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May 29
2013

How to Help a Local Christian Newspaper

Posted by Steve Marr in Untagged 

I know that a publisher of a Christian newspaper is struggling.  This isn’t a new problem.  I have written before about the challenges facing print newspapers. When I talk to newspaper owners, they tell me about how the costs of organizing, printing and distributing the paper are high. They struggle with limited revenue for advertising.

Apr 02
2013

Going Out of Business

Posted by Steve Marr in Untagged 

“Tom” owned a local store selling printer cartridges and posted a sign announcing that he was going out of the business. The owner blamed a slow economy. Maybe; maybe not.

I purchased around $600 of cartridges over the past year. On two occasions, I stopped by before closing time to find a note posted: “Closed early.  Sorry.” Since I needed the cartridge I drove to Office Depot, another ten minutes away.  In each instance, Tom’s store lost a $50 sale.

Then, I experienced another issue with the store. I needed a cartridge, but it was out of stock. The owner promised to have one by the next day. I stopped by the next day, and no cartridge.  He promised to have one by the next day. Again, there were no cartridges when I returned. Again, Tom promised to make sure to have one in stock that he would hold for me.  I returned a third time a few days later.  He told me that he was sorry, but he sold the cartridge.  However, he told me that he could order another.  I’m sure he could have, but I drove back to Office Depot that day and in the future.   If others experienced my frustration, he went out of business due to poor service and not a poor economy.

Jesus taught, “Be dressed ready for service and keep your lamps burning.” (Luke 12:35, NIV)  We need to be ready to meet our customers’ needs and keep our promises to them.

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Sep 10
2012

When is it Time to Move a Business?

Posted by Steve Marr in Untagged 

Several years ago I met with a dentist who was taking over a practice in a small town of 20,000 residents. He was struggling to build a client base and had two presenting questions. First, what could he do to build his customer base?  Second, should he stay in the current shopping mall location with high visibility along with high cost?

My advice at the time was to stay in the mall.  Even though the rent was high, the visibility would help build walk-in traffic.  Second, I advised that he work several evenings a week to offer extended hour appointments to folks with day jobs. Both steps worked. I asked if he wanted to expand his business by hiring a part time dentist to help manage the growing business.  He did not.
 
Now, he needs to decide if he should renew his office lease. This time my advice is different. He now has a short waiting list for new patients and has built a solid reputation for competence and integrity.  Renewing the lease in the mall will cost around $2,500 a month more than renting an office suite in another location. Given the build-up of his business, paying a premium price for location when you can’t take more patients is a waste of money. At this time, the better choice is to save money by moving.
 
Time and circumstances will alter a decision about when to move a business.  The prophet Joel wrote “Beat your plowshares into swords and your pruning hooks into spears.” (Joel 3:10, NIV) However, a hundred years later Isaiah wrote: “They will beat their swords into plowshares and their spears into pruning hooks.” (Isaiah 2:4, NIV) As scripture demonstrates, it requires different action at different times to make the right decision.
 
When you face major decisions, take the time to evaluate the situation. Determine what has changed and if those changes dictate a different choice. Then, make the decision that will grow your business.

Steve Marr, Your Christian Business Coach 





Sep 07
2012

Advice to a New Sales Manager

Posted by Steve Marr in Untagged 

Mike (not his real name) just accepted a new position as a sales manager supervising 22 salespeople. While he is new to the company, he understands the industry. My advice to Mike applies to most businesses.  Senior management wants improvement; otherwise they would not have brought in an outsider. He must prove himself quickly.

Aug 13
2012

A Land Contract Gone Bad

Posted by Steve Marr in Untagged 

A businessperson sold a building five years ago for $850,000 with $80,000 cash down.  Interest payments were at 6% with the balance due after five years with a balloon payment. The interest was paid each month on time and the balance is now $770,000.

However, the property value has dropped from $850, 000 to around $275,000.  When the buyer saw the value plummet, he notified the original seller that he was defaulting on the contract and would sign the deed back to the seller.

The seller was outraged, claiming that the buyer had an ethical responsibility to pay the balance, and asked me for guidance about the best way to collect.  I read the contract, and while I am not an attorney, I explained that the seller had a problem. The land contract called for payment in full, but the only collateral was the property.  There was no personal guarantee nor were any other assets pleaded as security. In essence, the contract called for paying the note in full or returning the property. The buyer had maintained the property and made all interest payments. He just decided not to follow through on the final payment amount of $770,000, given the decreased property value. The buyer had two ways of fulfilling the agreement:  pay the money or return the property.

The seller wanted to believe that there was a personal guarantee, either legally or ethically; but there was none.  The seller assumed that his security was that the property would hold value or increase over the next five years. Unfortunately commercial property values dropped.

The seller believed that this scripture applied: “The wicked borrow and do not repay, but the righteous give generously.  (Psalm 37:21, NIV)  However, I explained that he was getting paid.  He would get the property back rather than cash. If the agreement had been written differently, specifying that cash was due and providing a personal or other guarantee; then, the buyer would be required to pay.

Every business investment has some risk, and someone assumes that risk.  In this case, the seller believed the property value protected him, that if the buyer failed to pay he would take the property back and resell. In this case, the seller assumed a risk he did not fully grasp. James points out, “Why, you do not even know what will happen tomorrow. “  (James 4:14, NIV)  Since the future is not predictable, any investment places us at some risk.

Digging a bit deeper with the seller, I learned that he had received another offer for the property of $750,000 cash, an offer he declined to accept the higher $850,000 land contract. Every day we make business judgments, some better than others. In retrospect, the seller should have taken the $750,000 cash offer.  Without knowledge about the declining land values in the future, he did not.

I told the seller that he was stuck with his agreement and needed to accept the property back as full payment with a good spirit. The buyer was using the property for his business and offered a reasonable rental agreement, an agreement I advised the seller to accept.