One of the best things you can do for certain types of businesses is to fire bad customers who won’t allow you to earn a profit. You cannot chase sales simply for the illusion of rising revenue. What matters is how much excess cash your business generates at the end of the year that can then be spent on improving your standard of living, giving to charity, or reinvested in other opportunities.
[mainbodyad]I have never knowingly or willingly accepted a transaction that resulted in me losing money in the long-run. Additionally, you often find that the biggest problem customers represent a disproportionate headache to the total revenue and profit pie.
One word of caution, though: Be tactful. Things do matter. People don’t remember if you are right or wrong, they remember how you make them feel. Years ago, when I was still involved in the business, I told a woman she was so stupid she didn’t deserve to order from us. And I meant it (really, she was a complete and total moron – I didn’t want her money). But that was unnecessary. I shouldn’t have said it to her. I could have simply apologized and informed her we weren’t her solution but that we wished her the best of luck.
Sometimes, you need to fire your customers or even friends and family.
The same goes for toxic relationships. If you have friends who sabotage your work and constantly put you down, fire them. If you have family that tell you you’ll never amount to anything, fire them. Fire them all and surround yourself with people that you want to be like. (I’ve only had to do this a few times in my life because I am extraordinarily selective about the people I let into my inner circle. That minimized the potential for do-overs later.)
Look around you right now. You will eventually become like the people with whom you surround yourself. You are looking at your destiny.
A final warning, though – on the personal front, firing your friends and family does not mean only hanging around with people who agree with you politically, religiously, or culturally. Putting yourself in a self-imposed echo chamber is a sign of a weak mind. That is just as dangerous.
Reader Comments
(3)
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the comments to which they respond.
F
Frat Man
April 12, 2011
Any chance you can do a post on the 'dark side' of Benjamin Graham? It seems every article about him is highly praiseworthy, calling him the 'father of value investing' , 'Buffett's great mentor,' etc. But I heard he often flirted with bankruptcy and experiences wide, wide fluctuations in wealth, and was such a player during his life that, at his funeral, all his mistresses showed up and it caused quite a stir. Is there any truth to any of this?
Also, I'd love to know a little bit about Bill Ruane of Seqouia Fund fame...He strikes me as one of those financiers you might know the back-story of.
J
Joshua Kennon
May 7, 2014
Replying to Frat Man
Graham's personal life was a mess. He even took up a relationship with his son's mistress after his son committed suicide. I don't understand any of it. I finally had to chalk it up to a brilliant intellect with a temperament that would have made him a terrible spouse or lover, but probably, a very good friend. There are people like that in the world. The fluctuations in wealth are interesting because when you look at his writings and interviews, close associates, and how he spent his time, he really didn't care that much about money. It was just a mechanism to let him do what he wanted and presented one more intellectual problem he wanted to solve after he had overcome the need to get rich from his impoverished childhood.
The thing that sticks out about Bill Ruane that I absolutely love is he had a secret office a few blocks from his main office in New York. His staff didn't know about it. That way, he could go there and think without interruption if he had something he was working through. Given his net worth, the expense wasn't meaningful and the utility was huge. I just like the oddness of it. Then again, I like secret projects, secret offices, secret skills, secret passages, stories about secret millionaire-next-door fortunes. Maybe it was all the detective novels as a kid; plot twists still entertain me.
C
crabhooves
April 13, 2011
Hmm. This may be the final piece of justification I need to ditch a majorly depressive friend of mine that hasn't changed an inch in the two years that I've known him. Especially since I've been in the same mindset in the past...definitely do not want to become him.
Frat Man
April 12, 2011
Any chance you can do a post on the 'dark side' of Benjamin Graham? It seems every article about him is highly praiseworthy, calling him the 'father of value investing' , 'Buffett's great mentor,' etc. But I heard he often flirted with bankruptcy and experiences wide, wide fluctuations in wealth, and was such a player during his life that, at his funeral, all his mistresses showed up and it caused quite a stir. Is there any truth to any of this?
Also, I'd love to know a little bit about Bill Ruane of Seqouia Fund fame...He strikes me as one of those financiers you might know the back-story of.
Joshua Kennon
May 7, 2014
Replying to Frat Man
Graham's personal life was a mess. He even took up a relationship with his son's mistress after his son committed suicide. I don't understand any of it. I finally had to chalk it up to a brilliant intellect with a temperament that would have made him a terrible spouse or lover, but probably, a very good friend. There are people like that in the world. The fluctuations in wealth are interesting because when you look at his writings and interviews, close associates, and how he spent his time, he really didn't care that much about money. It was just a mechanism to let him do what he wanted and presented one more intellectual problem he wanted to solve after he had overcome the need to get rich from his impoverished childhood.
The thing that sticks out about Bill Ruane that I absolutely love is he had a secret office a few blocks from his main office in New York. His staff didn't know about it. That way, he could go there and think without interruption if he had something he was working through. Given his net worth, the expense wasn't meaningful and the utility was huge. I just like the oddness of it. Then again, I like secret projects, secret offices, secret skills, secret passages, stories about secret millionaire-next-door fortunes. Maybe it was all the detective novels as a kid; plot twists still entertain me.
crabhooves
April 13, 2011
Hmm. This may be the final piece of justification I need to ditch a majorly depressive friend of mine that hasn't changed an inch in the two years that I've known him. Especially since I've been in the same mindset in the past...definitely do not want to become him.