Fire your worst customers - Posted by Penny
Posted by Penny on July 08, 2008 at 22:41:31:
You’ve gotten lots of good thoughts & advice about actions, consequences, protecting your rights, etc. So I’ll give you a little feedback from a business perspective.
Behave like a business person. Businesses have to look at the bottom line or they aren’t in business very long. Profit versus risk is key. So at the end of the day, it’s all about the numbers and the data behind them. When you keep this foremost in your mind, it becomes less personal and the numbers guide you in what to do.
Have a back up plan for risky situations. As a business owner/investor, you’ll make mostly good decisions and a few bad, like everybody. Remember - it’s not your mistakes, it’s your recovery rate (my Dad always used to say this). That’s where having a back up plan is important. I read somewhere that 80%, maybe it was more, of the things people worry about never come to pass. So put your backup plan in place just in case, then focus on your future. You’ve gotten lots of feedback and opinions in this area already.
Keep good records. I once had a new salesperson at one of my businesses that never was able to perform. I watched the numbers and saw that it was hurting my business. Despite training efforts, it just wasn’t the right person for the job. Because I watched and analyzed the numbers, it made it easier to let the person go much sooner instead of letting the situation languish. I also had the numbers to rebutt a threat of a discrimination claim, so I could continue to sleep like a rock at night. I hired an employment attorney to review the documentation we needed to provide to comply with state employment law. And I used my backup staffing plan, since we were shorthanded afterwards.
Fire your worst customers. Good businesses don’t keep their worst customers. They let them become competing businesses’ worst customers. The worst customers have a lousy return on investment for the time you have to spend on them. Your time is one of your most valuable commodities. This tenant is taking way too much of your time. You are now in the process of firing her because you’ve already decided not to renew her lease.
Learn from your mistakes. What would you do differently?
Make decisions that satisfy your profit goals and risk tolerance. The right action for you should be clear. What’s right for you may be different than for someone else. If the situation changes, then you re-evaluate it.
There are times where business people allow some personal traits to affect reasonable business decisions, e.g. taking more costly action to get the tenant out sooner versus more passive actions of riding it out. Just be sure you’re doing it at a conscious level and are accepting the consequences and benefits of that choice. Sometimes your own peace of mind and personal principles can be enough to override the solution suggested by the numbers analysis. Sometimes it takes a different strength to not escalate a situation and ride out the solution because you may be further ahead in the long run.
But in general, the numbers can go a long way toward guiding you and giving you confidence in your decisions & actions. When you are confident in your decision and course of action, that confidence gets projected outward.
Hope this helps.