I can never get enough of good start up business advice. When ever the opportunity arises, I like to ask successful business owners to share some insight as to how they were able to cross that very difficult mine field from start up business to successful operation. The best answers are never quick two or three sentence words of wisdom but paragraphs of insightful information.
In this discussion on the Gopher Lawn Care Business Forum, I asked an entrepreneur who owns many landscape trailer outlet stores, what he thought were the biggest issues why new start up lawn care businesses fail. He is in a great position to meet and talk with many new lawn care business owners and he has seen quite a few fail. Here are six important issues he shared with me “I do interact with a great many start up businesses. The biggest reason that I normally see for start up business failures is the business owner trying to treat a start up business like an established multi-million dollar corporation. By that I mean that some owners think that they absolutely must have all the trappings of a corporate executive. They go out and rent or buy a building to locate their office in. They then buy a high dollar desk and enough electronics to run NASA just so that they look important when people visit. While all of that looks nice, it doesn’t contribute one dime to the bottom line. For my part of their spending, some will buy a completely decked out trailer and spend $15K to $30K on it when they could have gotten by just as well with a $4K trailer until their company was healthy enough for something bigger and flashier. Though I love the business, I don’t need the money badly enough to try to talk a customer into buying more trailer than they really need.
When I started my first business, I was on a shoe string budget. I never bought anything that I didn’t absolutely have to have for the business. Don’t get me wrong, I didn’t scrimp to the point that the customers looked at the business and thought “This guy will just waste my time”, but I didn’t try to look like the CEO of Microsoft either.
The single biggest pitfall in my opinion is getting to the point that you hire people to take care of every aspect of your business. As they say, nobody will run your business like you will run your business. Nobody else, no matter how much you pay them, has the same amount of incentive to make your business flourish. Never let go of the reins. Always pay attention to the way that your company funds are being spent. Don’t trust your managers to do it all.
Customer service is another HUGE thing to keep up with……especially in the “good times”. People tend to be less customer service oriented in the “good times” because they get comfortable with the large amount of business that they are doing and think to themselves, “what the hell…..I don’t need to bother myself with this problem customer. He’s only one person. I don’t really even need his business.” That’s the WRONG ANSWER. You may not need his business today, but the “good times” will eventually go away and you’ll wish that you had that customer back. No matter how good the times are, EVERY BUSINESS experiences “bad times” too. Besides that, most people are the same when it comes to their customer experience. If you treat them well, they will probably tell a couple of people. If you treat them badly, they will tell a couple of thousand people. Do yourself a favor and treat your customers the way that you would want to be treated.
It seems that the guy buying the least expensive product will inevitably be the guy who causes you the most problems and has the most complaints. The guy who buys the $45K trailer from us will be thrilled with it and we will never hear from him again until he’s ready to buy another one. The guy who buys the $850 open deck utility trailer will complain about any and everything. He will demand that you give him this or that for free. He will stand upon your very last nerve. When this happens (and it will) just keep in mind that the guy who bought the $45K trailer obviously has enough money that he doesn’t worry so much about every dollar that he spends. The guy who bought the $850 trailer may have had to save for a year to buy that trailer. His dollar probably means a lot more to him than the guy who bought the $45K trailer. He will therefore be much more “picky” about every little thing. The little utility trailer that he just bought probably means infinitely more to him than the $45K trailer means to the other guy. Keep that in mind when you’re dealing with the guy who bought the cheap product and then proceeded to “pick it apart”. You never can tell……that guy may be the next Sam Walton and if you give his problems (whether real or perceived) the same importance as the guy who bought the $45K trailer’s issues, he may one day be your biggest customer. Even if he never buys another product from you, he will probably send other business your way because you cared about his problems and concerns.
NEVER NEVER NEVER try to push your customer into buying. People HATE the high pressure sales tactic. I forbid my employees from ever being “high pressure”. I also forbid them from hounding the customer. Call the customer back maybe once just so that they don’t think that you’re not interested in their business, but let that be all. Calling the customer every day and hounding them will hardly ever be of any benefit to your company. It will turn more customers away than it gets for you. People do not like to be harassed.
ADVERTISING………..You can have the greatest product or service in the history of man, but if nobody knows about it, they can’t buy it. Advertising is the key to business growth. My advertising budget is in the neighborhood of $10K to $15K per month and I wish that I could afford to spend more on it. I will eventually pour more into it, but that will require not only spending more on the advertising itself, but also on hiring more personnel. When you expand your advertising campaign, you must have the necessary personnel in place to handle the increased calls and work load. It’s always hard to let go of the money to pay for the advertising, especially when you’re a start up company with limited funds, but if you are careful about where you spend your advertising dollars it will repay you a thousand times over. Beofre you say it, I know that a start up company can’t spend $10K or $15K a month on advertising. I started out spending $50 or $100 per month on advertising. You need to start small and as the business picks up steam, then increase the advertising budget to match the business increases. Your hardest decision about advertising will come when those “hard times” that we talked about come (and they will). It’s almost a paradox……..business is down and you’re making less money, but you’re still spending the same anount on your advertising. You WILL want to slash your advertising budget. Try to avoid that if at all possible. As I said earlier, if nobody knows about your product or service, they can’t pay you to provide it to them. If your profits are down and you cut your advertising budget, then your profits are probably going to shrink even more because your company name isn’t getting to as many people who want your service. In times like this, we are forced to spend a great deal of time studying where our advertising dollars are going, and trying to formulate a more cost effective way to get our company name out to more people for the same dollar.
Those are just a few of the literally hundreds of things that people need to think about when trying to get their company off the ground.”