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Don’t mix business with politics, religion

Posted by on Mar 9, 2015 in Business Basics

Published in The Tennessean March 9, 2015 By Ed Rappuhn – SCORE Nashville “I’ve been told to avoid politics and religion in my business discussions. I own the business and have strong views, why can’t I share them?” You most certainly can promote your beliefs, but at what cost? Society has become increasingly more diverse religiously and divisive politically. Is it worth alienating a good portion of the marketplace by spouting far right or far left opinions? Is it worth a discrimination lawsuit for failing to serve a member of the community who doesn’t share your theology? I have seen business owners post information on social media about their great company and then follow up with biased political posts. Then they share cute family pictures. Next you’ll see a religious post claiming their faith tradition has all the answers and everyone else is wrong, followed with another post saying “come see us at Bill’s Florist for a special deal.” How many people do the political and religious posts offend? I venture to say half of their potential customers will be turned off by what might be considered rants. Four notes about social media: Unlike a verbal conversation, posts don’t disappear. There is no way to tell by responses...

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Franchise ownership carries risks and rewards

Posted by on Feb 23, 2015 in Business Basics

Published in The Tennessean February 23, 2015 By Ed Rappuhn – SCORE Nashville “I want to start a business and am considering a franchise instead of an independent start-up. Is this a good idea?” Maybe. Let’s look at the plusses and minuses of opening a franchise. On the plus side, a franchise has a brand that has proven successful and can be cloned in new markets. Usually there are marketing campaigns built for the brand that you can use locally, or in some cases are already being used nationally. A franchise has been successful elsewhere and this can help you get a loan that might not be available for an independent start-up. You can show the bank real financial results from franchises in comparable markets. Regardless of your research and planning, it’s hard to be as accurate in predicting financial results for a brand new business. Although experience in the business is recommended, many franchises offer training to help you succeed. You also have a built in peer group with whom to share ideas that have worked, and those that haven’t. The product or service offered by a franchise should have a consistent level of quality; customers should know what they are getting. On the minus side, a...

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Small price hikes foil sticker shock

Posted by on Feb 9, 2015 in Business Basics

Published in The Tennessean February 9, 2015 By Ed Rappuhn – SCORE Nashville “We provide high quality, custom products to homeowners and contractors. Our sales are increasing but profits are down. Our competitors’ prices are considerably higher than ours. With our three largest customers representing three-fourths of sales we fear increasing prices will cause one or two of them to leave. Any ideas?” Why are you so underpriced? Is it because you did not raise your prices as labor and material costs rose? If so, you took the easy route of not rocking the boat. Now moving to market prices will shock your customers. Start by talking directly to your large customers. Explain what happened and that you need to move towards pricing comparable to others that do similar quality work. These customers are almost certainly contractors who also deal with increased costs and will understand you must do the same. They obviously like your work and want you to stay in business. And where are they going if your competitors are truly more expensive? Next, consider a tiered pricing structure. Tier 1 might be retail pricing, the highest price, which you would charge a homeowner directly. This will be somewhat above contractor price but in total will be...

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A look at options for turning around your struggling business

Posted by on Jan 26, 2015 in Business Basics

Published in The Tennessean January 26, 2015 By Ed Rappuhn – SCORE Nashville “My business is in serious trouble. We are losing money, unable to pay our bank loan, and my house is on the line. Any advice?” Having recognized your situation, it’s time to triage your options. You might try to save the business, take on a partner, sell the business, or simply walk away and start over. Be honest with your bank. The bank wants to be paid; they don’t want your house! If you have a plan to get the business on track, share it with the bank. Ask for concessions such as a temporary halt to accruing interest, a new payment schedule, and even a partial forgiveness of principal. But only ask for help from the bank when you can show them the sacrifices you, your employees, vendors, etc. are making to save the business. Are your value propositions (products and services) still meeting your customers’ desires? If not, consider revising what you do to meet their needs. Blockbuster is an example of a company that continued to offer a value proposition that customers no longer wanted. Can you reduce costs? Could you work from home and rent shared office and meeting space on an...

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Invest in excellent customer service – it’s worth the cost

Posted by on Jan 12, 2015 in Business Basics

Published in The Tennessean January 12, 2015 By Ed Rappuhn – SCORE Nashville “We have some tough customers. They complain about everything, much of which we can’t control. Some ask to return things after warranties have expired. We can’t afford to eat those losses. What should we do?” Whenever possible, provide extraordinary customer service. Your reputation is on the line and is easily marred by even one or two negative customer interactions. As a small business, you have the freedom to operate outside “corporate policy.” Listen to the constant complainers. Why are they dissatisfied? Identify one or two areas that commonly cause complaints and then improve in those areas. For example, what you think is out of your control might actually be the result of unrealistic expectations. If so, undersell your capabilities and over perform. If I’m told something I order will arrive in 7-10 days and it arrives in 5 days, I’m thrilled. If I’m told 3-4 days and it arrives in 5 days, I’m irritated – same delivery time but different expectations. Set expectations to make your performance excel. If you don’t have what the customer wants, don’t try to fit a square peg into a round hole. Send them to a competitor if necessary; they...

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