Solve It Forward

January 28, 2014 - 5 minutes read

 

When I was a kid I earned comic book money by pulling dandelions out of the lawn in our back yard.  My mother paid me one cent for each dandelion.  A comic book cost ten cents.  So every week I would try to find twenty or thirty dandelions to yank out.  I liked comic books.  One time I wanted to make a lot of money, and I remember talking to my mom in the back yard on a hot Sunday afternoon for more than three hours while I pulled out 600 dandelions.  I think that was the day my mom stopped paying me a dandelion-pulling fee and I had to find comic book money elsewhere.

But here is the catch. I only earned a penny if I pulled out the whole dandelion, including the root.

“If you don’t pull a weed out with its roots,” my mom said, “it will grow back.”  My mom always checked to see that the long root was dangling from the flower and leaves before I earned my one cent.

I learned a valuable lesson while pulling weeds.  You have to solve the whole problem, not just part of it.

In my business we have almost 3,000 commercial retail tenants. More than 95% of them pay their rent in full and on time.  Do I send each of them a “thank you” note?  No.  Do I spend my time smiling while I look at the list of everyone who has met their obligation at the first of the month?  Not at all.  But I and my Collections staff spend a lot of time on those relatively few lessees who pay late or, even worse, not at all.

In my company, and in all other companies I am familiar with, the Sales department and the Collection department are in a perpetual state of conflict.  Why?  Simply because the task of Sales is to sell.  A salesman takes the order and immediately moves on to the next customer, saying, in effect, “My duty here is finished.  I made the sale.”

But it is the task of Collections to collect.  Collections doesn’t care very much about sales.  So if Sales produces $1,000,000 in sales and Collections only collects $600,000, then Collections will look bad and the entire company will be in trouble.

At my firm we subcontract leasing to an outside group which does an excellent job.  But our collection problem is tricky because a tenant will usually not default in the first few months, and sometimes not for a few years.  By that time Leasing has collected its commission and moved on.  But if our rent collections are only 85% of what is due, we will soon be out of business.

This is why we insist on checking every prospective tenant’s credit and business experience very carefully.  Every month we turn down a tenant or two and have an argument with Leasing.

“But that space has been vacant for a year, and this is the first tenant that has shown any interest.”

“Right, Leasing, but have you noticed that they will have to spend $25,000 to build out the store, they have only $5,000 in the bank, and they have absolutely no experience in this type of business?”  I hold myself back from discouraging Leasing by pointing out that by making an offer for undesirable space the prospective tenant has already demonstrated a certain degree of naiveté.

We always win the argument, because “we” is me, and I am not interested in renting to a new tenant who will soon default in paying their rent, and cost me $10,000 or more and four or five months of time to evict.

In effect, I am still yanking out those pesky dandelions. And now I always strive to include the roots.  When you face a problem, whether in business or in your personal life, solve the entire problem so that it won’t grow back.  You will save a lot of time, money, and heartache.

In short, Solve It Forward.

 

Alan

 

 

Share this post:

FacebooktwitterlinkedinmailFacebooktwitterlinkedinmailTags: