Archive for August, 2007

Pruning your customers

Friday, August 31st, 2007

I remember the first time it happened – we turned a customer down. And this one even had money, ready to pay us. We referred them to someone else. It wasn’t because we had all the money we needed, that’s for sure. At the point they came to us, we were maxed out on our capacity. True, we could have tapped contractors to help with the project, but our workload wasn’t the only issue. The project they proposed for us was neither within our core competency nor was it something we aspired to be. It just didn’t make sense. A few of my employees thought I was smoking something to leave money on the table, but my vision was longer term than just fast dollars (which may have made me a bad or foolish entrepreneur, but I stand by my decision!).Pruning a tree

Saying no to a customer is good when:

  1. The work is not strategic nor within your capabilities. If you have been in business for a few years and you’ve never said no to a potential customer, you need to look at your strategy. Do you even have one? And if you do, are you weighing customer opportunities against them? Many entrepreneurs are in such a fury to get customers that they don’t realize that not all customers are created equal.
  2. The cost of serving the customer outweighs the price. Sometimes, customers can cost you money even when the projects or products appear profitable. Are they difficult to deal with? Do they cause turn-over within your company (which costs money and morale, especially in a small business)? Are you spending a lot more resources on them than you’re charging for? Unless you are keeping good records, you may never know who the most profitable (and unprofitable) customers are. How, then, do you know where to prune?
  3. You just don’t have the resources. If taking on a new customer would cause a decline in the quality of your product or service, think again. As a small business, we often only have our reputations to go and and can’t risk that. Rather than an outright no, try giving them a date by which you can deliver and let the negotiations go from there.
  4. They are asking for something for free without giving you anything. Even if it is a good reference or a referral, if you give too much away, you risk decreasing the value you or your products hold in your customers’ eyes. Sometimes as entrepreneurs have to give or discount in the beginning, but make sure you are getting in return.

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Customer service that retains the customer

Saturday, August 25th, 2007

My grandfather recently came to visit me from Texas and while he was here, I overheard him arguing with various customer service representatives at Sprint about his account. He had been a Sprint customer for over 10 years and recently canceled service for three phones all due to several run-ins with poor customer service.

He had been battling with them over a phone that had been dropped in a toilet and they refused to take it off the bill. For ten months he had been fighting with them and became so frustrated that he severed a decade-old relationship. He was satisfied with the product but yet driven to the competition. How do you keep your customers from doing the same? What are the keys for keeping customers happy?

In talking with a former client, he reminded me of a few of the things that we did that kept them faithfully coming back for more:

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Women entrepreneurs and funding – are we asking the right questions?

Friday, August 17th, 2007

So women aren’t asking for outside investments as often as men – what does that really tell us? Women are shy? I don’t think so. Perhaps we need to look at why women are starting businesses and the types of businesses they are starting.

The explosive growth of women starting their own businesses reflects a need by women to take control of their future. For many, it is also to find flexibility so that they can attend to their many competing responsibilities and interests. While kids are the largest such demand it is not just parenting but ailing parents and philanthropic interests that women try to juggle. Taking outside capital from a VC or an angel diminishes the control the entrepreneur has on where the business goes. They can’t just grow it at a slow rate to suit their lifestyle with outside investors to contend with.

Additionally, not all businesses are suited for outside investment. Service businesses, for example, make investors yawn. Most won’t even consider it. What type of businesses are most women starting? Services. One of the hottest new businesses is to become a Virtual Assistant, which is exactly what it sounds like.

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Entrepreneurship isn’t just for adults!

Friday, August 10th, 2007

A recent survey in the UK found that kids, ages 13-17, are already thinking about work/life balance. 81% of the kids surveyed are, at least. And 11% stated that they’ll look for jobs elsewhere if their boss asks them to put work before family. Perhaps the other 89% will just start their own company?

Speaking of kids starting businesses, an 18-year-old entrepreneur just posted a review of The ParentPreneur Edge on the book’s Amazon.com page. Talk about unexpected! He says he was 16 when he started his first retail business and was able to relate to the metaphors in the book through his own childhood. In addition, he found so much value in the business tips he is already re-reading it. Cool. THAT is why I wrote the book – to provide value.

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Building a Work Life Focused Company

Tuesday, August 7th, 2007

Woman jugglingAn article published in The New York Times Last week about Family-Leave Values reassured me that my choice to become an entrepreneur was the right one. It detailed some very depressing cases where people have been let go from their jobs because they were parents. What has this world come to when people are penalized for doing what comes, uh, naturally? Apparently even those who don’t have kids are not safe, either. People have been fired for taking off work to care for a sick spouse or an ailing parent. Some businesses are starting to get it, but it may just be up to us small businesses and entrepreneurs to show them how we bring in profits while caring for our employees.

When I started my first company 12 years ago, my goal was to prove that you could build a (highly) profitable company and honor people’s needs for work/life balance, including my own. We were successful and won several state and national awards for our creative attention to our employee’s needs. I have to admit, though, that it wasn’t always easy. There were several lessons we learned along the way that other companies, even the very small ones, can learn from:

  1. Work/life considerations must come from the top. Building a company that respects the fact that there is more to life than work requires top-level commitment. It has to trickle down through all ranks of managers from the highest to the lowest.
  2. Measurements must reflect the company’s commitment to results, not “face time.” Where possible, we had to make sure we valued results, not time in the office. This was especially important for remote workers.
  3. Managers must be trained to manage flexible work schedules. Not everyone knows instinctively how to manage for results or measure productivity instead of accounting for hours. We found that we had to train our manager in how to manager people remotely and how to develop work plans and goals that reflected what we really wanted in our business – a contribution to our bottom line – rather than just showing up.
  4. You must be able to say ‘no.’ In our business, not every position was conducive to a flexible work schedule. Some jobs really did have to be present in the office and we had to be prepared to make that call. It can not be flexibility at all costs.
  5. Policies must be formalized and administrated fairly. Finally, because we sometimes said no, we had to have our policies documented and monitor the implementation for fairness. Any flexible work schedule request that came in had to be reviewed by the employee’s manager’s manager to make sure we were staying consistent and fair.

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