Built 5 businesses so far, sold 4 of them to the employees as ESOP operations, and closed the doors on number 5 because the employees were turning it into their concept of an ESOP stealing me blind.
I can tell you it's a hell of a lot easier to run a business you knew damn little about walking in the door than it is to run a business you know the craft walking into. I can also assure everyone the best mechanics make the worst shop owners, be it automotive, electronics, guns, computers or construction.
Here's a short list of the customers you'll encounter.
1) Mr Easy wants exactly what you have in stock, pays cash, and repeats every week.
2) Miss Blonde- Buys what you tell her, pays by chargecard, goes away and is never heard from again
3) Joe Sixpack- Takes hours of your time inquiring about the product, finally buys, calls 23 times for additional information.
4) Mr Painintheass- Came in 9 times comparison shopping, finally bought after you came down on price and is now calling 3 times a day because of paint defects and because it really isn't what he thought he wanted. He wants to return the merch after you already replaced the item in your inventory, and he wants a full refund. By the way, he scrapped the packing and instruction manual.
5) Mr Iwantmore- Bought the product, paid 10 days late on the 30 day account, he wouldn't buy unless you gave him 30, and now he wants the package upgraded to include the features he wouldn't buy to begin with. After all, it's just a software change. He has a lot of friends he can turn onto your product if he is happy.
6) Mr Constantlylate- He can make another payment on his account if you ship him another 700 pieces on his ongoing order that you put on hold because he's already late 45 days late on the Net 30 account. You've got the pieces in inventory anyhow, so work with him. By the way he is sending you another RFQ on a big job. If you give him a good price on that you and he can both get fat.
7) Mr Awcrap- The job is 90% complete and he's on the phone mad as hell. Your installer is a complete Phuckup according to him, and he wishes he never met your company. (jump in the car and go see him, this guy can become your best customer)
8) Your wife's cousin Ernie- Can you get it for me at cost? Ernie already has comitted to resell whatever he wants to buy to one of your potential customers, at 10% below the price you quoted the customer.
9) The Theif- very common among government and large corporation buyers- Calls for a quote, has vague specs, requires your time to come to his premise and fully develope and write a spec for the job. Then takes a black marker to your submission, crosses out the specifics you wrote along with your letterhead to make the spec generic, and sends your spec to 27 potential vendors as a RFQ. This ******* should be shot after he is whipped in the parking lot.
10) The guy of your dreams- calls knowing what he wants, you have it in stock, and he sends his truck to pick it up. Since he doesn't have an open account he sends a check 3 days ahead of the pickup so you can verify payment is good. He will be your customer for the next 10 years, and send you a quart of Cheves Regal every Christmas. Then, he has a heart attack and his kid, the MBA, takes over running the business. Six to nine months later his company owes you $97,331.08 and instead of the check the kid promised you get a Bankruptcy filing notice.
11) Mr Badcheck- this guy is a joy of dimension unforseen. He called in a large order, and since he didn't have an open account was more than willing to take delivery COD Cash or Certified check. The UPS package car driver took the certified check, and it arrived at your door 24 days later. Six days after that, Sally at your bank called, that certified check you deposited bounced so high the bank is calling to let you know they need a deposit within 2 hours or they will have to start bouncing your checks, because your line of credit (something you would have refused if you knew squat) is maxed out, and the bank has put a hold on your deposit acount. You call Badcheck and findout the phone is disconnected. When you calm down enough to call the local cops in his town they tell you he did it to 27 other people and hasn't been seen for 2 weeks. They are pretty sure he was a fraud artist, but they aren't going to devote any assets to looking for him because technicly, it's a civil matter, and the crime occurred outside of their jurisdiction.
As you slam your thumb in the car door heading into the bank to talk to the loan manager you realize you still need to pay for the product Mr Badcheck took you for. At least now you know how the seller on ePay last week was peddling the units on Buy ItNow so damn cheap.
12) Lawyers- Forget it. Unless it's a cash transaction at full price you can't afford to do business with lawyers.
13) Doctors- make lawyers look like charms. Hell they won't even take calls from patients, and most of them don't pay their golfclub memberships on time either.
14) Tony Soprano - odd as it may seem, Tony is a good customer. You sell him what he needs, he pays cash, no receipt necessary, and he's down the road. Just remember to hold to the same terms with his associates.
15) Large corporations - if you can't double the normal price let somebody else have the sale. Their buyer knows more about your business than you do, and he knows how to squeeze your nuts and make you cry. His job is on theline every day, and he keeps what the company actually pays to a minimum.
Honestly, I think I need to do a book on business. The posts I see on boards for several of my intrests indicate the majority of people wanting to get into business are damn near clueless. Most don't have a basic understanding of DBA, Sub S, and LLC, but there are 20 people posting on what their third cousin's wife the waitress in the local choke & puke overheard from the halfassed accountant who comes in for coffee.
Customers, the ultimate customer group that will kill a business come into gunshops. Any gunshop owner who fails to realize the shop is a hobby is completely screwed.
Training costs, Motorola had their MRO shops by the balls for years, tecks needed to attend training, shop paid for training, shop paid for Motorola's costs. Tecks caught onto the pay me more or I move on game. Motorola controled what they paid for on warranty and servicing their repeaters. Motorola made SnapOn look geenerous. Every 6 months the factory clown arrived to tell the shop what training he needed to get next. Boy was Motorola pissed when the factory guy walked in and saw 2 competing brands on the salesroom floor.
Salesmen- well those are a different breed of creature. Herb TarlocusAmericanus. Been thru a few of them over time, and have learned a few things. First, unless you're selling Master Card priced merch only, the damn customer MUST first be qualified as a potential buyer! No if and or but about it. It didn't take me long to sit down with sales reports and figure out the salesman was spending 2/3 of his time on customers who couldn't finance the purchase. From then on, his first salescall was to qualify the customer and get a general idea of the job. No qualify, no second sales call. Here's a list of leasing companys, if you find one that will take your paper get back to us. It works out a lot better.
New employees, well I developed a whole new way of hiring people. If the newhire is going to work with Bob, Bob does the initial intervue. Bob don't like the guy's potential find another body. It eliminated a lot of turnover on new hires.
Retention of trained people - not much of a problem since I had a reputation for getting bored with well running businesses and turning them into ESOPs. People looking to be potential owners have a lot more intrest in being good hard workers.
Cost of operation, begin with the absolute knowledge every buck you pay an employee is $2.50 minimum somebody has to bring into the cash register.
I think the most important part of any business plan is the exit strategy. How the hell am I going to get clear of this turkey if it turns to **** and how bad will I get hurt? If you don't know that you're screwed.
What I know about cashflow is that it flows out of my pockets faster than it flows in. I must be good for the economy!
We have an election year comming up I could go on but I think you get the idea and we are doing everything out of pocket no loans no lines of credit with suppliers ( We did this on purpose ) . I will start a new thread with our company web sight link as I would actually like some feedback from yall as consumers.
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