Forums: Discussions for entrepreneurs and small business.

So how come you want to start a business? The obvious answer is that you want to make money. Fine...that`s a good thing, and it`s usually the reason everyone has for putting in the work and time.

But how does that money relate to other things?

For example; how high will you elevate making money in relation to a quality product? How high does making money come in relation to getting return customers?

Suppose you have a source for 25" televisions where you can buy them for $10 each. You can sell them for $50 each and make a killing. The only problem is the TVs die after two days of being turned on. You can sell thousands in that first week but you`ll never get another customer after the word gets out. It`s basically a con game.

Does your quality matter? How much? When there`s a seeming conflict between making money and high quality, which one wins?

What if you have a business that`s making money and growning. You`re successful, and you want more money. So you hire younger people who don`t have the knowledge to demand higher wages. You cut your costs, and your on-the-floor salespeople now have no product information. Would you rather make the money despite the growing number of customers who can`t get questions answered?

One of the Sloan brothers` basic steps to starting a business is to have a Life Plan. Part of that plan---the reason you want a business to affect your life---is understanding what values you assign to different things.

Some people want to start a business to fix the world. Others want a successful business to "give back to the community." Plenty of people want all the money in the world, one way or another.

So yes, making money is the starting point of opening a business. It`s not always the end goal, though. How do YOU relate the money you intend to make with other things? What other things are there? For example, how do you relate money to:

• Product quality
• Product availability (in stock versus backordered)
  
• Customer service
• Product support
• Repeat business
• Ethical sales practices (standing behind your product)
• ?? any others? .....
  

A good rule to go by:  Do not provide a service or sell a product that you yourself won`t use.  Be your own customer and you will right away  see if there are shortcomings in your product quality, service policies, or sales process.  In the software world this is called "eating your own dog food" (why do I always end up on the subject of dog food???)

Would you put that $50 TV in your own living room, knowing that it will only last 2 days?

 

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Oleg Issers | StartupNation.com Web Team

50% of computer programming is trial and error. The other 50% is copy and paste.

Great question Craig!

First of all, I am still struggling with what the H E double hockey sticks it is that I am doing. A little history on our start. I started this business with a huge need to make money and make it fast. If anyone has visited our website and read the "About Us" section, they will know that my trying to start something came in the middle of a long, long workers comp battle. I don`t go into a lot of detail on the site, but my hubby was injured. It happened at work, he went to the hospital and required surgery. His employer balked at a workers comp claim and we found ourselves in a huge battle. It took nearly 2 years to get the judgement where they were ordered to pay. Today, he has had about 5 surgeries and they are still working to get him back to work. 18 months into this, with no pay at all from him, we were on the verge of losing everything we had worked all of our lives for, we had pretty much exhausted every avenue financially that we had and didn`t want to tax family or friends. I had to do something and jumped in head first.

I had thought about doing something with food for years, but, when things are good, who in their right mind creates work for themselves. This was sheer desperation. As I thought about what I wanted to do and started to put things in place to get started, the words of an old boss of mine came to mind. He always said in business you have to offer 3 things, Quality, Service and Price and the purchaser should expect 2 of them. If they choose Price as an option, probably won`t get the best quality or service, choose Quality and it won`t come with the best cost. They feed off of each other. I made up my mind, then and there that we are in a different world these days, and to be successful and make this work, I was going to need to find a way to offer all 3. I believe we have done this.

Sorry for the whole novel, but, in answer to your question on the importance of quality and would I sacrifice the quality of my products to make more money? NO WAY!

We are producing a great product, offer great turnaround and believe we are very competitively priced. Our supply costs go up and down constantly. I have been able to continue to produce a high quality product and hold costs the same for the last few years. We have a huge base of clients that return time and time again and I appreciate that. It is because of customers like this that we made it thru a very difficult period in our lives and because they continue to return to us, we are now able to take a breath and begin to enjoy some of the things we once did. I would never, for any reason jeopardize the quality, and service, that we offer. I truly believe we are leaps ahead, due to the quantities we are selling and will make more in the long run, based on the quantity sold, then we ever will by reducing our quality and making more money.

If you cheat your customers, soon you will not have any customers!

No customers = No business!

I think many folks here on SuN understand the difference between conning someone and being authentic.

The issue is easy when it`s something blatant like selling a $50 TV that you know will blow up. Plenty of people do that, make some money, then move onto the next set of cons.

But as you move into the so-called gray areas, it`s not so cut and dried. For example, suppose you make some sort of furniture. When you started, you used a certain high-quality type of screws. Then the business begins to grow and you realize you could "just as easily" use lesser  quality screws.

Who would know, other than you? The furniture isn`t going to fall apart, it`ll last, it`ll look the same, the wood will be fine. Does it matter? Is it "cost cutting," or is it an "operations savings?"

The example is in the hardware and quality side of things. But there are many other decisions that begin with the business, then carry forward as that business lives and grows.

I`m interested in how many people, at the startup phase of their entrepreneurial venture, are consciously focused on the specific issues of how money will relate to these, perhaps more "intangible" aspects of running a business? Do you sit down and explicitly state what your policies will be on customer service, now, and into the future? Do you examine what might change as the company hires 50 employees?

Lots of people say, "think Big!" Fine. So now your company is generating $1-million a year in revenues. You`ve got storefronts in 20 cities, and a payroll of 125 employees. What policies will you have set today that will still be in place then? Why? How much does the money you earn relate to the way you`ll do business?

Consider companies that face the decision of going public. At that point, they have much less control over these types of policies. So why do they go public? Isn`t it because they want to expand and earn more money? That`s a good thing! But what if going public means losing their corporate culture? What if the stockholders demand that instead of a wood handle on that carving knife, they move to an imitation wood, made in China?

Then it`s aware that the stockholders do not share the same dream as the owner. It doesn`t mean the company will go to pot but can the owner accept that compromise? If not, then the owner should be firm on how the company is run or asked to be bought out. I know not that simple, but it is his company.

And good points about establishing and outlining a culture when you begin a business. I don`t have a plan but I do instill quality and customer service in everything I do. It is stressed in my marketing literature. Since I am kind of OCD, if I am to bring on employees, there would be an employee handbook to JDawg Design!

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Make it count! My Passion: www.jdawgdesign.com - My Rush: www.wyliephotos.com

Oleg,

A good rule to go by:  Do not provide a service or sell a product that you yourself won`t use.

Good Point. I think that is why I`m having a hard time determining if I want to be an entrepreneur.  I`m not a very material person, so it is hard for me to even consider selling consumer goods.  But still, I could always use a little more income.

Money, Freedom, and Self-Rule are major reasons why people start their own businesses.  But of all the small businesses that I`ve known, the successful ones are the ones where a lot of pre-planning was done and where the passion was contagious.  Most of these businesses sold very common products, like car window tinting and car stereos, a small line of food products, or specialty shoes.  I think that is important.  I don`t think you need to be unique to be successful.  You just need to have a product at a price that people will pay.  And if you back it up with good customer service, then customers will find you.

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Change creates Opportunity Opportunity creates Risk and Reward But, Who creates Change?

I am an entrepreneur not because of money, but because I`m too much of a pain in the ass to work for someone else. (It`s just who I`ve been since I was a child ... I butt heads with authority figures.)

When it comes to money, I`m very bad at "making what I am worth" because the money isn`t the motivating factor for me.

Quality ... quality is the motivating factor. Accept nothing less than perfection or don`t bother doing it. This is the same "personality flaw" (as my teacher in grade school called it) category that results in the first point above.

We`ve got some good comments here, and people understand that "money" isn`t the sole purpose of a business in all cases.

What`s interesting to me is that, these days, so many corporations have become locked into only the money. It`s the basis for what I would call profiteering. The money becomes an overriding purpose to all things, where all things become the slave to making more money.

Yet the cottage industry sector tends to be running on all the other reasons for having a business, with money being important but not the main priority.

I don`t think it`s about being material-minded. More so, I think we began to see in the 60s that life is about more than making money. Lots of people are idealistic in their youth, then lose those ideals and become more material-minded as they get older and accrue responsibilities. But in the past 40 years, I think we`re seeing an increase in people who want more out of life than money.

The issue here, and the point of the conversation has to do with how specific are you in this analysis? Do you have anything written down, or some sort of actual statement about your evaluation of money? Is it part of a mission statement, or some sort of personal credo?

When we`re small, struggling, and just starting out, we also usually are a single-owner business. We`re the only one making all the decisions. Then we hire 1 person, and we can pick and choose, spending lots of time finding a "friend" who`s also an employee.

But there comes a time when we have to start delegating. We hire an HR manager, a department, and we have many employees. We don`t anymore know everything about everyone, and we`re not involved in every single, daily detail of every process and transaction.

At that point, how do you ensure that money isn`t going to be the all-consuming reason behind everything the company does?

>I don`t think it`s about being material-minded. More so, I think we began to see in the 60s that life is about more than making money. Lots of people are idealistic in their youth, then lose those ideals and become more material-minded as they get older and accrue responsibilities. But in the past 40 years, I think we`re seeing an increase in people who want more out of life than money.<

I find it ironic that so many are willing to exploit anything to "pursue their passion."  Catch 22, I guess.

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Scott Watson.::.

Acme Data Online Backup Service     

Don`t Wait Until It Is Too Late To Recover Your Data

How is it either exploitation or ironic? I`m curious. I don`t see the "Catch-22" in this case. :-)