This is the unfortunate story of what happens when a business manager chooses the path of least resistance.  This path is known in some cultures as flushing money down the toilet, flinging profit out the window, and shredding company funds.  Ruthless, regrettable behavior to be sure. 

The tale begins on an upbeat note: we had our final blowout party at my house this summer.  Having lived at this particular property the past 14 years, there have been many occasions to throw a backyard humdinger, be it a neighborhood pool party or family affair.  This one in particular was for my son – our youngest of three – who’d recently graduated high school and at the time was headed off to college in a matter of weeks.  Expecting 100+ people, including a wide variety of friends, family, and other revelers, we needed a good-sized tent along with table and chairs.

You’ve been there/done that – yes?  No matter the season, it’s always a mad scramble to the finish line, getting every detail just so for the celebration.  In this particular case, the tent arrived the day before the party and the day after I’d mowed and watered the lawn.  Ah, the perfect plan coming together… with one problem: said tent was kinda gross.  If you’ve ever lived the joy of an oil-based staining project, you know what the tarps end up looking like – trash, amirite?  The brown, sticky substance gets all over everything and you’d sooner set the tarps ablaze than bother to clean, dry, fold, and store them for next time.  Well, that’s what the tent looked like – a ginormous tarp post-staining project.  Yuck.  I mean, it had no holes and surely was suited to keep our guests, ranging in age from 1 to 79, dry and/or out of the August sun, but still.  For as hard as my family worked to have everything look just so, a trashed circus tent didn’t really fit the bill.

So what to do?  Figuring it was too late to make a change – what with the party a mere hours away – we ignored the issue and carried on.  And a great party it was.  So lucky we were on that Saturday to enjoy perfect weather, a really fun crowd, and a three-piece high school band that wowed everyone with their two-hour classic rock set.  Early the following week, I lobbed a call into the rental store, one that we had used several times before to help us with prior graduation parties and other events, to offer my feedback.  The gentleman who answered the phone was perfectly polite and apologetic and assured me he’d pass the message along to the manager.

And then?  Nothing.  I never heard back.  Mind you, I was calm and measured in telling the clerk about our disappointment in getting what looked like a painter’s rag for a tent.  No yelling, no lawsuits intimated, no requests for anyone’s first born… nothing out of line (although I have been known to, um, yell).  I know full well it’s hard to call back a crazy person and yet that’s not who I was when I called the store.  Why not return the message and have a conversation?  Why not practice the old business principle that the best customer is the one who cares enough to comment and allow the service provider the chance to step up and set things straight?  It was weird to never hear a word.

Guess what else the manager never did?  Charge us!  The set-up was completed as advertised and on time.  The tables and chairs were sturdy and clean.  The pick-up went off without a hitch.  We tolerated an ugly cosmetic issue and yet everything was done for free.  Ridiculous.  Yes, I was disappointed enough to take time out of my work day to call and complain but under no circumstances did I expect to not pay for anything.  My wife had agreed as she had every prior time to pay hundreds of dollars – $450, to be precise – for the security of knowing that our guests would have shade, shelter, and the comfort of keeping their paper plates off their laps and indeed we got all of that.  I would’ve gladly accepted a reasonable discount to make up for the disappointment.  More importantly, it would’ve been nice to know management cared enough to chat about the issue!  But simply not calling and not charging us is bad business – and expensive at that.

If you run a business, you can’t hide from the reality and nuisance of the upset customer or client and you surely shouldn’t shoulder the opportunity cost and labor expense.  Think about it: all that equipment was rented to us and therefore no one else and the expense and manpower to load, deliver, set-up, breakdown, reload, return, and restock all that stuff had to be run through payroll.  It’s absolutely silly to not at least cover all that cost.  Being non-confrontational is somewhat understandable and yet taking a financial hit because you don’t want to return a simple phone call is just absurd.

At the risk of stating the dead-on obvious, if you want to eventually sell a business such as this rental company you’ll want to maximize net income, especially in the three-to-four years leading up to the anticipated exit (that's the typical time window a buyer prospect will review).  Assuming we’re talking about a reputable, well-run organization, someone out there will be willing to pay you a multiple of that very income. When you throw $450 of revenue and the expected profit – and in this sort of business, even a small-time operator can reasonably expect gross margin of roughly 75% or higher - from that sale away, you’re turning your back on that multiplied two, three, perhaps four times.  In this day and age, one assumes you can’t really afford to do that.  Pick up the phone, face the music, and minimize the cost of your mistakes.  It'll pay off on several fronts.