Thursday, February 18, 2010

What Happens when People Fail?

In a great book I just finished reading, Hard Facts, Dangerous Half Truths & Total Nonsense, the authors Jeffrey Pfeffer and Robert Sutton remark, "The best diagnostic tool – when we wanted to learn about a company quickly – is to ask what happens when people fail?"
  • If employees come to you with a hang dog look, when they are coming to say they screwed up, how do you react?
  • If you blast them like J.C. Dithers does Dagwood, how often do you think they are going to bring up projects that are starting to go awry?
  • If you claim to have an open door, but woe the person who comes in with a problem...
  • If you are known for your 'moods' and the employees seem to be away when you are angry...
  • (If your management team is guilty of any or all of the above, it reflects on you as well!)
All these provide every indication of what type of company you are running.

The only employees who never make mistakes are those who do nothing at all.

If you don't know the answer of what happens when people fail, have a friend come in and ask the employees. You might not want to hear the answer - but your company will be better off if you do.

Wednesday, February 3, 2010

Spring 2010 E-BASIC Microgrant program for Stillwater and Ponca City

The Spring E-BASIC microgrant program is taking submissions from entrepreneurs.

The E-BASIC provides small grants up to $5000 to new businesses in the Stillwater and Ponca City areas. There is a simple proposal/application required. The funds are to assist in startup expenses.

Also included with the grant for Stillwater company's is a 6 month virtual tenancy in the local business incubator, providing business consulting expertise, conference rooms and access to our programs and training sessions.

More information regarding the program.

Applications are due by April 9th. The program is very competitive and there are only a limited number of grants - so get your submissions in!

Tuesday, February 2, 2010

Of cows and milk

I was recently talking with a client who has a piano tuning business. Q: How is the piano tuning business? A: it is flat. (Sorry!)

Anyway, he had just finished doing a very minor adjustment to a piano he had tuned the previous summer. So it was an account he already had. The issue is whether to charge the church for 20 minutes of work, or just tell them thanks and hope they do another piano tuning this next summer? In a service business - is your time always something you charge for?

On the 'always charge' side, support includes:
  • there are costs of time and effort getting to the client;
  • your knowledge is what makes the job easy/short, so why should you discount it;
  • if a client gets used to you fixing things for free, they won't pay later for larger items (or 'forget' your free service).

On the 'sometimes not charge' side, support includes:
  • if you nickel and dime them, they are more likely not to call on something small - then when the big expense hits, they will balk at your cost;
  • there is a perception, unfair though it is, that if it takes you 5 minutes to solve something, it should not cost or cost very little;
  • service businesses are run on repeat business and so you take care of them to keep them long term;
  • it costs more to gain a new account than keep a current one happy.
Both have their merits.

I lean towards not charging someone for small services. If they expect to be charged, and you don't, their surprise might just jar them into recommending you! Give them an invoice for what the work would be, and mark 'PAID: thanks for your continued support!' on it. I want them to think of me whenever they think of the service I offer. Think of a person whose heater needs a minor service and the cost of a service call will be difficult to handle (we've all been there) - and you all say no charge.

If you don't charge, put it down as a marketing expense and track it - be sure you are not giving away too much. You won't be any help if you are out of business.

That said, some services are irregular and you might not see the same customer ever or rarely. In those cases, a middle road might be to charge a nominal amount for quick jobs - $10 for 10 minutes up to 30 minutes, then standard hourly rate.

Be clear on how your business operates and you will come to a decision you can feel good about.

The title of the post refers to the old adage about you can't sell a cow if you give the milk away for free.