Dave Says – On Business Edition

(how to not be a hypocrite)

Dear Dave,
My husband and I are taking your classes and following your plan. We own a roofing company. We offer six months, same as cash, and we accept credit cards. What are your feelings about our doing this? Does it make us hypocrites?
-Monique

Dear Monique,
If I accepted credit cards, it would make me an absolutely huge hypocrite, but you don’t do what I do for a living.

If this bothers you, it might be a good time to search your heart and ask yourself if these practices are blessing your customers. If you conclude that they are not, and you decide to discontinue those financing deals, you’d better come up with some other marketing strategies. You will lose clients over such an unusual decision!

Of course you could still offer some of those kinds of deals while actively discouraging their use. You could tell your customers that if you were in their situation, you’d just save up for a few months and pay cash rather than using a credit card or other financing options. That way the decision is theirs. But how will they react to such an uninvited suggestion? The last thing you want to do is encourage more credit, but the next-to-last is to run good business off.

No, I don’t think you’re being hypocritical, Monique. You have some big decisions to make about the quality of your customer service, though. Ten years from now, you want to know you tried your best to do the right thing for them, and you’ll always want to know you’ve done the right thing for your business.
—Dave

(start-up not doing well)

Dear Dave,
I opened by own business about six months ago, and it’s not growing at all. I’m a single mom, we receive no child support and my parents are helping us with all the bills. My biggest concern is the house. I bought it five years ago, and when I opened my business I did it with money from a home equity loan. What can I do?
Gina

Dear Gina,
The house is not the problem. You borrowed money to open a business, and that was no-no number one. You also have no savings – which is no-no number two – and now the business isn’t making a profit.

You need to close the shop and go find some work. The money you make at another job will determine whether or not you can stay in your home. If you’ve got a mortgage, home equity loan and business debts hanging over your head, the chances of this are slim. You probably need to consider moving into a small, inexpensive apartment for a while.

If you do this, get your debts paid off and your finances back in order, you might be able to purchase a house and give your company another shot in a few years. I know the idea of giving up your home and business is hurtful, but when you get cancer you have to cut deep enough to get it all. Gina, what you’ve got right now is financial cancer.

And it will eat you alive if you don’t fix it!
—Dave

(small hassle or big idea?)

Dear Dave,
I own a small business that produces niche products. Lately, we’ve been getting calls from prospective customers who want to use our products in different ways. How do you advise handling an “outside the box” request?
-Sean

Dear Sean,
Ask yourself three basic questions: Can the product be produced in the needed quantity for a fair price? Will it be something you’ll want to hang your reputation on? Do you really want to do this?

If you answer “yes,” additional questions arise. Can the product be used the way they want to use it? Must it be modified, and at what cost? Can you supply it on time?

I know I’m giving you questions, not answers, but in the end, providing a quality, functional product in a timely manner for a fair, profitable price is the key to a small business’ success.

An unusual request just might be a great entrepreneurial opportunity. It’ll probably take some work, because when great ideas show up they’re usually wearing work clothes. But do some research, and make the same basic manufacturing and economic decisions you would with a new item. Remember, this could open up a whole new market for you!
—Dave

About the Author
Dave Ramsey is a personal money management expert, popular national radio personality and the author of three New York Times bestsellers – The Total Money Makeover, Financial Peace Revisited and More Than Enough. In them, Ramsey exemplifies his life’s work of teaching others how to be financially responsible, so they can acquire enough wealth to take care of loved ones, live prosperously into old age, and give generously to others. Ramsey offers life-changing, financial advice as host of a nationally syndicated radio program, The Dave Ramsey Show, which is heard by 4.5 million listeners each week on 450 radio stations throughout the United States. His syndicated column, Dave Says, can be read in more than 300 print and online publications worldwide. For more small business advice, please visit daveramsey.com.