Last week I stated that people running small businesses badly are killing small businesses. Before expounding on that thought, let me first emphasize that I understand other factors hurt small businesses, too. I understand that certain regulations and taxes undermine profitability. Markets shift, recessions happen. On the other hand, I have struggled against the poor practices of enough businesses that I can say for certain: enough people are committing business suicide to warrant concern.
There are a few basic business principals that, if every business followed them, fewer businesses would be struggling. 1) Anticipate your client's needs. 2) Always treat your client with respect. 3) At all times, do your job with integrity. 4) Hire people to fill your knowledge gaps.
I put anticipating client's needs first because it requires planning, listening, learning, and the key, adapting. The kindest, best typewriter salesperson in the country will eventually run out of customers because he or she has an ever shrinking customer base. Being adaptable means being willing to change business models, which for a typewriter salesperson might mean becoming a specialist in repair with a customer base culled from the internet and small groups of typewriter enthusiasts. Maybe that person will never get rich fixing old typewriters, but with the right plan, or change of plans, maybe that person will never go hungry. No matter what we do, some people will be forced out of one busines and into a new business, factories will still close, small towns will still struggle in a recession, and corporations will still buy influence. However, if we try something new, people will be better able to adapt and still find a way to support themselves and their families. For this reason, I proprose that the United States start exploring compulsory business education.
When the company I work for was hired to manage a new building, one vendor called us before we even set up our office. He immediately wanted to schedule a meeting. With all of the tasks that come with transitioning a property into new management, we made time to meet with this eager gentleman. In a meeting at folding table in a near-empty room, this vendor came into the meeting wanting to know if we were going to renew his contract. He wanted to know if we were going to pay the invoices that the previous management company hadn't yet paid. He emphasized many times that his is a small business that could not afford to have a client miss even one payment, and he wanted us to make things right. He finally began to talk about his service at the building and declared that he was the only local vendor of his kind, and other vendors couldn't meet our needs like he could. We asked for a proposal on the rest of the year's work, and he told us he'd been giving the previous management company a discount and would have to raise his prices for us. My boss said that was fine, just give us the numbers.
To me and to my boss, this man's mistakes seemed obvious. He wasn't concerned with our needs at all. He did not ask about the new owner of the building, the plans for the building, or offer suggestions on how he could improve service. Had he asked those things, he would have learned that the new owner wants to make improvements to this investment. He was only concerned about himself and his immediate bottom line, and he lost site of an opportunity. When he spoke negatively about his competition, it turned me off, but I felt for him, the independent businessman. When he called me on my personal mobile phone at dinnertime to, for a second time, regale me with the saga of his tragically underfunded business, I began to lose patience. When he called my boss repeatedly to check on the status of payment for work completed under the old contract, my boss lost patience. When he submitted multiple proposals in varying degrees of detail at my boss's request, and each resulted in a different total, that was all we could take. In frustration and finally a sense of hopelessness, we declined to renew the contract.
I have dealt with hundreds of salespeople and service providers during my years in commercial real estate, and I've always been a sucker for good service. My favorite vendors follow those four little tenets above. They understand that in our business, especially, clients may have many projects going at once, many problems popping up simultaneously, and many people vying for our attention. They don't waste our time, they respond to calls and e-mails quickly, they provide fair pricing and are willing to negotiate, and their accounting is impeccable (or quickly corrected if something is wrong). They understand that our responses may take time. Most importantly, they see problems and opportunities before we do, which increases the likelihood that we will depend on them to fix a problem and rely on them as a knowledge base in the future. They know we have a choice of vendor most of the time, so they work to earn our loyalty.
The fact that I also deal with vendors who don't return contracts with signatures until I've sent them three e-mails, or who don't send us pricing until we beg for it, or who don't step up their game to impress new management has me baffled. The experiences of the past six months, especially, have led me to one conclusion: we, as a nation, need to start looking at ourselves as human resources, and we need to find a way to train and prepare every person to work well in whatever field that person chooses. Not every person will have the desire or skillset to start a business, but every person will understand how he or she contributes to the bigger picture. Even people whose end goal is not profit, such as teachers, military personnel, and clerics, can benefit from understanding basic business principals. A better educated populace with strong business acumen strengthens individual independence while also strengthening the success of small businesses and large corporations alike. Granted, such an endeavor requires a bit more than a blog entry to flesh out in its entirety, but I believe future economic stability depends in great part on how well we prepare every citizen--not just those who pursue an MBA--to compete in a global market.