A butcher, who had had a particularly good day, proudly flipped his last chicken on a scale and weighed it. “That will be $5.25,” he told the customer.
“That’s a good price, but it really is a little too small,” said the woman. “Don’t you have anything larger?” Hesitating, but thinking fast, the clerk returned the chicken to the refrigerator, paused a moment, then took the SAME chicken out again. “This one,” he said faintly, will be $5.76.” The woman paused for a moment, then made her decision…”I know what,” she said, “I’ll take both of them!”
As you can see from our butcher’s example, when operating a business it’s critically important to consider the lifetime value of your customers. Repeat business is way more valuable than short-term profits.
After thinking about how the butcher’s lack of integrity got him into trouble, I began to consider other reasons why some businesses struggle. Here are a few more reasons I came up with:
Ego Business vs. Business Opportunity – The foundation of a good business is a good business opportunity. As an entrepreneur, you want to fill a need in the marketplace. Unfortunately, many businesses are started solely to fulfill an entrepreneur’s ego (or, to put it less harshly, to satisfy one of the entrepreneur’s interests). This can often be seen in the restaurant & bar industry, where too many entrepreneurs open shop because it’s a “cool” thing to do. Such businesses rarely succeed.
Bad feedback & white lies – People like spending time with friends and family. Unfortunately, when it comes to business, friends and family members don’t always give the best advice. This is especially true at the birth of a business. Nobody wants to be a buzz-kill. No one wants to tell an entrepreneur their idea is bad, or their location stinks, or anything else negative. Most people are conditioned to be supportive of their friends and family regardless of the situation.
Plus, nobody wants to be wrong. Imagine your friend has an idea that you think is terrible. You share your objections, but the friend goes ahead with the idea anyways, and it succeeds. Now you’ll always be the naysayer that never believed in them. Nobody wants to be that person. That’s why you’ll rarely get honest, objective business advice from friends or family members. And yet, oftentimes friends and family are the first people entrepreneurs turn to for advice.
The owner is just a jerk -There are a lot of great people in the business world, but there are also some jerks. And these jerks sometimes start their own companies. A jerk, in this case, is someone who a lot of people can’t get along with. Maybe it’s because they’re a super-perfectionist, or they yell a lot, or they demand that everything be done in a certain way, or they constantly complain. Or maybe they’re annoying in some other way.
The key is that nobody — not employees, customers, partners, suppliers, clients, etc. — wants to give 100% for a jerk. Clients and customers will be turned off, and employees will start cutting corners. Most people believe that life is too short, and don’t want to spend their time working with someone they can’t get along with.
As we continue to grow Tama County, let’s all learn from the butcher’s mistake – repeatable growth is way more valuable than short-term profits.