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The first twenty years of my business career was in the food service and vending business.  This was a family business.  I worked in the business, bought a small branch from my father, grew the business, bought my father out and then sold the entire business at the end of 1995.

By the time I joined the vending business it had become a very tough business.  Every good location that could have vending machines already had them.  Commissions (rental rebates) were playing a more important part of the business.  It was difficult for customers and clients to recognize the difference between supplier companies. 

Because the business had become so tough there were a few lessons I learned that kept us prospering in a very tough time in challenging circumstances.  Here are 4 of the lessons I learned:

You must have great profits to hire great talent.  The vending business was a low profit and difficult business.  You started work between 3 AM and 6 AM and would spend the day having people yell at you when they lost money in the machines.  Because profits were low it was difficult to pay salaries that would attract great management talent.

Lesson learned:  If you want to develop a business that has great talent, have a business that has the potential of creating great profits.

Find a way to differentiate yourself.  From the outside one vending company looked like another vending company.  We prided ourselves in providing great service and products.  We struggled with how to demonstrate this for many years.  Finally, we put together a series of service and product guarantees that no one else in our industry would copy.

Lesson learned:  If you want to truly differentiate yourself you must deliver products and services that your competitors won’t.  This allows your customers to understand what’s different about your company and your value proposition.

Make programs relevant to your employees.  We were one of the first vending companies if not the first to install a total quality management system in our company.  We had our mechanics and route drivers all take a basic college statistics course as part of the quality program.  None of these people had college degrees and more than one had not graduated from high school.

Lesson learned:  If you want people to learn something difficult, make sure it’s relevant to their work.

Know that your employees are only going to treat your customers as well as you treat them.  In my early years I didn’t do a very good job of treating the people I worked with very well.  Once I reached thirty I figured out that if I couldn’t respect the people I worked with, they wouldn’t respect me, the company or our customers.

Lesson learned:  Your employees will only treat your customers well when the employees are valued and treated with respect.  Love your employees and they will love your customers.

What lessons have you learned with companies you might now work with any more? 

Josh Patrick

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Topics: value creation, wealth management, enterprise value, lessons learned, value enhancement

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