Unpacking people, money and networking

Here is the fourth and last in the series on starting your own business.

Customers

A powerful quotation is attributed to Mahatma Gandhi who, in a speech in South Africa in 1890, spoke about loving your customers: “A customer is the most important visitor on our premises. He is not dependent on us. We are dependent on him. He is not an interruption in our work. He is the purpose of it. He is not an outsider in our business. He is part of it. We are not doing him a favour by serving him. He is doing us a favour by giving us the opportunity to do so.”

These wise words, said more than 120 years ago, still carry such relevance today. I am convinced that living them out can still be of great value, irrespective of whether we are employed, self-employed or even seeking employment.

Just remember, customers don’t care what you know until they know that you care. Show your love with the acronym CARE:

Create an experience

When you love someone, you behave selflessly. What are some outrageous ways you can improve the experience for your customers? Here is an example. One customer tweeted that he hoped there would be a porterhouse steak from Morton’s waiting when his plane landed in Newark. Sure enough, when he got off the plane, a Morton’s employee wearing a tuxedo presented him with a complete steak dinner and silverware. Now that is service! Do what you wish other businesses would do for you and pass along some unexpected joy.

Attend immediately

Have you ever stood at a counter waiting to be served, wondering whether you might be invisible? Yes, you have, so you know how it feels to be ignored. Your customers deserve your full and immediate attention. Be intentional in the way you increase the responsiveness within your business, company, organisation and person.

Respond to their ‘pickle’

Everyone who serves customers in any way wants to provide the best service possible, and most businesses are always on the lookout for the best way to do it. Good customer service is about more than just being nice; you need a multi-pronged approach to stellar service, and it all begins with the Pickle Principle.

‘Pickles’ are those special or extra things you do to make people happy. Bob Farrell, founder of Farrell’s Ice Cream Parlour and Restaurant, tells the story that coined the ‘pickle’ phrase and led to the bestselling customer service training video, Give ‘em the Pickle.Years ago, Farrell received a letter from a loyal, but disappointed customer stating that he loved the restaurant, loved their hamburgers, their ice cream, and especially their pickles. He said he always asked for an extra pickle when he ordered, and he always received one. But when he’d visited the restaurant that day, he had asked for an extra pickle and had been told he would be charged $.75 for an extra side of pickles. He was very disappointed and said he wouldn’t be coming back, if that’s the way Mr Farrell was going to run his store.

The experience was an eye-opener for Farrell, who didn’t know where the waitress got the idea to charge for an extra pickle. Farrell bent over backwards to apologise to this customer. And, following this incident, he made the ‘war cry’ for his business, “Give ‘em the pickle!” In other words, take care of the customer – keep them satisfied by giving them that little extra something that keeps them coming back.

Engage your whole team

A business consultant was training more than 3 000 employees of a mid-western grocery chain to approach their jobs with the goal of creating a memory for their customers. She stated that, "this is what will distinguish your store from all others.”

Johnny was a 19-year old bag boy who had Down syndrome. His first response to the consultant’s suggestion was, “I’m just a “bag boy.’” Nevertheless, he went home and shared what the consultant had said with his mother. They began to ponder how he could create a memory for his customers. Johnny had a habit of collecting inspirational thoughts to read. He decided he would begin printing these sayings and place one in each of the bags of his customers.

When customers came through the line, he would place the sayings in their bag and say, “I’ve included some of my favourite sayings in your bag in the hope that it will encourage you today. Thanks for shopping with us.”

After just a few weeks, an amazing thing began to happen. One day the store manager noticed that all the customers were lined up at only one cashier station when there were other stations open. He began to panic, thinking the other stations were broken. After further investigation he found this was not the case. Actually, customers wanted to come through Johnny’s line in order to get his saying of the day.

One woman came up to the manager and said, “I used to come to the store only once a week, but now I come every day.”

Money mistakes entrepreneurs make (with thanks to Heinrich Grove)

1 Not separating business and personal expenses

You as the owner are only entitled to take money out of a business in one of three ways: salary, dividends and loan repayments.

Many entrepreneurs say “I am the business” which lands them in deep trouble as they start using the business bank account and a personal account and try and mask personal expenses as business expenses.

In auditing there is a term which is called a “fraud risk indicator” – a red light that something is wrong in the books.

What are the two main fraud risk indicators?

Working with lots of cash and using a business account as a personal account.

What are the consequences of paying personal expenses out of a business account? If SARS picks it up they are going to start digging and you might end up in trouble. Your business can never grow as you are always using the profits for personal consumption. The value of the business deteriorates.

2 Compliance not kept up to speed

It’s much easier to fall behind with compliance than what you think, and it’s much harder to become compliant again than what you think.

There are three main government departments you need to stay compliant with: the South African Revenue Services (SARS); the Department of Labour; and the Companies and Intellectual Property Commission (CIPC)

3 Not keeping proper records

Many entrepreneurs fail to keep proper accounting records, and when there are inquiries from SARS or one day when they try and sell their business then they can’t produce the evidence of the transactions when the potential buyers do a due diligence.

Two things you have to have in place:

- A proper accounting system

There is a reason why you pay for a good accounting system, do you want to entrust your business operation to something which is free?

- A proper filing system

Two types of filing systems:

Paper based filing system – you keep physical files of everything, the more traditional way of keeping records.

Electronic filing systems – you keep your files electronically.

4 Not keeping an eye on cashflow

Businesses can be profitable but have cashflow issues. It’s about tracking cash inflows and outflows to ensure liquidity. Effective strategies include forecasting based on historic information and market trends; effective debtor management; controlling expenses; and building cash reserves.

Grow … through networking

The Centre for Entrepreneurship recently hosted a networking breakfast for businesses and entrepreneurs through the Cape Chamber. It was a well-attended event with a group of confident, purposeful men and women in the room.

I also had the privilege of attending the Premier’s Entrepreneurial Recognition Awards (PERA). It was an inspirational event with many entrepreneurs/businesses in the conference centre.

These events got me thinking just how important networking is, and how to maximise on events like these as many who attended successfully did.

Here’s a nifty definition of networking: Creating a group of acquaintances and associates and keeping it active through regular communication for mutual benefit. In my opinion, networking is an essential skill for aspiring and existing entrepreneurs. When used consistently and purposefully, it can seriously increase your impact; raise your income and extend your brand awareness.

Here are some tips to build a growing network:

Aim to connect, not to sell

The MC at the networking breakfast related how those attending a previous event had been asked, “How many of you came to sell something?” The answer was about 50%. The next question was, “How many of you came to buy something?” The answer? None.

People don’t attend a networking event to buy products or services. Uppermost in their minds is how can they build relationships and connect with others who might add value to their business and vice versa. Making this key mistake could alienate you at the event and leave you with the impression that “networking doesn’t work for me”. It can and does work when you focus on connecting.

Identify what you want to achieve and whom you want to meet. Another mistake that is made is focusing on quantity (shotgun approach) rather than on quality (laser).Most events last two to three hours with the networking section restricted to 45 minutes. Rather than distributing and collecting business cards, aim to focus on six to eight new people or connections. You will need to leverage these through speedy follow-up after the event.

Follow up promptly

It is essential to follow up quickly and in a meaningful way. A sincere email sent within 48 hours of the event should do the trick. Don’t forget to put this contact into your networking schedule and maintain the momentum.

Prepare your elevator pitch

At the recent event, we all had a short opportunity to share our elevator pitch. The key here is to practise your pitch, make it personal, impactful and concise. One of the gents attending delighted the audience by singing, “Jeremiah was a bullfrog.” His first name was Jeremiah, and now no one will forget it.

Be present, visible and likeable

This means being punctual, practising little courtesies like listening carefully, smiling appropriately and shaking hands firmly. It means thinking how you can first add value to others before seeking value for yourself. After all, one of these “strangers” might be the key person who opens a door to a major business deal for you. What would be the reason they remembered you? Because you came across as genuinely interested in them and their world. This can lead to expanding yours.

Finally, identify which groups, companies and individuals you want to meet and connect with. It may be that a networking event doesn’t have these earmarked people in attendance, but there may be a company, individual or interest group present at the networking session who can, in turn, give you a warm introduction to those key people/organisations.

● Steve Reid runs his own business in support of entrepreneurs, leaders and incubators. The first three parts to this series were Part 1: “A roadmap to starting your business”; Part 2: “Grow the horse…. and the jockey”; and Part 3: “See right, start right and sell right”.

You can contact Steve at steve@entreprenacity.com