Dave Says…On Business

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Dear Dave,

My husband and I are taking your classes and following your plan. We own a roofing company. We offer six months, same as cash, and we accept credit cards. What are your feelings about this? Does it make us hypocrites?



Dear Monique,

If I accepted credit cards, it would make me an absolutely huge hypocrite, but you don’t do what I do for a living.

If this bothers you, it might be a good time to search your heart and ask yourself if these practices are blessing your customers. If you conclude that they are not, and you decide to discontinue those financing deals, you’d better come up with some other marketing strategies. You will lose clients over such an unusual decision!

Of course you could still offer some of those kinds of deals while actively discouraging their use. You could tell your customers that if you were in their situation, you’d just save up for a few months and pay cash rather than using a credit card or other financing options. That way the decision is theirs. But how will they react to such an uninvited suggestion? The last thing you want to do is encourage more credit, but the next-to-last is to run good business off. No, I don’t think you’re being hypocritical, Monique. You have some big decisions to make about the quality of your customer service, though. Ten years from now, you want to know you tried your best to do the right thing for them, and you’ll always want to know you’ve done the right thing for your business.



Dear Dave,

I opened my own business about six months ago, and it’s not growing at all. I’m a single mom, we receive no child support and my parents are helping us with all the bills. My biggest concern is the house. I bought it five years ago, and when I opened my business, I did it with money from a home equity loan. What can I do?



Dear Gina,

The house is not the problem. You borrowed money to open a business and that was no-no number one. You also have no savings—which is no-no number two—and now the business isn’t making a profit.

You need to close the shop and go find some work. The money you make at another job will determine whether or not you can stay in your home. If you’ve got a mortgage, home equity loan and business debts hanging over your head, the chances of this are slim. You probably need to consider moving into a small, inexpensive apartment for a while.

If you do this, get your debts paid off and your finances back in order, you might be able to purchase a house and give your company another shot in a few years. I know the idea of giving up your home and business is hurtful, but when you get cancer, you have to cut deep enough to get it all. Gina, what you’ve got right now is financial cancer.

And it will eat you alive if you don’t fix it!



Dear Dave,

I own a small business that produces niche products. Lately, we’ve been getting calls from prospective customers who want to use our products in different ways. How do you advise handling an “outside the box” request?



Dear Sean,

Ask yourself three basic questions: Can the product be produced in the needed quantity for a fair price? Will it be something you’ll want to hang your reputation on? Do you really want to do this?

If you answer “yes,” additional questions arise. Can the product be used the way they want to use it? Must it be modified, and at what cost? Can you supply it on time?

I know I’m giving you questions, not answers, but in the end, providing a quality, functional product in a timely manner for a fair, profitable price is the key to a small business’ success.

An unusual request just might be a great entrepreneurial opportunity. It’ll probably take some work, because when great ideas show up they’re usually wearing work clothes. But do some research, and make the same basic manufacturing and economic decisions you would with a new item. Remember, this could open up a whole new market for you!



Dear Dave,

My husband is a landscaper who works for the state. He has his technical license and wants to start a business doing private work as well. What advice would you give to someone just starting out in this field?



Dear Amy,

First, I’d check to see if there are any additional licenses required for doing that kind of work in your state and the cities in which you’ll be operating. You want to make sure you’re starting off on the right foot with any authorities or governing boards.

The next thing I’d advise is to keep it simple. There’s no reason to run out and incorporate or anything like that. It’s a service business, so print up some cards and start thinking about a basic one- or two-page website. Then, once you land some jobs, post tons of pictures of his work. Before and after shots are great sales tools in his industry, so you’ll need to really show off his talents.

Of course, no one will know you’re out there or online unless you really talk up the business with people. And I’m not just talking about homeowners and businesses. You guys need to approach anyone who may be a potential lead—real estate agents, builders, bankers, architects and anyone else who touches a piece of real estate.

When we built our house, the architect recommended the landscaper. So, try to figure out all the connectivity points you can. Then, stay in touch, and buy them lots of coffee and doughnuts!



Dear Dave,

I’m starting a photography business on the side to help generate extra income. I have friends who’ve told me they’d like to use my services. However, I feel weird about charging them because they’re friends. How do I get past that?



Dear Daniel,

I understand how you might feel weird taking money from friends, yet you’re providing a service, and you’ve opened this business to make money. They’re going to pay another photographer if you don’t do the job, so why shouldn’t they have the fun of working with someone they already know and like?

There’s a psychology at work here. If you comp or discount them now, they may never see you as a true professional. But if you charge them a fair price, you’ll be establishing yourself as a pro.

Still uncomfortable? Tell them you’ll do the work free of charge this time if they’ll help you find six new clients. There’s nothing wrong with a trade, especially when you’re starting out. Just make sure you get something worthwhile in the deal!


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