24 June 2011

Four Ways To Ruin a Good Small Business

Sad but true, the inspiration for this week's blog post came from observing the business practices of an area business.

Being a small business owner has made me extra-sensitive to the business practices of other small businesses.  I feel that observing what they do well and what they do poorly can provide some powerful vicarious learning opportunities to me.  If a business is doing something great to meet its customers' needs, then I want to emulate that in my own business.  If a business is doing something that could cost it customers or lead it to get shut down, then I want to avoid doing those things.

1.  You ruin a good business by hiring family.  While some family involvement is often normal for young businesses, hiring family members to "help them out" can lead to a tense work environment and lead to feelings of resentment among employees.  This goes double when the family members just aren't the best employees.

2.  You ruin a good business by showing favoritism.  This is somewhat related to the first one.  Some employees are going to be better than others; that's just natural.  However, be sure to play up those things that all employees do well.  In the case of this particular business, the best that can be said of one employee is, he does a very good job of not over-exerting himself.  Unfortunately, he's a relative of the boss (see #1) and therefore will be around a while.

3.  You ruin a good business by putting employees above customer service.  If you had an employee who cost you several high-paying customers, what would you do?  Shrug those customers off because, after all, there will always be more?  In this economy, there's no guarantee of that.  There's a fine tension to this.  I've had customers ticked off at me before and complained about me to my boss, and each time, I was grateful that my boss heard the customer out and stuck up for me while satisfying the customer.  There has to be a cut-off point, though.  If one or two customers register complaints about an employee, then maybe that's on the customers.  However, if several customers complain about an employee and immediately seek another business to meet their needs, then, regardless of how much you may ADORE that employee, they've got to go.

4.  You ruin a good business by turning a blind eye to illegal or unethical practices.  Bottom line, in the eyes of the law, the boss is responsible for ensuring that the employees conduct business and represent the business in ways that are lawful and ethical.  In this case, the boss is much like the parent of a minor; while the employee may get in trouble by being terminated or even, in some cases, incarcerated, the boss could lose the business altogether.  Allowing one employee to engage in illegal or unethical business practices can be doubly detrimental to the business:  (1)  As previously stated, it can cause the business to be shut down, and (2) it ensures a bad reputation for that business.

What are some business practices that you've seen or experienced that can ruin a good business?  How could the business have turned that into a positive?

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