What’s important when getting started?

A young man I know is getting started in business. He provides handyman services for homeowners. In a display of wisdom beyond his years, he asked his Facebook connections for things to read and people to talk to re: business advice.

Getting started means wearing several hats

Running a business on your own means you get to do all the jobs, including:

  1. Getting organized.
  2. Deciding who you are best suited to work with.
  3. Deciding who you shouldn’t work for even if they’re throwing $1000 bills at you. Almost everyone does this at least once because we start out under the illusion that everyone can be our customer.
  4. Letting people know that you’re available to help them. This includes discussing what you’re really good at and staying away from everything else (ie: learning to say no).
  5. Pricing your work.
  6. Selling / reaching an agreement to perform work.
  7. Doing the work.
  8. Following up.

The hard work

When getting started in your own business, there’s some “hard work” that has nothing to do with your service. I say “hard work” because they’re often things you don’t want to do, don’t have the time or money for, or don’t see the purpose of.

This includes “Getting organized”, which include making sure your bookkeeping is under control, getting all the permits and licenses that you need, doing whatever is necessary to make sure you are operating legally wherever you live, and getting the proper bonding (if needed) and (definitely needed) insurance to protect you and your customers so that if and when you make a mistake, it doesn’t cost you everything you own now and ever will own.

These things will seem like a pain, but the reality is that the pain they cause is much smaller than the pain created by not taking care of them.

Marketing and sales

Items two through five may generate an “OMG, seriously?”

A few thoughts about them…

If your typical happy customer is married, lives in 59912, works outside the home, and has a spouse who travels, then you’ll want to focus on identifying and attracting those specific people to your services. Don’t waste time advertising to 100,000 people who don’t “fit the profile”.

Come up with a one page (both sides) piece of paper that tells EXACTLY what you are great at (and what you actually want to do). Include your contact info.

Get a box of your business cards made into fridge magnets. Old school, but people will leave them on the fridge forever once they trust you. Even if you’re in their phone contacts, that fridge magnet is in their face every day. Make sure the visible side has your name, phone number, name and what you do. It’s OK to make a special card for magnets.

Figure out what you need to make from each job, including the expenses you might not be thinking of, like insurance, fuel, uniforms, marketing, downtime, taxes, etc. If you do everything else right and mess up your pricing, you won’t be happy.

Be humble, but don’t be shy. If you’re great at something, simply tell people you love to do that work.

As you prepare to leave the customer’s home, ask for more work. Say “Is there anything else that you’ve been meaning to get fixed?“, then let them think long enough so they’re the next one to speak. If they say no, say “OK, I’ll be happy to come back if you something comes up.

Ask your mom, your grandma, and the moms of a few of your friends these questions:

  • “What frustrates you about repair guys that you’ve had in the house?”
  • “Who is your favorite repair company?”
  • “Why are they your favorite? What makes them so special?”

I can predict the answers, but I want you to ask anyway. YOU need to hear these words coming from folks who resemble your customers. These conversations will help you prepare to sell to the customers you want. It isn’t about convincing them to do the work. It’s about showing them you’re the right guy for them.

Do the work, follow up

I’m not going to tell you how to do the work, but I will suggest how things work while you’re at the customer’s home.

Show up in a clean truck.

In Montana, this isn’t always easy, but do the best you can. Your rig sets a first impression when you arrive. It doesn’t have to be a $60,000 diesel rig. It just needs to be clean.

Park on the street.

You don’t want to park in the customer’s driveway and drop a bunch of mud, gravel and whatever else you’ve been driving through that day. You also don’t want to be in the way when someone gets home, someone needs to leave, etc.

Show up in a clean shirt that tucks in.

This means buying at least 3-4 uniform shirts. Get your company name, your name, and your logo sewn onto them (if you have a logo). If you want to go a little crazy, put a big logo, phone number and website address on the back. No matter what, make sure your company’s name is visible through the window of someone’s front door. You want the shirt to tuck in because repeat customers don’t call you because they like seeing your rear hanging out under an untucked shirt. Enough said.

If a job trashes a shirt for the day, change into a clean shirt before arriving at your next job. Yep, you might have to carry several clean shirts with you. Pro athletes don’t take the field in dirty uniforms and neither should you. Show up looking like a pro every time. Meanwhile, you’re a walking billboard.

Buy a box of those silly little shoe booties.

If you walk into someone’s home leaving a trail of muddy, snowy footprints, I guarantee you won’t be asked to come back. Yes, it’s a bit of a hassle to pull them on and pull them off repeatedly, but it beats losing a customer you worked hard to get. You want to be the service they choose first. When some other handyman asks for their business, you want them thinking “Nope, never using anyone but (that guy).

Make it like you were never there.

After you’ve left a customer’s home, you don’t want them to find any evidence you were there except for the repaired item, a receipt, and a business card. If you made a mess, clean it up. If you tracked something in or the job generate a mess, be sure you have the stuff needed to clean it up. If someone has to clean up after you, they’ll never ask you to come back.

Sign up for Square

… or a similar service that lets you get paid via card using your phone. Many competitors will take credit / debit cards. Yes, it will cost you a few percent of your sales, but it will get you sales as well. Be sure to put the card logos on your business card and one page brochure.

Find customers that can help you during lean times

One of the frustrating aspects of managing rentals is dealing with maintenance. Become the dependable guy for people who own rentals, or rental management firms and you’ll have business that keeps feeding you when you aren’t sure where your next gig will come from. Think about other opportunities similar to this.

Follow up

Call or text the customer the next day and ask them if everything is ok. Leave a voice mail if they don’t answer. Almost NO ONE does this. You will stand out by doing so. 1000 handyman services might read this and STILL, few of them that don’t already do it will start doing it habitually. If things went well, it’s a natural time to thank them and remind them that your business depends on referrals from satisfied customers. If they didn’t go well, it’s a chance to save that customer. Sure, you have to hustle a little, but people refer vendors who took great care of them.

Get some help with Facebook marketing

Your business is ideal for marketing to people on Facebook. Despite all the noise about Facebook data in the news, it’s important to know two things:

  • Most data was given with implicit permission that was granted when someone took a poll on Facebook.
  • This data has been collected for 100 years. Facebook’s is a bit easier to use.

For example, you can ask Facebook to put your ad in front of homeowners who live in the 59912 zip code who have a household income of $xx,xxx. You can optionally have them echo the ads to Instagram. You can have them eliminate homeowners who aren’t married and otherwise filter out people who don’t fit your ideal customer profile.

Few other advertising mechanisms can put your smiling face in front of *exactly* the right people, much less charge you only for the ones who click on your ad.

 Photo by Wonderlane

What does a new business owner do first?

Recently I received an email from a reader who said my blog made them feel like they had come in during the middle of a movie.

Why? Because they’re at the startup stage in their business, while many of my posts focus on existing businesses.

Fair enough. Let’s talk about startups.

The overwhelming load at startup can freeze you in your tracks. You’re just starting to learn how to market (usually). You may need to know where to find less-expensive supplies, how to introduce your product to customers and how to price what you make/do.

Best of all, you’re trying to figure out how to do all of this on a limited budget without feeling like your investment is as fickle as a bet at the horse races.

It’s a tall climb. It feels like there’s so much you’re supposed to do before you start and the list gets longer on opening day.

What Nike would say

The key is to start.

People freeze in pre-launch because they’re worried about everything being perfect…which frequently breaks your focus on starting. You may have heard this described as “perfect is the enemy of good” (or “of done”).

Don’t you need business cards first? Or a fancy color brochure? Or a sign? No, no and maybe. Where a home-based manufacturing or service business is concerned, the answers are likely no, no and no.

Permits: You need to take care of whatever permits, licensing and tax registration requirements exist in your state/community/neighborhood. Not optional.

Business cards, stationery, brochures, etc: I still don’t have a business card. I just haven’t gotten around to it. In my business, people who meet me almost always know or have heard of me – and that’s intentional. I make it super easy to find and contact me, yet I haven’t met many of my clients face to face. If you sell what you make on the internet, you might not meet your customers except at a trade show (trade show prep is another post). You may absolutely need a business card – but it shouldn’t stop you from opening the doors.

Is it an attractive model?

You might be just starting to figure out how to price your products and services. Typically, people in a new business start as low as possible, thinking that’s their “in”. Price should never be your only competitive edge. One edge, sure. Only edge? Never.

Setting a price depends on your business model. If your business model doesn’t makes sense financially on day one, it might never make sense.

Start by determining your fixed and variable costs. Fixed means “expenses incurred even if you don’t sell a thing”. Variable means “expenses that change as sales volume changes”. Of course, you’ll want to have some money left for your salary, taxes, utilities, marketing, support/service, and profit margin.

This requires knowing your numbers. Knowing what every supply costs, knowing how much time processes take so that you know your labor costs, whether you or someone else is performing that labor. Use a yellow pad, spreadsheet, whatever. Don’t get tied up by the mechanism. Start.

Note: Profit is not salary. More on that another day.

Don’t forget the locals

Everyone looks on the net for quality supplies at low prices, but don’t forget the locals. You might be surprised to find that you don’t need to pay always-rising shipping costs (because “free shipping” isn’t free) to buy beeswax from three states over because there’s a beekeeper in your community who can deliver it *today*.

You might have to buy online at first, but never stop talking to customers and friends about your supply needs. Find online communities of people who make similar products or serve similar customers. For handmade goods, the communities at Etsy.com are good and there are others out there in every niche. People in these communities are surprisingly helpful and will tell you things a website/catalog wouldn’t ever mention.

Feed your mind

No matter how insane my schedule, my daily ToDo list includes a page from Peter Drucker’s and John Maxwell’s daily readers. They’re a great centering read to start my day. Don’t underestimate the value of this.

Next in this series, identifying who’s just right for your porridge.

Making nothing but customers

sunday morning

One of the reasons that I see businesses struggling (or not doing as well as they could) is that they appear to work as if the profit from a sale to a new customer is more important than getting a new customer itself.

Recognizing the difference is critical to turning one-time visitors into long-time devotees.

Devotees. Not just customers.

What’s a devotee?

A devotee will bring their family to your place when they come from out of town. Not just once, but as many times as they can.

A devotee will suggest your place both to visitors and those new to the area and make the place seem like the only place worth choosing.

A devotee considers your place the (not “a”) dependable solution to fill their wants and needs – and when recommended to others, your work secures their reputation among their circle of influence.

Testing 1-2-3

One of the little things my wife and I do to “test” a new restaurant is stop in (often late in the day) for coffee and a dessert. Sometimes we’ll do this just to get out of the house for a little while after a home-cooked meal or a long day. We get to experience a dessert we probably wouldn’t make at home and escape a little.

When we do this, we’re often asked if it’s our first time to visit their place.

What varies widely (both here and elsewhere) is how the experience goes from that point forward.

Think about how you welcome new guests and how the locals and tourists might be helped differently. Don’t leave this up to chance. TRAIN your employees in the proper ways to pull this off, things to avoid, things to always include and how to add just a little personal touch of their own.

What really gets my attention on these late evening visits is how we are treated – especially the first time – when all we order is a cup of coffee and a slice of pie to share.

What happens next?

Consider the specific differences in your customers’ experience when visiting your place for the first time, when visiting it thereafter, and when visiting it at the point where several employees know your name because you visit so often. It’s important no matter what kind of business you run.

Why is it so important?

Because that first sale – especially that dinky little cuppa joe and slice of pie – is a critical first step to creating a devotee.

You might not feel like those coffee and pie customers are worth fawning over like everyone else (assuming you fawn). The thing is, when they walk out to the parking lot (or leave the drive up) for the first time, the impression in that first-time-customer’s mind usually determines whether or not they will return.

Perhaps with tourists, you don’t care, but you should.

With social review services like Yelp, UrbanSpoon and TripAdvisor (among others) to help *future* customers make purchase decisions, one-time visits by someone with a smartphone can pay big dividends or cost you visitors. Imagine the unseen revenue loss from a few poor (and deservedly so) online reviews. You’ll never know how many people didn’t visit because of a series of unfavorable reviews.

Even if you have no desire to carry the internet in your pocket, consider that as of June 2010, 45 MILLION people in the U.S. currently carry a smartphone. Every one of them is a little review machine just waiting to create (or destroy) your business’ karma. Collectively, those reviews can transform your business.

Keep in mind that’s roughly 1 of every 4 people you see.

Doing the math

A little “What 1 new customer means” math…

  • For your cafe: One visit every other month. Average ticket size: $50 (you already know your average lunch and/or dinner ticket size – if you don’t, you better find out).  That’s $300 a year. Over 20 years, that cup of coffee and pie eventually brings you $6000 worth of business.
  • For your small engine repair shop: 3 visits per year at between $75 and $150 per visit (or whatever your per ticket average is). Call it $100 to make the math easy. That’s $300 per year or $6000 over 20 years.
  • For your oil change shop: 4 visits a year. $40 per visit. Only $160 per year, or maybe twice that if you upsell *wisely* and don’t sell stuff just because you can get away with it.

Those numbers seem almost too small for you to care about, especially over 20 years…until you realize how many first-time customers drop in each day.

Now, with that number (for this month) floating in your head, let’s look at the math again.

How many first impressions do you get to make each day?

Don’t just make the sale. Make a new lifelong customer.

5 expensive new business mistakes and how to avoid them

Coaster
Creative Commons License photo credit: waffler

We’ve talked about how the “Stimulus Economy” is a great time to start a new business.

One of the reasons: Existing businesses in your desired market are likely to have downsized (ie: laid people off) or cut back on some activities, services or product lines that might not be their most profitable activities in some way, shape or form.

Perhaps they need a specific, expensive crew of staffers to deliver that service and while in flush times they can justify it, in the Stimulus Economy they cannot.

Maybe that means no one should do these things (or create them), but that’s an easy place to find product and service ideas. If nothing else, it might provide offshoots of those ideas that are even more profitable and worth starting a business around.

Armed with one of these new ideas (or new twists on the old ones), off you go to start a business.

Excluding the marketing, customer service and positioning things we talk about regularly…What are some of the expensive mistakes you can make?

Not following up

You’re new. You don’t have that many customers to begin with (maybe none). It should seem like common sense to keep up with them. If they start to wonder why you haven’t called, stopped in or replied to their email – it’s beyond “been too long”. Do you have a system – even if it’s on paper – for managing this process? You should.

Not hiring an accountant from the gitgo (ie: the beginning).

This seems like a luxury. The problem is that you make choices in the early days that can potentially haunt you a decade or more later particularly if you are wildly successful. LLC? C-Corp? S-Corp? Even that seemingly simple choice can make a huge difference depending on how your business is valued. Even if you only pay them now and then to do specific tasks, it’s critical to do some of these early things right the first time.

Not having a serious insurance person in your corner

In the early days, it’s not unusual to make mistakes. If you can’t avoid them, make them while being properly insured. When you talk to a prospective agent, tell them *everything* your business does and how you do it. Failing to mention that twice-a-year hayride at your guest ranch can be a one way express ticket to bankruptcy.

Not being organized

Part of this is included in the “Not following up” item and in the next one, but seriously – it’s 2009. If a yellow pad and a #2 pencil really is the toolkit for you to keep 100% on top of your business, that’s fine. Be sure to use it.

Emails, papers, phone messages, customer communications, invoices. It all adds up. A cardboard box in the corner is not the way to manage it. A two-foot-tall stack of manila folders that always seems to be scattered around the office isn’t either.

Not having a clear division of duties

If you have a small team in place, it’s easy to assume everyone knows what to do. Trouble is, that might work for 1 customer or 3 customers, but if you have 57 leads active – its impossible to keep things under control and know who is doing what and when. Result: Lost business. Lost prospects. Angry staff.

Twitter and The Echo Chamber

Echoe LosAngeles Graffiti Art
Creative Commons License photo credit: anarchosyn

Today’s guest post comes from Twitter founder Evan Williams.

During this Tekzilla interview, he was asked for advice to give to tech startup businesses. His response really applies to all new businesses.

Part of his response was “Do something awesome”, which might seem a bit obvious, but he made a very important point about what he calls the “echo chamber”.

Check it out. Maybe there’s something awesome in there for you to take back to your business.

PS: He mentioned that their API team is just two developers. Think about that for a minute, if you’re in the software biz.