You know, it can be really lonely at the top. When you’re the business owner and the CEO, one of the constant things that you’re going to run into is…
THEY ALL THINK YOU’RE RICH.
Who’s they? Everybody from bankers, to lawyers, to your own CPA firm, to employees that want loans, to sales people that want you to upgrade different systems. Even family members will kind of expect you to pick up the tab because you’re the business owner. It’s really, really a tough thing.
– Bankers – I have had bankers to whom I’ve said “you know, we’ve had a 12-year relationship but I’m still going to shop your rates every single year or every other year just to make sure that you’re giving me good, competitive rates on my loans.”
– Attorneys – There are ton of attorneys out there and they also have competition. Don’t be afraid to shop your attorney and just let them know “I’ve got to check other rates to make sure you’re competitive.”
– CPA Firms – I once had a CPA firm for my telecom company and our annual reviewed financial statements got up to about $22,000 just for the annual review which I thought was crazy. When I shopped around, I found two other CPA firms that were willing to do the same thing. They were smaller firms, and although they didn’t have the long-term relationship with me that the other one did, one was at $8,000 and one was at $12,000, so I saved myself $10,000 just by shopping around.
– Employees – I had an employee, a sales person, and we had a disagreement over a commission structure. He then decided to file a complaint with the labor board after he had quit the company. I had to go into the labor board, he told his side and I told my side. It turned out that the labor board sided with him saying I was wrong and I ended up having to pay a fine of $10,000 to him for this commission dispute. It was very interesting because when I came back to the office, my HR person at that time said “well, you’ve gotta feel really good about paying only $10,000 it could have been a lot more than that.” And I told this person “don’t ever tell me that again. I’d feel much better if you were paying the $10,000.”
The perception is that when you’re a company owner, you must be rich. A friend of mine who owns his own company had a judge in a U.S. court of law tell him , “well, you’re a business owner, you can afford it” after a judgement ruled against him. He couldn’t believe his ears!
People have no idea how much money your company makes. Here’s why. They see a gross sales number, for example a $100,000 sale that may only net your company 3% or 4% on the bottom line, but… they don’t realize that. They just see a $100,000 sale and they think “WOW! That’s a $100,000, that’s a lot of money!” They don’t understand the difference between sales and profits. So, this is just a reminder for you…If you’re the business owner, they will all think you’re rich.
So, why do I bring this up?
1 – Because you need to be aware of this. You will constantly have to be on guard for people over charging you. Interestingly enough, often times it’s the vendors that have been around the longest that do this. They get lazy, they get complacent, they take advantage of the long term relationship and know you’re buddy-buddy. What you end up finding out is that they’re charging you the highest prices in town. Be aware of how the world sees you now.
2 – Learn how to say NO, a lot.
3 – You’re going to have employees come to you that want to borrow money. This is always an uncomfortable thing. If you’ve got the cash and want to loan them the money and you’re a compassionate and caring person and that’s part of your nature, then do it. But, I would always say to document it and document the payback plan and have them sign it. In fact, make them do the document. Say “hey listen, specifically, how long do you need it, how much money am I gonna take out of your future pay checks, etc?” and work something out like that.
- Always, always, always shop your credit lines, your bank fees, your attorneys, your CPA services and make sure that they are aggressive and that they are earning your business every single year.
- Let your long-term vendors know that you’re going to shop their prices occasionally because that’s just good business. I’m ok with paying a small premium (5%-10%) because of a relationship, especially people that have been around for a long time. They know you, they know the way you do business, you trust them and that relationship certainly has some value but, keep in mind that everybody has competition. Your CPA firm, your law firm, your bankers, even your employees have competition. Yes, turn over can be expensive, there’s re-training and that’s sort of thing but you’ve got to keep these prices in check.
Nobody’s looking out for your money except you!
Keep your eyes open and make people compete. It’s just good business and you’ve got to run a good business.
I hope this is helpful to you and if you have a business question that you like answered, email me. If you’re looking for a business coach that will help you get real results in your business, that’s my business, that’s what I do, I’m happy to help you. Feel free to share this with someone who you think might need it, ok?
Have a great day!