Starting a business can be exciting and challenging. There are plenty of organizational questions to answer. It’s often fun to consider how you’re going to spend your seed capital – computers for the office, a cellular phone to keep in touch with your investors, board meetings in the Bahamas. In the beginning, business novices tend to spend a lot of money but make little. Although most people believe that starting a business is the difficult part, the true challenge is to stay in business beyond this initial start-up period.
It is a privilege to serve our customers. This guiding principle (and some start up money) has helped Merion Station grow with one of the most loyal followings in the pet industry, where we market our products. Be honest and fair in all your dealings. Along with this in today’s marketplace, remember to let people know you appreciate their business and referrals. An example: One day I was approached by the owner of one of the larger magazine groups serving the pet industry. He asked me what I thought about his firm where I placed about $6,000 a year in advertising. I told them they were ugly to do business with, and if my ads ever stopped drawing business I would withdraw them in a second. Horrified he asked why. I told him: in seven years of placing ads in his magazines, and seven years of receiving bills every month for those ads, I never ever received a single thank you. As fate would have it, a competitor started running ad space and instead of working out a new test schedule I withdrew my ads, never called him, and have subsequently never run again despite his phone calls and requests. When I look at our own shipping form, in a 3 ½” x 8” form we say “Thank you!” to the customer SEVEN times. (Then just to be sure we get more business, we give the customer a free gift he or she will glue to their front door – so they always have our name and phone number handy for re-orders.)
Make money. Remember, your primary reason for being in business is to make a profit. This is the reason for businesses, and in fact the heart of business. The owner of a pharmacy is not in business to cure you; he is in business to make money. The airlines are not in business to take you from point A to point B, they are in business to make money. The way they do it is incidental. It is not the goal of restaurants to feed you, it is to make money. If they do this correctly – with good food served properly, you pay them – and come back to further their goal and send them referrals. If you don’t make a profit, you won’t be in business long. I’ve seen the way too many inventors and other people who are starting out saying “I won’t make any money, I’ll just do this till the product gets off the ground.” No! The reason to go into business is not to market your product successfully, that goal just strokes your ego. It is to make money on your product so that you can stay in business and can grow and expand.
Don’t worry about your mistakes – everybody makes them. And that nonesense about learning from them – don’t worry, you won’t. From most of them, you won’t learn a thing except ouch, that hurts. You’ll do it again. Maybe not the exact same thing, but it will be pretty close. You’re in a good company. Henry Ford went bankrupt 3 times before coming out with the Model-T. Macy’s went bankrupt and came back. New Coke, wow whatta’ screw up. The Edsel – all these were losing propositions. Well financed, well thought out, big, big errors. Errors in judgments, in predictions, in execution – by people with plenty of research teams and focus groups…and experience. If these executive giants can screw up, you can too. Even the pros hit into sand traps once in a while. Big companies have the money to power through their marketing blunders – and I mean big, expensive, marketing blunders. Hopefully you can survive too. But win or lose, take your best shot, and if you fail it’s not the end of the world. By the way, when you start up, it’s a wild ride, and things go up and down in a radical fashion. I don’t know of any business that started off on an even keel and much less stayed there. Here’s something to go with that: If you find yourself cash short, with excellent long range probabilities, sacrifice some of your vendors to stay in business. Pay them what you can, when you can. When my company had hard times – and I had plenty of hard times – I sent to the people I owed money whatever I could – every week. I called them to let them know I wasn’t running from them, told them times were tough and I was paying them off as fast as I could. Every week. $50. $100. $500 or $1,000 – whatever I could. It showed them I was trying and making an effort. They respected that. Only two vendors dropped off, and they were paid eventually too – just like everyone else. And you know – the ones that stuck it out, they have my undying gratitude, and my continued business. I don’t even get quotations from other companies on those parts they supply – whatever they charge me is just fine. They saved me when I needed it. Vendor credit is a valuable part of any business, and appreciated when needed. Sacrifice a vendor if you have to, but stay in business. Declaring bankruptcy is just the beginning of a migraine.
Read! Web sites, trade journals and magazines present valuable trade information, along with precisely targeted market – specific educational material. Learn everything about your primary industry, your markets, your competition and all the secondary and tertiary industries you hope to serve. Gather information.
Just start. Don’t know about payroll? When you have a staff you will figure out how to pay them. Don’t know about taxes? There is no income tax if here is no income. Just start. Jump in. Don’t worry – if you are successful and you make a lot of money, all the questions you have now will have been answered. Money solves a lot of problems, and answers a lot of questions.
