The best small business advice I ever learned was from Michael Dell.
Once a year, Dell Computer holds Platinum Councils when their largest customers provide feedback on their biggest problems. It gives Dell the opportunity to talk about how they can partner with their customers to improve their operations.
These are important corporate customers who drive Dell’s revenues and offer ideas about how Dell can continue to offer value and to stay profitable. Dell doesn’t have to guess. Customers tell them.
Small business owners should do the same thing because they too have important customers. We suggested this to Joe who runs an online retailing operation. He’s quite successful, but fell on some hard times when he became ill.
Joe hit our Panic Button because not only did he have these massive hospital bills, but his bookkeeper decided this was a golden opportunity to drain the company of all its cash and take off. Joe was going to close the business. We gave him five small business tips before he did that.
First, when you’re in crisis, map your assets. That’s right. Count all the things that are RIGHT about the business. Sometimes that’s hard to see. These were Joe’s assets:
He had a client base of over 400 customers. They’d been buying faithfully from him for over 20 years. That’s the equivalent of an entire generation. If a new competitor came on the scene, it would take quite a while to build that kind of loyalty. We weren’t quite ready to throw in the towel on those clients.
Second, Joe had to change all his accounts and passwords to close the barn door. He also needed to find a new bookkeeper and to check at least five references. Maybe three people can lie consistently, but we doubt if five can lie consistently. We also suggested he hire a forensic accountant to do unscheduled audits of the books to keep that bookkeeper on his/ her toes.
Third, we recommended Joe negotiate payment with his credit card company. This helps “stop the clock” on his interest rate payments so the cash from the business could go a little further after the bookkeeper debacle and interest costs don’t mushroom.
Usually, it’s difficult to negotiate with the rep on the phone, but you may well be able to negotiate with the department supervisor. They have much more authority. Ask to speak to that person. The credit card issuers know some payment is better than no payment. Agree to a payment plan.
Fourth, we suggested Joe call his top 100 customers and ask them why they bought from him instead of the competition. We think we know the answer to this, but don’t assume it. When I encourage all my small business owners to do this, they’re shocked at what they learn. One customer told an architect, “you’re the most reasonable in price by far”. She correctly interpreted this comment as, “man, I’m leaving so much money on the table!” Yup. Ask the right question to help guide your pricing and service model.
Fifth, we recommended to Joe that he make a monthly habit of calling at least 2 customers per work day during the year. He’d get great feedback on his business and the industry, learn about his competition, and cement the client relationship. I guarantee you, if he actually does this, his business can double within 12 months. So can yours.
Remember something about client relationships; they’re dynamic. They’re busy growing or dying. If you think a client relationship is static, you’re wrong. It’s probably dying. Calling customers and hearing what’s happening in their world accomplishes so much.
You learn about what your company is doing right and wrong; you’ll learn about competition’s weaknesses and strengths and you’ll also find out where the future risks might be in the relationship.
Don’t spend tons of money on bringing in new customers. Love the customers you already have. Build a stronger foundation with them. Invest at least 20% of your marketing budget with existing customers. You’ll see the fruit from this.
As for Joe, we have great hope for him. He bought our training videos and he’s watching them faithfully. You can too.
We’ll show you how to double your profits with the same effort in any economy. Take our short course, you’ll never be the same.
And if you’re not satisfied, your money will be returned, no questions asked. It’s a $249 value for $49.
Here’s a note from one of our entrepreneurs:
“Dawn, I can’t thank you enough!! I can finally read my profit and loss statements! For ten years I’ve felt so inadequate not understanding such a key aspect of my business. In five minutes you clearly explained in detail how to use this invaluable tool; in a language I can understand! Thank you! I can’t wait for the next class!”
It’s all there for you in our training videos. Quick, easy and fun.
Need more help? Don’t Panic! Ask Dawn!
We’ll get back to you either online or via phone. Your choice. It’s the only live help desk online for small businesses.
And it’s free for now.
We don’t like to drive a car with our eyes closed. Neither should you run a small business without knowing the basics. We make it easy.
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Our Instant CFO, Instant Marketing Manager and Instant Sales Manager Courses will teach everything you need to know about running a successful small business. A $249 value for only $49. You get the Instant Marketing Manager and Instant Sales Manager Courses as a BONUS!
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If you haven’t done it already, download our cash flow management whitepaper.
It’s free. I wrote it because no one else was talking about this stuff.
If you run a small business, you need to read it. Fast and easy.
Tell everyone you know who runs a small business they should read it too.
In your corner as always,
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