# General Business Category > Entrepreneurship and Business Management Forum >  Fundamental business principles - Get and keep customers

## Dave A

First a couple of observations. Doing business in South Africa has become increasing complicated. And perhaps it's not just a South African phenomenon. There seems to be an ever-increasing list of demands that have little to do with  a successful business. Like corporate social responsibility, and turning our offices and workshops into primary school level classrooms. Things that government should be taking care of. Our education system. Our taxes. Our favorite charities.

My next observation is that as a business grows it gets increasingly complicated. It's so easy to forget about the basics. And yet it is vital that we don't lose sight of the fundamental principles that got us to our complicated business in the first place. Because they still apply.

My final observation is that we tend to hop around in discussing business related topics. There's no problem with that and by all means let's continue. But I think it's time we also laid a foundation of basic business principles that are built from the ground up.

So here is the start of a series that I hope we are going to work through together. For anyone in the early stage of the business experience, we're starting from where you're at. For those of us who have been at this for a while, it might be useful to remind ourselves of the simple things that we tend to take for granted or forget in the midst of all those seeming complicated decisions. 

Add your comments along the way. Ask questions. And let's build this from the ground up.

Now I don't pretend to know all of these rules. But I'll talk about the ones I've found. And maybe you'll take the time to talk about the one's you've found. Or you might take the time to disagree. And perhaps this will become the definitive series on business from the small business owners perspective. Goodness knows there seems to be a need for it.

So, to kick this off, let's talk about the purpose of a business. Not *your* business, but *ANY* business. Because if we talk about *your* business, we're going to get confused by *your* dreams, needs and aspirations. Not that those aren't important. They are *your* drivers that will get *you* to do what it takes to move your business forward.

But a business is an unemotional machine. The product depends entirely on the raw materials put in and how they are processed. And just as there are laws of physics that determine these things in the material world, there are similar laws of business that determine the results of a business based on the raw materials and the way they are assembled.

So you might _think_ the purpose of your business is to make you enough money so that you can build a boat and sail around the world, or to pay for a three month vacation, or (add your own purpose here) - but in reality that is _your_ purpose for _having_ a business. And I'm sure we can get to discussing that too.

So right now - first things first: What is the purpose of a _business_? *Any* business?

The best I've ever heard is *to get and keep customers*. It really sums it up in a nutshell. And it's blunt enough to reflect the real character of business fundamentals. Can you think of an example where it does not apply?

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## Marq

> The best I've ever heard is to get and keep customers. It really sums it up in a nutshell. And it's blunt enough to reflect the real character of business fundamentals. Can you think of an example where it does not apply?


If you have the wrong customers, like those that don't pay or those that create problems then it does not apply.

I was always taught that the main purpose of any business was to make a profit. Still works for me.

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## duncan drennan

I think it may be a twofold answer encompassing both the *why* and the *how*.

I think that the *why* is to support the lifestyle of the owner and the employees, i.e. *gainful remuneration*. (so I agree with Marq here)

Why do most people work when they would "rather be fishing/golfing/skydiving" etc? I think that if everything is stripped away it comes back to the basic need to feed, clothe etc. ourselves. Yes, there is FAR more to this (just have a look at Maslow's hierarchy).

Now on the other hand there is the *how*, and I agree with Dave, *get and keep customers*

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## Dave A

Aah yes. A live one  :Big Grin:  

The main *purpose* is profit. The main *activity* is get and keep customers.

Thanks Marq and Duncan. I'm going to be doing my writing on this series at night for a while. Not the best of time for this but at least I know I've got you to keep me on my toes.

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## Dave A

I'm surprised no-one has pasted me for describing business as an  "unemotional machine".  :Fish:

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## duncan drennan

> I'm surprised no-one has pasted me for describing business as an  "unemotional machine".


 :Stupid:

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## Marq

> I'm surprised no-one has pasted me for describing business as an "unemotional machine".


I agree with this statement - its the bodies driving and steering the machine that have the emotions. :Big Grin:

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## entoserv

> The best I've ever heard is *to get and keep customers*. It really sums it up in a nutshell. And it's blunt enough to reflect the real character of business fundamentals. Can you think of an example where it does not apply?


OK. Why do you spend time and money on SAPCA or here.



> If you have the wrong customers, like those that don't pay or those that create problems then it does not apply.
> 
> I was always taught that the main purpose of any business was to make a profit. Still works for me.


So maybe it should be changed to *get and keep the right cutomers*.

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## Dave A

> OK. Why do you spend time and money on SAPCA or here.


Now where have I heard that before? I think you've just blown your cover - I had wondered...

I think part of what is highlighted here is the seperation of personal and business interests. My best explanation is that these activities are my way of giving back some of what I have received and it's at a personal level.

However, in saying that, I have learnt so much from the experience that I don't think I'd have learnt elsewhere, and that should make me a better asset for my business.

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## Candy Bouwer

> I'm surprised no-one has pasted me for describing business as an "unemotional machine".


Well it certainly can't start without being unemotional...i would imagine it would start with a vision, a goal and then a personal purpose to succeed. Unless of course you are a huge giant in industry already. Getting and keeping customers is a heart attitude too.

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## ThomasM

A business is about giving the customers what they want at a price they perceive as fair.
So the first step is create a business around a service that meets a customer demand- that means find out what the customers need and let them know by local advertising ( knock and drop newspapers) and use your vehicle as a moving signboard, the cost of vynil lettering is quite reasonable.
Work out what you think your time is worth per hour and charge that price( take into account tools running costs in that hour) Divide your monthly target earnings by the hours you are willing to work and price any jobs on that price.
The next step is to do the quality job you promised & priced to make a reasonable profit.
If you can't make a profit because the customers do not accept the quote then find another business need and start a business around that need. My experience is that some customers expect you to chase around and not pay you a profitable return for your labour and make you lose money rather I can sit on my rear end and make no profit 
but make no loss.
If you get all your quotes accepted hen your price is too low in comparison to your competition. If you are only getting acceptance on 2 or 3 quotes then maybe your quotes are too high.
As a contractor I usually ask for a deposit before I start the job to cover materials and labour +/- 50-60% up front. Do not be afraid to ask and it helps to have some standing in the community, join your local ratepayers and or crime forum do something for the community; you will be surprised what that sort of networking can do when you meet over a cup of tea or a beer after the meeting. Remember service first and a fair price and the profit will come automatically.
Above all be happy doing the work you have chosen, customers like a happy chappie to work for them, it gives confidence.
Regards
Thomas

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Dave A (12-Oct-09)

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## Marq

> Above all be happy doing the work you have chosen, customers like a happy chappie to work for them


I believe that is the master key to all of the business teachings.....oh hang on they don't teach that out there. Well they should - it would solve a huge pile of problems. :Roll Eyes (Sarcastic):

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