U.S. Embassies: An Out-of-the-Box Entity to Help a Small Business

The United States has an embassy in almost every country in the world. You can go to the State Department website www.state.gov for a list of all the countries and the contacts there.

The Embassy is an out-of-the-box entity for a Small Business source. My personal story in utilizing a U.S. Embassy was when I had my watch company and acquired a license for an Elvis Pressley watch. I had noticed earlier that many retailers sold musical Mickey Mouse watches, and my research showed that these watches were made by Seiko, which owned a patent on the musical part of it. Seiko was a Japanese based company. I tried to contact them re obtaining a license or to have them make the movement for me with the Elvis tune that we would supply, and I was prepared to visit them in Japan. It was an easy stop off for me when I visited China where our watches were made. Despite numerous attempts to contact Seiko to set up an appointment, my entreaties were greeted with silence. So, as a long shot, I contacted the U.S. Embassy in Japan to ask for help in getting an appointment with Seiko. I was pleasantly surprised at their timely response in contacting management at Seiko on my behalf. This was quickly followed by my receiving a warm response from a high Seiko official, inquiring when I would like to set up an appointment to see them. When I did see them in Japan, I was ushered into an elegant conference room where 12 Seiko people were sitting, waiting to hear my story. This was an amazing outcome in my mind to a simple inquiry. A Small Business guy (although I was physically taller than everyone) all alone with 12 managers of one of the largest companies in Japan.

When you think about it, one of the missions of an Embassy is to assist American citizens visiting their country. My inquiry was a rarity and therefore got their attention. Compared to the complex problems they frequently encounter, this was an easy good deed for them to accomplish. An official request from an American Embassy can carry great weight with a foreign business in a friendly country.

The old maxim “nothing ventured, nothing gained” applies here. I believe this is as good a source to use as any to get an introduction to a firm you want to sell.

The back end to this story is after a lengthy, cordial meeting, they refused to sell me or license me their technology. They did offer to sell me their musical clocks, which I somehow believed were not good sellers for them.

Fortunately for me, six months later, someone invented a new musical watch chip, much less expensive than Seiko’s, which I was able to successfully use.

 

Cash Free Ideas to Beat Competition

Competition for customers in most industries is extremely intense. This is exacerbated if the customer is a large one and your product is not particularly unique or patent protected. Your customers are also in a high pitched battle with their competitors. This can be seen in your everyday life. Look at the competition in cars, retail stores, food stores, homes, computers, music, etc., for your dollar. This extends into the industrial sector and personal services.

Here are some non-cash ideas to help  your small business better compete.

Exclusives. If you have any type of new or unique product and no money to promote it, think of offering a key/large customer an exclusive. The exclusive can be for 30 days to a year with a performance clause for a time specified renewal. When we were in the game business, we would introduce a new game to the leading department store in each major city. We sold them on an exclusive basis for 30 to 60 days in return for their running an ad for our product at their expense. Your exclusive could be narrowed down to a particular channel. For instance, I  know of companies that gave Amazon.com an exclusive for all internet selling in return for them giving special promotional pushes for the product. Examples are running 2-day sales or pop-up ads when customers look at a related product (i.e., a wine game when a customer searches for one of their 9,000 wine books).

You could simply give an exclusive to a large retailer for buying it and putting it in all their stores: Radio Shack with 6,000 plus stores, Costco with 400+ stores, Wal-Mart with 3,000+ stores, etc. Exclusives can get you immediate orders, free ads, better position, earlier pay terms, earlier orders, etc. The result is more credibility, more cash, and brand building at no cost.

Better Service. Contrary to popular opinion, most purchasing is not based on the lowest price. Service is a key component in many buying decisions and can take many forms: shorter turnaround in shipping than competitors, customer training on your product features and how to use or sell it, friendly and knowledgeable people manning your phones, customer friendly website, dealing with problems quickly and fairly, admitting, correcting, and paying for mistakes.

One of the key factors of our success in the watch business was our service and special offers. The business was mature, highly competitive, and a me-too industry. We entered the industry with a unique novelty approach that featured artwork on the face and a rotating disk with art as the second hand. For instance, our most successful watch was a cute cat with a rotating mouse going around the dial that the cat always just missed catching. These watches were easy for competitors to copy. However, we copyrighted each design and consistently earned money from infringers. We offered two elements that propelled our success.

1. Special exclusive designs for a low minimum of 200 watches with no premium cost to the buyer. This was in contrast to large watch manufacturers who asked for a minimum of 10,000 watches. We accomplished our low minimum by working closely with a small Chinese factory, by using standardized parts, and by our willingness to break even on these orders. We knew the profit would come on the re-orders. Our low minimum allowed us to break into the world of Disney, selling to their retail stores, theme parks, and catalog division. All three wanted exclusive merchandise that could only be bought through them. Our small minimums allowed them to test all their ideas without paying a price for mistakes. We were rewarded with large quantity orders for the watches that tested well. We also rewarded small customers who supported our line with periodic exclusive designs. The result was loyalty and increased business.
2. Quick turnaround. This was and is increasingly a key component for small business success and survival. It reduces your cash commitment to inventory and likewise for your customer. It also reduces risk. You need to give a lot of attention and thought on how to realize quick turnaround. We analyzed every component used in a watch and the delivery or manufacturing time of each. We discovered the bottleneck in time replenishment was the unique printed dial on each watch. Every other component was easily available and in stock from many suppliers in China. Fortunately for us, the printed dial was a very low cost component. So we took chances and built up inventories of dials on watches we projected would sell well. The dials cost $.05 each; but in our pricing, we figured it at a $ .20 cost. This gave us the cushion for discarding unused dials.

We shipped all our watches from China to a public warehouse in Long Island without boxes, which were printed in the U.S. Air freight is a widely competitive business, particularly between UPS and FedEx. Therefore, we eventually flew watches in for $.17 each. We also discovered that the processing of shipments through customs varied greatly by which city they entered. The net result was that we could get watch reorders within two weeks of the order while our competitors’ lead time was generally two months. This was a tremendous plus for us with our customers and reduced our cash needs.

Special Terms. Cash strapped businesses with high profit margins should seriously consider additional discounts for immediate or quick payment.

Toy manufacturers usually ship most of their products in the fall. To plan production, particularly with overseas manufacturing, they need orders early in the year. So they successfully offer a special early buy discount to their customers.

Many companies offer volume discounts or rebates. They spell out the discount earned at various volume levels. These discounts can be achieved as you reach the level or can be rebated at the end of the year. This encourages your customers to place more of their business with you rather than sharing with other suppliers.

Private Label. Many products lend themselves to be made under the

customer’s label rather than your brand. The disadvantage to you is you don’t build your brand, and margins are usually lower. The advantages are you don’t need to maintain back up inventory, your order lead times are better, and you should get your payments quicker.

Your entire business should always be customer oriented. Special offers are particularly effective in building your relationship with a customer and does not drain your cash.

 

This blog is an excerpt from my book, Bootstrapping 101.

A Perfect Gift for Small Business Entrepreneurs

Small Business blogs were my first encounter with social media. The goal was to share my hard earned knowledge with existing and wannabe Small Business managers to ease their path to entrepreneurial success. If successful, I was hoping that they would then consider buying my book, Bootstrapping 101. However, I was warned not to sell my book in the blogs. I have followed that advice for some 90 blogs. Now, I would like to blatantly try to sell you on purchasing it for yourself or someone else who fits the bill. Why?

I see the need for this book more than ever, particularly in the current economy with more people than ever trying to realize their dream of having their own business and for existing small business owners working very hard to survive. From all my guest speaking to entrepreneurial classes at MBA classes around the country and from mentoring activities, I see close-up that many key points in this book are not taught or understood. I tried to keep each chapter short and devoid of fluff for easier and quicker reading, yet interspersed with interesting (I hope) stories to illustrate points. You can skip chapters and focus on ones most interesting to you as each stands independently.

I thought the best way to explain the book’s value is to show you this Table of Contents with a sentence or two description of each chapter. Here it is:

INTRODUCTION (includes definition of Bootstrapping)

BARTER

One of the world’s oldest forms of commerce is advocated in its modern form. Barter’s advantages and how it works.

PUBLICITY

Achieved at no or minimal cost, publicity can be more credible than paid advertising which usually is too expensive for start-up and fledgling companies. How to get this publicity.

INTERNET REVOLUTION

This  fast changing, growing, and inexpensive medium can assist small business reach their goals and better compete with large companies.

FREE ADVERTISING

How to get free ads in major media through PI ads.

SELLING

Who should sell, how to sell, and sales’ interaction with other company disciplines. Sales Reps: their importance, how to find and deal with them.

SPECIAL OFFERS TO KEY CUSTOMERS

No-cost strategies to acquire and/or grow key customers and to obtain favorable treatment in areas of importance to you.

MENTORS

Importance of having a good mentor in the ultimate success of a company. Where and how to find and interact with them.

BUSINESS INCUBATORS

Provide a business support process for start-up and fledgling companies that includes a physical home, management guidance, technical assistance, basic business services, and mentoring.

UNIVERSITIES

An untapped asset for small businesses, universities can help you in building your company with no or minimal costs.

RELATIONSHIPS AND TRUST

Finding and developing relationships to advance your business. Better Networking.

PRICING FOR PROFIT

Maximizing your profits and thus increasing cash are discussed in depth through correct pricing. All the elements that should be considered and by whom are explored.

FACTORS

Loan or advance money to a company, regardless of their credit rating. The pros and cons of their use and how to find them.

SUPPLIERS

Can be a valuable extension of your company and an important part of your sustainability and growth. What they can do for you and how you should treat them.

TESTING THE WATERS

Testing the feasibility of your new product or service before you expend valuable resources in its pursuit. This process will also aid in risk reduction.

LICENSING

Can give a company instant credibility and business. Not all licenses require large initial expenditures. Ideas on finding and utilizing them, their advantages, questions to ask in exploring them, and contractual issues to consider.

FRANCHISING

Is a type of business that lies somewhere between buying a business and starting your own. The pros and cons of franchising plus how to find appropriate ones.

CONVERTING FIXED COSTS TO VARIABLE COSTS

Is an effective strategy to reduce overhead, conserve cash, and reduce risks. The different ways to accomplish this.

OUTSOURCING

An important strategy, especially for undercapitalized businesses to grow, reduce risk, and offer more to your customers in terms of quality, value, and support. The negatives  are refuted.

GOVERNMENT HELP

Government agencies to assist start-up and existing small businesses to succeed. They are free and open to everyone. Agencies covered are SBA, SCORE, SBDC, PTAC, U.S. Customs, Department  of  Commerce, MBDA, UBOP, WBC, and U.S. Embassies.

IN PERSPECTIVE

Important factors for entrepreneurial success are explored, covering attitudes, finance, people, and knowledge.

Appendix 1—R&R Harvard Business School Case Study

Bootstrapping tips utilized in case

Appendix 2—Tips for Getting Appointments

Appendix 3– Cash Flow Statement

If you now want to purchase this as a gift for yourself or someone else, we offer it in paperback at $19.95 or as an E-book at $9.59. As we are self-publishing Bootstrapping 101, it is not available in bookstores. It is available on Amazon.com. You can follow that link or visit our website, www.Bootstrapping101.com,which also links directly to the Amazon page.

I always bought business books with the hope that I could get one good actionable idea. I believe you can get at least two here.

Entrepreneurs-Time To Be Thankful

Whether you’ve had a difficult year in this current environment or have been one of the fortunate ones and prospered, it would serve you well to pause and take stock of all the things you should be thankful for.

 

Be thankful you are in your own business and your own boss. Millions of people aspire for the same.

 

Be thankful for all your customers without whom you would have no business.

 

Be thankful you live in the United States, which affords you the opportunity to pursue your passion and to succeed with no limitations– and yes to fail, which is one of life’s great teachers.

 

Be thankful you can choose which 80 hours each week that you can work.

 

Be thankful for your family, friends and mentors who are your support team–an important element for Small Business owners.

 

Be thankful for your loyal employees who are helping you fulfill your dreams.

 

Be thankful you are rewarded for your company’s successes while knowing you can pay for its risks.

 

Be thankful that you can make sure everything is done the right way.

 

Be thankful you can try to implement any ideas you have and bring them to fruition.

 

Be thankful you are in a position to positively impact other people’s lives.

 

Bob Reiss www.bootstrapping101.com

Writing Business Plans-Anyone Have a Pencil?

The smartest entrepreneurs plan on growing and are prepared for change.

I have a few words of advice for first-time entrepreneurs, as well as seasoned business owners looking to hit a new stage of growth. My advice is this: write your business plan in pencil. I realize this may be difficult for all you non-golfers, but doing so will illustrate two important principles.

1. Change is inevitable.   

I have little doubt that you (the small business owner) will shortly have to change, amend, modify, scrap, or abandon your original business plan altogether.  One of the attributes of successful entrepreneurs is Flexibility. By writing your business plan in pencil, it forces you to look at change as the only constant.  Make change your friend, embrace it, and work it to your benefit. The reasons why your original plan will need to be changed after your company is actually operational are myriad. It’s likely you under or over-estimated your competition, margins, cash needs, competencies, and suppliers. Or you misjudged market need and size. Every entrepreneur discovers new opportunities that didn’t appear until there was actually a business up and running.

2. We must avoid business plan worship.

When we see documents neatly typed and even praised, we are reluctant to change. Especially for those who attended business schools where the plan took on a larger than life importance. People whose plans got high marks or even worse, won a Business Plan contest, tend to feel their plan is inviolate. They also tend to believe that if they rigorously adhere to the plan, it will yield the riches of their dreams. It Is my hope that the mental image of a pencil will remind you that change is good and will help you reach your goals.

Most small business owners that I know never wrote a business plan. In 16 start-ups, I never wrote one. John Altman, a very successful entrepreneur, founder of six companies, and former professor of Entrepreneurism, never wrote a Business Plan for his start-ups either. Most people who write a business plan do it to raise money or because someone told them that’s what they’re supposed to do. The fact is that a detailed plan is only required if you want to raise money from a bank or venture capitalist. Both will hardly ever offer a loan or invest in early stage companies. So your energies are wasted writing those long and thick plans.

Now don’t get me wrong. I strongly believe in planning, just not in long, voluminous tomes, that will probably go unread. For sole proprietors or a few employees, it can be in your head or- if you must commit it to paper- on a napkin.

If you really want to write a plan, try this. At the start of each year write your goals are for that year and specifically target new areas of distribution and the names of new accounts that you want to sell. Also put on paper the names of current customers with whom you want a deeper relationship and the strategies you’ll employ to do so. This plan should only run one or two pages. I also recommend you write down your accomplishments and shortcomings from the previous year. While you can do this exercise primarily for yourself, I would also share it with members of your team.

As your company gets bigger, written planning documents become paramount. As your company grows, you want to be sure all your employees are on the same page and equipped with the knowledge of how they can contribute to the company goals.

It’s a reversal of commonly accepted logic to suggest you postpone the business plan until you’ve reached a growth spurt. But as John Altman said on this point, “If you’re going to empower the other people in your company, guess what: You’d better give them a map to the highway you’re on! Otherwise, they can’t share that vision in your brain.”

Buying Decisions-Rational?

After decades of personal selling and observing others sell, I am convinced most buying decisions are based on emotions rather than on a rational basis. The ratio of the two motivators varies with the individual buyer and the circumstances at the time, but clearly the seller must always be aware of the emotional component of the decision process. Having the best product, service, price, warranty, etc. does not ensure a sale.

Here’s a sampling of some of the non-rational reasons I have observed buyers employ in their buying decisions.

• They like salesperson personally.
• They have something in common with salesperson, like attending the same school.
• Seller is friendly with their boss, or boss told them to buy.
• The previous buyer bought from current vendor.
• They perceive seller is friendly with someone in top management.
• Something in your offer positively impacts their bonus. (This may be rational from their personal viewpoint, but their job is to find the best deal for their employer.)
• They receive some personal gain from the seller.
• The seller is great looking.
• The seller is a stylish dresser.

 

There are an infinite number of emotional decisions involved in buying decisions. The buyer may be unaware of them.

So, if you are a seller and you know that your product or service is clearly superior to the one being currently bought by the buyer, do not assume he will switch to you. Do your homework and try to determine everything you can about your buyer to understand his/her emotional buttons so you can put them in play in addition to your rational approach. Your persistency can eventually overcome a buyer’s emotional bias.

If your many attempts fail, you might approach the buyer’s boss with your strong rational arguments that can trump the buyer’s emotional decision-making.

 

 

 

The Mission Statement – For Small Business?

The mission statement is something very different from the business plan. Mission statements set the moral and human goals to which your company is supposed to aspire. In many cases, they also state higher order business goals, such as a corporate commitment to maintaining an annual compounded rate of growth of a certain percentage.

Mission statements are most often associated with large corporations—an effort to get thousands of people to pull in the same direction across a far-flung corporate empire. But I think a mission statement is a good thing for a small business as well, and it’s something that should be developed at the outset.

The mission statement clearly tells employees what behaviors are expected of them and describes the kind of treatment they can expect from their employer. Most people have a strong desire to know the rules of the game. In addition, they want to be proud of the company for which they work. The mission statement gives them at least one piece of the puzzle.

This is also the best reason not to have a mission statement if you don’t intend to follow it. There’s nothing more poisonous than to have the management thumping away on some ethical tub, and at the same time acting in ways that directly contradict the espoused values. If you can’t walk it, don’t talk it!

The mission statement, like the business plan, is a useful tool for triangulation and mid-course correction. Take it off the shelf every once in a while, and see if you’re living by it. (Better yet: look at the framed version on your office wall.) And when you face a tough choice, look at that statement again for guidance. To the extent that your mission statement contains concrete business goals, make sure that you either (1) achieve those goals, or (2) acknowledge that you aren’t achieving them and take steps to bring the company’s performance into line with its aspirations.

You may not spend a lot of time on your mission statement, but you should clearly set the tone for the kind of company you’re trying to create and sustain. Culture comes from the top—that is, from you. How accessible will you be to your employees? Will you truly listen to their input, or will you just pay lip service to their ideas? What are your expectations from everyone, especially in the realm of building trust? How will your company treat its customers? What are its attitudes toward quality?

Part of the point of the mission statement is the process as well as the product. If you involve other people in the development of the mission statement, you’re already sending a signal about your culture.

 

Factors: How They Can Help Small Business

Factors finance $120 billion in receivables, yet most start-up and small businesses are not aware of them. Business schools rarely acknowledge them. However, they can alleviate your cash flow problems.

They can loan you or advance you money against your receivables and in some cases against your inventory.

In other words, your receivables are an asset that the lender (Factor) purchases.

 

The Advantages of Using Factors:

• You get payment for your invoices within days. This allows you to pay your suppliers on time, to build trust  with them, and to take advantage of their cash discounts. It is a financial tool that speeds your business’ cash flow. Factors do not lend money on purchase orders.

• All your costs are variable.

• Factors check the credit of all your customers and would-be ones. Thus, you get more accurate and current information than if you performed this function on your own. More money is saved by eliminating the need to hire a credit checker.

• Factors collect al your receivables. In today’s world, the majority of customers like to stall the payment of their bills. Some will not pay until someone calls them for payment. The Factors have more leverage than you as an individual have. They may represent 50 suppliers of one customer.

• Factors act as insurers of the receivable. If after you ship a customer and the customer goes bankrupt, the Factor may be stuck, depending on your contract, not  you. This feature can help you sleep better as well as eliminate your bad debts.

• The Factor can take over some of your administrative functions and save you the resultant labor costs. On one of our game companies that was created around a licensed product, the Factor supplied us with data on monthly shipments which acted as our Royalty statement. They also provided us with total shipments by territory or account which we used as our Sales Rep commission statements.

• You can get money even though you don’t have a good credit rating. The Factor is only interested in your customers’ credit ratings.

 

The disadvantages of using Factors are the costs, which can be high in some cases, and they may alienate some of your customers with their collection techniques. You need to read and understand their contract carefully.

You can locate an appropriate factor by going to the website of the International Factoring Association, www.factoring.org, or ask your local banker, SCORE, or SBDC office.

 

(This post is excerpted from Chapter 11 of Bootstrapping 101.)

 

 

Sales Reps and How They Benefit Small Businesses

I was a national sales rep for 14 years before switching sides and founding or co-founding 16 start-ups, one of which made the INC 500 list three years in a row. . .So, I feel qualified to speak on this subject which I think is misunderstood and not taught at school. This is why I’ve written a comprehensive and practical Guide to Help Sales Reps and Manufacturers understand each other better, to create a positive partnership that will yield more profits for each, and to extend the duration of the partnership.

Too often this relationship is adversarial. It shouldn’t be, as both factions need each other.

Before I discuss the highlights of this Guide, I think I should define what a Sales Rep is.

A manufacturer’s representative, also known as a sales representative, sales agent, a broker in some industries, or simply a rep, is an independent business person who acts as the sales arm for one or more businesses which are comprised of one or more products or services. Most Reps are paid a commission for their sales efforts rather than a salary. Some Reps are permitted to take a draw (or advance) against commissions; others are not. They are responsible for their expenses. The commission can vary greatly–from 2 percent to 20 percent.

Basically Sales Reps are Entrepreneurs in their own business. It is important to understand this as you can’t order them to do something. You need to sell them on your integrity, agenda, company, product, and vision. To do this effectively, you should understand how they think, their strengths and weaknesses, and the environment they work in. This Guide should help you with this to achieve a more productive relationship with them.

 

Here are some of the subjects covered in this Guide:

 

Compensation

Reps are primarily paid on a commission basis although in some industries, such as Pharmaceuticals, they receive a base salary with performance-based bonus. The wide spread of commission rates (2%-20%) is based on a variety of factors explored in the Guide.

 

Who Becomes a Rep?

There is no Sales Rep gene, and they come from all walks of life and choose the profession for different reasons. They want to be their own boss, they see the opportunity to earn a lot of money as there are no ceilings on their compensation, they know that they can choose which 12 hours a day they want to work, etc.

 

Why Work with a Rep?

There are two perspectives on this question: that of the manufacturers and that of the customer who the Rep is selling. Both are covered in detail, but the two main reasons for a manufacturer are they get an experienced salesperson with no fixed cost and quick access to desired customers who are difficult to reach.

The Buyer among many reasons prefers a Sales Rep because they trust them more as they know that the Rep depends on them for a living more than the manufacturer does, and the Rep is more accessible.

 

How to Find and Select a Rep

Before you begin the process, you need to think through what you expect from a specific Rep, the kind of characteristics he or she should have, their customer base, the other lines they carry, and much more. Finding the right Rep is a difficult task and there are numerous approaches. My most productive methods were to ask Buyers on whom the prospective Rep calls. They are a gold mine of valuable information to help you in your quest. They not only can identify the most successful Reps that call on them but lead you to the most promising newcomers that are not on everyone’s radar yet. They will be able to give you more time and passion Second: I checked with other good Reps that we knew. Reps network with each other and know the difference between good and bad ones. Today with the advent of the internet and the comprehensive searches you can do, I discovered a site www.rephunter.net that matches up Sales Reps and Manufacturers to each’s specific needs. They are very professional and worth a look see.

 

Rep and Manufacturer Complaints About Each Other

There is a long list of complaints each party has about the other. I believe it’s very helpful to understand what these are. They can help you to help each other, which will profit everyone. The list of complaints that I enumerate are valid and not readily apparent to the other party. If taken seriously, each party can improve the running and effectiveness of their company. Basically, there is a healthy amount of distrust on both sides. A lot of this stems from many of these easily correctable complaints. Trust is the pillar on which effective relationships are built. With it this Rep/Manufacturer relationship should have a long life.

 

Training Reps

Most manufacturers give short shrift to the training of a new Rep. They make the mistake of sending out catalog sheets or directing them to their website and maybe supply some samples and expect the orders to roll in. . .not a formula for success. Would you train a new full-time hire in so casual a manner? The Guide offers solid and proven ideas on how to accomplish this training.

 

A Tip for Reps

This section offers an idea for Reps on how to solve a problem many Buyers have and in doing so earn themselves more sustainable earnings.

 

Advice for Both Parties

Here we offer key suggestions to both sides on actions and attitudes they should adopt to make this Rep/Mfr partnership more effective (Profits and Fun). We also address how to deal with the problem created periodically by many large customers who tell their buyers to stop dealing with Reps for the mistaken reason that more profits (the Rep’s commissions) will accrue to them. We offer what we did as national reps to solve it.

 

The Future of Reps

There are many outside world trends, including technology that indicates that reps may become extinct. I don’t think so if the parties will work closely and with honesty. . .but it helps to take a step back and think about planning for the future.

 

This Sales Rep/Manufacturers Guide is FREE, and you can get it by going to http://www.bootstrapping101.com/pages/guide.html.

Customers – Find and Satisfy Them and Prosper

The No. 1 need for business success is a customer. That’s pretty obvious, so why am I telling you this?

It may be obvious, but most companies seem to quickly forget this essential fact. Small and Start-up companies desperately need customers to begin their journey to profits and sustainability. Many large Fortune 1000 companies forget the customers that made them successful.

Just look at all your daily life experiences in dealing with a phone company, an airline, an utility, your cable provider, a government provider, etc. In their effort to develop systems to deal with their size, they become impersonal and forget about the one constituency that propelled their success: their customers – who become increasingly frustrated with their treatment and are open to change their buying behavior.

Customers are important because they give the companies the orders that initiate the service or product that gets delivered and creates the company cash income – the lifeblood of the enterprise.

You might posit that orders are most important, but orders do not create more orders. Only satisfied customers do that. Happy customers whose expectations are met or exceeded become your best salespeople and effectively promote your wares by word of mouth, at no cost to you. You can’t buy more effective advertising than that.

Satisfied customers are likely to become long-term customers who will look forward to buying your new offerings. It is much easier to increase revenues through existing customers than to find new ones and much less costly. The bonus is that these satisfied customers will get you new ones through singing the praises of your company, its products and/or services to their friends, family, and acquaintances.

Unlike all other forms of media advertising, there is no cash outlay for this. There is, however, an investment in maintaining the quality, service, need fulfillment, value, timelines, warranty, etc. of your offering whether a product or service. If you deliver on these actions, positive word of mouth will enable your continued growth and sustainability. Likewise, if you fall short, you’ll have to deal with negative word of mouth, which can spread more rapidly than the positive kind. Witness people leaving a bad movie and emphatically voicing their disappointment as they leave the theatre.

So, amid all the chaos problems, uncertainties, distractions and new opportunities,  which are typical of a small business, don’t forget for a minute how all your decisions and actions affect your customers. Neglect or short change them and be prepared to pay a high price. Satisfy them and Prosper.