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Biz Talk: It's All About People, For Better or Worse

Every business involves people. You have to learn to deal with all kinds of people if you want to stay in business.

Before you get too excited about your business idea, you should first ask yourself these questions: Do I like people? Am I comfortable handling different types of personalities?

If you answered yes to these questions, then you can go ahead with your business planning.

The most challenging part of every business endeavor is people. The people you encounter every day can either lift you up or put you down. It is all up to you to make the most of each and every relationship.  

Let me tell you about the different people I had to deal with when I started CoffeeShop Treats*:

1. Family. Surprisingly, the biggest opposition you will encounter may come from your own family. Because they were brought up in a very different environment, my parents were too scared to let me take the risk. They would give me all kinds of negative scenarios, which would have discouraged me had I lacked the passion for my business idea.

2. Suppliers. This group of people is one of your best sources of information. They know common industry practices and practical solutions for your business situation. Listen to them and use their advice to validate your market research findings.

One of the biggest mistakes we made was to ignore advice from one of our suppliers to defer major operational and physical changes for at least six months in order to establish good relationships with the city/county officials, especially the health inspectors. Once you've established those connections, you will be able to easily determine their focus and perspective when it comes to keeping your business up to code.  

3. Investors/Partners. Do not assume that just because these people became your partners, they understood and agreed with every detail of your business plan. Make sure that you are all on the same page and that your partners get all updates and reports of major changes or critical situations.

It's much easier if you can find partners who are as passionate as you are about the business.

One of our investors withdrew her share just when the business started losing money. It happened right after we all agreed to proceed with renovations to comply with the building and health code requirements. We were not able to anticipate this move and had to resort to business loans and personal borrowing to make up for the loss.

4. Service Providers. Your accountant, banker, lawyer and consultant are business partners with whom you should maintain regular contact in order to minimize or eliminate avoidable mistakes.

Do not rely on hearsay. Ask questions and professional advice, especially if you’re a first-time business owner.

Our accountant was so helpful during our preparation for the business purchase that we were able to come up with the business valuation, purchase negotiation and sales agreement on our own. It would have cost us $3,000 to 5,000 had we used the services of a business broker and/or lawyer.

5. Seller(s). Although it may be a temporary relationship, the former owners (of the business you’re buying) will be able to help you with information about their experience. This includes lease arrangements with the landlord, customers’ profile and preferences, tenants’ attitudes and behavior, store image and reputation, and the general security, peace and order of your location.

6. Employees. They can potentially be the most stressful group you have to deal with because you will be working with them every day. Make sure you choose the right people during the recruitment process. If possible, defer hiring outside help until you have established your policies and procedures, or until you can no longer keep up with the demands of daily sales and operations.

We made a mistake of hiring too many people just before we opened the store — because sales didn’t really start picking up until six weeks later. It was too late when we realized that out payroll expenses were already way over budget.

7. Customers. They can keep you in or out of business. Especially when you’re just getting started, these customers will try you out first. If you pass their test, they can be your loyal customers. However, they can also ruin your business if you happen to attract the worst of them.

At CoffeeShop Treats, a couple of teenagers put a few strands of hair in their coffee, perhaps as a prank. One customer spilled his drink and complained about the wet floor. Another customer returned and exchanged some doughnuts bought the day before, mumbling about them being too hard or tough.

8. Co-tenants. You want to keep a healthy relationship with co-tenants because they are potentially your regular customers. They can also help by bringing in their customers to your store, especially when they are not your competitors.

They can also give you tips and advice when dealing with the landlord, city officials, bystanders and even potential troublemakers.  

9. Competitors. Depending on how you handle them, competitors can pose some trouble for you. We had an incident where, without us knowing she was a competitor, a woman started talking to our customers about how her shop's doughnuts and coffee were better and cheaper than ours. Another competitor tried to copy our signage and promotional strategy.

10. Community/General Public. You have to keep a good reputation within the community. They will watch your back when you get their trust and confidence. One nearby resident informed us about a couple of prowlers he saw the night before on his way home. He advised us to leave some lights on to deter potential break-ins.

Your character, determination and patience will be tested by all kinds of people around you. Always try to keep your composure and be ready for unexpected actions and reactions from people.

With an open mind and ears, you will learn a lot from people who can help build your knowledge, character and experience.

*CoffeeShop Treats LLC, a bakery cafe business, was sold in 2007.

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