January 2016 was our 10 Year Anniversary. I would love to say that over the past ten years, I now have all the answers to running, growing and nurturing a business. But, just like with children, a business doesn’t come with an instruction manual. You have to learn as you go and sometimes the “going” isn’t much fun.
If you have ever experienced “Buyer’s Remorse” when buying a house, multiply that feeling by a million when you buy a business. You wake up the next day and say “What the Heck did I just do?!”
What I can tell you is what I have learned NOT to do. Sometimes the lessons were brutal; emotionally, financially, physically and spiritually. There were days I cried and thought I must be the dumbest person on the planet. Why were some of my Signarama siblings flying past me in sales? How could they afford to buy all that equipment? Why is it so hard to find employees? Why do my computers hate me and keep having issues? Can’t everything and everyone just work and get along? Where the heck is the “Easy Button”?
Buying into a franchise, such as Signarama, you would think that there is a magic formula for success. Put up your sign, open your door, have an Open House and ribbon cutting. Just do what they tell you from your two weeks of training and the customers will come. BOOM! You’re making signs.
HIRE SALES STAFF FAST!!!
Luckily, I bought an existing Signarama location and had an inside staff that knew what they were doing with making basic signs. There were existing customers to keep the shop going. This allowed me to go out and make sales.
Well…I thought I was making sales. I was muddling through and luckily came from a sales background, so the gift of gab and a little BS thrown in went a long way. Looking back at all my “rookie mistakes” makes me cringe.
But I also hired two sales reps right away, as this is what the Franchise told me to do. So there were three of us running amok without a clue. We would meet at the end of the day and try to figure out from our notes and collection of business cards, what the customers wanted. We were fairly clueless and it also soon became apparent that one of my sales reps was doing more harm than good with representing my company.
LESSON LEARNED:
Be the face and voice of your company for sales and marketing when you first start out. Don’t just hire for the sake of “feet on the street”, as this can backfire on you. You need to coach, train and monitor sales reps very closely. First impressions and relationships are everything!
THE CUSTOMER IS ALWAYS RIGHT
This adage has been used and taught in schools for centuries! It was engrained in my brain and I was a believer. If the customer was unhappy, it was the business’ responsibility to fix the problem and make it right.
Train your staff to respond better. Do anything and everything to keep the customer and make them happy. Losing a customer was a Cardinal Sin and must be a sure sign of a poorly run business.
LESSON LEARNED:
Customers should be encouraged to exit for one of three reasons: They’re costing you too much financially, taking a steep emotional toll on you and/or your staff, or they do not value the services that you offer and you feel like you are being used for your creative ideas.
Sometimes the direction your business takes as it matures can no longer provide the product or service a customer needs. Financial decisions may dictate that it is simply costing too much to maintain the client. We let go of a prestigious client whose projects were so tedious and time consuming it was stressing out everyone. I was so nervous about filling the “void”. The next month we had the best month EVER! We were able to devote more time and effort to our customers who love and appreciate us and helped them grow their businesses.
SELL VOLUME – PROFITS WILL COME
In every sales driven organization the “top performers” are revered. Just sell! Bring in revenue and profits will come. It was drilled into me to only worry about the “Break even number”. What do you need to sell to cover your overhead and expenses? There were assumptions made that cost of goods, payroll and overhead would all be a certain percentage. If you stayed at the 80/20 rule with Signarama, which means 80% is produced in house and 20% is outsourced, life would be good.
Well…I can tell you now…Life wasn’t so good then. It is demoralizing to “break even”. A business needs to reinvest in itself. Paying employees, rent, vendors and not making a dime for yourself or having funds to cover unexpected maintenance is the worst. Can you meet payroll? Tax man cometh? Sleepless nights and anxiety were my constant companions. I was never so happy to lose these two BFFs.
LESSON LEARNED:
Remember the story of the Tortoise and the Hare? Well, that story holds true in business as well. Don’t just run off and sell everything and anything simply to make sales volume numbers that look fabulous. In the end, when the dust settles, you run out of cash because you are not profitable. I have seen many “Rookie of the Years” in Signarama close after their second year.
Analyze your cost of goods and overhead. Make sure you are making profitable sales. Realize that YOU are an integral part of that product or service. You and your staff are the added value that the customer is paying for. Your ideas, creativity, on time delivery, and customer service are worth every penny to your clients. This is the perceived value of your product and service. Don’t be afraid to charge for this.
Revenues make a business look good…Profits keep a business healthy.