Recently I was eating at a sushi bar with one of my partners . The Sushi chef noticed our Rustic Creek logo shirts and asked how business had been. When I responded “great”, all conversations stopped and everyone stared at me. I felt like I just rained on everyone’s parade. It turned out we had joined a group of builders commiserating on the state of the economy and the housing market.
On the way back to the job site, my partner asked why I thought we were so busy and getting busier every day while everyone else seemed to be struggling or going out of business. I didn’t have a simple answer for him. What I had was a 30 minute version of a full semester course I took in college. I didn’t realize how much I remembered and was able to use until that point.
My business management professor was the typical, never had a real job PhD. kind of college professor. I learned what I needed in order to pass the test, pretty much thinking that I was ignoring everything he said. Only now do I realize he was right about a lot of things. The main points of his course still hold true. As I passed on these points to my partner I began to re-evaluate our recent success and see how we could do even better.
Never compromise quality. In good times anyone can do what you do at an average quality and survive. When times get tough customers thin and the real cream is all the customers are willing to pay for. Yes they want to pay less for it, but lowering your price only dilutes your brand. If you keep your focus on quality you will lose fewer customers than your competitors and even pick up some from your lower quality competition as they let the customer down.
In lean times the customers who will settle for second rate work will now just wait it out. Your low cost competitor will keep lowering their standards, elevating your standing in the business all the more until they close up shop and do something else.
Remember who pays your bills. In other words never compromise service. Everyone that works with me knows that I only sign the checks, the customers pay for them. Do what ever it takes to give your customer a product or service that benefits them more than the money they are paying you and they will keep paying. If you or your employees make a mistake, let the customer know, don’t try and hide it. Be upfront, and honest with the customer and let them know you want to work with them to correct the issue. Twitter is forever now, and one bad tweet goes a long way.
I recently had a major system upgrade go awry, conflicts with other vendors popped up, and the system didn’t work as expected. After being down for 2 days and having wasted 16 hours of the customers time, I sat down with the decision maker for 10 minutes. I explained my position, gave him the facts, without finger pointing, and told him the options. The first of course was that I would work with the manufacturer and the other vendor personally to resolve the issue however since we didn't do the initial work, it would be billed time. Second we could restore the system to its previous condition or finally, the best option in my mind. Upgrade the rest of the system so they would have all the latest and greatest with a new warranty. He selected scenario number one and within a couple of hours we had the system running at about 90%. Two days later while trying to fix the last 10%, the client called and asked for a quote to finish a complete upgrade. He figured since the old system had been around for 5 years and it was really time to completely upgrade even though the new system would not add anything significant. All I could tell him was it would be a better integration with the other recently upgraded components.
When you or your crew forgets that the customer pays the bills you will lose the customer. This doesn’t mean that you should kiss up or do anything the customer asks. It also doesn’t mean that you should reduce your invoice if you cost the customer extra time. If you and your crew honestly did the best job you could, the customer will know it, appreciate the extra effort and gladly pay the bill. If you have employees that are costing you customers, a recession is a great time to re-train them or find better quality people.
Focus on what you know. Your customers might thin a little in hard times, but you must avoid the temptation to take on projects outside of your expertise. You won’t be able to provide the level of quality that your customers expect from you. The referral business that becomes increasingly important will be lost. If you need to broaden your horizons, and add new products or services, make sure you get the knowledge and tools first, not second. The most successful people only do one thing very well in life, the rest they just do above average. Those people get paid the most for doing it.
Seek Continuous Improvement. My partners and I attend at least one training day every other month, and occasionally as much as two days a month. Sometimes people ask how I can afford them gone that often, especially when the classes can run upwards of $500 a day plus travel expenses. My reply is “how can I afford not to have them go?” I may not get paid back in a month or even a year on some classes, but the investment always pays off. Everyone like the breaks, enjoys the classes and it is a great intel gathering opportunity.
I also like to sit down with my clients at the end of a big project and do a formal handover and training. Many of my contemporaries say that I am wasting my time and my clients’ time. I also know from talking with them my call back and referral rates are much higher. In the last 5 years I can only think of one client that said the formal handover was overkill. I also know it works when I replace a system put in by someone else less than two years before. Generally the clients never learned how to use the system and out of frustration and embarrassment call someone other than the original partner. The best part of the handover for me is the customer feedback. Some won’t give me any but others give lots, both positive and negative.
I use this feedback as a lead to the sales question, “is there any one you know of that could use our services?” Rarely do I get a name or number on the spot but usually within weeks I will get a call from someone that had been let down before. Asking your customers to help you improve your business not only helps you seek continuous improvement, it strengthens your ties with them and brings them on as part of your word of mouth sales force. As long as you keep up with them, they will keep selling for you.
Remember Everyone Has a Job. After finishing college and starting my first business which I basically failed at, I did like most entrepreneurs and starting buying how to get rich books, how to start a business books, just about every self help business related topic I could find, I bought. Like most self starting small business, I started out with me, myself and I and a budget of $50.00. I got into the financial cycle of finding the customer, doing the work, paying the bills, repeat. It was years before I figured out how to grow the business right. I got bigger jobs that required employees, so I hired. When the job was done I now had 5 people sitting around and one looking for the next job. After three years of this I realized that I was financially exactly the same as I was three years earlier. The main difference was I now had payroll to make, office rent to pay, big insurance bills and I was working 7 days a week instead of 6. All for the same money. At my wife’s begging I sold off the entire thing.
As a strange side effect of the business sale, I ended up moving to get away from some new very noisy neighbors that had recently moved in. My new neighbors were all retired or young business owners. Very quickly I saw the difference between how they ran their business and how I ran mine. The epiphany came on a rainy Saturday as I was helping my general contractor neighbor pour concrete. One of his workers said he was tired of seeing the boss on the jobsites, and that he should be out getting more jobs. The light came on. My job was not to do the work, but to hire and train good people so that I could get the next job before the old job was done. My job was to build the business, not the jobs. I used to feel guilty asking my employees to work on things when I wasn’t around. Now I know that is my job. If you feel this way, get over it.
By the time I had the epiphany, I had already been over a year into my current business. At that point I was still in the same small business trap that I had been before. I cut back on some expenses, bought the insurance policy and hired my first partner. He did ok, I made a little more money, but had a lot more time to run the business. Within a couple of months I hired my second partner, invested a little more in training and Voila, business really started to grow. I had the time to keep up with all of my jobs, I was able to make better appointment schedules, keep up on the bills and most important start looking for the next job before the current work ended.
Without doing my job as the owner working on the business, I couldn’t follow any of the guidelines above and couldn’t create a really successful business. Everyday I work on jobsites with other vendors or contractors that consist of themselves and maybe a helper. They all have the same excuses for not growing that I had. None of them realize all they are doing is working in the business which makes them the business, not the business owner.
Business success takes lots of courage, effort, sweat and tears. The guidelines I have listed are just some of the building blocks needed to really get your business growing and differentiated from other business. It took me years to learn what some guys figure out in days, and what many others never figure out. As they say “if I only knew then what I know now”.
No comments:
Post a Comment
Thank you for your insights.