We talked to a potential client last December about the possibility of exiting his business. The client has a nice operation that they have built through the years and provides services to enterprise class customer base. To summarize the business, it is a B2B operation that, over the years, has provided an ongoing strong value proposition to their clients.
In our discussions we would normally talk about the competitive aspect of their business. They said that there was one particular national competitor on a regional basis that manages to "under cut" them from their pricing. It is not typical that the client would lose out on a potential engagement because the other party would be able to offer a more attractive price.
I mentioned that when a competitor is able to offer a less expensive route in most cases, there are areas where they take short cuts in either their product or service. In order to offer low prices, they would have to cut the quality by obtaining products from an overseas alternative, where quality assurance and product integrity may not be up to par. Do they use labor or utilize service that do not adhere to the same standards they do? What drives these costs or savings?
The competition is a smaller operation that does not have the same investment in infrastructure and operations. From the description of this competitor, it is the typical competitor that sells their services and products on a purely commoditized model. The short cuts occur in the safety aspect of their business and they have minimal safety procedures in place. It may even be described as an outright risk doing business with such a vendor.
Today they found one of the competitor's associates dead. He was found in a structure where there was no safety gear (and procedures) in place. The competition's delivery of their service and product was delivered in such a manner that extreme short cuts were taken in order to provide a highly competitive price. It took 35 rescue and first responder personnel to extract this employee's body.
In reviewing this particular incident, who incurs the liability in this tragedy? The enterprise customer could certainly be held liable for this incident. Yes, it was a contractor, not an employee, but should blame be put on their purchasing decisions? They wanted something on the cheap without taking into account, what short cuts are actually being taken to deliver this service at such a price. I would also venture to say that the company probably did not even have any insurance coverage for such an event.
This awful tragedy does turn a benefit for our client in the sense. They can clearly show the value proposition of why their pricing schedule is different. They do what is proper and right to deliver their services in a safe and quality manner. They've already won additional customers as a result of their standards.
In choosing the right service provider to help you exit the business, are you utilizing the right decision matrix to accomplish this? Have they gone through a similar process themselves, ran their own enterprise and understand all the nuances of business ownership and the eventual exit of an owner? Choose wisely for one of your biggest investment in your life: your business. Utilize the help of a professional.
In our discussions we would normally talk about the competitive aspect of their business. They said that there was one particular national competitor on a regional basis that manages to "under cut" them from their pricing. It is not typical that the client would lose out on a potential engagement because the other party would be able to offer a more attractive price.
I mentioned that when a competitor is able to offer a less expensive route in most cases, there are areas where they take short cuts in either their product or service. In order to offer low prices, they would have to cut the quality by obtaining products from an overseas alternative, where quality assurance and product integrity may not be up to par. Do they use labor or utilize service that do not adhere to the same standards they do? What drives these costs or savings?
The competition is a smaller operation that does not have the same investment in infrastructure and operations. From the description of this competitor, it is the typical competitor that sells their services and products on a purely commoditized model. The short cuts occur in the safety aspect of their business and they have minimal safety procedures in place. It may even be described as an outright risk doing business with such a vendor.
Today they found one of the competitor's associates dead. He was found in a structure where there was no safety gear (and procedures) in place. The competition's delivery of their service and product was delivered in such a manner that extreme short cuts were taken in order to provide a highly competitive price. It took 35 rescue and first responder personnel to extract this employee's body.
In reviewing this particular incident, who incurs the liability in this tragedy? The enterprise customer could certainly be held liable for this incident. Yes, it was a contractor, not an employee, but should blame be put on their purchasing decisions? They wanted something on the cheap without taking into account, what short cuts are actually being taken to deliver this service at such a price. I would also venture to say that the company probably did not even have any insurance coverage for such an event.
This awful tragedy does turn a benefit for our client in the sense. They can clearly show the value proposition of why their pricing schedule is different. They do what is proper and right to deliver their services in a safe and quality manner. They've already won additional customers as a result of their standards.
In choosing the right service provider to help you exit the business, are you utilizing the right decision matrix to accomplish this? Have they gone through a similar process themselves, ran their own enterprise and understand all the nuances of business ownership and the eventual exit of an owner? Choose wisely for one of your biggest investment in your life: your business. Utilize the help of a professional.
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