I promise

As an entrepreneur and small business owner, it’s easy to get caught up with a new customer, a big sale, or a new opportunity.  Your adrenaline rushes, and the excitement grows.  You’ll almost do anything to get the contract!

But – be warned.  Be very careful what you promise.  As entrepreneurs, we have the uncanny ability to envision everything in the positive, embracing the “of course we can do that” attitude.

Everyone knows that in today’s economic environment, it’s the added service that gets the sale.  The ‘extra’ value you can give to your customer.  To be there when they need you, and to deliver in an emergency.  Need it two weeks earlier?  No problem.  Need to make last minute changes?  You got it.  Whatever it takes.

The problem?

Over-promising.

If you can pull it off – perfect!  You’ve made a great impression, and have become invaluable to your customer.  You are the hero – you scored the big goal, and achieved your vision.

The risk?

Well, the unfortunate outcome if you can not deliver as promised can be as small as losing a customer, all the way to law suits and bankruptcy.

A few points to remember when going in for the sale:

• Don’t agree right off the bat to additions and special requests.  Tell your customer you have to check with your partner / managers/ vendors if they can meet an aggressive time line or have the available capacity and manpower.
• Remember, you have limited resources at your immediate disposal.  Will you need to hire more employees?  Contract labor?  Storage space?  All these things cost money.
• Most customers are aware that special requests come at a premium.  Extra things cost money.  Don’t be afraid to add a line item for the additional requests.  Don’t use it as a chance to ‘stick it’ to your customer, but make sure you put in money for what it will really take.
• It’s not just you promising to deliver – you are making a promise for everyone who works for you.  Make sure they are all on board with the additional work or overtime that might be needed.
• Don’t be afraid to pass up a sale – it’s better to lose one sale than to sacrifice your company.

Finally, if you do make a promise, be prepared to do whatever it takes to make good on that promise.  Once you sign that paper, it it very difficult (and embarrassing) to go crawling back to your customer asking for more money, more time, and making excuses.

And yes, this does come from experience.

What do you do when you over-promise?  What precautions do you take?  Leave a comment and let me know.

A quick story – I was reading to my son last night before bed, which I do every night.  It’s one of those times we have to spend together, without stress or interruptions.

Our puppy started barking.  It’s a new thing she has been doing lately – barking at the cat, or at something she sees outside.  I also knew, in the back of my mind, that she also barks when she has to go out.

I quickly ignored that thought.  I was spending quality time with my son, and he was close to being asleep.

When he finally fell asleep, I got up, and could immediately tell what she was really barking about. 

I mean an entire roll of paper towels clean up kind of barking.  I don’t blame my dog, I blame myself for ignoring her and not LISTENING.

Now, relating this to your small business.

The economy is tough right now, and you might find yourself with more free time on your hands than you would care for.

Now is a great time to LISTEN to your customers.

Call them up – ask them how they feel about your company and the services you provide to them.  Yes, use the word “feel”.  Purchasing is typically an emotional act – at least in the sense of who they purchase from.  Actually listen to what your customer has to say – write it down, put it in a spreadsheet – whatever works best for you to organize the feedback.

Call all of your customers.  Call potential customers, and ask them questions about your product or service, what they like about the current supplier, what they dislike.  You’d be surprised at how open people are about who they are not satisfied with.

And make sure your customers are satisfied with you and your company.  Other people might just be calling your customers, asking them these same type of questions.  And I am sure you don’t want your customer to leave you with the same type of result my dog left for me last night.

Good luck – let me know what kind of questions you ask, and what the typical response is.

I almost did not write this post.  It seems like such a negative to think of a way to take advantage of a situation where your customers are having to let their employees go.  And, it was even more difficult to come up with a suitable title for this post!

But, I thought – the current rising unemployment is what it is.  Due to cutbacks and loss of production, companies are having to cut costs, and cut staffing.

That being said, is there a way for your business to benefit from this?

Yes, there most certainly is.

Your business can benefit from your customers having to cut back on their employees.

It might not happen right away, but you need to start putting a plan into place, and getting the word out to your customers.

There are a few ways unemployment can help your operations:

• If you are one of the thriving businesses, you can hire skilled people at a lower salary than normal.
• There are many more options to hire employees on a contract, or part time basis.
• Group together with other companies to hire someone on contract, splitting the cost.

On the other side of unemployment, there are ways to increase sales:

Sales Idea #1: If you sell a service, many companies that have had to lay employees off still need that service, just not on a full-time basis.  Market your services to those companies, showing them you can provide what they need at a much lower cost than having to hire someone to do it.

Sales Idea #2: Put together a type of co-op for your customers.  Group customers together and sell them your service, spreading the cost around to the companies in the group.  They all win, and you probably make more money than you would otherwise.

Sales Idea #3: Gather some friends that are recently unemployed, and put them to work selling for you, making calls, sending out brochures – whatever it takes to bring in business.  Give them commission.

Sales Idea #4: Find out which companies in your area have had to let people go.  Call them up and introduce yourself.  The people there are most likely not busy, and now is a great time to get in and form some good relationships.  Most other companies are not selling to those companies, since they don’t expect immediate sales from them.

Sales idea #5: In these times, the companies that are still around will do anything to save money.  Call them up, find out if they can use your product or service, and bargain with them.  I don’t recommend trying to undercut prices to the point where you are losing money, but do what is needed.  Offer then a 60-day new customer special on pricing.  Offer them extra services for the same money.

Times are definitely tough right now, and it seems like new job cuts are announced every day.  It is never good to see people out of work, and by you taking advantage of the current economic situation, your small company might just grow, allowing you to hire some of the recently unemployed!

If you have any good ideas about how to sell in a slow economy, please throw me a comment!

We’ve all heard about the massive amount of money the government is planning to put in the economy to try and jump start it.  Billions.  Hundreds of billions.  Some say approaching a trillion dollars.  350 billion dollars has already been pumped into the financial sector as of this writing (January 2009).

How do we get a piece of that bailout pie?

We’re not greedy.  We don’t need a lot of that money.  A small fraction would be great – a million or two dollars would be just fine.

Since you most likely are in or own a small business, chances are that you are realistically not set up to work directly with the government.  It is not that easy to be a direct vendor with the government.  There are forms to be filled out, and paperwork to be done just to be set up as a federal government vendor.   Then most government vendors have a full-time staff just to keep up with the paperwork that the government demands of their vendors.  And then, once you get to that point, you still have to submit lengthy proposals and bids just to try and get a project with the government.

Signing up to be a vendor to your state or local municipality is easier, but you still have to submit bids and proposals and go up against dozens of other similar vendors to get a chance to work on a project.

But there is an easier way to get some of that bailout money.

It is well-known that the government dictates that a certain portion of a project, when awarded to big established vendors, has to go to small and minority businesses.  And that’s you, right?

Absolutely right.

The best and easiest way to get into those projects, and not have to deal with government paperwork and bureaucracy is to become a government sub-contractor.  That means you get a piece of the project, but do not have to deal with all the paperwork.    You won’t get the entire project, but a piece of the pie is much better to swallow than the entire project.  Basically, the winning bidder who gets the project is more likely to act as a project manager to all of it’s sub-contractors.

How do you get into being a sub-contractor?  Here are a few easy steps to check off:

• Sign up for a DUNS number if you don’t already have one:  http://www.dnb.com
• Sign up at Central Contractor Registration:  http://www.ccr.gov
• Look at the sub-contracting listings for a parent company to approach: http://www.sba.gov/subnet/

Once you get to look at the SBA listings, you will see a list of companies that are registered with the federal government that possibly have sub-contracting opportunities.  Call the contact person listed, and explain who you are, and what you do.  If they don’t have any immediate projects for you to bid on, don’t worry – the projects are coming.  Start networking with these people.  Set up meetings with them, and keep in touch with them.  Networking with the right people is the key – you want them to think of you first when they do get a big project.

You might also want to look at the Federal Business Opportunities page, which lists open orders for materials and services the government is looking to procure:  http://www.fedbizopps.gov

Have you ever done any government work, either direct or as a sub-contractor?  Send me a note or comment, and let me know.

Tis’ the season to give!  And, as a business owner, it is often customary to give gifts to your customers, as a way of saying “thanks” for their business.

Where I work, we get a table full of cookies, candies, and other goodies – which quickly get eaten up by everyone in the company.

No one is complaining about the gifts, but most people don’t notice who the gifts came from, or care, for that matter.  Most of the people who partake of the sugary goodness do not interact with you or your company, or have any influence on what they purchase from you.  And once the gift has been eaten, the box goes in the trash, along with the card you might have taped to the top of the nice gift tin.

What I am getting to is that while gifts are nice to give to your customer, they don’t always yield the results that you are expecting.

The purpose of giving a holiday gift is not only to say “thanks for your business”, but to also keep you in the forefront of your customers thinking when the time comes to make a purchasing decision.

Those gifts – which are thoughtful – do cost you money, so you can consider it a business expense.  It is not unthoughtful to desire a return on your investment (forgive me if I sound heartless – I am just looking at an honest point).  There are better ways to thank your customers, and keep you and your company in front of them all year.

Here are a few ideas which are much more personal, and directed toward the people that you do business with:

1.  Send birthday cards. Put their birthday on your computer calendar, and have a reminder pop up a week before their birthday.  Send them a card with a hand-written note.

2.  Personalized Pads of paper. I did this for my customers – they all loved it, and carried it with them all year.  It is not expensive to have pads of paper made up with your logo, company information, and phone number printed on it.  Contact a printer in your area.

3.  Wall calendars. Without a doubt, it will be in front of your customer every day, and they will look at it every day.  Make sure you have one specially printed with your company information on it.

The ideas here are not to frivolously spend money to wine and dine or impress your customers – it’s to give them a thank you gift, while at the same time keeping your company on their mind every day, so when it is time to purchase, or if they have a problem, they will call you first.  Also – make sure you know the rules about giving gifts for the different companies you do business with. Not everyone is allowed to receive gifts.

Good luck, and happy holidays!

Everyone has heard that our long stretch of an expanding economy has quickly come to an abrupt halt, here in the second half of 2008.  There is a minimal amount of credit to go around, consumer spending has fallen, and, as a result, business spending has fallen.

Business is tough out there.

And, as they say, only the strong survive. That includes your small business.

When times were good, and the money was flowing, it seemed like everyone was in need of your product and service.  What most companies did was to specialize – that way they could perform one function, excel at it, and charge a premium.  And they would get paid for it.

You might have been the only game in town that provided that product or service, or you were known to be the best.  You served your customers well, and got compensated for it.

But… now the game has changed.

Companies and people are not spending like they used to.  Production is down, and materials and services that businesses need are down.  People are holding on to their money, making sure they can pay their loans and mortgages.

So – what are the rules now?  What can a business do to survive the next couple of years of tight budgets?

I’ll tell you.  It’s time to generalize.

Yes, as you can probably figure out, it’s time to move in the opposite direction as specializing.  Be more for your customers.  Be able to do more, provide more, and help them more that you have been.

Broaden your products, services, and assistance to your customers.

You should start with your current customers for this method.  The next time you visit with them (and I hope you are visiting your current customers more often), ask them what else they purchase or need that is in line with what you currently offer.  Try not to turn anything down that your customer needs, as long as you can provide what they need in a reasonable time, fair cost, and high quality.

You do want to provide more products and services to your customer, but not to the effect that you degrade your current relationship with them.  Because if you fail, there will be someone else right on your heels to pick your customer up.

It’s easier to keep a customer than to get a new one.

Why should your customer buy goods and services from you instead of their normal supplier?

1.  It’s easier to deal with one vendor than multiple vendors.

2.  You have a proven track record of being there when your customer needs you.

3.  You might be able to provide additional services at a discounted “bundle” rate.

4.  You guarantee 24 – hour delivery?

5.  You can be “on call” for your customers during late business hours.

It’s the “extra” services that will allow you to beat out your competition during these tough times.

Ask your customers what they think.

I’ll bet they will be excited about your new services.