My Expensive Hobby

Last newsletter it’s all about taking care of customers, now let’s talk about the business or to most small businesses it all starts as a hobby specially to craft business.

Have you fascinated with something and you focus your interest how they made it? Of course you are. Festivals and craft shows have hundreds of crafters and by browsing all booths one particular product or products catch your attention. You end up buying few items and very satisfied with the products. ‘In your mind, I think I can make this product by myself, I know it might be hard at the beginning but for sure with trial and errors it could be easy in the long run.’ For few days it’s in your mind how to start making these products. You end up searching millions of site in the internet for specific ingredients and raw materials. You found some of the material needed and so excited you order and once received started making first product with the only basis is the internet knowledge. Finish product came up nice but not to your expectation. So you think okay, I will try different formulation; and by doing trial and error you end up to a product that you think is the best ~ better yet you made it!

Being so excited you show your creation to friends and family member. They too are amazed you made a nice product. With this start-up knowledge you are now thinking you might make some money if people around you or you know will buy these product. Then you start making these products in larger quantities. You are selling them in margin of profit you think is enough (not too pricey but not too cheap since some people think if they were offered too cheap product what kind of ingredient it has and when product is to expensive they think you make so much money and want to get rich in no time).

Now as my heading starts ‘my expensive hobby’, the question is how much you can afford to put a start up investment to your hobby (or I should say, business? You are now getting to the complicated part of your hobby. Based on my experience, which I learn the hard way, set a goal first how much time you will spend to this. Then also set a time frame how long you think it will take before it makes money. (Craft businesses usually, make money almost immediately) but when you plan to make it bigger along the line, you must expect long term goal. Say a year it should make at least 0 to 10% net profit. Then again start from there. After the first year it should make a little more than that. But the point is no matter how much you think it should make in terms of net profit, you must set how much you need to put in initial investment.

Now after setting the initial investment and forecasting profit, you also need to set an amount for advertising. To start with it’s nice to have word of mouth advertising. It’s one of the most powerful form of advertising. Once you already making some sales, allot an specific amount to advertise.

If you look to big ‘fish’ out there in the market today, they spend tons of money to advertise their products. But for now you can’t do that. All you need is effective reasonable form of advertising. Base on your total sales (let say a month) is two hundred dollars, my suggestion is only ten per cent (10%) is good. So $20.00 is good for at least copy paper to print some literature describing your product and distribute to people you know. Let them help you distribute additional literature to those they know. You can also print this literature and put them on the windshield of cars in the malls parking lot. Just make sure the mall management allows this. So it’s better to inquire first. Then you can track improvement if sales are improving.

Next time, form of advertising.

Customer Relationship

Let's talk about relationship between customer and business. Most businesses treat their customers in different ways. If you are a big fish, you'll be treated like a king and if not, they look at you like nobody.

I have two stories to share, one happened to a guy that just started his home based business and struggling to make ends meet to his business. To save some money from shipping and handling fees he decided to go ahead and pick up what he need in one of the supplier. Along the way there is another supplier he knows that have the same product (raw material) and think just the heck of curiosity he stop by and ask to this business he need these material and since he's in the area he stop by and buy what he need. Unfortunately the customer service representative from inside their office didn't even show up at the front window and said they don't take orders over the phone.

Our guy tried to tell them since he is there already (at the area) could she come at the front desk and take the order. Again she insisted they couldn't come and get the order, telling him he has to place order over the internet. Then if he wants he can pick his order on a specified day or date. Of course our guy is a little upset thinking that since they are a business and it's the first time our guy encounter this kind of treatment as a customer he shouldn't receive that kind of service. First of all he is a potential business customer who wanted to establish a long term relationship with this vendor/supplier. And shouldn't be treated like that from the beginning.

Then our guy went to the vendor/supplier that he really intended to go (their competition). And from the first step at the door he is greeted warmly, invited in and given a tour of the showroom, offer some snack and told him feel free to browse around and take time, if have any questions just ask, given a catalog of their products if he didn't see what he wanted they will help to find it. First thing our guy notices is a sign on their wall that simply says: "A CUSTOMER WHO SPEND A DOLLAR OR A THOUSAND DOLLARS TREAT THEM THE SAME".

Finally our guy gives his order to them; guess how much he spent, two thousand four hundred dollars!!! ~ Needless to say he is very happy and has a great relationship with them. Also becomes a repeat customer. Finally after sometime our guy has a striving small home based business because someone took the time to come out and treated him as it should be.

Now, let's talk about the next story. Internet customer service and business, the same guy (our guy) is looking for different containers for his products. He researched and spent hundreds of hours looking for those perfect containers he needs. He found what he is looking for. He orders one each just to sample the containers. He places his order and pay by his credit/debit card. The order goes through and received a confirmation email. Next day he also received a copy of the receipt via email. After a week he didn't receive his order. Wondering why it's taking so long. He looks at his order again and sees that the last four numbers of his card is not matching. He know he made a mistake then he called the company and left a message telling them about the error he made. Asking them if they can fix it so his order should continue to be processed. Also sent them an email stating the same situation so he has a hard copy of the order to make sure they know what he is asking for giving the order/purchase order number. But again here is a business that can't be bothered with a little guy, or maybe they don't have customer service department, unfortunately didn't even return his call or email message. Similar to our first story, about a little guy who climbed the ladder one step at a time, he is now successful and his business is thriving.

The lesson in this story is simple: take time to help all potential customers whether they are big (and don't judge them by the way they look) or small and build a good relationship to everyone. Treat every customer the same. Customer will remember how you treat them from the very beginning and word of mouth is the best and worst advertising for any business.

S. M. D.