7 Business Owner Sins

There are 7 deadly sins you can do that will kill a deal and hurt your business. They are:

1. Not meeting the client’s expectations
2. Mishandling a client crisis
3. Taking on more than you can handle
4. Putting all your eggs in one basket
5. Up cash creek without a paddle
6. Treating your employees as employees
7. Not Planning for yourself

Any one or combination of these can not only kill the partnership, but have the ability to take down your company as well. We’re going to take a bit of time to talk about each one of these, in this lesson we’ll cover the first two.
Not Meeting Client’s Expectations
It’s essential you give your client’s exactly what you promised during the negotiation portion of your relationship. If an event does happen where there is no way to meet the client’s expectations, not only do you have to find a way to fix the situation, but you also have to find out where it all went wrong.
A couple of things could have contributed to this problem:

1. Bad salesmanship. This could mean the salesperson was trying too hard to seal the deal and didn’t listen to the client’s needs.
2. Lack of communication. This breakdown occurs between the salesperson and your operations department.

In order to avoid these mistakes, you need to put a clear plan of action into place that all of your sales staff needs to follow:
·       Think before you speak.
·       Give yourself a break.
·       Perfect your process.
·       Pre-format over-deliverables.
·       Stay hands-on throughout the entire process.
·       Define success.
 
Mishandling a Client Crisis
Crisis’ will happen, but how you respond and fix them will define your company and interaction with your clients’. You need to respond quickly and effectively. This will help you gain even more trust and confidence from your client.
Some simple tips can help you deal with any client crisis:
·       Take responsibility and apologize no matter who is at fault.
·       Act swiftly and effectively.
·       Step in and take control of the situation.
·       Never point fingers or place blame.
·       Stay in constant communication with your client.
·       Stay calm throughout the situation.
·       Keep your eye on the ball.
 
Taking on More than You can handle
When you take on too much, your business can’t keep up and therefore you can easily lose control of everything and find yourself barely functioning. You want your business to be successful, no doubt, but you need to have a plan for how you will handle the growth. Your clients expect great customer service and highly quality products/services, they don’t know or care about your behind the scenes operations to get those things done.
·       Look for these signs that you are taking on more than you can handle:
·       Clients’ needs aren’t being met.
·       Employee morale is low, clients are upset and you’re in a panic.
·       You have to react in emergency mode to save accounts.
·       Your current clients are suffering from trying to keep up with new business.
·       Profits are going down.
·       You are just trying to pick up the pieces of your business.
·       Your clients/customers leave.
·       Resources are being reallocated.
 
There are six steps to this plan:

1. Bring in your best team and have them all help to meet the clients needs.
2. Review your operational system.
3. Anticipate future problems better.
4. Communicate better.
5. Include costs in your quotes.
6. Always have a back-up plan.

All Your Eggs in One Basket
It is common for people to focus one big client as they produce 80 – 90% of the revenues.  Even though you may have other clients, this big client might demand extra time and you let those slip.  It is not uncommon when this happens that you lose customers and are now dependent on this one large client.  What if there is a downturn?  These steps can help.
If you’ve ever mishandled a client, you could drive away potential clients as well. In order to keep balance and prepare for a strong future, there are a few things you can do.
·       These things include:
·       Stay in the loop and try to know what’s going on inside your fish company.
·       Constantly reinvent yourself and stay at the top of your industry.
·       Stay exclusive.
·       Try to secure multi-year commitments and contracts.
·       Spread your contracts out.
·       Price your products/services correctly.
 
Up Cash Creek without a paddle
Even when business is good there’s still a change of running out of cash flow. You have to always be prepared for a slow in sales or a surge in expenses. One of the keys to balancing your cash flow is to get your clients to pay on time. This can seem like a nightmare, but is absolutely essential to a successful business.
Here are some tips to speed up the payment process:
·       Always send invoices on time and adjust your records for potential audits.
·       Learn how the client processes payments on their side and find out precisely where to send invoices.
·       Find out who’s in charge of processing orders and payment, so you know who to contact if needed.
·       Have a follow-up procedure in place, just in case.
·       As a last resort, call your contact to ask questions.
·       Always make sure your invoices are correct before sending them out.
 
You also need to make sure your cash flow is protected. You can do this by:
 
·       Always know which accounts need paid and when.
·       Negotiate with your suppliers for the lowest cost possible.
·       Have a bank contingency plan in place.
·       Build your own inventor network.
 
These are all great ways to protect the cash flow of your business and prepare for fish transitions and slow sales. These last few lessons are all about finding and catching your big fish clients. These clients are essential to your success and your need to take the time to work through each of these steps carefully and correctly for the best success.
Don’t treat your employees as employees
You can’t do this alone.  As one gets stressed and especially if working with a large client or group of clients, stress will grow.  As you work with your employees it is common to think and treat them as employees.  Doing this will create animosity and you might lose them to the competition and or ruin your reputation as they don’t feel welcomed and appreciated.  A simple steps is to talk to your team in details about he parts they play and show them respect.  Treat them with respect and like family.
However, the danger here is getting to comfortable with them and relaxing.  There is a fine balance you need to walk and having open and regular conversation is key with your team.  If there is a problem then it needs to be addressed openly and honestly without any emotion.  I use a tool called the Whole Message Model for this.

• What you have seen and observed
• How does this make me feel?
• Here is what I think we should do to correct it
• What you think about this and the process?

The more you create communication the better.
Not Planning for yourself.
Finally this is the most dangerous thing that people miss.  They don’t plan for their business or themselves.  There are six things you should be doing:

1. A formal business plan looking at strategy, competition, markets, finances – Do this annually
2. A 2 page Quarterly plan – updated and changed quarterly
3. Communicate goals and engage team with goals
4. What are your personal goals for the year? – A detailed and formal yearly plan for your personal life
5. A quarterly personal goal achievement
6. Review and assess monthly – How are your business/financial goals meeting your personal goals and what are the effects to both.

These are things that can hurt you or if aware can make you stronger.  Are you having a problem with mastering these?  What can you do differently to change them and be stronger?