First 10 chapters, Assured Entrepreneurial Success

CHAPTER 1

LOCATION

Considerations:

Do I want high foot traffic?--it will cost the most.

Do I want to save rent money and get the least expensive place?

Do I want to sub-let from someone else?

Have I found a place that has had high previous tenant turnover?

Is my place the previous hot spot for traffic and now, people have
gone elsewhere?

Is my place in the path of growth that is perhaps 5-10 years still ahead of me?

Am I located at the end or middle of a block, nearest residential areas or am I between an industrial and commercial area--and a great distance from any residential?

What are the advantages to being closer to either?

Can I realistically-economically gain an option to buy the property so I am not beholden to a landlord for more than a year or so?

Am I near enough to a river, lake, ocean, that I may have to be concerned about floods?

Am I near a municipal dump?

Am I near a liquor store/bar?

Am I near any business that may disrupt my business?


Realtors will tell you all success for them relates to closing and location, location, and location. I do not claim that location is unimportant, but that location is not all that it is made out to be!

Let me offer examples where location was irrelevant to the success of some businesses.

AT the crossroads near Folsom Lake and a North South Road (Sacramento County, California) sits a restaurant/bar combination that seems as remote as anything could be to the rest of the world. I was driving/wandering around in one of my cars a decade and a half ago, just looking to see what existed in that part of the world/county. According to all the laws of busies and location, this place should have been located at least 12 miles further West and maybe a few miles South. There were no ranches, cabins, businesses or other life, save for the wallet-less birds that flew over (little existed here but a crossroads.) When I entered this place, I expected to see some inebriate owner watching football and the ambiance of death waiting to crumble the insides. I did not experience anything remotely similar to death warmed over. What I did experience was an energetic conversation with the owner or manager (I forget which) who told me without exaggerating, that this place was a night place, and that I would need dinner reservations at least one week in advance, thought they were open 7 evenings and were miles from civilization. They had a steady clientele who booked reservations between one and two weeks ahead, year around, no exceptions. They would be happy to serve me a snack type lunch, but they were a dinner house that had been there for a decade and rarely had stop-ins. (Those without reservations).

This owner had obviously curried favor with the Folsom Lake fishermen and women and others who he knew that liked rubbing elbows with "Country!"

My next example is one closer to heart; what was, in the 60's, known as Charlie Anderson's Domino Club. If you think that a building in the middle of nowhere is a tough nut to crack, just think about this; One door only (grand fathered), facing an alley, and no advertising. This was likely the pre-eminent resident's exclusive, up-scale restaurant and bar place in San Francisco, California. My dad played piano while, across from him was another pianist playing another piano which faced his, so they could see each other over the length of both pianos. Leonard Garr played and my dad played, and an artist painted a live nude lady on a platform off the their side. Above the other side, gracing a wall, was an example of the artist's work--another graceful nude of one of his past models.

Charlie Anderson didn't need to advertise, lower his prices or do anything special. He just knew how to "do San Francisco with San Francisco natives" who knew this was their hangout and no visitors were allowed (philosophically).

I can't say whether Charlie's place still exists (it did from the late 50's to the 70's and that Charlie sold out).

Location is a prime factor if one is dependant upon a specific clientele. If one doesn't locate near one's customers, one had better have a super service/product or the customer will go elsewhere for his/her goods/services.

Your author seeks to buy businesses and, perhaps interesting to the reader, it is not important to me where the business is located. I only seek those businesses that are operating and depending on their profitability, I use company stock, use all cash, or use just short balloon date promissory notes. CHAPTER 2

SECURITY

Considerations:

Am I locating near a crime infested area without realizing it?

Are there a number of homeless or welfare people nearby that might be inclined to find my firm ripe for the pickings?

Can employees and customers/suppliers enter and leave with reasonable safety and in a well lit area?

Is there sufficient privacy in the layout of the business so that thieves will have little privacy to themselves and yet, where robbers would have a hard time getting to a secured office?

Is the street and surrounding areas reasonably monitored by the municipal police?

Does my layout tell customers that I have little of value to pocket?

Security may well be an area within business operations that can make or break a firm's financial neck. Let me explain. You are likely honest and do not steal from your neighbor, your store or office or anyone else. You likely always wait in lines and pay for all gods you have chosen to buy. I do. Some people feel, for a myriad of reasons, that if they are clever enough to pocket or take goods not seen by the store within which they are shopping, that they deserve to keep the goods. Some people are compulsive thieves and have admitted on TV cameras that it is a disease, that even if they have the means to pay for goods, they must take things and not pay for these things, even realizing that if caught (it appears that less than 1 thief in 10 is caught) jail is inevitable even after reimbursing the merchant for the goods.

Because this embezzlement and shoplifting is done to the total of billions of dollars yearly, stores must do some things to protect themselves: the most undesirable thing is to raise the cost of all goods because the store owners are not stupid enough to pay for thefts from their own pocket. They simply raise the rices of goods to compensate for those that leave the store without being paid for. Also, executives get very lax at raising the wages of the cashiers and warehouse workers, instead keeping the difference for their pockets or just to reimburse themselves for the lost money and goods.

Electronic cameras can record most activities of thieves, but a professional thief will get what he/ she wants most of the time--that's how they stay in business! The fact that their purchased goods or the costs of goods in the neighborhood rise to accommodate for the loss of goods taken does not slow down the thief. Some thieves think everyone else owes them a living and the benefit of their clever stealing. Specially coded price tags help slow down some theft, as does an alert staff.

Make certain that if any employee is to handle money, that your business insurance carrier provides you with bonding on each of them (refer to chapter on insurance).

When hiring, it is a good idea to do security/police checks on your employees if you have any doubt or care if they might have been in jail for any reason. It will frustrate some employees, but if they have something to hide, wouldn't you want to know it now? CHAPTER 3

HIRING
Full-Time Executives
Fill-Time Blue Collar
Part Time
Seasonal

Considerations:

Have you remembered that not all employees are as honest as you, nor is everyone else a crook?

Have you remembered that not everyone is as ambitious, and that their definitions of ethics may be different from yours? Have you remembered that going through the interview phase of hiring is just slightly less uncomfortable to the average applicant than is receiving a dental root canal?

In hiring, do you want to do a back ground check on every candidate, or every serious candidate, or is that background check an affront to the person's integrity?

Can you offer a specific duration, written employment contract to any employee? Musicians and entertainers receive them--why can't you offer one?

Are you getting the word out to all logical sources/places that you am hiring (homeless shelters, state unemployment offices, special pool groups--those over 50--and Viet Nam vets)?

Do you have a reasonably paced training or orientation program so that you pay heed to what an employee can be reasonably expected to remember from day one as a new employee?

If you have a new employee manual, have you set policy to have it examined semi-annually to compare your hiring criteria to what your true staffing/skill needs are?

Do you test or not test--who and when and why and how--and if yes, who grades the tests?

Do you have a formal pay raise policy or promotion policy?

Do you have a policy about using temps?

Under what conditions will you require drug testing?

A hundred years ago, hiring, other than by a government, was very easy to accomplish--if someone "looked" and "sounded" good, you hired that person. If all employers had been totally ethical and moral and all that, they wouldn't have asked any female employee to sleep with them as a condition of employment. Further, Black, Hispanic and other non-Anglo employee candidates would have been given equal opportunity. Unfortunately, employers, across the board, haven't been fair or equal. Obese people, recovered alcoholics, Blacks and others have been basically termed "one of them" by the "good old boy network" who figured that they could do whatever pleased them with their firm, and the negative consequences to their employees was not their concern. Thankfully (sometimes obsessively and arbitrarily) the federal government stepped in after several court battles and passed laws protecting employees in several ways, not all of which I agree, but with good intent nevertheless.

According to the specifics of the law, all employee candidates must be considered equally for each position. In firms with 150+ employees, an employer must hire a specific percentage of "minorities". The government's equal opportunity and quotas fail when it doesn't allow for differences in skill demands. For example, if on an emergency basis, an Anglo with a high level of skill in a specific field leaves a company and the firm is obligated to hire a minority for its next hire, the firm, according to the he letter of the law, must hire the most qualified minority person. The only complaint I have with this is that it is feasible that no minority might apply who has decided previously to gain the necessary skills to perform the job. The company would lose. This specifically happened to a lamb manufacturer in Chicago and was delineated on the TV program 60 minutes a few years ago. The equal opportunity commission even placed a fine on the firm and gave the firm no opportunity to discuss the situation. The firm I think went out of business because the fine alone exceeded the firm's net profits for a year.

If an employer is not qualified to hire (95% are not), they /he/she should retain an employment agency who can screen and do all the necessary paperwork and interviewing and screening. A search agency can be hired in advance to do the same thing for an executive employee.

IF you are new to the United States, you might not know the following:

An employer may not ask, via mail, the phone or in person, (before hiring) a person's race, religion, creed, sex (whether obvious or not), whether they have ever been arrested, and on and on. The situation is simple--the employer may and should ask all the questions possible of the employee candidate regarding past accomplishments, failures, objectives, and what he/she would most like to accomplish if they became an employee for the firm. Getting "inside the employee's head" is a great idea when the interview is restricted to finding out how the employee would solve certain problems that are directly relevant to the firm's success and therefore, the employee's success.

Most employers do extensive examinations of prospective employees. I suggest caution doing so, because the employee candidate in front of you now (poetically speaking) is not the same person that left the last firm he/she was with. Each person changes one way or another, for the better or worse, and it is your author's opinion that too few employers remember this; if the employee candidate was failure or bad news with his/her previous employer, it might well be that the previous employer may have been dictatorial or sexist or whatever. Ask what is relevant and applicable to tomorrow, not yesterday, and I think you will be ahead of the game, for after all, tomorrow's profits are all that your candidate can help you reach, yesterday is gone!

Full-Time Executives

Too many "grunts" fail to understand the value of an executive to a firm: an executive "supposedly" has the scholastic training and previous work experience to know how to handle the entire firm and knows from which employees technical advise/help can be procured.

Some employers hire incompetent people at all levels under these circumstances, the hired individual is not able to perform according to the individual's professed capability. Other than these rarities, the average executive, when given the responsibility and authority, can adequately run his/her firm and under some circumstances, run it better than can the boss. Because of this advanced operations skill, these individuals are paid several times what the blue collar employees are paid and this often promotes hostility and frustration on the part of the lesser paid blue collar employees. When the blue collar employees demonstrate their frustration, in my opinion, management is at fault, because it failed to share critical data with those whom such decisions are most affected.

Also, for the reason of critical skill need and responsibility for the entire company, executives are harder to hire, take longer to be hired, are tested more extensively and are perhaps improperly, considered the most important, least easily replaced staff members.
Fill-Time Blue Collar

Blue Collar employee are the stuff with which America is made. These are the grunts, the lowest line employees, the people whose floors are covered with either the poetical garbage sent down from management or the literal policies that too often reduce operational efficiency because of arbitrary policies that too often are not tested as being valid and therefore, valid and valuable for the company.

Part-Time

Perhaps the biggest gain in new business for the employment agencies of the world is in the demand for part time temporary workers who can come at a moments notice and stay as long as is needed. Part timers are often hired not by the personnel department ( if you are your firm's "personnel") of firms but by temporary agencies who handle all aspects of the hiring process and then (supposedly) send the most qualified candidate to the contractors' address to complete either specific tasks or spend 'x' hours under direction of the store/company owner/manger. In this instance, please note I identified the using firm as a contractor, not the employer. The temporary agency, if one was used to find the employee, becomes the employer and the firm using the employee is the contractor who uses the employee, an pays the agency who takes a cut to off-set administrative costs and which includes a profit per hour the employee works.

Seasonal

The seasonable employee is a valuable source of high traffic customer satisfaction. The seasonable employee is an employee hired to work for a firm during periods of a year that the employer normally feels is a "high wave" on the sales curve (refer to sales cycles) so that all customers, old and new, are assisted to the best ability of the firm without regular employees being "strung out" trying to help all customers with all problems. If an average employee is expected to help 100 customers during a shift and all of a sudden 150 expect service, the employee must either offer quick, slip-shod service, or receive the assistance of a seasonal worker who can do "maintenance" jobs that don't require extensive customer service thus freeing the permanent staff to help any customer with odd requests or special needs. (in some cases, to simplify things, seasonal workers don't help customers at all, they simply do the cleaning, moving and stocking of goods and do all the "housekeeping" things that regular employees cease having time to handle during high wave customer times.

The EEOC feels businesses must keep a racial mixture among their employees. When one is operating their own firm and each employee becomes a part owner, I think the ratio required disappear because the EEOC has no and cannot regulate the racial mixture of business owners.

Different types of employees and how to deal most effectively with them:

There are some things that new, hiring entrepreneurs, need to know about different employees.

Some employees will be honest to a fault, pointing out everything that they think is not honest, ethical or not exactly as you have indicated things should be or according to the faultless employees perspectives.

Some other employees will feel that since they will never be given an "honest break", they have every right to borrow, take, fib or do whatever it requires to get the most out of the job and to have you off their back.

Some other employees will be quiet because it is either their individual way or within their culture.

Some other employees will be so mouthy that you'll think them impertinent.

Some employees will feel that to get to work at all is quite reasonable and that dealing with their family is more important than anything, you, the owner, have in mind for them!

Some employees are so sloppy you wonder how they can dress and drive and others are so neat you wonder why they don't have fits when something is just slightly less than perfect!

Some employees will tell you what you want to hear, some will tell you exactly what they think, some will be sexual, some aggressive, some assertive, some you will forget even exist, and many will be so afraid that the slightest "direction/order' will cause them to go into the rest room to get rid of their shakes!

In training, there is no simple, pat answer because: people learn at different speeds and have different comprehension levels, some hate to be tested and then, forget learned data after being tested. Some love tests for it is time to demonstrate their skills. Others think that if they have to be tested, then you are a slave monger and they should be elsewhere. Your author knows of no method(s) available to determine employee effectiveness will appeal to all employees! CHAPTER 4

BUYING SUPPLIES [known as Purchasing]

Considerations:

Some suppliers will offer credit--have you inquired about such?

Some suppliers' product quality is superior to your needs, while others are inadequate. Have you a supply quality requirement?

Have you determined how long various types of supplies ought to last? Many discounters are opening up whose prices, per single unit, are 50% of that of local specialty firms. Do you want to consider trades-outs or buy from the discounter?

It's been said that employees' use of company supplies in Fortune 500 firms costs their employers thousands of dollars annually. Also, the attitude employees have regarding stinginess on the part of the employer can be as harmful as being too free with supplies.

While your firm cannot afford to become a full fledged supply house for your employees, there must exist a comfort area for both you and the employees where you know what you can use personally and what you should buy for your own use--previous to any intrapreneuring.

Supplies are those things that we do not intend to re-sell, but use in our offices and shops and stores: like toilet paper, cleaning solutions, stationery, pens, tape, and the list often seems endless. If we are astute, we will find up to three vendors (suppliers) that carry what we need and see which ones have the best quality for our needs at the lowest price and the best, if available, credit terms enabling us to buy and use now and pay later.

There is a cardinal rule in business that many of my friends seem to ignore (assuming one has a business with daily cash receipts and vendors allowing single payments monthly)--that those who pay when invoiced (rather than at a later date if agreeable by the supplier) are losing the use of their money and therefore, if one is astute in investing their daily revenue, are losing its availability. Some stores make 30%. of their net profits by the use of their daily cash! Greater than immediately needed quantities should only be bought when the price available is considerably less than buying said items when needed. Remember, any dollars not put to use bringing in more dollars are usually, thought not always, wasted dollars. Any activity and any inventory or capital equipment not used to generate dollars should be considered as wastefully and done away with as soon as possible. Everything in your firm costs you money and often your extra items must be inventoried and this hastens waste!


SUPPLIERS

Considerations:

Do you constantly read industry journals and newsletters to learn about new suppliers?

Do you keep abreast of all currently used suppliers' return policies?

Do you have any suppliers who provide no credit? Have you developed sufficient bank credit terms to make up for this?

Do you have back-up suppliers for those whose business practices may make them vulnerable to strikes or failure?

Do you constantly monitor customers' quality desires and see that you are carrying a combination of low, medium and high quality goods as applicable?

Do you constantly gain updated industry data from suppliers?

Are your suppliers as ethical as you?

In this chapter I relate to both your usables and your resalables. This means I am talking about your both your inventory which you buy to resell and your consumables; toilet paper, stationery and the rest that keeps your business in business. (Some people call these office supplies).

To handle this effectively, I now separate the two types of suppliers, because they supply radically different types of goods and your need for them is different.

Usables

These things help keep your people and some customers happy but they don't increase your bottom line--they do the opposite--they just take money out of your pocket. As they are not direct profit contributors, be a bit careful how you use them, and don't go crazy trying to saver a dime, while you are not interested in paying more than necessary either.

Women are more aesthetically oriented than men, so the color of your women's restroom (or, if you have but one restroom, make sure is clean, clean and clean, and colored attractively--it can't hurt to make it attractive) is often important. How a man leaves a bi-sexual usage restroom also is indicative of how your women will feel after they have access to a neat, non-poster filled restroom which has a toilet seat left down (I do not understand this argument of nature--since both sexes can raise and lower the lid with only negligible trouble). The neater the restroom, the happier everyone will be. Colored waste paper is cheerful too! If your supplier(s) of reusables are understanding your needs and know you will treat them fairly, they will hand deliver whatever you need and on a timely basis and can help keep your appliances working property or advise you on contractors who can. Being unnecessarily tight (my term) with providers and other suppliers is wasteful, as long as your integrity is not called into question by the use of the goods you use and how you use them in your shop. If you buy cheap cleansers that smell, the customers and suppliers who visit you will make viable excuses not too--they don't want to become inundated with your foul smells!

Rule #1--you live there, make it nicer than your home! CHAPTER 5

BUYING INVENTORY (Merchandising)

Considerations:

Here is where the large firms make it or break it regarding cost controls, aside from employee labor costs. Are you using just in time inventory ordering?

Do you have a sufficient variety of goods so that you can prompt new customers' purchases without going off onto an illogical tangent?

When new goods are delivered to your store, do you have a policy to examine them immediately so that items needed to be returned are prepared for same quickly and then TRACKED so they do not wind up at the supplier where they just sit?

Do you sometimes become experimental and buy something off the beaten track that is slightly complimentary to your regular inventory that can attract and "grab" different customer interests?

Do you assign the job of buying to different employees every so many months so each employee gets more experience in this critical field?

Are you always ready to buy out auctioned inventory from afar to cut your inventory costs? (By averaging, you can add the cost of your manufacture bought goods with the auctioned bought goods, and arrive at a lower bought cost!)

Do you have something constantly on sale to prick interest in sale oriented customers?

New products and services

According to every management consultant and supposed guru (be he/she have business cognizance or not) a business need be careful of their variety and freshness/style in inventory. If a new thing ( good or service) is available from a start-up or veteran business, the entrepreneur is directed to be sure that the new item is not appropriate for his/her market or, if found to be so, he/she had better include same in the inventory open-to-buy!

When your author was a student of the science of inventory control and merchandising, he was taught such things as cost of goods sold, carrying costs, credit terms, inventory mix, lead time to arrival, competition on the part of suppliers of resale goods, warehousing of goods, banks loans to financing inventory and a myriad of other things.

I can gladly say that while some facets of business seem to have remained the same for a dozen years, inventory science has not.

When you examine chapter 52, Accounting, you will recall that the most recent scientific analysis on reduced cost operating systems, et al, in inventory acquisitions includes what is now known as not first in first or last out, but Just in Time Accounting and buying. As this name may imply, inventory buying used to include slight storage charges so that a merchant would have a storeroom and carry backup inventory in almost all areas. This would require the merchant to actually carry double inventory (a very expensive system and very historical--the way most merchants have operated businesses for over a hundred years! With a warehouse full of inventory, all merchants had to a) secure with gates or shelves all incoming fresh inventory so that it was of virginity when it was placed on the "floor" to sell, b) be insured against theft, fire and other emergencies, c) inventoried for tax purposes on values of the firm and handled one or more additional times, and perhaps ever mini signs made up for the goods that were simply on shelves awaiting customers on the floor! That meant each item had two homes, and two ID tags on its front shelf--one to tell the warehouse person what was on the shelf ready to go to the he sale floor and the item on the floor itself.

Cost accountants and business consultants, in order to cut firms' inevitable rising costs, felt that the traditional method of buying just enough inventory to keep 1-15 replacement items in the warehouse of the merchant is too expensive.

Now, the most scientific method of handling (read that buying) inventory requires that the buyer arranges delivery so that inventory arrives at the store in the morning when it would ordinarily be placed right on the shelf. This way, with the just-in-time system, the cost of buying and storing and selling is reduced because the merchant only needs to pay for inventory sold, with no need any longer to pay for any warehouse building, inventorying, insuring, handling or anything else applicable. Plus, its important for the merchant to get the most liberal credit terms possible; for example, some suppliers will offer the traditional 2/10, net 30. This set of numbers breaks down to the following, and it is simple to remember:

The 2 equals the percent discount, the 10 equals the last day after receipt of goods, when the merchant can pay the bill and take the 2% discount and the net 30 means if the merchant does not for any reason pay within the 10 days, the are authorized to pay as late as 30 days from date of receipt of goods and the merchant is then obligate to pay the face amount of the invoice.

Mathematically, if one gets a 2% discount, this equals an annual discount of 24%. The proof of this is--there are 360 banker's days to a year. if one pays within 10 days and gets a 2% discount, he would get actually a 360\10=36. He can earn 36 X 2%= 72% per year.

A 2% discount over a monthly invoice means a person can save 2% a month. There are 12 months a year, so the 2% is multiplied by 12 to equal 24% Since most firms earn 12-15% annually, this discount is critical to any firms success! (If a firm is not taking this discount and is earning 15%, the firm is giving up 24% more return that is available.

It has also come to my attention that many retailers are paying cash for their inventory out of their pocket upon its delivery, and they have either not asked for credit or have been in business for 2 plus years and have been refused credit. When your business is about to open, you ought to contact all your inventory suppliers and seek the most generous credit terms available: first, assume you are gong to get credit. Then, try for the most generous terms; 5/30 net 90 or any that allow you to work with the vendor's goods the longest period of time before you have to pay for them! If you INVENTORY TURNS" are 12, that means you are turning everything in the store at least (averaging) 1 time per month. With these turns in mind, If you can get, as an example only, 4/45, net 60, these are the advantages (and therefore consequence) of having the vendor's goods on credit for that period of time: for 15 days longer than needed, you are able to sell what you are buying for your regular "markup" (chapter y) and you are earning extra profit on the sold item because you based your profits on having to pay the vendor's full net price (net= regular cost to you) and yet you are paying 4% less.

Always borrow from the bank to pay your vendor's when they offer discounts like 2/10 or anything better. Reason: the bank is charging you between 8 and 15% interest on an annualized basis and the discount earned is based on a monthly basis--meaning you are earning between 24% and 36% (or more percent) given by the vendor. The bank charges a maximum 15% divided by 12 = 1.25% interest charged for the use of the money, presuming you pay the bank back within the 30 days, or a full 15% of you pay it back in 1 year.

If you can get the vendor to constantly increase the time before you have to pay the invoice, the better for you. If you can get the vendor to take less and less for the amount of the goods (a $100 piece of resalable goods initially costing you $50, then $40, then 35, etc). The less you have to pay for the goods, the more profit you make in one of two methods; you charge the same for the goods and turn as many as normal thus increasing your profits by having a higher margin of profit, or you are going to reduce the selling price of the goods by whatever percent with the intent to sell more and then you have this cash available to invest in other things or in outside activity (trust deeds, et al, chapter z). CHAPTER 6

SELLING

Considerations:

Do you have selling contests, seminars, and ask that each person study from Joe Girard, Stone, etc?

Do you introduce the complimentary, not related and sale items?

Do you inform all employees that every employee is a sales person and then do you reward every person for extended efforts in making sales?

Do you pay for floor people to attend community college, 3 unit credit sales courses?

Do you have your people shopped?

Do you ask your people to visit the competition every month to compare styles?

Do you offer debarment responsibilities and change these every 6 months?

It is not heresy to remember that cutting an operating cost or eliminating waste is similar to making 30-50% sales. If you eliminate waste, it is like free sales!

I have not had one merchant in 25 years tell me that their business was basically like any others; that their selling chore, responsibility, skill needed, opportunity or that they were similar to anyone else in need.

My close call selling percentage, before I quit selling in the field, was 85%. This meant, whether I was selling oil, greeting cards, film processing or whatever, I would canvas via the phone book or other media, logical dealers or retailers of the kinds of goods I was wholesaling to see who might be a reasonable retailer. I would take my goods, insurance and seek them out when they were likely slow, so as not to interrupt their sales time or customer service time.

I would not ever say I was there to sell something to the merchant, because I wasn't! I was there to solve his/her problem(s). All merchants ( I haven't met any exception in 30 years) need to serve customers and therefore, solve their respective customer's problems.

According to scientists to study human behavior (you might think behavior science is hokum, but I know better), people have needs that need satisfying. Coke satisfies the average soda drinkers needs better than Dr. Pepper, Ford satisfies the motorists needs better than Subaru, et al. Research, questionnaires, surveys and other investigation systems can accurately determine what customers want and wise merchants follow these guidelines.

When I sold (satisfied a merchant's problems which were increasing his sales) my metal treatment, I simply asked what he/she would say about a chemical that would increase an engine's RPM even if I did not touch the vehicle in any way, and the vehicle could be in horrible condition. I knew the characteristics of my product (called Tephguard) and knew what it would do. I didn't say that I would make the merchant lots of money. The merchant's money was his business. Merchants are rarely stupid. The merchant's (mechanics) problem I sought to solve was to increase his customer's engine speed without touching the engine--just by having the mechanic pour my junk in a can into the crankcase of an operating engine. If the engine increased in RPM in 1 minute, I was proven correct. If not, I was proven wrong and I would walk away and the merchant/mechanic owed me nothing. If I was right, and I could increase the RPM by 50 in 1 minute, than my product had valuable characteristic and the merchant could make lots of money using it and selling it. I had no turndown in 35 attempts! I averaged 100% cold call sales. I didn't work a miracle. I simply attempted to satisfy or solve the merchants's problem by increasing the quality of the work the merchant was performing on the customer's car.

Was I a "born" salesperson? Those who sell poorly would say yes. Those who are professionals would say no. What is cold-call selling? What is therefore, a cold-call selling ratio?

Cold-call selling means not contacting a firm in any way before approaching it for a sale. According to White's tutorial book on selling, a professional sells 95% of the time, and a college student majoring in sales/marketing sells 80% of the time.

When I first took White's tutorial test, I averaged, I think, 60%. When I completed a semester's worth of classes and outside selling, |I took the test again and attained 80%, top for a college graduate who has studied selling.

Within a few years, I had my own consulting firm, and took on Tephguard. I hired 15 field sales people, who I learned after bringing them into the office a month later, sold nothing. I inquired why they had a unanimous record of 0 sales. Each told me it was a tough field, no one was buying, and that getting an appointment was a bear itself.

I asked how many demonstrations they had conducted and a few said they had conducted one and most had conducted none. Tephguard is a demonstrator's dream.

I terminated all the sales people on the spot, took all their merchandise out in the field myself the next weekend and used the techniques learned from White, Joe Girard, Bettger, Stone and others who are experts in the science of selling. How did I do? I sold all 25 cases at my full retail price and got cash. I had no turn downs! I simply studied, of those who had auto repair shops, who was repairing cars and who wasn't. I examined my "potential market" and conducted a demonstration at each place I visited. If I had offered to sell my oil/metal treatment, I am sure I would have sold no more than one of my 25 cases. Instead, I went to each merchant/mechanic and said I simply wanted to see if I could increase the client's engine RPM by 'x' percent without me touching the engine at all. IF I could do this, the client's car was sure to work better. The product worked perfectly the first time every time because I had tried it on my car and naturally, received the same consequences/benefits.

Perhaps insurance salespeople have the toughest "road to hoe". I don't know. I realized when I moved to Arizona, the highest cold call sales ratio I found was 8%, not 98%! People thought I was a genius or a nut case when I told them what my highest ratio was before I left field sales. Each sales person naturally felt their respective field was too extraordinary or special for cold call closing ratios to have any meaning. I did not agree then and I do not agree today. Selling is a science. No one is exempted to cold call close 100%, but there is no excuse for any ratio or percentage less than 85% for those who:

understand intimately their product, use their product, succeed as users of their product, believe in the company selling the product to the salesperson, understand that merchants and consumers do not like feeling that anyone is selling anything to them. People need help buying, but, like the physician and dentist, one needs to help show the positive side of taking instructions. Realtors need to show the beauty and financial benefits of home ownership (not how much down payment do you have?) Car sales people must have a desire to find out more about what the customer wants WAY before a car is even shown to the customer. Computer salespeople need to demonstrate what a computer can do, not ask the customer what the customer needs or wants unless the customer is very technically oriented. (I have never had a computer salesperson demonstrate a computer's software--the main if not only reason for having a computer! Most computer store salespeople show hardware sitting on a counter and expect people to buy it and then take lessons on its use at some college--wrong, wrong and wrong again! One place I was going to buy a computer said that he doesn't even warrant his equipment, it's too expensive for him to do so--unless the customer is wiling to bring in the computer to his shop--he sells low cost hardware--not any recognizable service and he is proud of his cost cutting ways!

Your author's required reading demands/expects the reader of this material to read a few issues, if not directly subscribe, to Venture and Inc., magazines. These are the motivators, the testimonials of successful merchants from whom a potential entrepreneurs can study!

A few additional points of view:

Usually, a customer can afford more than what they say they can afford, if the product/service is geared to making them money.

Customers do not buy features, they buy benefits (16 bands, 400 lbs of pressure, +- 2 db, and a myriad of other features mean nothing to most people unless a technician is buying. The average customer buying for personal use wants to know the BENEDICTS of the features the manufacturer wishes to tout. Maybe the 16 bands can provide greater variety of sounds to an audiophile. Maybe the 400 lbs of pressure will expedite the removal of paint or the placing of a chemical on something. Maybe the +- 2 db will give the listener a cleaner, truer sound without fuzz.

Don't ask what you can do for someone. Wait to see what they are looking at, or listen to their questions if they come to you. How may I help you is also lame. A greeting is fine, people do like to be greeted, most of the time. If a person says they are just looking, it is not a lame comment. Potential customers are looking before they are able to make up their mind! Unless you are visiting a pizzeria or a hamburger joint, you likely need to study the merchants's wares before you decide. Maybe you aren't sure whether this or that option better services your need. Perhaps what you think you need you don't need. Listen to sales people and then ask questions.

Let's say you have made the sale. You have won the confidence of the customer. To increase the customer's satisfaction and your firm's net profits, it's just fine and reasonable to introduce complimentary goods to the customer. In fashions, salespeople automatically try to sell a shirt with a suit, socks with shoes, belts with pants, etc. CHAPTER 7

STORE POLICIES

Considerations:

Have you made sure all employees understand and have had a chance to comment before you demanded all policies be followed?

Have you given a manager authority to waive or by-pass some policies under given circumstances?

Remember, there are no policies that invent themselves. Some stores have no written policies because some store customers don't tolerate policies.

Are all policies examined quarterly to see if they are still applicable and provide more benefit than hassle to the store?

Make sure all employees sign a document that they have read and understand all policies. Then, provide written test, for all new employees', their understanding of policies via giving examples of situations and ask which policy might cover this and how to apply said policy!

Some policies must be inviolate and others policies must be so flexible that you can toss them at whim! (Drugs in the store vs. operating hours)

Store policies are valuable and perhaps necessary for any merchant: they remind the manager/owner and all employees (full time, seasonal, temporary and others) about check cashing, taking things out of the store for the employee's use, when vendors should come to demonstrate or introduce/sell to the merchant, how often mark-downs should be taken, how to deal with irate customers, etc.
Other store polices ought to describe how to handle robberies, break-ins, promotions, reimbursement for school, vacations, et al.

A store policy is a safety valve and a timely up-date on how best to manage the business--therefore, a policy needs to be examined fairly regularly (monthly?) and removed, modified or simply examined to see if the way the community and the business respond and deal with each other makes each store policy relevant and most appropriate for current operations. In short, don't wind up with policies remaining on your books that suggest your employees take an hour off on Sunday morning for church, or that ladies will not date employees or customers or marry while in your employee--such policies will get the store owner in court for breaking a myriad of federal laws!

Only have, for a store policy, the technical actions needed to be taken in case of some rather major problem and the boss cannot be located. When the store owner is very savvy, he/she will let the store employees do whatever their common sense and business experience guide them to do! If the employees act like children its usually because they have been treated like children. If the employees have been treated like adults and given continuous responsibility, these same employees can defuse troublesome situations or find their own very viable solutions to episodes of need if YOU LET THEM! A chain of command is not bad if someone must be held responsible! (maybe one strong person will try and override the person thought to be in charge until the weaker, real temporary boss, is identified as such! If the boss is a quality boss, no matter what the decision is of the person in charge, the boss will, as close and as much as can be done, leave the decision alone and back it up! If the person making the judgement screws up royally, the boss needs to increase the training, quietly or privately, of the preferred person in charge to assure the boss that volatile situations or power struggles will be quelled quickly by the person known to be in charge when the boss is out!

Make damn sure all employees, customers and others are all treated equally in all policies! CHAPTER 8

CREDITORS

Considerations:

Have you continuously asked for an increase to your line(s)?

Have you continuously searched for the least expensive rates of interest on lines of credit?

In case you might be late paying anyone's bill, have you informed the applicable person/company?

Do you have credit available even with those to whom you now pay cash?

Have you compared each supplier's credit terms with those from your bank to see whose is least expensive? Presuming you are in business partially for money enhancement, you need the best money terms at all times!

The greatest ally you can have or be your biggest headache! What/who are your creditors? The people (firms) who supply you with resalable goods for your firm and others who provide usables used in your store. For example, someone provides you your toilet payer, stationery and gas for your vehicles. Someone provides you advertising and maybe security. These creditors must be paid so that your business will not be disrupted in what is called a maintenance item.

Finally, your resalable goods' suppliers must be paid or you are going to have further problems; if these suppliers are not paid on time, you will likely have no help when you need special assistance--greater credit terms, help finding special order items for better (read that biggest spenders in your store) customers, and sometimes better than average return policies for those customers you want to keep who return things that are well beyond their repairable stages.

Most vendors will replace customer' returned goods even thought such goods (inventory) require the vendors often to take a small loss--something the vendor(s) are willing to do because you are helping the vendors earn good profits by paying all invoices on time and not asking unnecessarily for special favors.

(People who demand things of others before they will keep their original bargains are unethical in my book! I recognize that some people think those merchants who can badger their supplier(s) to:

1) accept unreasonable returns, 2) better credit than the merchant has earned, 3) to accept slow paid invoices, are considered excellent business people (hard nosed profit seekers, et al).

I find it fine if a merchant wants to discuss different terms for in the future, or if a merchant wants to pay for the due bills and suggest that next time, different terms, favorable to the merchant, be discussed. I just do not think it fair to have the vendor, or creditor, be required to accept different terms AFTER THE SERVICE OR CREDIT HAS BEEN PROVIDED. If our credit is amenable to be increased or we have followed the "rules", then ask for what you want.

If the merchant tries to get something undeserved from a vendor, the merchant is browbeating and such hurts everyone!

I suggest the merchant negotiate what to earned, before both sides have satisfied a contract.

I suggest the merchant to not start negotiating after things have been provided that you have agreed to. (If the merchant finds it necessary to re-negotiate, do so without expecting things to go your way at this stage).

I have expanded on this chapter because of what I read and believe that Don Trump (he admitted so in an autobiography) has done with his creditors: He forced banks to provide credit on various deals, or threaten bankruptcy--without giving up his lifestyle!

Rather than me analyze each or any of his deals, (he is no apprentice in finance) I want to explain how he has hurt others:

When he negotiated for a loan for 'x' dollars to buy or pay for real estate, he did so on part gamble and part cash flow analysis.

He led a very glamorous life. When the properties (which were pledged to pay for his loans) began slipping in profits and, therefore, were not able to pay their mortgages, instead of putting all other deals on hold, he kept on buying speculatively and continued his life style.

He threatened the lenders that should they foreclose on any loans, he would abandon other properties that may not be paying either, keep their cash flow (daily revenue) and let the bank face a run on deposits and bankruptcy. His bankers had no other viable buyers at the time who would pay what was due on the loans, so his bankers had no choice but to re-write the loans at terms most favorable to D. Trump.

Don kept his lifestyle and its gambling. He forgot that if these lenders had not been so good to him in the first place, he wouldn't have been able to procure the properties.

Now, with the banks losing, based strictly on his threats, new potential borrowers who have other good deals cannot get money because Don failed to keep his word. This is/was the most unethical thing he can do. If he had instead offered to work out any pay back plan the banks invented, and been willing to immediately sell all of his possessions to make his payments (unless he got a lender in Asia to lend him enough to pay all his loans off using the same collateral) he should have moved to a card board box to satisfy his loans. Then, he could have kept his dignity, made honest attempts to pay his huge debts and cold have borrowed from these same bankers when the properties again were paying good profits. CHAPTER 9
HOW TO HELP SOB'S FAIL:
(WHY SOB'S SUCCEED AND NICE GUYS FAIL IN SMALL BUSINESS)

The book to which this chapter refers suggests that being cordial, paying bills on time, collecting debts amiably, treating employees as family members and being in general a "Good Joe" or someone who is overtly empathetic is the best way to lose. I do not agree!

Being a decent person, caring about others and offering a fair deal (reasonable goods and services for a fair price is the best way to succeed, and has been the best way to deal since time began.

Let me give you some examples of the bad vs good guy syndrome:

The bad guy (my ex-step father is a prime example) bullies everyone, makes excuses when it is time to pay employees or creditors, badgers customers (he/she presumes they will come back or that he/she doesn't need this or that customer, etc.

The bad guy seems to have a few redeeming qualities; spotting other bad guys! A "crook" seems able to catch other crooks, a sneak seems able to catch other sneaks, et al.

Now the good guy syndrome: the good guy syndrome denotes a guy or gal who automatically sees the world with rose colored glasses on--everyone entering the shop or calling is a "good Joe", an honest person, and this good person syndrome perpetrator has a Mary Poppins, innocence that is usually beneficial to the business. Whether the lacking of the street smarts which seems vital to any business is a true liability remains to be seen. For example--John Doe asks for credit and explains that such and such a product is just what he/she wants for the spouse or girl friend. This customer has just started on moved to this job from afar and just moved into an apartment which has no phone and the customer's line is to be hooked up next week.

The product is selling for several hundreds of dollars and the customer seems so honest and true and "churchy" in honesty. The good guy/girl merchant will often feel that the honest person/customer is a good risk (any time a merchant lets goods go out the door without being paid in full permits a great risk to occur. Fraud lines at district attorney offices across the nation abound with tales of "she/he sounded so honest when they asked about credit and wanted to so please his/her spouse, etc. This type of being a good merchant, a trusting merchant is, in my opinion, excessively trustworthy. A trusting merchant, wanting to make a sale to a young, new to the neighborhood, would ask for references and offer to do a lay a way. Since the merchant probably cannot afford to give away the item (what any merchant does when it extends credit to anyone who does not pay) the merchant is wise to ask for a lay a way, a credit card, a co-signer, or something else to protect the merchant.
Where can the merchant become the good guy and be safe? The merchant can be or play the good guy in how he/she treats the customer--in dialogue, in exclaiming it is good to have the new customer and mentioning politely that the store takes such and such credit cards, does lay a ways or takes checks protected with bank guaranteed cards. The merchant takes no chances with the value involved in the sale.

The good guy merchant pays all bills in time, pays employees as expected and in the amount expected. The merchant treats everyone like they were respected grandparents (presuming the merchant respects his/her grandparents);.

Let's say that the merchant is a good person and the competitor is a bad person (using the examples of description above). The good merchant can do all the things the bad merchant is not doing and soon the good merchant will take a good percentage of the bad merchants' business away!