Self Inflicted Problems
 
 
How I wish I could walk into a brand new company that hasn't started yet so that at least I won't have to deal with self inflicted problems. 
 
But no luck
 
What normally happens is that the business owner has had years to build the company wrong and I have to undo the damage. 
 
The business owner hasn't a clue that he is damaging his company's future.
 
There's a huge number of ways that the business owner is damaging his company's future with self inflected problems.  And he may not even be aware of these problems!  Here's a few of examples to think about.
 
I'll talk about:
1. Hiring the Closer. = Giving your business away.
2. Hiring the Closer. = Destroying your marketplace.
3. Mr. Cheap = Painting yourself into the corner.
 
Here we go!
 
1. Hiring the Closer. = Giving your business away.
 
This one is easy to understand.
 
You hire a 'closer' and he can actually sell!  You have a couple of these in your business and they are between 20% and 50% of your business.  You're so happy!  But wait a minute!  Danger lurks here!
 
This 'closer' or 2 start complaining that they are not getting paid enough.  They are right.  You're probably giving them anywhere between 10% to 30% of the gross sale.  They want more.  You can't give them more because you have all this overhead which just sort of happened.
 
One day they leave and take the busisness with them and find your competitor that will produce for them. 
 
You lose 20% to 50% of your sales and start losing money and your business dies.
 
I walked into a terrible one of these years ago. 
 
I got the phone call and went to visit.  I got there to find a huge warehouse that was a factory.  There were pieces of steel everywhere.  But there were no people in the factory.  I went up to the second floor looking for someone and no one seemed to be there.  I walked into this nice office.  There he was, the owner.  Sitting behind his desk just staring at the wall, all alone in this big building.  I introduced myself and asked him what happened.
 
He told me that he produced clothes racks for the department stores.  You've seen them.  They're those chrome racks full of clothes hanging on them. 
 
Well he had a very good sales person.  She left with his best accounts and left him for dead.  He had a huge overhead and losing that portion of his sales put him cash flow negative.  There was no way he could regain the work because the stores had a relationship with the sales lady that left.  He was stuck with the huge overhead and couldn't downsize fast enough.  He ran out of cash and didn't make payroll.  The workers left.
 
He was just sitting there and he looked like he was about to have a heart attack.  There was nothing I could do.  I left.
 
The problem was there for years staring him in the face but he never saw it.  He hired a good 'closer'.
 
 
2. Hiring the Closer. = Destroying your marketplace.
 
This is a little harder to explain.
 
The business owner thought he was smart and hired 'closers'.  The 'closers' went out to sell and most failed so the business owner spent most of his time hiring.
 
He believed in the 80/20 rule where 20 percent of his sales force sell 80 percent of his sales.  This is only true because the owner or management haven't a clue how to build a Sales Engine and are depending on the inate talents of the 'closers'.   This is simply a matter of bad management.  Yet no one in management will admit to this!  They just blame their inadequately trained sales people for their failures.
 
Just to digress a moment, imagine if all his sales people were given a Sales Engine to implement and they were all successful!  How rich would you be?  Very!
 
How much money would you make?  A lot!  Oh,  you don't think this is possible?  Well maybe I'm the only one that can do it.  Here's an example with Palmer Company.  All his sales people were able to be successful because I created a Sales Engine for them to use.  The weren't before I created the Sales Engine.  If they didn't use the Sales Process they couldn't even get an appointment.  With the sales process they were doing business 71% of the time!
 
Anyway, since the business owner can't create a Sales Engine, he had no control over his sales process. 
 
So the sales people all had different ways to sell.  No problem you say?
 
Well even if he succeeded for a while he was planting seeds of his  own destruction.
 
This is because he never had a clearly defined reason why his market place should buy from him. 
 
This is how these destructive seeds are sown.
 
Since he does not have a narrowly defined Marketing Position then the 'closers' are out there saying whatever they can to make the sale!  Every sales person does it just a bit different.  So just think about it.  Each sales person is saying whatever he likes which is different from the next sales rep.
 
The world gets confused and the company never gets a reputation for doing a particular thing right!
 
Let's say the business owner's 3 sales employees and went out trying to sell 3 different people.  Each of these people heard a slightly different thing from the each of the others.  So one day they are at a cocktail party and for some reason they start talking about the business owner's company.  Each of these customers have a different view of the company because each sales representative said something slightly different.  They look at each other and wonder what the business is really selling and what is it they are really good at.
 
The world never really knows what this business is really good at!
 
This business owner is just working hard to get ahead because the marketplace will never grant the business a position in the world.  It will always be an also ran.  It will be vulnerable to a directed attack.
 
I probably can't explain this adequately here. 
 
Maybe you understand what I'm saying and maybe not.  It would take too much background theory and too many examples.  Maybe I'll write a book on it because it's so important.
 
Bottom line is that you know that you haven't ever really grown strongly by hiring 'closers' and mostly you're frustrated about it and blame your salespeople.
 
 
3. Mr. Cheap. = Painting yourself into a corner.
 
A business owner was once an employee and decided that his boss was a moron and he could do better. 
 
After all he only got paid maybe 20% of what the boss charged.  All he had to do is go independent and charge 50% of what his boss charges and he will be able to take the business away from the ex-boss.  Simple enough.
 
He charges a cheap price and of course the customers love him and he gets a whole bunch of these customers. 
 
But then he notices that he can't do all the work himself and who has time to answer the phones and keep up with the filing!  So he hires an office girl and he also hires a a technician.  Now with his new overhead he starts to lose money.
 
He finds me and I walk into the mess. 
 
We need a higher price so he has adequate margins to pay for his overhead and take something home.  But all of his customers know him as Mr. Cheap.  So there is no way they will accept higher prices from Mr. Cheap. 
 
Now Mr. Cheap is stuck.  He needs to raise prices but his customer base loves him at his old cheap price!
 
Solving this problem is very hard. 
 
We need to replace all of his customers with a new set of customers that DON'T know him as Mr. Cheap.  And at the same time not alienate his existing customers.  This is hard!  It will take more time and effort to rebuild this company than if he had just started correctly from the beginning!
 
How I wish I had met the business owner when he started so that he would not be between this rock and a hard place.
 
 
There are many many other mistakes that business owners make.
 
These mistakes are self inflicted problems on the business that the business will die of.  One day I'll write a book with a lot of these examples and in depth explanations of why they are self inflicted problems.
 
These self inflicted problems are the cause of the mess I'm always walking into. 
 
Not only can't the business owner take market share because he has no Sales Engine, he also has painted himself into a painful corner with self inflicted problems that will eventually kill his business.
 
And I have to fix these.  Oh what a mess!
Unfortunately, sometimes it's too late to save the business owner.