In addition to running a few dry cleaners/laundromats in the Springfield area, my parents also own Flynn Sales & Service, a business in which we sell and repair commercial and industrial laundry equipment. We are also official distributors for Dexter Laundry Equipment for central and southern Illinois. Essentially, we work with almost exclusively other small businesses: laundromats, nursing homes, hotels, etc. This can make things a little difficult when it comes to the payment side of the transaction.
Small businesses are more difficult to run now than ever and our customers can, obviously, be a little stingy when it comes to what they're willing to pay. This stinginess can present itself at any time: when we send them a quote for the estimated price, when we get to the location and find out they've changed their mind, or in some cases, even after we're finished installing the machines and they feel they can haggle since it would be too much work for us to uninstall the machine at that point. This behavior can drive some of us crazy, to the point where we would prefer to not do business with stingy customers at all. But my dad, who essentially makes all sales and service decisions for the company, has an unbelievable ability to remain steadfast, to his own detriment in many cases.
My dad truly believes that small businesses are a most vital part of our economy. He is also a very humble and hard working individual, never trying to steal an extra buck from anyone. He believes that if you work hard and do the right thing, things will take care of themselves. I greatly admire his philosophy as an individual, but this way of thinking can sometimes muddy the water when it comes to business.
At times, when customers try to haggle or talk him down, it is truly because they just don't have the money and would pay if they just had a little more. Other times, they may be just wise to the fact that my dad is quite easy-going when it comes to money. Regardless, my dad is usually willing to give a lot more than the rest of us would like him to. I've asked him on several occasions, "you only charged enough to cover our cost of the machine and barely enough to cover our cost of labor and gas. Why not charge more?" He hates that question since he gets it almost constantly from the rest of the employees and of course, my mom, who is not only part-owner but is also in charge of all finances. But he always just answers, "It's tough out there for us small businesses. We have laundries. We know it's hard. The economy and customers are hard enough to handle. The least we small businesses can do is help each other out." He goes on to say that we're getting enough to cover our paychecks and put a little money back into the business, and that's good enough.
You could easily argue that my dad is not great at this business thing. But he's been running Flynn Sales for over 25 years and he has one of the best reputations in the state. He also has a great reputation with Dexter, despite having a small sales region and many times talking his own customers into buying used equipment because of Dexter equipment's durability. He's been offered to take over larger regions including St. Louis but has turned them down as he doesn't want to sacrifice the quality of his work just to expand. He seems to turn down opportunities fairly often in his work, but he's made it very clear why. He cares about his customers and would rather see to it that they are taken care of than make a few extra bucks, and he knows that when it comes to laundry equipment, nobody can take better care of his customers than him.
This is an interesting story. But does it tie into opportunism and not taking advantage of opportunities when they avail themselves? I didn't quite see the fit between what you wrote and the prompt.
ReplyDeleteI gather that in this business there is no up front cash payment before the install of equipment occurs. One might ask why. One might also ask whether there is competition in this business or if it is more like local monopoly. And then one might ask whether demand is sufficient great at the time of scheduling for an install that some of these have to be delayed because there just isn't enough time in the week to do them all, or if that is not an issue.
In other words, what the economic environment looks like matters for how to interpret the story and where opportunistic possibilities are present (or not). From what you wrote, I couldn't tell.
I think you're right, I should elaborate more on the environment of the industry to show how it might tie into opportunism. Flynn Sales does not hold any monopolies over the industry by any means, however, as official Dexter distributors, we are the only place customers in this area can purchase new Dexter equipment from aside from Dexter's headquarters, which sells at list prices far higher than ours. Some other Dexter distributors choose to do business in their regions slightly differently than we do in ours, i.e. shorter warranties for labor on equipment, less discounts in overall price, etc. They are able to trim these perks because of the quality of Dexter's equipment, or in other words, the equipment is so dependable, customers will still buy without long labor warranties and at higher prices. This may not necessarily be the exact definition of price gouging or opportunism, but the main idea is that there are several perks Flynn Sales could take away at the cost of the customer, but my dad chooses not to mainly because he wants to give customers the most for their money or save them money when he can. It seems as though that may fit a loose definition of foregoing an opportunity for the benefit of others. I also didn't mention the presence of other equipment companies and their distributors in the area. Our customers could choose to go with Speed Queen or Uni-Mac machines instead of ours. This influences our willingness to add perks to our sales but only slightly. No other businesses in the area provide the same service warranties we do despite the fact that, for our customers' needs, our machines are more dependable than most any other brand of machine. So we still have a decent amount of room to cutback our services or raise our prices.
DeleteAlso to answer another of your questions, we cannot always collect payment before installation due to unforeseen occurrences during installation. To use an example from this Summer, one customer's old machine had torn through the concrete support underneath it. So after removing the old machine, we had to tear up the remaining concrete and dig a deeper space, then frame and pour a new concrete base before returning the next day to install the new machine. Several of these factors were not part of the original quote and needed to be added to the bill. That was a fairly uncommon occurrence, but in general, situations arise along the way that make collecting payment before installation pretty difficult.