The 10 Commandments of Entrepreneur Business Relationships
So you want to go into your own business?
Maybe you have been an employee for most of your career or you have taken an early retirement? Perhaps you have always wanted to be your own boss?
As one who has been in my own business for 25 years and is still going strong, I have made my share of mistakes, but have learned from them. Perhaps you can take advantage of my 25 years of experience as an entrepreneur.
Today’s business environment is brutal. If you are going to make it as an entrepreneur, the key is getting a keeping business relationships. Not only is difficult to get new business, your competitors are working overtime to steal whatever you have. Here are 10 of the key fundamentals of successful entrepreneurship. I call them my “10 commandments of entrepreneur business relationships.”
Thou shalt not price products and/or services unfairly
Thou shalt be mindful of the value concept.
Thou shalt not be an ostrich when it comes to your competition
Thou shalt be mindful of the levels of service you provide
Thou shalt not ever sacrifice the quality of your work.
Thou shalt watch for personality conflicts and address them.
Thou shalt adjust to new client/customer needs
Thou shalt take great care in billing clients/customers
Thou shalt keep accurate records of meetings and phone calls
Thou shalt regard communications as the most crucial of the 10 commandments
Try to price your goods and/or service fairly and be reasonable with your charges. Perhaps you are pricing too much or even too little. Make sure you know how sensitive your client/customer is to pricing. If you are basing your pricing on fees, be sure to review them periodically. Pay close attention to what competitors are charging. You can be sure your client/customer is aware of the pricing marketplace.
The value concept is based on the Benefits – Cost = Value formula. The key is the benefit your client/customer achieves from doing business with you. No matter how low your prices, if benefits are not there neither is value. On the other hand, clients/customers are often willing and happy to pay higher prices and fees if the benefits represent a higher value. Learn exactly what your client/customer seeks from its relationship with you. Be mindful of the opportunities of providing value-added services within the relationship. Create ways to communicate value. One good measure of the client’s/customer’s perceived value in doing business with you is if they recommend you to others.
Burying your head in the sand when it comes to your competitors can put your right out of business. Know who your competition is and be mindful of their distinctive competencies. If competitors have made any attempt to steal your accounts, be aware of the approaches they have taken because it will give you a good idea of your vulnerabilities. If there are major pricing differences between you and your competitors, try to determine if those pricing differences are justified. Monitor how much awareness and exposure your competitors are generating. This might uncover a marketing vulnerability that needs to be addressed.
Be aware and empathetic to the service needs of your client/customer. Make sure your follow-up is prompt. Answer all telephone calls and e-mails as soon as possible. Make sure there is an adequate of frequency in face-to-face or telephone contact. Do not overly rely on e-mails. If you have a “voice mail” or automated answering service, be sure it is handled effectively. Periodically monitor the service levels and make sure the recording works properly.
Make sure you have a quality control system in place. Learn from your mistakes but don’t make them over and over again. Turn customer complaints into ways to make the relationship even stronger. Be totally sensitive to client/customer complaints. Listen carefully to what is being said and thank the client/customer for sharing their dissatisfaction. Remember: as long and the client/customer feels he/she can complain and you will listen, your business relationship is on a safe footing. When that client/customer doesn’t bother to complain, the pink slip is probably in the mail.
Closely monitor the relationships between your account people and the client/customer. If there is a personality conflict, fix it. Maybe it’s the fault of your people or the fault of the client/customer. Be sure that New Business development person who might have brought in the account is not involved in the day-to-day activity with the client/customer. Clients and customers who are swept off their feet by the new business person often can be disappointed with the account management person. That new business person should disengage as quickly as possible from the account service relationship. Perhaps your client/customer has problems with the bringing on of a parade of account service people. If so, that should be addressed.
Providing value is a dynamic concept – it changes as client/customer needs change. It’s crucial to continually monitor and track the directions you customer is taking. It may require a commitment to grow with your client/customer and adjust either on the upside or downside your service to meet their needs. If your client/customer is going through difficult times, it may be necessary to put activities on “hold.” Periodic sessions with the client/customer are needed to understand the environment and directions the client/customer is taking and the service adjustments that are needed to address those changes.
One type of correspondence you can count on your client/customer to read carefully are your invoices. Nothing can reflect more poorly on a supplier of products and services as sloppy, inaccurate or incomplete billing. Special care needs to be taken before a bill is submitted. Crucial players in this process are: the individual(s) who develop the bills; the individual(s) who approves bills; the individual(s) who monitors payments; the individual in charge of collection if payments are not made in a timely manner, and the collection techniques that are used. Poorly handling the billing and collection process is one of the easiest ways to jeopardize a client/customer relationship.
After each meeting or phone call with a client/customer some written acknowledgment of issues discussed and actions taken should be communicated. This technique confirms timetables for production, deadlines and the individuals responsible. They should be produced and distributed to all appropriate customer/client personnel in a timely manner. Such reports provide accurate records of account activity and function as a reference device to confirm what was decided, when and if forward is needed, who will be responsible.
Communications is the “gatekeeper” for virtually all the other commandments.. Clients and customers are never lost when you can communicate freely and openly. Lines of communications won’t stay open forever, and one sure way to close or clog those lines of communications is making the same mistakes over and over again. Two final refinements of Commandment X: (1) NEVER lie to a customer/client and (2) NEVER promise something you know you can’t deliver.