Business Myths From The Recession
Six business myths about recovery in 2011
Myth #1: I need to cut prices.
Clients don't pay more than your standard prices in good times, so don't discount fees when times are bad. Cut prices now and you will have a difficult time raising them later. Instead, be flexible on delivery or payment terms. I don't offer open accounts. I explain that carrying balances costs me money and, therefore, it costs my clients money.
I suggest breaking a large project into pieces, so you can bill and be paid as the work progresses. In my case, I charge prior to starting the work, so I have the cash to negotiate with my suppliers to obtain a cash discount. This benefits everyone. If my supplier wants or accepts credit cards, I use them always. Why not delay the payment for at least 30 days and receive dividends in the forms of mileage or other credits?
"I have learned to keep going, even in bad times. I learned not to despair, even when my world was falling apart. I learned there are no free lunches. And I learned the value of hard work."
― Lee Iacocca, former CEO, Chrysler Corp.
RULE 1: Whenever I grant a concession, I make sure I get one in return.
Myth #2: Large companies are safer than smaller ones.
The value you offer to small or mid-size companies is frequently more clearly recognized. You're often working with higher or mid-level executives, instead of mid- and lower-level managers at a large firm. The choice is yours. My approach is to focus on larger companies, but to focus on a department within that organization. That way, I get the financial resources of the large firms, and the interaction and recognition I would get if I were working with a smaller firm.
"Knowledge is limited. Imagination circles the world."
― Albert Einstein
RULE 2: Whatever size company you work with, make sure it fits your corporate personality. Choosing the right size company to work with is as important as choosing the right client.
Myth #3: I need all the business I can get.
As I previously said, choosing a client is a powerful tool that shapes your business. My first client was Toyota. Toyota is still a client 25 years later. They built my business. They educated me. I delivered more than I promised and, over the years, they have rewarded me with millions of dollars in business. Equally as important, Toyota has been a referral for other accounts and has allowed me to us them as a reference. Once I had experience in the import car business, I was able to get other business from similar accounts, as well as expand my business to suppliers to the automotive industry.
"A great deal of talent is lost in the world for want of a little courage. The fact is . . . we must jump in and scramble through as well as we can."
― Sydney Smith, essayist
RULE 3: Choose accounts that are both profitable and replicable.
Myth #4: When times are tough, go back to basics.
Innovation is not an invention, but all inventions are innovations. Inventions include objects and substances, but innovations can include processes, strategies, methods, and ways of doing things. Innovations are how we save money from creativity and inventions are how we make money from creativity.
How you think is everything. Think success. Think about innovation. Think about not following the tried and true, but think about breaking away and finding a better way to do something.
New approaches might require a stimulus on service. Bring fresh ideas to your clients. Understand their "pain" and find the cure. If you are truly an expert, you bring solutions to your clients' problems before they ask you. You become more proactive in your clients' business by being a problem solver. Engage your clients over the long term. Learn their business. They are not interested in your business. They only want to know how what you offer can benefit them.
Determining the problem is more difficult than finding the solution. Know your clients' business well enough to refine the problem, so you are the only solution. Clients remaining engaged in the relationship if they see you bring innovative solutions to them.
We are born curious. As babies, we experiment with everything around us . . . as children we ask endless questions. But, as adults, we learn to accept instead of remembering how we used to act. Develop ideas, write down observations, and explore new ways to do routine things. Make a commitment to test your knowledge and ask What IF?
Be daring, be different, be impractical, be anything that will show integrity of purpose. Have an imaginative vision for your client. Don't become a creature of the commonplace or the ordinary.
"The painter will produce pictures of little merit if he takes the work of others as his standard."
― Leonardo da Vinci.
RULE 4: Be Different. It's better than being commonplace.
Myth #5: Satisfied clients are the best advertising I can have.
This is simply not true. Clients pay you for your services or products. They don't call others to tell them what you did for them. If they are happy, they continue to do business with you . . . if not, they move on. Listen to them.
Learn to see the invisible opportunities where other people only see visible limitations. Become a problem solver.
You grow by building on your strengths, by getting better at the things you're already good at. Become good enough and you become an expert. Experts stand head and shoulders above everyone else. You succeed when you do what you know.
Think of your product or service as a lighthouse for your clients, as a beacon that lights the way and shows them the direction they want to go. You show them the path to success while illuminating the obstacles to be avoided. When you know what your clients' vision is, you make better choices and you build better relationships.
Then ask your clients for help. Ask them for a referral. This might seem distasteful or shameless but, if you have done a great job, why won't they refer you to another client? If you haven't satisfied their needs, then you need to know quickly.
I recently told a client how another client offered to provide me with a referral. His reaction was "Why haven't you asked me? You are the best supplier I have and I would welcome the opportunity to tell others of the successes you have created for my company." Here was an added benefit: this client resold himself on my service while offering to recommend me to others. When someone refers to another company, their reputation rises or falls on your performance. If they are willing to take that risk, then you have proven yourself to that client. My mother always told me that the dog wagged his own tail because no one will wag it for him. In the case of referrals, someone else can do the tail wagging for you.
"When you believe that something can be done, your mind will find ways to do it. Believing in a solution paves the way to finding a solution."
― David Schwartz, The Magic of Thinking Big
RULE 5: If you don't ask, you will not receive. If your client has to ask, you are no longer his first choice, but one of many. You should have known the question was coming before he asked it.
Myth #6: If I work hard and provide a good product, I will be a success.
Ben Hogan, golf legend, said his success was based on Three Ps: Practice, Persistence, and Perseverance. By doing all three, Ben figured out how to perfect his golf swing. Do you think he could win over Tiger Woods?
I think not. Tiger Woods perfected Ben Hogan's three Ps and added Innovation. He uses technology, mentors, strength training, dietary training, and more. Tiger Woods has been able to learn from other greats, including Hogan, Arnold Palmer, Julius Boros, Bobby Jones, Sammy Snead, Lee Trevino, Jack Nicklaus, Greg Norman, and so forth.
I have come up with my own 3 P's for business decision making.
- Pleasure. Does this proposal or opportunity provide a pleasurable experience. Does it make me happy? Will others take pleasure in seeing that I am involved in the project? Will it make my employees Proud?
- Profitable. Does it add to my emotional or financial capital? Am I getting paid for my wisdom or simply a margin for providing stuff?
- Payback. Am I paying back society, my business, my associates, myself with some promise I made or obligation I want to keep?
I run this matrix in every business or personal challenge. I often refer to them as, "distractions disguised as opportunities."
Tiger Woods often acknowledges the people who have helped him, including his father. No one goes through life alone. Your successes are an accumulation of the things you have learned and the ideas you have gathered from the people you've met along the way. Remember, you're standing on the shoulders of giants.
As you grow and develop in your business, industry, community, and family, your growth comes from those who came before you. Learn from their failures.
Failure is the first cousin to innovation. We must allow a safety zone for failure. Failure is the way we learn about what works and what doesn't.
Focus your time and money on what works. Don't be afraid to innovate. Be proactive and don't rely on what worked in the past, but focus on what can work for the future. This is the way to success, not failure.
Doing what you did in the past is the fastest way to fail. Never stop learning. Never stop improving. Never stop taking a risk. Analyze the details and share the information with your clients.
Learn how to ask luminous questions and you will see the light.
You are paid for your wisdom.
Knowledge is the information you get from reading books.
Wisdom is what you learn from your experiences.
You have experience in your business.
Your clients have experience using your product or service.
Become the expert resource in their business and become a transformational resource for your client.
"The general who wins a battle makes many calculations in his temple before the battle is fought."
― Sun-Tzu, Art of War
RULE 6: Significance is something we produce by the relevance others place on what we do for them.
