The Karl Principle

As my buddy Alex Rogers from Chartec would say, you’ll need to turn down your sensitivity meter.

“You shouldn’t do business with assholes.

You are in business to make money, not take abuse.”

Sign of business maturity is when you can focus on your business development and growth, without compromise that you had to make during the startup stage.

You know what I mean: You’ve taken someones money to design their web site in the past. If you’re the one person that didn’t, substitute an equally slimy task that you knew in the back of your mind you shouldn’t have welcomed but you did because you needed the money. We’ve all done it, it’s the core of entrepreneurial spirit and capitalism – sometimes you trade your comfort temporarily for the bigger payoff in the future.

Many people become complacent and forget that the discomfort is a temporary measure to achieve goals. They get emotional, stubborn, refuse to change, make tons of excuses for something they know they shouldn’t be doing. Yeah, I’m talking to you. When you started your business, was this what you signed up for? If you work for someone else, was this what you thought you’d have to put up with to get paid?

Vision.. Mission.. Values.. It’s what the business is built on. But much like any other building, it has to have retrofitting, cleaning, pest control, upkeep and occasional demolition.

I can’t read between the lines Vlad…

Earlier this week, my company decided to end the deadbeat abuse. Over the last year as my company grew by the leaps and bounds, collections became an actual automated role within OWN. We came up with the process, enforcement, followup measures and even concessions we were willing to make in order to get paid for the service that we were providing.

Let me dumb that down for you.

We made it easier for people to fuck us out of the money they legally owed us.

We had people that would loudly dispute their unwillingness to pay the bill. Really!

One deadbeat from UK went so far to refuse not just to pay but ignore phone calls, 10 days worth of followup email, support request updates, etc. When he was cut off, he sent a small encyclopedia alleging abuse, lies, theft, demanded proof that he owed money.

Oh, the humanity!

How was this gentleman confused? Well, in August he had dodged the bill for 25 days. On 26th of August, when we finally collected the amount that was owed since the 1st, he assumed that was a charge for the 1st of September. He also happened to be delinquent 6 our of 9 months in 2009.

Who, in their right mind, would put up with this? Not just the deadbeat, but the abuse that comes along with it. The blame game and victimization from someone who knows full well they are taking advantage of the process because they have more time than money and are simply trying to take advantage of the system.

We all have clients like that.

However, our reporting is typically not thorough enough to isolate the abuse. Why? Because scumbags are craftier than programmers. Yesterday saw a story on TV about how a crime syndicate would print fake UPC codes they purchased on eBay, slapped them on Target items, carried hundred dollar items out for $5.99 – $6.99 and then sold them on eBay and craigslist for the difference. That is a crime.

When the same thing happens in our business, white collar abuse of information employees, it’s discarded as a difficult client. Oh Bob, he’s just fiery. You have to know how to work with him.

This is where Karl says… Bob, you’re fired.

So…

Sometimes it’s hard to look at numbers black and white and just slam the door shut. But it’s your business as a business owner to assure it’s survival, pay your employees and deliver a sold service to your user base.

You can do so without being abused.

Your employees shouldn’t be yelled at.

You shouldn’t be The First Bank of Vlad.

You shouldn’t waste your time charging fees for people that ignore bills.

You should just run your business and focus on your product and service.

It’s not really that black and white, cut and dry.. Many people talk about how a business needs to constantly kill it’s C clients and focus on A clients. The reality though is that a corporation is really just another person. And how that corporation behaves in the marketplace is a reflection of it’s ownership: Do you want to be the abusive guy who only takes and throws people off the bus the moment they are not useful.

What I’m getting at is that there is a delicate balance between doing the right thing, being compassionate for the client base that may be down with financial issues as well as being tough with the people that abuse you.

As for us… We axed deadbeats. It took us exactly 2 days to make up all the business that those clients were bringing to us. Considering the amount of effort, abuse and general crap we’ve had to put up with and beat down staff.. 2 days of revenues is a small thing to part with to have efficient employees and a focused company.

Do likewise… Oh, and if you were offended, “Karl” has no relation to www.smbbooks.com where you can find many great SMB books, as all characters depicted in this blog are fictional and any similarities are purely coincidental.. but you should still buy Karl’s books and come see Karl and me LIVE in Chicago, next Wednesday at the Marriott O’Hare.