of contracts, etc. The thing that they either don’t care about or are oblivious to is that all of our houses were installed at the same time. Everyone will soon need to change their HVAC units and when people ask who I used I’m going to be honest with my review. They are losing a ton of business by being penny wise and pound foolish.
That’s is no fun! My mom had to replace her HVAC and its not cheap! I figure the free market will run its course with that business. 5 years down the line, if they are still making the same mistakes, they won’t be in business.
Yikes, that manager sounds horrible! It’s so horrible that that person was even around. I definitely agree thata bad manager can lead to a bad rep within a community which means has has to go ASAP if the business hopes to survive!
Danielle | http://www.FollowMyGut.com
Danielle, he was bad 🙂 He transferred before he finally quit. This particular company only fires people if they do something ‘unethical’ so they don’t have to pay out unemployment. I can understand that from an accounting standpoint. But, I don’t think it makes good business sense. He did a lot of damage there, he should have been fired.