It’s that time of year. Time to renew the annual landscaping contract for my house. I’ve relied on the same local company for the last few years, and they have done a good job. On the other hand, as usual in the spring I’m bombarded with flyers advertising other companies, and even individuals, who profess to be the very best with lawns and gardens.
To me, it’s not a big deal who I choose. The market is competitive, so within a fairly predictable range the prices are about the same. Most of them will do a competent job. I had one, a few years ago, that was dreadful, but that was an anomaly. I’ve never had one that was amazing, despite the marketing hoopla.
So, from my perspective, choosing one company or another is a minor decision, not really worth spending a lot of time and effort to get right. I am buying a service. My choice, right or wrong, isn’t going to affect my life much. It’s pretty simple.
For each of the entrepreneurs vying for my business, however, the formation and continued success of their company is likely to be one of the most important things in their life. While winning or losing my business this year is not a make-or-break event, the business itself is a big deal to them.
It’s all about point of view.
I was reminded of this aspect of life during a recent walk along Bloor Street. Bloor Street west of Spadina, like many other retail thoroughfares, is chock-a-block with small businesses: one beside the other, individual storefronts, marching relentlessly into the distance as far as you can see. There are probably thousands of individual businesses along that stretch, most of them locally owned and operated. Some are restaurants, some clothing, book, home décor, and other stores. There are clubs, and service businesses, and who knows what all else.
The same thing could be said of hundreds of streetscapes in Toronto, or any other city. It is not so different in malls. Even the chains are often locally owned and operated by franchisees. If you look around, local businesses are everywhere.
It is easy to view this reality as a group – as thousands of stores – rather than see each one as the life’s work of an individual. Yet, it is the latter which is the more visceral truth.
During my walk, I passed a small retail outlet, selling small pieces of furniture and other home décor items. At the cash, two people were engaged in a heated – and obviously emotional – discussion. Apparently husband and wife, they were agonizing over the future of their store.
“There is nothing more I can say to the bank,” said the man. “It doesn’t matter if it makes sense for us. They won’t give us any more.”
The woman was distraught. “How will we pay them? If we can’t bring in the right inventory, we won’t have the money for the monthly payments.”
“I know,” he replied, “but it is what it is. We have to make the rent first. New inventory will have to wait. We’ll cut prices even more on the stuff we have.”
“We can’t,” she said. “We’re already losing money at the current prices.”
“We have no choice. We need the cash, or we’ll default on the bank loan.” He was cold, but in a sad way.
She looked hard at him. “But that means our house. We can’t lose our house.”
There was more, but that was enough.
This is a little shop that I might enter one day on a whim, then buy or not buy depending on my mood, and whatever other irrational factors make one reach for the wallet. To them, it is their life. To own this store, they mortgaged their house. Now they might lose it.
It’s not like this concept is news to me. For some parts of my career, I have advised small business owners. This same thing happens in many businesses, not just in retail stores.
Years ago, I advised a metal-working company in Toronto. The owner had actually been a tool and die maker when he was younger, then decided he wanted to have his own company. He and his wife were planning to have kids, and part of his dream was that he would build a business that one day would belong to his sons. (Not his daughters. They would find great husbands, he thought. Times were different then…I think.)
When he started the business, it specialized not in tool and die, but in custom orders using sheet metal: signs, displays, boxes, parts for bigger items. It took him five years to save up enough money to launch the business, renting a factory unit in Mississauga and buying used equipment at auctions of failed sheet metal companies. He didn’t have any customers, but he cold called people who might need sheet metal products, and sold at dirt cheap prices to get their orders.
If you asked him today, he would tell you with more than a little bitterness that he ran out of money many times in the first few years. His wife often advised him that it was time to call it a day, but he always thought that, with a little more effort, he could get over the hump. He worked long hours, sometimes eighty hours a week during periods when he couldn’t afford his workers. Sometimes he had to delay payroll just to survive.
He did survive, and after more than twenty years bought his own 20,000 square foot factory/warehouse, not really all that large, but a big deal for him. Tenacity, good prices, and hard work meant that he got contracts for regular supply to major chains, some of them spending several hundred thousand dollars a year. The new factory was justified by a five year contract at more than a million a year, on which he could generate more than three hundred thousand of annual profit.
Everything was looking up. Taking big risks, working long hours, and investing so much of his own heart into his business was paying off. Along the way, they bought a nice house, and his two sons and a daughter grew up with many of the luxuries he never had as a kid. By the time he bought the new factory, his sons were 21 and 18, and his daughter was 19. All good.
The dream didn’t work out quite as planned. Neither of his sons had any interest in the business, and in fact his older son was openly disdainful of any business in which he had to get his hands dirty. A few summers working in the factory were enough. He had already decided he was going to work for an investment bank, and get rich the easy way.
The daughter, on the other hand, was interested in the business, but he couldn’t get his head around a woman running a sheet metal company. In any case, she was “too young”, and by the time he thought she was old enough, she was studying to be a veterinarian.
The end result? He retired three or four years ago. He tried to sell the business, but got no takers. The customers were fickle. As he got older, they had started to look around. Not all of them stayed with him. Eventually he sold the business for peanuts to a competitor just happy to see him out. His retirement nest egg didn’t come from selling his business – the business into which he poured his heart and soul – but from selling the factory. The purchaser tore it down. They only wanted the land, but paid many millions for it.
His factory was one of thousands in the industrial areas of the Greater Toronto Area, and each one has its own unique story of risk and sacrifice to build a business. Like retail stores, which each just seem like nothing special when you walk down the street, factories large and small are a dime a dozen, yet they are each a big deal to the founder/owner.
It’s not just a question of mortgaging the house, or saving for years, or working long hours. Many people bring their family and friends into their enterprise. How many times have I seen someone with a business idea make the rounds to all their friends and family, getting $1000 here, $10,000 there, until there is enough to make it happen? That person is putting not just the money, but also their relationships, at risk in a business that, to them, is a dream they are striving to fulfill.
More than once I have seen a business fail, and with that failure family rifts created that may never heal. On the other side, I have several times seen the same thing happen with successful businesses, where the friends and family feel they didn’t get their fair share of the rewards.
It is not just factories and retail stores. Many of the small apartment buildings in any city were originally built by an entrepreneur, risking everything they had, and everything their family had, to be a landlord. The same is true of service businesses, although in those cases the capital is usually smaller, but the investment of time – and heart – by the founder can be astronomical.
If you look around any city, you will see tens of thousands of businesses of various types, all providing goods or services to the public or to other businesses. It is easy to think of them as important in a group – they provide most of the jobs, and most of the economic growth – but just as easy to forget the importance of each one as an individual venture. We forget the “blood, toil, tears and sweat” that goes into each one, no matter whether it succeeds or fails.
The same, by the way, is true of charities, and of international aid, and any number of other situations in which we make day to day choices in a world with a lot of choices. They matter a lot more to someone else than they do to us.
And what is the point of this? There are two.
The first point is about loyalty.
When we deal with businesses, we tend to wear our “market actor” hats, meaning we are free to move from one supplier to another on the slightest pretense: a small drop in price, a fancy ad, a minor advantage of convenience. We do that because we see the business as a business, impersonal and non-human, and don’t for a second put our minds to the real live people behind it. People who care about their business, and for whom your decision to “go somewhere else” matters.
That doesn’t mean you should stick with someone who provides bad service, or defective products. It doesn’t mean buying the same thing over and over again, when in fact a new product would actually serve your needs better. (Yes, I may have to actually replace my Blackberry with a real smartphone.)
What it does mean is that, all other things being equal, loyalty should still count. When you are happy with the goods or services being provided to you, there is value in being loyal to your supplier. It is not inertia. It is recognition that you are dealing with real people.
The second point is about perspective.
This is another reminder that, even where people have shockingly different perspectives, all of those perspectives can be true. How often do people in a particular business – the energy business, to take one close to home – decry the unwillingness of their customers to give their business enough mindshare? (“Why are our customers so stupid?” one industry executive asked me. My answer was “They’re not stupid. They just don’t care.”)
So, in the same way that, as customers, we should remember that businesses are a big deal to the people who start them (i.e., through loyalty), as providers of goods and services to others we should remember that those goods and services may not be as big a deal to our customers and clients as they are to us. They need something, often something they can’t really define with precision. They don’t want to become experts. They don’t want to have to think about it, or care about it (or you). They want your business to figure out what they want and need, and provide it.
From both sides, that of the customer and that of the business, the large point-of-view gap is an issue. Both sides benefit from a little more understanding of the relationship from the other side’s point of view.
But there is a broader point as well, perhaps a combination of the two. Much of modern life is about very casual relationships between people, like customers in a store, or landlords and tenants. We often depersonalize those relationships, as if they are not really relationships with people at all. It’s not a bad thing to remind yourself, periodically, that no matter how complex your life gets, all human interaction – even the most casual – is still about other people.
– Jay Shepherd, April 12, 2016