Driven to Business with Eddie Mayfield

The term “common sense” is often used to describe what we think of as obvious to most people.  However, as some have quipped, “common sense isn’t always common.”

I feel that way when I see people and businesses violating the most fundamental rudiments of business, without any realization they are doing so.

Here are a few:

• Ignoring Cash:  Out of cash, is out of business.  It’s really not more complicated than that.  It’s a business fundamental, that while obvious, is commonly violated.  When I was flying airplanes, we were often told the first rule of flying was to watch your airspeed, and the second rule of flying, was again, watch your airspeed.   The reason is the moment air is no longer flowing past the wings at a sufficient rate, you stall.   In business, that rule is cash.
• Look at your business through the eyes of your customers:  If they say your service is bad, your service is bad.  It makes no difference what you or your employees think.  Violate this business fundamental, and your customers will put you out of business.
• Price your products and services properly: Prices should be set by the value that customers assign.  Many businesses fall into the “markup” trap.   You pay $100 for a part; you figure 10% is a reasonable return, so you sell it for $111.11 (by the way, you divide your cost by .9, you don’t multiply by 1.1 to achieve a 10% margin) .  However, that part has a value of $1000 to the customer.  Sell the value, not the cost.   Not every job or sale goes well, and if you are pricing yourself with little or no margin, it will eventually catch up.  Price by value, as determined by the customer.
• Your job is to create and keep customers:  It is not to have nice furniture, or a snazzy website.  All of those may be nice, but the fundamental priority is to create and keep customers.
• Hire the right people:  I learned this the hard way.  At one time, I hired strictly based on skills, paying little or no attention to personality, temperament, or values.  I was often surprised, naively, that employees weren’t as nice to customers or their colleagues as I’d hoped.  Hire honest people that have the skills to help you grow the business, that fit your culture, and are friendly.  A bad hire costs you a lot more than a wasted salary, it can cost you your business.  I go a step further, hire people that you enjoy being around.  It sure makes running a business a lot more fun.

Eddie Mayfield

Driven to Business, hosted by Eddie Mayfield, airs at 11 AM every Saturday on WAFS, Atlanta’s Biz 1190 AM.  The show is podcast on eddiemayfield.com and itunes, and streamed live on biz1190.com 

Simply the best business radio in Atlanta..  Driven to Business.