Bottom Line Business Insights : Maryland Business Lawyer & Attorney : Wagonheim Law Firm : Mergers & Acquisitions & Contractual Negotiation

It seems like every year I have read articles (now blogs) condemning the practice of making New Year’s Resolutions. The critics charge that efforts to change for the better should not be reserved for one day on the calendar, but rather should be an ongoing effort throughout the year. 

Personally, I like the New Year’s Resolution habit. While I embrace ongoing change, I’ve always welcomed the blank space in which to reflect and make renewed commitment. In no endeavor is this more necessary than in business.

With that in mind, I submit the following Resolutions for your consideration:

• Arrive at a new focus on brand discipline. Farrah Fawcett, Steve Jobs, and the Lessons of Apple...in 2 minutes
• Use the time over the holidays to write your higher level strategy planning time into your 2012 calendar. Note that I did not say “pencil” it in. Use a Scripto. The Importance of the One Night Stand
• Scrap your annual review process and find a better way to coax the best out of your people. Employment Law’s Dirty Little Secret
• Personally visit every single one of your customers in 2012…no exceptions. Do Your Clients Still Know You?
• Look at your most important forms – contracts, purchase orders, etc. – and make sure they actually say what you think they say and that they actually protect you the way you think they do. How to Document a Transaction
• Make sure your company has locked down its streams of income through enforceable restrictive covenants like Non-Compete Agreements. What Thomas’s English Muffins Can Teach You About Non-Complete Agreements and Why You Need a Non-Compete, Non-Solicitation, or Confidentiality Agreement for EVERY Key Employee
• Pay attention to the little things that could make or break your contracts. Contracting Basics: Why Boring Things Like Venture and Jurisdiction Matter
  
• Get better at basic small business financial management. Basic Small Business Financial Management 
  
• Make your company a little bit more embezzlement proof. 5 Ways to Prevent Fraud and Embezzlement
  
• Make sure your company follows Rule Number 1
  
• Don’t just learn the Lessons of My Father, commit to putting them into practice.

Please accept our best wishes for every personal and professional success in 2012.

Do you have any other suggestions for small business owners?

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I am always attracted to the edge of the flame – the flickering boundary between the candle and darkness, where the fire seems to dim to a burnt orange. My eyes hover there, and it is in that place that I find the most meaning. 

Chanukah is known as the Festival of Lights, but Christmas and Kwanzaa could also carry that label. Through its trappings and teachings, each holiday compels us to focus on light and warmth; the light of shared values, the warmth of family, and the brightness of hope and peace. We are told in the verses of our worship that, unlike so many candles, our holiday lights need not flicker and die in the space of a few hours, provided we make it a point to carry their light with us throughout the year to come.

I am writing this blog in a bleak time of economic uncertainty. So many families are under stress and our leaders seem incapable of giving more than lip service to the commonality of our purpose.  But it is precisely this commonality of purpose that marks the readership of this blog and others like it. 

The website of the advisory group Vistage features the statement: “wherever you see a business, someone once made a courageous decision.” That statement resonates with me, and I have cited it in other entries. I see those courageous decisions as individual choices to keep the darkness at bay. These choices…these decisions to start and persevere with businesses – especially in times uncertain – live on the edge of the flame and each, in its own way, carries with it hope.

The coming year will bring us large events to consider and experience. But in the midst of the tumult which will, no doubt, characterize a good part of 2012, let us remember the brightness of this holiday season, conspire together to push back the darkness, and find within ourselves the courage to live the words we pray.

Happy Holidays from Eliot Wagonheim and Wagonheim Law.

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In  March 2010, my accountant told me I was a bad client. I’m not saying he implied that I was a bad client or hinted at his meaning. He looked me straight in the eye, sighed, and told me flat out that I was a bad client. He was right.

I had been with my accountant, Mike Weinberg of Weinberg, Griffith, Tucker & Jones PA, since starting this firm in 2002. Over the years, I have come to value his insight, his genuine concern for his clients, and his principled approach. But valuing those things is not the same as utilizing them. 

Every year, I would gather my information from the past year – internally generated general ledger, payroll reports from ADP, personal information and receipts, etc. – and turn them over to Mike…usually somewhere around March. Mike’s firm would prepare the requisite returns, I’d pay the taxes, pay my bill, and put the process to bed for another year. 

But a strange thing happened over the years. The firm grew, added employees, and became what one might call a “real” business. We had employees depending on us to help pay for their homes, their children’s education, and contribute toward their long-term security. We had a diverse and growing client base. We had become, in other words, a “real” business. 

Unfortunately, I wasn’t acting like I ran one. Even while guiding clients through some extremely complicated situations, I was running my business like it was a start-up. Certainly, I had all the trappings of a real business – I had an insurance agent, an accountant, a benefits advisor and an IT consultant – but that wasn’t Mike’s point. 

When Mike called me a “bad client” he was telling me that it was not enough to engage consultants if I was not willing to put forth the effort to use them properly. He wasn’t after a fee; what he wanted was communication. He wanted me to work with him during the year so we could do some tax planning and discuss the strategies he could employ to help us reach our goals as a firm. What he needed was for me to make it possible for him to bring me his best; when I failed to do that, year after year, I earned my label as a “bad client.”

I’ll never forget this discussion. It took all of 2 minutes and it contained one of the most important lessons I’ve learned as both a lawyer and a business owner. I’ve given that speech to my clients – those who pay me to be reactive, rather than allow me to be fully engaged in the pursuit of their goals. I gave the speech last week to a client who made an appointment to see me this week after many months of silence. I’ll probably continue to give this speech to carefully selected audiences for the rest of my career.

As we approach 2012, perhaps you may want to consider the advisors you value and ask yourself if, objectively speaking, you too have been a bad client. If so, maybe the new year brings with it a chance for you to do better.

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“I got a phone call this morning from one of our oldest customers. He fired us. After 20 years, he fired us. Said he doesn’t know us anymore. I think I know why.” 

The speaker recounted his phone conversation to his account reps, saying “we used to do business with a handshake, face-to-face. Now it’s a phone call, a fax, ‘get back to you later,’ with another fax, probably.” 

This United Airlines commercial was originally aired before e-mail and the advent of social media.  First aired twenty years ago, in 1990, it still resonates. So many businesses are started by an entrepreneur, skilled in the producing the product or service that spawned the company.  Customers came because of the skill and stayed because of the attention. As the owner of a small business, the founder could track every project and knew every client. When someone was upset; he knew it.

Growth has a way of making that kind of personal attention obsolete. Time passes and a founder looks around to realize that whole projects are being performed for customers he never met. And what about the ones he knew – the ones who built his business or who inspired him to go into business in the first place? Chances are, they’ve been delegated. Delegated to talented people, to be sure, but delegated just the same. 

Sooner or later, the thought has to occur to these customers – your old friends -- that if they mean little enough to your company that they can be delegated, your company means little enough to them that they can go elsewhere.  

Looking ahead to 2012, most business owners set targets for growth  -- more revenue, more customers, bigger projects, better distribution. But how many set goals reflecting stronger relationships, customer retention, and expressions of gratitude? 

Many years ago, I read a book, Raving Fans by Ken Blanchard, in which the author urged business owners to “pay attention to the ‘fine’s.’” He meant that people rarely voice their complaints. When asked about service or the particular product they purchased, even when dissatisfied, they’d normally respond that things were “fine.” Not every customer can be counted on for enthusiasm.  After all, there isn’t an infinite amount of enthusiasm to go around. But the silence and the “fine’s” speak volumes to those with a keen enough ear and enough focus to notice. 

So what are you doing to focus on client retention, rather than just growth? Studies indicate that a new client is 7 times more expensive in terms of marketing and advertising dollars than existing clients. The point is that it is much cheaper and more efficient to keep the clients you have than spend every ounce of energy trying to bring new prospects in the door. 

If you do not already track trends in returning business, 2012 is an ideal time to start. After all, nothing speaks to customer satisfaction more than repeat business. Even more than tracking it, look for the things that increase the pace of returning business over time. 

Perhaps, like those executives in the United Airlines commercial, you can forgo e-mail, faxes and phone calls, and, just once in a while, put in the time to travel even great distances for a handshake.

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