Most Important Thing to Know

[KristineS]

What do you think is the most important thing that someone who is starting their own business should know? What do you wish you'd known when you started your business?

[huggytree]

the cheapest customers expect the most

avoid the bottom 50% and you will have a much better customer base(referrals) and less stress

it took a couple of years to narrow this one down...things are much smoother...i used to bid on 10 jobs to get 1...now i get 9 out of 10 jobs

[billbenson]

I think everyone should have a straight commission sales job.Like it or not, everyone here does sales and marketing for their business. You learn a lot if you don't make any money if you don't sell anything in a straight commission job.

[Dan Furman]

You're the one who has to make the work appear.

[SteveM]

Nothing is as easy as it appears, and everything takes longer and is more expensive then you think to accomplish.

[KristineS]

the cheapest customers expect the most

avoid the bottom 50% and you will have a much better customer base(referrals) and less stress

it took a couple of years to narrow this one down...things are much smoother...i used to bid on 10 jobs to get 1...now i get 9 out of 10 jobs

I saw a discussion about this on a garment decoration forum on which I post. A business owner wanted to dump a customer who was cheap and rude. Half the responses said keep the customer because money is money, and the other half said life is too short, so dump him. I tend to agree that life is too short.

[KristineS]

I think everyone should have a straight commission sales job.Like it or not, everyone here does sales and marketing for their business. You learn a lot if you don't make any money if you don't sell anything in a straight commission job.

There is something to be said for learning how to sell. A lot of business owners could use this knowledge. Of course, if you own your own business you do have a straight commission sales job. If you don't bring in business, you don't make any money.

[KristineS]

You're the one who has to make the work appear.

Very good point and something a lot of new business owners forget. If you're not prepared to hustle, you might be better off working for someone else, or at least working with someone who is ready to hustle and comfortable with doing so.

[KristineS]

Nothing is as easy as it appears, and everything takes longer and is more expensive then you think to accomplish.

This is a big gap in a lot of people's business plans. They underestimate how much time they'll need and how much money. Good point.

[lucas.bowser]

I saw a discussion about this on a garment decoration forum on which I post. A business owner wanted to dump a customer who was cheap and rude. Half the responses said keep the customer because money is money, and the other half said life is too short, so dump him. I tend to agree that life is too short.

I can tell you that I have worked places where we assigned a pain factor to our customers. We didn't dump them, but they also didn't get any preferential treatment. Our best customer service was reserved for our best customers. The higher the pain, the quicker we replaced them when we were capacity constrained.

[lucas.bowser]

As far as the original question, my number one would have to be understand your overheads. People tend to be really good with the variable costs that go in to producing and providing a service. They tend to have a looser understanding of the fixed costs they have, regardless of what they produce or sell. I've seen more businesses fail from that than just about anything else.

[huggytree]

I saw a discussion about this on a garment decoration forum on which I post. A business owner wanted to dump a customer who was cheap and rude. Half the responses said keep the customer because money is money, and the other half said life is too short, so dump him. I tend to agree that life is too short.

your quality of life matters...stressing over crap customers isnt worth it....when i get a bad one i stress on it for days.....

spend your time focusing on people who want a quality product and are willing to pay what 'quality' costs....a cheap customer isnt a repeat customer unless your still the lowest price.....and you will never be the lowest price...someone will always be cheaper....the customer will buy whatever the product is out of someones trunk or hire someone on the side who's sitting next to him on a bar stool.......being the cheapest is always a way to be a loser...unless your Walmart and learn how to perfect it and are happy with 1-2% profit

[huggytree]

in my sector i find people dont include office time in their hourly rate....i dont get it...i have 1 hour in the office for every 5 hours in the field...its like $10 per hour just to cover my bids, quickbooks and phone time............i find 80-90% of people in the trades consider this time 'free'


all expenses get passed on to the customer

[KristineS]

I can tell you that I have worked places where we assigned a pain factor to our customers. We didn't dump them, but they also didn't get any preferential treatment. Our best customer service was reserved for our best customers. The higher the pain, the quicker we replaced them when we were capacity constrained.

I think a lot of companies have a pain factor of some sort, Lucas. We've fired a few customers in our time. Sometimes it's just not worth it to try and make things work.

[KristineS]

in my sector i find people dont include office time in their hourly rate....i dont get it...i have 1 hour in the office for every 5 hours in the field...its like $10 per hour just to cover my bids, quickbooks and phone time............i find 80-90% of people in the trades consider this time 'free'


all expenses get passed on to the customer

That's a good point. Administrative time has to be paid for too. It's things like this that new business owners often forget.

[RegAddking]

- There's some kind of rule whereby 2% of your customers will take up 80% of your time. Something like that. So you could let that 2% go and find better ones.

- The main thing is to focus on making a fat net profit. Watch the numbers: hours, income, expenses.

- Do your returns in good time!

- Figure out what business or service these 3 overlap in:

a) Doing what you love
b) Which there's a big demand for and
c) Which pays good money.

You'll never slog a day in your life if you do.

[KristineS]

- There's some kind of rule whereby 2% of your customers will take up 80% of your time. Something like that. So you could let that 2% go and find better ones.

- The main thing is to focus on making a fat net profit. Watch the numbers: hours, income, expenses.

- Do your returns in good time!

- Figure out what business or service these 3 overlap in:

a) Doing what you love
b) Which there's a big demand for and
c) Which pays good money.

You'll never slog a day in your life if you do.

I think you're referring to the 80/20 rule.

[KristineS]

As far as the original question, my number one would have to be understand your overheads. People tend to be really good with the variable costs that go in to producing and providing a service. They tend to have a looser understanding of the fixed costs they have, regardless of what they produce or sell. I've seen more businesses fail from that than just about anything else.

Another good point. I think people tend to forget their fixed costs when planning out their businesses. Or they underestimate them.

[DeniseTaylor]

If there is anyway to base your business on a passion, you're better off. Building a business is hard work and sacrifice, so when the going gets tough, your passion can pull you through. Your business has more meaning and it goes beyond just "working."

[billbenson]

If there is anyway to base your business on a passion, you're better off. Building a business is hard work and sacrifice, so when the going gets tough, your passion can pull you through. Your business has more meaning and it goes beyond just "working."

While I agree and think it is particularly true in the early stages of a business, I think most businesses become mundane after a while. I was a field salesman traveling throughout Central and South America and the Caribbean for 10 years or so. In the beginning it was exciting but after a while it was just another airplane to a different city or country. I met a photographer for Playboy once. He said that after a while it was just another day of taking pictures.

Of course there are certainly exceptions. Although I think most of us can certainly say we would much rather be doing what we are doing because of either the independence or it's much better than doing the same thing for someone else and making less money.