The Fix is In

If you believe Steelers linebacker Joey Porter, the NFL is about as legit as professional wrestling. According to Porter, the world wanted the Colts to win so the refs tried to rig the game by making bad calls. It reminds me of something I read in Freakonomics.

In Freakonomics, the authors write about an entrepreneur who starts up a bagel delivery service. The idea of the company is to deliver bagels to business offices so the employees don’t need to go out to buy their snacks. The owner of the service received payment on the honor system, leaving a collection box for people to put in a dollar for each bagel taken. The owner of the delivery service kept meticulous records of how many bagels were eaten versus how many dollars were put into the collections box.

To summerize the results, the important part of them anyway, the larger the corporation and the higher up the corporate ladder the customer was, the more likely they were to cheat the delivery service out of that dollar. I think this is astonishing. Who could better afford that dollar for a bagel than a corporate executive? The authors of Freakonomics make some interesting speculations based on the data, that these dishonest corporate execs perhaps rose up the ladder as a result of their dishonesty. That they felt a certain sense of entitlement, as powerful corporate executives, that they deserved the free bagel. Also, that cheating is far more acceptible in larger corporations than in small business.

Another interesting thing I’ve read in a few places recently is moanings from small business owners about how slow large corporations are with paying, and how large corporations often quibble over the bill. The remarkable point that several of those complainers made was that they were afraid to complain or stand up to justify increased charges because they feared that the large corporate customer would take their business elsewhere.

How do I draw a line between these bits of information? When you’re a small business servicing a large corporation, you should be even more vigilent about standing up for yourself than with other customers. I can easily believe that people in larger corporations are more likely to cheat. I’ve seen it enough times, with my own eyes. When you let them take the first liberty, perhaps they’re slow with paying a bill, paying after 90 days when your contract said net 30. When you let them do that, you’ve lost the war. They know they have the upper hand, that you need them more than they need you. If that’s the case, get out of the business.

Yep, you heard me, get out of the business. You have a faulty business plan. You should aspire to be in the position of providing a service that your clients need. Not on that, but that they get a better value from you than they could get elsewhere. There’s the key. Value. When your corporate clients play games with you like slow payments and shorting your bills, they’re telling you that they don’t value your services very highly. They may as well get the same service somewhere else. That’s too weak of a position to be in, for any business owner. Sell your business now. Close it down while you still have a shirt to wear. Move on.

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