Monday, October 10, 2011

For the Managers: When business becomes personal

For 20 years in construction business, waking up early was a practice my father trained us to do and yes, even as a mother now, that is what I am teaching to my three daughters, this is to do and accomplish early all the works and to do some more if time permits. Discipline is a must for every individual that is beneficial in so many ways which is also one of the ingredients of success.

Dealing with different kinds of suppliers, talking with different attitudes of customers and managing a lot of people for one organization are just a common situation in every common business set up. Routine as it may be but to the owners or entrepreneurs who owns the business, a few did something different that only not made them satisfied for the result of the end product or services but can also make them fall at the same time. How it happened?

Traditional treatment or set up is only applicable for start up business, say with 5 employees, sale up to 100 thousand pesos a day and catering up to 3 to 4 communities. In this Traditional set up, the manager/owner is usually the one directly talking or contacting the consumers, the manager usually treat the customers as his long time friend, giving them freebies for expecting a long term relationship, sometimes one can give the product if it is about retail for a “break-even” price or “no-profit” at all which is against already of the law of business which is usually sum up to the basic price plus the profit.

Usually this Traditional set up is own by a single proprietorship where the manager is the owner itself. This is very effective approach but not applicable at all times especially if the organization or company is growing. In this case, a lot of business approach can be use and business is business policy must be implemented. It does not mean that the Traditional approach must be abolish completely but subtle. Business is business is an Idiom which according to the dictionary is something that you say which means the purpose of business is to make a profit, and that other things, such as personal feelings, must not be allowed to prevent this Business is business, and if your friend can't produce the work on time, I'll have to find someone else.

Let us start with the proposal to the client if the manger is offering a service like in a construction business where the service and the finish product are the one that must be in quality, standard and using a good engineering practice. In giving proposal, everything must be within the cost. It must be transparent from the start. All documents must be presented like Bill of materials, scope of work and contract. As the manager, one must know exactly the budget of the client, both must be honest or if not, everything will be under the “black and white” process.

In the beginning of the transaction until the end of the construction, both must have a harmonious relationship, forget about the smile and favor, at the end it will not count. The deal will be all about the legal documents so stick with it. In business even the manager have a passion to do it even without profit which is wrong but is still happening especially in a construction business due to the fluctuation of prices and natural delays, the end result from the contract will still be the final judge, not the favors of the manager just to help the client to have their dream home which is like even installing granite slabs to it’s countertop even what supposed to be is ceramics tiles. This a ‘no-no” to all managers, even one is very generous in giving it whether one bought it or an excess materials from the previous project.

In business, it is survival of the fittest, or in other words a company must have an operating capital, skilled manpower and overwhelming clients. From a successful entrepreneur in order to become successful, one must have 25% integrity, 25% hard work and the 50% will be luck which can be translated as 25% passion, 25% skilled manpower and lot’s of connections.

The complete example is when dealing with a bank. Banks will accept your funds or deposits with open arms, that’s what they do and practice. The bank will be the manager and you as the client. The manager will give you all the perks like a free gadget if you will avail this checking with a minimum cash deposits, always with a smile, you even made the manager the godfather for your daughter but once your check bounces, there is no favor from the manager but to closed the bank account. Business and process of the bank and only means that business is business.

In finance, the best partner of the firm is the loan agency. They could give the manager a big capital but only with a collateral and for a certain time. In retail such as selling gadgets or hardware materials, the time given for the managers from the suppliers are usually 30 to 120 days depending on the evaluation of the suppliers. This is in order for the manager to sell off all supplies within this time before its due date and because also of the quantity of the materials like bolts, nuts, paints, lumber, screws and the like are delivered in bulk. The loan agency could make the operating capital in full as long as the company is progressive but once the sales is declining which is also equivalent to bounced checks and not paying on time, the years of partnership will become a day of bailing out.

It is good if the manager has a will and passion to what he is doing like putting quality, extended services and extra effort to make the clients satisfied with the product or services but it is important also to remember that business is business specially to the clients who are there in front of you not to have a chit chat about clothes or fashion or even your advocacy but to get what is under the contract and the end product with satisfaction. Extending efforts that will kill the company like giving out materials or scope of work that is not included in the contract must be stop. The manager is in the loosing end every time he is giving out something from his own pocket.

No client will think that the manager is doing a charity work. Clients are always thinking that what you did is the amount they paid you. As an entrepreneur for more than a decade, it is better to stick with the contract and scope of work. Always be objective and rational to all decision making, communication is the key, forget text messages but instead a meet up or direct phone calls, this is to have a better understanding. In business, the formula must be strictly follow, based price plus profit.

In business there must be profit to survive and to continually grow the organization. This is doing what is right based on the computation of the cost, right for the organization and due for the client. Don’t forget that only few could appreciate the amount of time and the amount of passion the manager put in the project but many and most will only think that it is just part of the cost. For those without passion, to them it is just pure business.

For a builder, total quality management is a must, with careful budgeting, skilled manpower and financial formula are in place, and the company is growing. Clients are not asking for anything but only the expected result to be met. External forces might delay some actions but in communication, nothing is impossible.

In all kinds of business, there’s always disputes even between your suppliers friend and you, might be between the prices, quality or time of delivery but it is just part of business. No business in history can have everything or much politically correct to say, one cannot please everyone. Customers and Managers have their own mindset, as honest as one could give; some external forces who are playing god and expert are the culprits. To have a smooth transaction, just communicate, spread all the comments and meet in between, it might be business but to the manager and to the customer, everything is personal no matter what, it will be your dream home, better to have a good relationship with the builder, in the first place, that’s the person you will never forget for the rest of your life, no matter what.

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