Lars Poulsen - 1995-12-

One of the sure signs of getting old, is when you discover that history is not a chronicle of progress, and sometimes you feel that you have experienced decline in your own lifetime.

When can you safely mix business and friendship ?

Recently I have discovered a troubling trend in American business life: Nobody wants to make friends anymore. In fact, friends and business associates alike seem to think it somewhat odd that I prefer to do business with small local companies, whose owners I know personally and trust to deliver what they promise. "At least, you need to get a written quote and shop around to make sure you get as good a price as you could somewhere else." But that ruins the whole deal.

Do you also think I'm acting strange ? Are you under 40 ?

The advantage of living in a small town

When we first started renting out the condominium where my wife lived before she met me, we needed it painted. Since it was a new unit, there were no special quirks to it, and it seemed reasonable to shop around for the lowest price. That was when I learned that housepainting can be done at any price you want. A two-bedroom apartment can be painted for $400 or for $1000 ... but you don't get the same job. If you are not too unlucky, the $400 job may actually look okay if you aren't knowledgeable, but it won't last more than a year. The $1000 job should be expected to be good for at least 5 years, if it was really done right. So if you are going to be living in it, this is what you want. But if you are not an expert in the field, it is quite possible, that you got a $550 job, and were just charged $1000. The cure for this, is to find someone who has been around for 10 years, so you can see how satisfied their customers from 5 years ago were, and hopefully someone you will be seeing in the neighborhood and at school meetings so that they will have reason to want you to stay on friendly terms.

In fact, there are similar trade-offs in many businesses. The store with the lowest price for your computer disk drive is likely to be staffed with incompetent people who won't be able to give you any help if you have problems. The lowest priced housecleaning service may not send you the same person two months in a row. The car repair shop that advertizes the lowest priced muffler repairs may in fact not replace the parts they charged you for. And if the underpaid and undertrained staff is fairly sure they won't see you again anyway, why should they not rip you off ? This is the mind set of the big, faceless city.

From Handshakes to Lawyers

I grew up on a farm in Denmark, and when I was young, it was quite normal for farmers to settle a business deal with a handshake and - for a large deal - drinking a beer together. Of course they knew that this would not work with city people, whose memory seemed curiously defective: They tended to forget the parts of the deal that were to their disadvantage; so with them, one needed a signature instead of the handshake. The worst thing that could be said about a man in the community was that his word was no good.

To make sure you understand just where I'm coming from: When we left the house to work in the back field, we would lock the door ... but leave the key in the lock, in case a neighbor or the mail carrier needed to come in. I still believe that if you have to lock your car when it sits in your driveway, it's time to move.

Loyalty paid

In this safe, stable world, people were valued as neighbors and business partners; customers were as much partners as were suppliers. The relationship was based on trust, and the fact that it had already lasted for a long time was sen a a predictor of future stability. Therefore, an old customer (who had already been proven trustworthy) was seen as more valuable than someone who just showed up for the first time. Therefore, longtime customers were offered better terms than newcomers.

Today, we have turned the world upside down. In their eagerness to attract new customers, businesses give special deals available to newcomers only. From credit cards to long-distance telephone calls, we find that the best terms are available only to new customers, and to get the best prices, you have to change suppliers every 6 months.

Don't wait around for a gold watch ...

Similarly, we see businesses laying off employees in times of record profits as often as when they are on the verge of going bankrupt. Then, a few months later, they pay headhunter fees and relocation expenses to bring in a new employee. This is considered more cost effective than to train the employee they already had.

Let's bring back the good old days

Let's try to do better next year. Instead of bemoaning how mean the world has become, let's try to be less mean ourselves. Instead of chasing the sale prices at Home Depot and Price Club in Ventura, 35 miles down the road, let's give the business to a local family-owned store. When you factor in the cost of driving, and the time and the aggravation, the price advantage of the big chains isn't all that great. And the value to the local community of keeping the local stores alive is unmeasurable, but big.

More pages

(End of page)