Let me ask you a question. Do you realize you are the chief executive officer, or CEO, of a very important company? You are, and that company is yours. It's now up to you and you alone to make all the decisions: Who will be your customers? What supplies, tools and equipment will you need? Where will you purchase them? Where do you get the education you need to fabricate the products you will sell? How do you make a profit? How do you meet deadlines? How do you run a business? And how many hats can you fit on your head at one time?
The point I'm trying to make is if you are going to run a business, then get serious and run a business!
You are now in business and it is time to think like a business person who is serious about making money. If you are not serious about making money, do yourself a favor and stick to a hobby. There is no sense in putting yourself through the stress, risk and anguish of running a business if you don't want to be well compensated for it. If you are a CEO determined to see great business and financial success, then read on!
There are some important concepts you must accept, embrace and practice if you are going to be financially successful. I encourage you to read or listen to business management books. There are more principles than what I am going to enumerate here, but these are the ones I see as the most needed within the workroom industry.
Your time is valuable. Every minute that you spend working in your business has a price tag-every minute.
Your goal is to have the customer pay you enough to cover every minute of your time including a profit! If the customer receives your time (i.e., your service and product) without paying a fair value for what you are offering, then consider that customer as robbing you, just as if he had put his hand in your pocket and removed your money.
There is a high demand for what you offer. Sewing skills and window covering knowledge are scarce. There is a severe shortage of people who know how to sew. There is an even greater scarcity of window covering workrooms-especially those that are good!
Think of it this way: Rocks are free because they are plentiful. Rubies, emeralds and diamonds are valuable because they are rare. When anything is scarce or rare, it becomes a luxury product. You are selling a luxury service and product.
Income is directly proportional to knowledge. It takes education to make money. The better educated you are, the greater should be the price on your time, services and products.
It doesn't matter if you are self-taught with no college degree! The more experience you have, the more classes and seminars you attend, the more books you read, the more you network for knowledge and the more you research, the more your value increases.
Think about all the computer consultants out there. The majority of them probably are self-taught and even operate home-based businesses. They've committed their time and energy to learning computers and they are not afraid to charge for their knowledge. My self-taught computer consultant charges $70 an hour, and he is worth every penny! Why do I think that? Because I don't know how to do what he does. Your customers don't know how to do what you do either!
It takes money to make money. I know that is an old clichι, but it is a fact! The more money you wisely invest into your business, the greater will be your success. In most any other industry if you were to start a business, you would have to lay down a hefty investment to pay for inventory, equipment, operating overhead and working capital. Working capital is necessary so you can pay your expenses and your own salary while you are building the business.
All of this is unheard of in most workroom start-ups. Too many who start in the workroom business bring along their backgrounds of frugality in trying to cut expenses to keep their families fed and clothed. There's nothing wrong with being frugal. It's just that in business you will have a long, hot, dry, winding road to trek if you allow frugality to overcome wise investment.
The key word here is wise. I'm not talking about going on a spending spree and buying everything you see advertised. I'm talking about evaluating the products. Invest in those products that will educate you and elevate your value to your customers, that will enable you to produce a better product and command a greater price, that will get your work done faster, that will organize your business for greater efficiency, or that will reduce mistakes and pay for themselves.
Don't agonize over spending $20 if it will reap a benefit greater than $20. If you don't have the cash on hand, don't agonize about borrowing some if you know you will receive back that much and more.
Know and understand the numbers. Sewing is fun and you can make things that people want, but that is not what will make your business profitable. What will determine your success is understanding what's involved in setting a price that will pay you what you deserve and leave you with a profit. If you don't know what you need to charge per hour to make the income you need to survive, then your business could go under and you'll never know why.
If you add to your overhead (invest in major equipment or move into a rental location, for example) you need to know what you must generate in gross sales to pay for that added expense. Obviously that also will raise the price you must charge per hour. If you don't know what your sales, overhead and profit were for last year and how those numbers relate to each other, how can you determine what you need to do to better your sales and profit this year?
If you need to learn about reading numbers, pay your accountant to teach you or hire a business consultant. That would be a wise investment!
Know your market. This is a concept that is so hard to grasp. It was very hard for me. We all think everybody is fair game for our products and if we can't make a sale to everybody we approach or who approaches us, we think we're failures. Wrong!
If a Lincoln automobile dealer cannot sell a car to someone whose income will support the purchase of a Ford, then he has not failed as a salesman. He has failed to qualify his customer and has wasted his time.
Remember, you are selling a custom product, a luxury product. The devoted discount store shoppers are not your customers. If you are a wholesale workroom, not all decorators and designers are your customers either. Some haven't accepted these very concepts we're discussing and don't know their market, or the market they've chosen is lower than the market you have chosen.
Know how to sell. Even if you are a wholesale workroom and have a limited clientele list, you still must know how to sell. Once you learn your numbers and know what you must charge per hour, don't be surprised if it's much higher than your competitors. Sadly, this industry persists in undercharging for its services. However, if you know how to sell and can do it well, you have a chance at getting the prices you need. If you can't, then you might have to do some soul searching to decide if this is the business for you.
Do what it takes to teach yourself to be an outstanding sales person. Two books I highly recommend are: "Selling The Invisible," by Harry Beckwith, available through most book stores, and "Selling to the Limit," by Ellen Madill and Jo Ann Brezette, available from Brezette, (317) 844-4636. This is another wise investment as long as you practice what you read!
Be professional. I said plenty about this in last month's article. (See D&WC, June 1999) Remember to act like the CEO of a major company because that's what you are!
Choose a very prominent, successful person, CEO or president of a major corporation and let that person be your mentor and role model. Ask yourself what that person would do to correct this problem? Would he invest in this equipment to help the business? What would he do to create a greater profit margin? Imagination can be a great motivator and image builder!
Accept full responsibility. By receiving money for your services and products, you have increased your responsibility at least threefold. Now you must make an adequate income for yourself. You must do your best to offer good customer service and more than satisfy your customers. And you must set a good example for the industry.
Just as every employee represents the company he works for, you represent the drapery workroom industry. If your quality and service are inferior, your customers will be hesitant to deal with other workrooms. When they are forced to do so, they will be far more demanding than they should have to be. If your prices are too low, they will expect all workrooms to have low prices.
Unfortunately, for the most part, our predecessors have already set the stage for us, and it is something we need to turn around for the benefit of all. Take your responsibility seriously and remember that you are not the only one to whom you are accountable.
All of these concepts are a major part of what a CEO must believe in and use in order to run a successful business. Running a business can and should have some fun to it, but it is a serious game. If you don't follow the right rules, there may be more than money lost!
Kitty Stein, WCAA, is a 20-year veteran of the drapery workroom field, having owned and operated her own business for 18 years and having taught classes on window treatment construction. Until 1990, Stein and a partner owned a workroom with nine employees. She since has opened her own smaller workroom, Workroom Concepts, that has just one employee. She also does workroom consulting, seminar speaking and is the author of Order in the Workroom available through Draperies & Window Coverings.