5 Business/Life Lessons from my Furnace
Anita Sharpe on Business
My furnace died this week, which was no great surprise considering it was 44 years old. In the process of choosing a company to replace it -- I narrowed my search to two established, well-respected firms -- I found there are great business/life lessons even in the most mundane of situations.
1. The new world belongs to the quick and the guileless. The winning bidder for my business was at my house within four hours of my first call for an estimate. The losing bidder took two days. When the winning bidder calculated the replacement cost on his laptop, he had no problem with my observing and noting everything from wholesale unit cost to cost of labor to ultimate profit margins (55% gross, 10% net.) The losing bidder just scrawled a number -- a very big one -- on a contract form and said it was his best and final price.
2. It's stupid to assume your customer is stupid. This seems blindingly obvious, but clearly not everyone
understands that customers today do research. We know the difference between a low-end and a high-end unit and how much every piece of the process -- even labor -- should cost. The losing bidder must think his prospects (or perhaps just women?) fell off a turnip truck.\n\n3. Going for short-term profit is a losing game. Much of corporate America still operates this way, but my experience serves as a microcosm of the idiocy of this thinking. Apparently, the losing bidder's new owner is pushing its staff to bring in as much revenue and profit as quickly as possible, hence the huge markups on its products and labor. But who these days will fall for that? Stupid people, I guess.\n\n4. Obsolescence is OK. The truth is my furnace could have been fixed. It was so well built, it might have gone another 44 years. Yet its energy efficiency was analogous to a '55 Cadillac (or a modern-day Hummer.) Replacing it is good for my energy bills and better for the environment. My hunch is that by the time my new furnace shuffles off its mortal coil, there will be a much smarter way to heat and cool our homes.\n\n5. Life is mostly a matter of perspective. The repairman who initially looked at my furnace said it would cost about $5,000 to replace; it was not a happy day. When the winning bidder came in with a price about half that, it felt like I'd received a sudden windfall. I was giddy for hours.