Seasonal Business

I do not see (Amazon) a book about seasonal business. The topic is puzzling. This might be a good subject. Seasonal Business and the broader subject of Seasonality.

Some pieces are on the web:

Running a Seasonal Business

Find out what smart tactics these entrepreneurs use to ensure the success of their seasonal businesses.

By Rich Mintzer | March 16, 2007

URL: http://www.entrepreneur.com/management/operations/article175954.html

No matter what industry they're involved in, most businesses have seasonal highs and lows. Yet like Santa, some companies--summer camps, ski schools and Christmas stores, for example--depend heavily on the revenue generated during a single season to carry them through the year.

Typically, seasonal businesses fall into one of two categories: those that can shut down in the off-season and those whose owners have to find another way to maintain cash flow during the rest of the year.

Scott Stillings' business firmly falls into the first category. Owner of Winter Sports School at Nub's Nob ski resort in Harbor Springs, Michigan, Stillings says his business is a model of great cash flow. ''This is such an open-and-shut business," he says. "We balance our books every week, pay every bill and everybody each week, and when we close the door at the end of the season, we know right where we stand. There's no carryover.''

The staff begins preparing in September for the ski and snowboarding season, which begins on Thanksgiving weekend. Stillings says opening day is the school's busiest, followed by the days around Christmas and then President's Day weekend. "Then we stay at a manageable cash flow level [the rest of the season],'' he adds.

Because there's not much inventory and no permanent staff--Stillings hires more than 100 instructors each season--the doors close the second weekend in April each year. ''In April, we try to finish everything for the year and hash out what we should do for next year while it's fresh in our minds," he says. That includes updating literature, brochures and the website, so people can always access the next season's information.

"Then we don't do squat until August when we stuff brochures into envelopes,'' says Stillings. ''Most years, I can take the whole summer off if I wanted to. If it hasn't been a good year, I can always strap my guitar to my back and go off and perform as a soloist or in a band.''

Pinching Pennies
''Obviously, in a [seasonal] business, you need to budget carefully to make sure you don't overspend or extend yourself past your capabilities,'' says Dennis D. Vourderis, who, along with his brother Steve, owns Deno's Wonder Wheel Amusement Park on the boardwalk in Coney Island, New York. ''Maintenance, taxes and equipment financing all need to be based on a 12-month year, so you need to know you'll have enough funding to cover those expenses during the time you have no cash flow.'' Having good credit, he adds, is a necessity in a seasonal business.

For the Vourderis brothers, whose parents purchased the amusement park and the Wonder Wheel--a Ferris wheel built in 1920 and declared a New York City landmark in 1989--the busy season runs from April to October. ''We face the beach, so we're 100 percent driven by the weather," Vourderis says. "If the sun comes out, people come to the beach, the boardwalk and the rides. If it's raining, it's not even feasible to open." Since a year's worth of business gets squeezed into six months, every sunny day counts. Vourderis uses July 4 as a benchmark for being in the black.

During the off-season, Vourderis stays busy, as he, his brother and their trained staff dismantle the seats and other parts of the rides and store them in a warehouse where they're painted and undergo maintenance, repairs and inspection.

Maintenance, repairs and painting also occupy the winter months for Jay Kandle and his family, who run Lake Kandle Campgrounds and Swim Club in Sewell, New Jersey. ''We like to winterize in October, right after we close," says Kandle. "We also take care of the pool, put away the rescue equipment for the lifeguards, do landscaping maintenance, rebuild old picnic tables and so on. We prepare for the coming year like farmers.'' Kandle dedicates his entire year to the business, despite the fact he's only bringing in money from the campsites and swim club for close to eight months of it.

From tax planning to hiring staff, Kandle spends October through March gearing up for a season that will involve approximately 2,000 swim club members and campers visiting the 150 camp sites on nearly 20 acres. One thing that helps keep the Kandles in the black is the additional income they generate from renting out 40 additional acres of farmland, which, along with the campgrounds, have been in the family since 1892.

''My father and mother had the dream of opening a swim club and campground,'' says Kandle, who has taken a slightly different approach to running the campground than his parents did. ''In my parents' day, January would have been a lean time of year. But by marketing the swim club to attract more business and taking deposits now, we're able to increase our cash flow during the off-season.''

The off-season is also a time for seasonal business owners to handle the important decisions that'll affect business the upcoming season. ''From a managerial standpoint, I try to break the business into two interrelated areas, the business side and the operational side,'' says Ron Weinhold, general manager and head of operations at two Cal Ripkin baseball camps and tournament facilities in Aberdeen, Maryland, and Myrtle Beach, South Carolina. "The height of activity on the sales side is between October and June, and the height of activity on the operations side is between March and October. So even though our business is considered seasonal, it's very much a year-round operation, with key decisions made during the winter months."

The camps are also slightly different from some other seasonal businesses because of increased cash flow during the months preceding the camps. While the official camp season is visibly the busiest, off-season registration generates the bulk of their income.

Switching Gears in the Off-Season
Although many seasonal business owners are able to ride the revenue wave through the off-season months, some owners opt to switch gears. Whether it's to maintain more consistent cash flow, better utilize a retail location or create a little peace of mind, some seasonal business owners have alternate plans for the off-season.

The Christmas Dove stores in Barrington, New Hampshire; Ogunquit, Maine; Boston; and New Orleans, don't close down after the holiday, but instead undergo a transformation, capitalizing on consumers' interest in decorating for other holidays throughout the year.

"Halloween has become huge with people decorating their homes inside and out, going to parties and giving gifts," explains Garth Svenson, who now runs the family-owned business started by his parents. "People also decorate for Valentine's Day and put up lights for St. Patrick's Day and the Fourth of July."

Supplementing the biggest annual shopping holiday without straying too far and losing the Christmas store following has been a balancing act. But by taking advantage of consumer demands, they've been able to turn what was primarily a Christmas business into a year-round celebratory store.

Jan Axel, a long-time sculptor who took to landscaping after moving from Manhattan to South Salem, New York, supplements her Delphinium Design landscaping business with holiday decorating services. ''As a landscape designer, I found it got very slow in the winter, so a colleague and I started doing holiday decorating,'' Axel explains. Together, the two started Cirque de Botanica, a separate holiday design business. ''It was a natural spin-off, and the immediate gratification makes it very appealing. A lot of what we do as landscapers takes so much time; sometimes it's years before we see a finished product mature.

Besides filling a creative niche, Axel's off-season business also bridges the gap between the planning and design phases--which can take place in the fall--and spring and summer, when her planting crews are out in force, sculpting a wide range of residential gardens and landscapes.

The Year-Round View
With 13 stores in seven Eastern states, selling outdoor patio furniture peaks for retailer Patio.com during the spring as warm weather approaches. Then, as the weather cools and entertaining moves inside, there's a drop in sales.

To avoid having to lay off any of its full-time employees during the slow season, 10 years ago the company began offering top-of-the line pool, ping pong and foosball tables, as well as bars, barstools, and bar tables and chairs in their store showrooms during the fall and winter, transforming a seasonal business into a year-round enterprise.

In fact, the off-season pool table business has become so successful that Patio.com has become the world's largest Brunswick Pool Table dealer. ''It's taken a tremendous amount of work and a lot of training, but we've been able to turn Patio.com from a seasonal company into a successful year-round business,'' says the company's co-CEO Mitchell Ross. "All the salespeople have become experts in both patio furniture and pool tables. Our entire delivery staff now knows how to do pool table assembly and repair." In fact, they've been so successful at blending patio furniture and pool tables that Ross has wondered whether they should now call the business ''PatioandPoolTables.com.''

Whether your seasonal business is one that sustains you through the year or requires an off-season transition, it can provide great diversity--and even a little downtime--if you master the art of careful planning, scheduling and pacing yourself for the full calendar year.

Case study: How I manage my seasonal business

WHO: James Mekin-Hewitt of H2O Sports

WHAT: Poole-based watersports equipment retailer

THE ISSUE: Surviving year-round when running a seasonal business

THE SOLUTION: "We sell clothing and equipment for watersports such as surfing and diving. Our busiest time of year is between April and October, and on a typical Saturday in the summer around 500 people pass through our shop. In the winter, this figure will drop to just 50. We have two permanent members of staff who work all year round, but during the summer we take on a part-time employee to help us deal with the workload.

"We start preparing for the summer months well beforehand. We order stock early to take advantage of discounts and we organise payment plans of between four and six months. Most of the stock has arrived by Easter, but we usually receive our deliveries in three drops because we don't have lots of storage space. Once we've sold the stock from the first drop, we've usually covered the costs of the entire order so everything we make on the next two drops is pre-tax profit.

"We have a good overdraft facility with our bank, which we can dip into before the summer season. We may need it if one of our suppliers doesn't offer a payment plan or if we can make greater margins with a single stock purchase.

"Our rent is the same throughout the year and we put money aside in the summer to cover our rent in the off-months. We make extra money by subletting space to a sail-repair business and a wakeboarding school. We charge them more in the summer and this helps pay the rent later in the year when sales have slowed.

"Our three company vans are leased. Buying them outright would have tied up too much cashflow in the beginning, and leasing gives us flexibility; we can either buy them at the end of the leasing period or upgrade them.

"We earn extra money in the off-months by running watersports coaching holidays abroad. It takes us out of the country for free, which is a bonus, and it's very good for business because lots of customers buy our equipment to use on the trip. The surf clothing business is seasonal, but we also stock regular casual clothing which sells year-round. At the moment we're improving our website, which we hope will boost winter sales."

LESSONS LEARNED: "Cashflow is very important in a seasonal business, so don't get carried away and order too much stock. For some of our larger equipment, such as kites and boards, we'll sell and replace them as we go. Last year, we finished up with a little too much stock, which we had to sell at reduced prices. So be flexible when ordering things, otherwise your cashflow will be as unpredictable as the weather."

For Every Tourist Business There Is A Season

January 28th, 2007

All businesses have a seasonal ‘ebb and flow’ to their year, some kind of fluctuation in sales or activity that can be tied to the different times of year.

For those of us with tourism-based businesses located along the Blue Ridge Parkway, Winter is generally our ‘down time’, our slow season. Most Parkway businesses close officially on October 31st each year, although I don’t know anyone who can’t be persuaded to stay open an extra week or so if Autumn leaf season has been long or delayed, due to cold and resulting color changes. Parkway businesses will keep their doors open for, and keep taking money from, the droves of visitors driving our back roads during the Fall - as long as they keep coming. Some with strong holiday mail order businesses stay open through Christmas, and then close down. Still others stay open year round, but with reduced hours.

And then there are other businesses around here that only come to life for Christmas or Winter season only, like the Christmas Tree industry or Skiing. “Pick and Choose’ or ‘U-Cut’ Christmas tree farms are more popular than ever here in western North Carolina in November and December. I can’t say the same about skiing though. Although some areas of Appalachia were at one time historically popular during Winter as ski areas, more recently ’ski season’ has pretty much amounted to a few weekends of weather cold enough to manufacture a few flakes of snow. Any time I mention the movie, ‘An Inconvenient Truth,’ it’s amazing how quickly people seem to change the subject or get quiet. I guess no one wants to consider the affect of climate change on seasonal businesses in the Blue Ridge mountains….so we’ll save that for another time. And another post.

Sections of the Blue Ridge Parkway at the highest elevations are often closed during Winter months due to ice that rarely melts under areas shaded by pine trees. These sections of the Parkway are especially treacherous, all those beautiful overlooks beyond scary curves without substantial safety barriers. So from November through April, most people couldn’t get to their favorite tourist businesses even if they wanted. But since so few families travel the Parkway during Winter months, there simply aren’t that many people inconvenienced by the closings.

And so an economic slowdown is imposed on all of us along the Parkway.

Years ago, when we started our handmade soapmaking business, this slowdown time of year was a time to panic. A time to be fearful. Few people - and few businesses - have to learn to endure months with little (or no) income, and also learn to view that seasonality as ‘normal.’ And it took me a while, because I used to worry and wonder: Would our customers come back?

But after nine seasons, we know that they do come back. Year after year after year. And so we’ve also learned it’s especially important to use our down time to prepare for our customers’ return in the Spring.

These days, slowdown season is really only a slowdown of in-store visitors. We don’t shut down and go to Florida or travel cross country for a few months, like many of our neighboring tourism businesses do. Our website sales are year round, as is our wholesale business, and so packing and shipping of orders is part of our daily routine all twelve months of the year. Although we’re not open daily with regular hours during the Winter months, we are happy to open the shop to customers for appointment shopping.

Without question, the most important part of slowdown season is that it is a time of special projects. A time to focus on making decisions that require careful consideration and time to ’sleep on it’ - like changes in product packaging or price increases. Time for projects that demand concentrated energy and creativity in planning - like getting this Backroads Business blog up and running. Time to offer related services that that can be offered in different forms - like week long and weekend handmade soapmaking workshops. These intensive sessions are impossible to facilitate uninterrupted during busy peak season.

And it’s also a time for property renovations. Because what self-respecting vacationer comes to the mountains to ‘get away from it all’ and wants to deal with all that noise and dust and mess caused by construction and renovation? If they wanted to deal with drywall dust and the smell of stain and paint drying, they could stay home and renovate themselves.

And so what’s one way we can show our customers how much we love them?

We can schedule our renovation projects during OUR vacation time!

Tomorrow we begin renovation to expand our web order packing and product packaging area. This will also allow a ‘re-assigning’ of other rooms’ to various business functions. As any business grows, your procedures and processes change. In order to stay efficient (and sane), the physical layout has to change too. And in our case, as our web & mail order operation has grown, we need more space to store product, pull and pack orders, and ship. Yet we still need enough retail space for our drop-by customers to browse and select products when we are open full time during tourist season, May through October.

Next month we’ll see a reshuffling of the current retail area. I’m thankful all the soap is still made out in The Soap Shed, and we’ve got plenty of room out there to continue expanding as needed. But in the meantime, I’ve got two rooms of displays and furniture sitting out on our wraparound deck, taking the place of all those rocking chairs that customers were lounging in just a couple months ago. When it was about 40 degrees warmer!

I think we’ve got it rough sometimes juggling our seasonal business, but then I read about a fireworks factory whose product is only in demand certain days of the year! I don’t usually find much discussion about running a seasonal business and coping with its challenges. But I did find an interesting article on learning to budget year round and survive seasonal sales slumps.

Downtime or slow time for a seasonal business can also truly be a wonderfully creative time. What about thinking of how you might diversify the products you offer? How about brainstorming to see what other markets might be able to use what you make? Maybe there’s a new niche out there that would be able to use your product, if you made minor or cosmetic changes to ‘fit’ that new niche?

Asking these questions makes me realize that there is much, much more to say about running a seasonal business. So I will explore more - but in another post!

Seasoned Pros

Operating a seasonal kiosk keeps these partners on their mistletoes.

By April Y. Pennington | Entrepreneur's StartUps - September 2004

URL: http://www.entrepreneur.com/magazine/entrepreneursstartupsmagazine/2004/september/72328.html

Everyone knows the crazed nature that takes over gift givers during the holiday season. No one knows it better than Michael DeAcosta and his three partners, who staff their Santa's Pen kiosk from November 1 through Christmas Eve at the Park City Center in Lancaster, Pennsylvania. For seven weeks, their seasonal kiosk, offering personalized ornaments, stockings and frames, opens for business inside the mall and takes full advantage of the shopping frenzy that erupts every year.

Running their business during the busy holiday season requires staffing the kiosk during the mall's extended holiday hours. That makes Santa's Pen an extremely time-consuming commitment for the partners of Diversified Investment Group—DeAcosta; his wife, Theresa; and Rick and Shelley Bortz. Rick, 45, owns a construction company, and Shelley, 40, owns a hair salon, so they're already juggling entrepreneurial ventures. Theresa, 36, a stay-at-home mom, must balance caring for her children and working at Santa's Pen when the holiday season rolls around. Michael, 36, a full-time teacher who also has a DJ business, finds that during the time Santa's Pen is open, he's putting a total of 110 to 120 hours per week into all his jobs. "[The holiday] time of the year is when most people are gearing down and goofing off," says Michael. "We don't get to do that until Christmas is over."

Despite the long hours, the partners feel strongly that it's important to their success to have one owner at the kiosk with the employees at all times. In addition to staffing the kiosk during the seven-week sales season, the four partners begin preparing for the holiday season in October, ordering stock and gearing up. The actual holiday rush can be hectic, yet Michael points out that when it's over, "we can take a deep breath, relax, do inventory, and close the doors till [next season]."

Diversified Investment Group, which began operating its Santa's Pen kiosk in November 2002, had approximate sales of $85,000 for the 2003 holiday run. Their kiosk carries some 500 personalized ornaments that span hobbies, sports and professions, as well as personalized stockings.

In deciding to launch the business, Michael and his partners relied on their gut. Michael knew the company's founder and trusted her instincts. That trust has paid off, and today, the company is expanding beyond merely seasonal sales. This past year, when someone approached them about attending a big cheerleading competition, they attended as vendors. They were a huge success, ringing up sales for their large assortment of cheerleading items, as well as other sports-themed and Christmas items.

"Every woman who heads up a cheerleading competition was throwing cards at us and saying, 'We want you to come to ours,'" Michael recalls. Now they've been asked by a T-shirt silk screener to accompany him to a soccer tournament and sell their soccer-themed items.

That success has proven to Michael and his partners that demand for their products isn't limited to the holidays. "Depending on what you're selling, with a kiosk business, there are so many opportunities if you're willing to put forth the effort and time."

Film 1a

My First Movie: Taking Those First Steps
Part One: An Introduction
an article by Rob Lohman
They say the beginning is never easy. This seems to be at least partially true. It has taken me a long (and winding) road to get me to making my first little short (a short little movie). When I was in high school there where two things interesting to me: acting (which turned out to be a love of things visual instead of acting) and computers. Somehow I rolled into the computer branch and began my career as a computer programmer.

Move forward a few years later and this is what I am doing professionally at this very moment. How this all relates to my first movie? Well, the love of things visual never went away and by 2001, the year I was mostly 23 years of age, my collection of DVD's had grown quite large. I saw every "making of," if you get a chance rent the El Mariachi DVD disc. Watch the movie, then watch it again with Robert Rodriguez's commentary track and play his 10 minute film school extra. Now if this is too your liking I suggest checking out his book Rebel Without a Crew) and got more interested in making movies. All these years reading internet sites, books and magazines about the subject suddenly caused an electronic charge in my brain that I needed to do something. Why was I not doing anything with my information and love? No clue.

The Beginning
I am a firm believer in preparation and doing things the hard way. Learn a lot, do a lot, fail a lot and get good at what you do. I immediately decided things were required: books, camera and ideas. Bought myself a pile of books about directing, lighting, digital movie making, etc. A while earlier I already had begun writing down movie ideas, scene ideas, character ideas. Anything and everything that could come in handy some day (even things I thought would never come in handy). I encourage anyway who wants to make movies to start the habit of writing things down. In about a year's time, eight ideas have been written down by me, what I call large ideas (a movie, a TV show or a short movie). Next to that there are also numerous ideas that are committed to paper about all sorts of things. It might never get used (some if it already got used now), but there is a lot of stuff for me to fall back on later!

While reading all the books (and still continuing to read the articles on the Internet) my mind started thinking about a camera. After a month or two the choice had been nailed down to the Canon XL1S camera (PAL edition since I live in Europe). Why this one? good preparation! This is one important piece of it. The camera is well known for its beautiful picture, extendibility (different lenses, third party support etc.) and support from Canon. The only thing against it was the price. Everything in Europe is expensive, cameras included. Fortunately for me there was a heavy project at work during the last months of 2001. This allowed billing overtime to the company, in turn allowing me to buy the camera (together with some savings of my own). First week December 2001 I picked up my camera: happy day in my life!

After some two months of experimenting (December 2001, January 2002) I bought myself the Canon filter set containing the following: ND (less strength then on the manual lens), UV filter (filters out UV light and protects your lens from dust, scratches etc.) and a Circular Polarizer filter (this filter can be rotated so that you can remove reflections etc. on surfaces like glass and water. On a car window you can rotate it so that you see through the window into the car or that you see the reflection instead). All of these filters have been used on my little short movie, they came in very handy! The UV filter is on my lens permanently to protect it. Also bought myself a case for the camera (not a real camera case but a toolset case) which has room for cables, tapes, batteries and all sort of things that need to be dragged along for the ride (this turned out to be a very wise thing to buy as well, it protected my camera and allowed me to bring everything with me in an easy to move case). At this time there was no money left to spend so the tripod had to be borrowed from a friend, a Manfrotto (no fluid head unfortunately).

The Movie
The feeling came that I needed to do a movie. What about was the question. Some ideas where already on paper (as described above), but I wanted to start small and easy for a number of reasons. My friends and myself all have jobs or school, so time is limited. Furthermore it usually is wise to begin small (and thus also making small mistakes), which has some nice side effects: it will be much cheaper, easier and faster too make! While looking around in my country for film schools I might wanted to attend (there are only 2), one required a movie to be submitted (on a very tight deadline, but we will get to that later). This was interesting. It gave me an opportunity to make something that could also be used if deciding to apply for this school, also giving me a deadline in which to work to stimulate me further. Splendid! The deadline was 3 weeks away (that is a very short period of time). What was needed was a simple idea, easy to execute: a story about a burned out business man. It wasn’t a very big interesting story, but it allowed me to make the following shortcuts:

Easy access to locations:
Since I am a business man myself (where did you think part of this story came from?) there was direct access to all of my sets without needing to dress them. If asked gently we would be allowed to film at my own work. This was granted (swell). The other location was my own house (and my lead characters house) which was easy to use as well.

Traveling time:
Driving from my home to work is only a 15 minute drive. This was handy because my 2 person crew (friends of mine) could sleep at my house. The only downside to this was they had to picked up from far away and dropped off at the end of the weekend (some money went into car fuel here). This tremendously cut down on the time to shoot this movie. We shot this movie in 3 days, 2 of which we where at work.

Even though things were looking favorable two more things where cut: sound and light. While one of my crew (the lead actor) is an audio engineer (and had brought professional audio equipment with him) I decided to not use any audio. My idea was to let the movie be told from the perspective of the character, as if he was looking back on his own live. To add to this feel the movie is going to use music and VO (Voice Overs) of the character talking about his own life). Second, we probably would not have any time to do extra takes if the audio was not correct. Besides this I also choose to not use any additional lighting, due to a number of reasons. Money (of which there was not much left), no time to buy any lighting gear or rent it (which cannot be done easily here), and again the time that would be required to learn how to light and place these lights. These two things together saved me days of time (really). If I had not done this all the footage that would was needed to be shot would never have been shot, no way!

Equipment
The following equipment was used to make this short movie:

Canon XL1S PAL (standard 16x II lens)
Canon filter set (ND, Circular Polarizer & UV filter)
Manfrotto tripod (no fluid head)
Dolly (a little car from work with big wheels)
2 MiniDV tapes
Some power extension cords
Firewire enabled laptop from work (comes with my job)
Windows 2000 professional
Adobe Premiere 6.01 for editing

Pre-production
The total project was supposed to last three weeks, one and half weeks where spend on pre-production (idea, script, planning etc.). Came up with my basic story idea in a couple of days, putting it down in a couple of sentences. The next thing I did was to write down the number of scenes the idea needed, describing and numbering them (came to 20). although I had started writing a true script there was no time to finish it (had no vacation during my pre-production). This was mistake number one. I should have taken the time to write at least a very basic script outline (this should not take too long if you already have a scene/story outline).

One thing that triggered my slow script writing (and therefore running out of time) was language choice and my choice to do voice over. Since my native language is not English I was debating with my self to make the voice over English or my native language (Dutch). This together with actually coming up with voice over lines was too much in the small time available. From my first thoughts voice overs did not seem that more difficult than "normal lines". I was probably wrong in my assumption. It is probably "easier" (not implementing that the craft is easy!) to write character dialog then voice over dialog, because you do not want the voice over to be cheesy, easy and tell the viewer everything. It must, however, grab an audience, inform them and keep them interested in what they are seeing as well. This turned out to be more difficult than I had initially thought. It really became a double cutting sword. On one side it was working in my favor (not having to record audio on set) and on the other side it was working against me (more difficult to come up with interesting lines). This problem must still be tackled this very moment. Wish me luck.

My second mistake in pre-production was to not storyboard, mostly out of time constraints. The other part was a little arrogance from my part thinking that I had the shots in my mind and that the movie would not need that many (since it was a little short movie). How more wrong could I have been. I realized there was a problem after the shoot was over and editing had started. Suddenly there were scenes that could not be put together. Let me explain this a bit more with an example from my movie:

My main character has entered his work and is walking down a hallway. The camera is following him with a dolly down the corridor as he turns into a office room. This scene needs to be cut to a scene where he is working. The problem here lies in that I do not have any footage to go in between these two shots. It feels very unnatural to see a person walking down a corridor (with his coat etc. on) and then suddenly working. Something needs to happen in between. Now if the jump in time was bigger, say from leaving his home to working, that would have been acceptable. An audience just simply fills in the blank here. In my case the jump is just too small. It does not seem to work.

If there had been an storyboard session (even if it was rough with pictograms or something) this probably would have been noticed before it was shot. I am currently thinking about drawing some pictures, shots and sequences that where in my mind before the footage was shot to help me in my final editing moments. It can be quite disorienting to have a pile of footage and no visual guideline other then a scene list! Not every movie will need a full drawn out storyboard, but I truly have learned that it is a good thing to really think about how scenes and shots will connect to each other both before it is shot (also handy while you are shooting).

One final thing I did in my pre-production phase was planning: calling all the people again to make sure everyone was ready to go, writing a second scene list in the order I was planning to shoot it (instead of the order they would appear in the movie). Planning all the shots around locations is a good idea, it allows you to go through your sets as fast as possible. You also ensure that important things do not change in the mean time. First day and half were at work and the last day and a half at home. We started out at work because this was the most important set where we could only be at specific times. My own house was available to us whenever we wanted. This list proved to be a very good thing to make because everyone knew exactly when we where going to be where and what we were going to shoot. It also allowed me to track everything while my mind was in a thousand different places (working with equipment, instructing actors etc.). I am going to drop the bomb here. Take half of the scenes of the first day of shooting and mirror them on the second day of shooting, moving everything half a day back. Why? Two reasons. You are not going to shoot everything within your chosen timeframe so over calculate. Reason 2, your very first day (ever! Remember this was my first movie and perhaps yours too!) will be chaotic, disorganized and above all very informative and learning. That last part is a very, very good thing. It takes a lot of time though, so double half of your scenes from the first day to the second day.

Production (the actual shoot)
There we were. At my work with a car full of people and equipment (it was a small car). It was end of the afternoon of a Friday. Out three day shoot was about to begin, boy, was I nervous! For the first time in my live I was embarking on creating something of my own (truly my own) with the help of other people. We unpacked our gear from the car and headed inside, some co-workers interested in what was about to happen. Luckily for me not much people were around. When you set up your very first scene to be shot in your live, I don’t need anyone to watch other then the people who I truly need (and trust around me).

Only one scene got shot from the 3 planned the very first day, luckily for me the most important one: my main character working during the evening. The scene was shot in about an hour. The rest of the time was spent unpacking, fiddling with the tools, discussing the scene, instructing the actors and repacking the equipment. although this scared me off a bit at first it turned out all right the next day when we shot a heck of lot more scenes. We had gotten our important scene which we couldn’t do any other time (we needed an evening scene and only had access to work the next day during day time). The other scenes where miscellaneous scenes which could also be shot during day time.

I learned an important lesson here: as with everything in live it takes a lot longer then you initially think (or perhaps hope). Later that evening, after dropping of equipment at home, I took my crew (3 people total, including myself) out for diner in a very nice restaurant. We had a nice time eating, laughing and discussing our first day of shooting.

Do not forget to feed your crew! Sounds simple enough, and it is. Everyone needs food and drinks to survive the day. Your actors and other crew will be happier with a full stomach (not too full) then an empty one! For my movie I needed to shoot a short little lunch scene where everyone was eating around a table. Knowing this when scheduling my scene and knowing that we needed to lunch ourselves as well on Saturday I planned this scene in the middle of that day. Just before we needed to shoot this scene we went off to a bakery to get all kind of things for lunch. When all the crew (including the actors) and myself sat around the table to eat our lunch letting the camera roll (and moving it around a couple of times). This worked out very well! Together with fuel for my car these where the only costs I truly had. Pretty doable.

While filming the second day I made my next big mistake: forgot to bring an important piece with me: the lead character’s laptop (actually my laptop from work). It was still at home. Instead of going back to get it (which would have taken at least 30 minutes plus the time to get everyone working again) we found some old unused laptops and used that instead. No-one will probably notice the difference anyway since the focus is not on the prop, but on the character using it! During shooting I was also very please with my earlier made decisions to not record audio or do lighting. In simulating working (and phoning for example) the characters just talked about anything they want (some pretty hilarious things like trading an old car tire for a mother-in-law). The sound will not be used, so it does not matter! Together with not having to set up lights, which I have never done (so removing lengthy testing and fine tuning), this turned out to be great time savers. Without these "restrictions" the shooting would have never been completed in 3 days!

Together with my crew I learned a lot of things: thinking about how to shoot a scene, moving the camera around, doing more then one take, different angles to shoot at etc. etc. Listen to what you crew has to say, in my case they had some very good ideas! My first shooting experience has certainly been an exciting journey! I can still remember the thrill of seeing your first footage on the TV, raw, just shot. Together with my crew we watched the "dailies". It was a fun experience. Some things worked and looked great, others did not. One thing we all noticed immediately where auto focusing problems. These where most evident during our dolly shots down a hallway (these could have been shot in manual focus since the character keeps the same distance throughout the "walk") and shots inside an elevator (here the auto focus had difficult focusing on a light surround a button). Next time I will try to shoot as many things in manual as possible, otherwise beautiful shots look now rather dull. Oh well, this was mainly a learning process anyway!

This is it for the first installment, I hope everything was readable and you did not got an information overload. Next time we are going to talk about the editing process, color correction effects work and a bunch of other things. I promise to include a whole bunch of pictures then to balance out the text some more. If you have any comments (positive, negative or any you want to share), ideas, suggestions, remarks or questions you can reach me at visuar@iname.com

Calif - Wilson, thoughts

Wilson pays workers well to boost profits

Automotive News / March 19, 2007 - 1:00 am




David Wilson, president of David Wilson Automotive Group in Orange, Calif., says the key to his company's success is grooming strong dealership general managers.

Wilson's 15 dealerships in California and Arizona recorded revenues of $1.67 billion in 2006. The company ranks No. 13 on this year's Automotive News list of the 125 largest dealership groups, based on new retail vehicles sold in 2006.

Wilson discussed his operating philosophy with Staff Reporter Donna Harris.

You've said your company thrives on strong general managers.

I have a 25 percent partner in every dealership. They have earned that partnership out of sweat equity, and they are treated like they own 75 percent.

How did you arrive at that philosophy?

The ultimate oxymoron is "minority stockholder rights." There is no such thing. I realized that from my experience as a 25 percent partner. When I became an owner, I was going to treat my junior partners in a much different way.

Do they have a lot of autonomy?

I am running the company; I'm not running dealerships anymore. In 1989, before we opened Tustin Lexus, I helped the general manager interview salesmen. I recognized I didn't have time to help interview salesmen. I was running Toyota of Orange. I said, "Hire whomever you want."

I didn't go back to that dealership for three years. It is the same way with the other stores.

You say you overpay your employees. Why?

If you don't pay people enough, you get more turnover. Our managers would be training people and interviewing people all the time. Let's sell something instead of looking for people.

How do you find good general managers?

We grow our own. We don't hire general managers - we hire salesmen. We've had many general managers from other dealerships apply for general manager positions. We say, "We do have sales openings." We have three examples of people who were general managers somewhere else, started as salesmen at one of our dealerships and are now partners.

The policy keeps people from quitting. I had a fellow who had been a general sales manager for me, and he quit to become a general manager for somebody else because we didn't have an opening. He came back because it did not work out. He started as a salesman, even though he had been with me 10 years. Now he is a general manager.

You have a reputation for paying your employees more than they would get for comparable jobs at other dealerships.

We overpay our people by 20 percent, but we net 5 percent on sales before taxes. Our people are hyperproductive. If a comparable dealer has six sales managers, we might have four. They generate the income of six managers, but I am only paying four.

Our vacation policy is two weeks after one year. Most everyone else gives one week after one year. We give three weeks of vacation after five years and four weeks after 10 years. We have a pension plan and a profit-sharing program. We don't pay anybody minimum wage - 150 percent of minimum wage is the starting salary at any dealership. And we let our people work overtime.

What impact does that have on employee turnover?

In the last 20 years, I have never advertised for employees. All of our people are promoted from within. We have second and third generations working for us. They know what a great place to work it is, and they recruit good people. We hardly have to fire people because we are hiring only productive people.

You run very large dealerships.

We average over $100 million in revenues per dealership. The opportunity for economies of scale is in the big stores. If you want to be a big dealer, you need to be in a big market with a volume brand. You have to have a plan. You have to have some belief in yourself and your ideas.

We have a benchmark of $1 million per employee. I send the general managers a report reminding them of that every month. If a store has 100 employees and is on track to do $90 million, they have to get rid of 10 employees or jack up sales.

All the stores are within one or two employees of that benchmark. Some are more efficient. Toyota of Orange has 150 employees and is doing $240 million in sales.

Some would argue you are successful because you have the right brands.

I am lucky to have Toyota, Lexus and Honda. But I have spent over $100 million on blue sky. I didn't win that money in the lottery.

The only open point I got was Right Toyota in Scottsdale, Arizona. I held the land for six years at a cost of $50,000 a month. I was in it for the long run, and it's now the number-one Toyota store in its region.

It was the same way when I got the first Lexus franchise. A lot of people turned that car down. I started building in 1987 and opened in 1989. I spent $8 million before I saw the car. There were a lot of sleepless nights thinking: "Am I going to lose Toyota of Orange over a Japanese luxury car that some people say isn't going to work?"

I lost money the first four years at Desert Lexus. Sure, it looks good now. But it wasn't always that way.

How is your Ford dealership in Orange County doing?

It is the second or third most profitable Ford store in California. We were selling 300 new units a month there five or six years ago. Now we are selling less than 100.

That was the reason I bought a Mazda franchise to put in with it. Ford did not want that. But what can you pay employees? It gave me the opportunity to keep people and shore up the expense base. Nobody wants duals, but manufacturers have to be realistic.

You are opening Toyota dealerships in Mexico. What's that like?

Mexico is the land of opportunity. Toyota has been there only a couple of years, and they already have 10 percent of the market.

For customers with good credit, the interest rate is 15 percent. Mexican dealers make 6 to 7 percent. We can make more on the interest than we do on the car.

Do you plan to expand in the United States?

I have potential general managers pushing, wanting to know when we are going to get another store so they can be a partner. Our goal this year is to exceed $2 billion in revenue. I have a list of people I call four to six times a year, to let them know to give me a call when they think about cashing in.

Didn't you consider going public?

In 1995, Merrill Lynch approached me to go public. My controller explained to me that we will make the money we would have raised in a public stock offering in five years anyway. So why sell for five times earnings? I did not want to retire.

We had what they call an all-hands-on meeting. You have lawyers, underwriters and CPAs in one room. I looked at those 20 experts, who were making $300 per hour, and realized who was paying for it all. It was our last meeting.

Is there room for more public dealership groups?

Ultimately, there will be more publicly held groups, because the manufacturers limit acquisitions. There may be spinoffs. There is a tremendous amount of venture capital available, and some dealerships have terrific and proven returns.

Lots of private groups do as well as or better than the public companies. They don't need public money. But at some point, what is the exit strategy for those people? This is an evolving as well as a consolidating industry.

A dealer with a bias toward centralization

Baltimore dealer group is known for innovation

Automotive News / March 19, 2007 - 1:00 am




With seven dealerships, Schaefer & Strohminger is a relatively small group. But the Chrysler group and many larger dealership groups cite the private Baltimore company as a model of operating efficiency and a source of ideas to borrow.

Schaefer & Strohminger CEO Joe Jankowski has a reputation as an industry maverick because of such innovations as eliminating general managers at dealerships. Jankowski, 51, discussed his business strategy with Staff Reporter Donna Harris.

You are considered a pioneer in centralizing your operations.

Back in 1992, we centralized accounting. There was no technology to do this. I had an IT person build a customized system. It was considered taboo. I was the Antichrist.

In those days we had general managers who wanted complete control over financial statements and cash flow and how inventories were handled. There are people in the auto retail industry still talking about centralizing operations and whether they want to pull that trigger.

We dramatically reduced staff. We had 38 total accounting people in five or six stores. Today we only have 15 people for seven stores. In 1997 we eliminated general managers. We have store managers who run sales in our dealerships.

Our fixed-operations people report to our two fixed-operations directors, who work for the management company. One specializes in service and body shop, and the other in parts. We used to have a formal director of sales but eliminated that position. Co-owner Dave Strohminger fills that role now.

We now have centralized accounting, legal, information technology, tax, human resources, warranty administration, fixed operations and Internet lead management.

What's your next initiative?

We just started taking incoming service calls in a centralized environment. We have Web-based service scheduling, and our entire phone network is linked to handle this. So when a customer calls, the person who answers the phone can immediately help schedule an appointment. If they can't handle the call, the customer will be linked to a service manager or adviser.

We already field phone and Internet sales leads in a central environment. Internet sales represent about one-third of our total volume. We record all incoming calls for quality purposes, and we track them for advertising sources. Each advertising source has a different 800 number, and we monitor those calls. We try to help the customer immediately.

How much have your centralization initiatives saved the company?

I couldn't tell you anymore - it's so deep in the culture. It's really a savings in personnel.

What about used cars? F&I?

We are bringing in a used-car sales trainer so we will not take our eyes off the ball.

We also are driving higher levels of finance and insurance profits. In the last year, we have moved our numbers up by over $100 a unit. We expect to add another $100 per unit this year. We are running $920 a unit now, and our goal is to be at $1,000 per unit.

We've had a really serious focus on training personnel and setting expectations. You get what you expect. We have three managers consistently selling over $1,000 per unit. And they are very customer-friendly.

You have said your focus is on selling prepaid maintenance plans.

Maintenance plans are part of a holistic approach that moves the customer from the sales department to the service department and captures customers for the long term. We have three stores doing in excess of 50 percent sales penetration on maintenance plans. The goal is to have every store sell over 50 percent of its customers maintenance plans.

We have dramatically lowered the price of the product, to $295 for three years worth of oil changes and rental cars if they bring their car in for service.

How soon do dealers start losing their customers' service business?

From Day 1. Forty-five percent of people who buy cars from us never show up in the service department for customer-pay work. After three years, 75 percent of our customers are gone.

We have high customer satisfaction. But why don't they come back for service? If 75 percent of customers are gone three years after the vehicle purchase, lots of stuff has to change.

We are going to have mandatory training over the next four months for every service adviser and manager. We are going to certify these folks, and we will give them continual feedback. Whenever customers walk into the service department, they will know exactly what to expect from that experience. We expect increased sales.

What's your goal?

If we retain 50 percent of our customers after three years, I would consider that a wild success.

Our average hours per repair order used to be 1.6. Right now it is running at 2.1. We think this program will take us to 2.5 hours per repair order.

Why did you divest your Toyota dealership?

It was in a tough area of town, we couldn't get inventory from the factory, and somebody offered us a significant amount of money for the property. We were going to have to build Toyota a new facility. So instead of putting capital in, we took capital out.

You have bought out competitors only to close the points.

We are strengthening our operations and doing more with our existing brick and mortar. On two occasions we have bought competitors and closed the points.

We purchased a Mazda store at a very good price. There are seven Mazda dealers in our market, including our two. There is not another competitor until the 15-mile radius. As part of our strategy, we studied traffic patterns. The harbor is a natural barrier between us and our competitors. And between two major interstates, I-83 on one side and I-95 on the other side, there is a swath down the middle that is about 400 square miles. We now have control over that geographic market.

There are seven Hyundai stores in the Baltimore market. The dealer who sold us the Mazda store also owned a Hyundai store within that same swath. We took that dealership and moved it 3.5 miles to an existing facility. We still have one of the only two Hyundai dealerships in that geographic area.

Your company has a long history.

It is the oldest Baltimore city dealer. It was started in 1917 by two brothers-in-law, the father and grandfather of the existing dealers.

If you question anyone in this town about our reputation, we will be off-the-chart good. Hopefully we will stay ahead of the curve so we will be here for the next 90 years.

Customer Service Tips

http://www.joelonsoftware.com/articles/customerservice.html

Seven steps to remarkable customer service
By Joel Spolsky
Monday, February 19, 2007

As a bootstrapped software company, Fog Creek couldn’t afford to hire customer service people for the first couple of years, so Michael and I did it ourselves. The time we spent helping customers took away from improving our software, but we learned a lot and now we have a much better customer service operation.

Here are seven things we learned about providing remarkable customer service. I’m using the word remarkable literally—the goal is to provide customer service so good that people remark.

1. Fix everything two ways
Almost every tech support problem has two solutions. The superficial and immediate solution is just to solve the customer’s problem. But when you think a little harder you can usually find a deeper solution: a way to prevent this particular problem from ever happening again.

Sometimes that means adding more intelligence to the software or the SETUP program; by now, our SETUP program is loaded with special case checks. Sometimes you just need to improve the wording of an error message. Sometimes the best you can come up with is a knowledge base article.

We treat each tech support call like the NTSB treats airliner crashes. Every time a plane crashes, they send out investigators, figure out what happened, and then figure out a new policy to prevent that particular problem from ever happening again. It’s worked so well for aviation safety that the very, very rare airliner crashes we still get in the US are always very unusual, one-off situations.

This has two implications.

One: it’s crucial that tech support have access to the development team. This means that you can’t outsource tech support: they have to be right there at the same street address as the developers, with a way to get things fixed. Many software companies still think that it’s “economical” to run tech support in Bangalore or the Philippines, or to outsource it to another company altogether. Yes, the cost of a single incident might be $10 instead of $50, but you’re going to have to pay $10 again and again.

When we handle a tech support incident with a well-qualified person here in New York, chances are that’s the last time we’re ever going to see that particular incident. So with one $50 incident we’ve eliminated an entire class of problems.

Somehow, the phone companies and the cable companies and the ISPs just don’t understand this equation. They outsource their tech support to the cheapest possible provider and end up paying $10 again and again and again fixing the same problem again and again and again instead of fixing it once and for all in the source code. The cheap call centers have no mechanism for getting problems fixed; indeed, they have no incentive to get problems fixed because their income depends on repeat business, and there’s nothing they like better than being able to give the same answer to the same question again and again.

The second implication of fixing everything two ways is that eventually, all the common and simple problems are solved, and what you’re left with is very weird uncommon problems. That’s fine, because there are far fewer of them, and you’re saving a fortune not doing any rote tech support, but the downside is that there’s no rote tech support left: only serious debugging and problem solving. You can’t just teach new support people ten common solutions: you have to teach them to debug.

For us, the “fix everything two ways” religion has really paid off. We were able to increase our sales tenfold while only doubling the cost of providing tech support.

2. Suggest blowing out the dust
Microsoft’s Raymond Chen tells the story of a customer who complains that the keyboard isn’t working. Of course, it’s unplugged. If you try asking them if it’s plugged in, “they will get all insulted and say indignantly, ‘Of course it is! Do I look like an idiot?’ without actually checking.”

“Instead,” Chen suggests, “say ‘Okay, sometimes the connection gets a little dusty and the connection gets weak. Could you unplug the connector, blow into it to get the dust out, then plug it back in?’

“They will then crawl under the desk, find that they forgot to plug it in (or plugged it into the wrong port), blow out the dust, plug it in, and reply, ‘Um, yeah, that fixed it, thanks.’”

Many requests for a customer to check something can be phrased this way. Instead of telling them to check a setting, tell them to change the setting and then change it back “just to make sure that the software writes out its settings.”

3. Make customers into fans
Every time we need to buy logo gear here at Fog Creek, I get it from Lands’ End.

Why?

Let me tell you a story. We needed some shirts for a trade show. I called up Lands’ End and ordered two dozen, using the same logo design we had used for some knapsacks we bought earlier.

When the shirts arrived, to our dismay, you couldn’t read the logo.

It turns out that the knapsacks were brighter than the polo shirts. The thread color that looked good on the knapsacks was too dark to read on the shirts.

I called up Lands’ End. As usual, a human answered the phone even before it started ringing. I’m pretty sure that they have a system where the next agent in the queue is told to standby, so customers don’t even have to wait one ringy-dingy before they’re talking to a human.

I explained that I screwed up.

They said, “Don’t worry. You can return those for a full credit, and we’ll redo the shirts with a different color thread.”

I said, “The trade show is in two days.”

They said they would Fedex me a new box of shirts and I’d have it tomorrow. I could return the old shirts at my convenience.

They paid shipping both ways. I wasn’t out a cent. Even though they had no possible use for a bunch of Fog Creek logo shirts with an illegible logo, they ate the cost.

And now I tell this story to everyone who needs swag. In fact I tell this story every time we’re talking about telephone menu systems. Or customer service. By providing remarkable customer service, they’ve gotten me to remark about it.

When customers have a problem and you fix it, they’re actually going to be even more satisfied than if they never had a problem in the first place.

It has to do with expectations. Most people’s experience with tech support and customer service comes from airlines, telephone companies, cable companies, and ISPs, all of whom provide generally awful customer service. It’s so bad you don’t even bother calling any more, do you? So when someone calls Fog Creek, and immediately gets through to a human, with no voice mail or phone menus, and that person turns out to be nice and friendly and actually solves their problem, they’re apt to think even more highly of us than someone who never had the opportunity to interact with us and just assumes that we’re average.

Now, I wouldn’t go so far as to actually make something go wrong, just so we have a chance to demonstrate our superior customer service. Many customers just won’t call; they’ll fume quietly.

But when someone does call, look at it as a great opportunity to create fanatically devoted customer, one who will prattle on and on about what a great job you did.

4. Take the blame
One morning I needed an extra set of keys to my apartment, so on the way to work, I went to the locksmith around the corner.

13 years living in an apartment in New York City has taught me never to trust a locksmith; half of the time their copies don’t work. So I went home to test the new keys, and, lo and behold, one didn’t work.

I took it back to the locksmith.

He made it again.

I went back home and tested the new copy.

It still didn’t work.

Now I was fuming. Squiggly lines were coming up out of my head. I was a half hour late to work and had to go to the locksmith for a third time. I was tempted just to give up on him. But I decided to give this loser one more chance.

I stomped into the store, ready to unleash my fury.

“It still doesn’t work?” he asked. “Let me see.”

He looked at it.

I was sputtering, trying to figure out how best to express my rage at being forced to spend the morning going back and forth.

“Ah. It’s my fault,” he said.

And suddenly, I wasn’t mad at all.

Mysteriously, the words “it’s my fault” completely defused me. That was all it took.

He made the key a third time. I wasn’t mad any more. The key worked.

And, here I was, on this planet for forty years, and I couldn’t believe how much the three words “it’s my fault” had completely changed my emotions in a matter of seconds.

Most locksmiths in New York are not the kinds of guys to admit that they’re wrong. Saying “it’s my fault” was completely out of character. But he did it anyway.

5. Memorize awkward phrases
I figured, OK, since the morning is shot anyway, I might as well go to the diner for some breakfast.

It’s one of those classic New York diners, like the one on Seinfeld. There’s a thirty page menu and a kitchen the size of a phone booth. It doesn’t make sense. They must have Star Trek technology to get all those ingredients into such a small space. Maybe they rearrange atoms on the spot.

I was sitting by the cash register.

An older woman came up to pay her check. As she was paying, she said to the owner, “you know, I’ve been coming here for years and years, and that waiter was really rather rude to me.”

The owner was furious.

“What do you mean? No he wasn’t! He’s a good waiter! I never had a complaint!’

The customer couldn’t believe it. Here she was, a loyal customer, and she wanted to help out the owner by letting him know that one of his waiters needed a little bit of help in the manners department, but the owner was arguing with her!

“Well, that’s fine, but I’ve been coming here for years, and everybody is always very nice to me, but that guy was rude to me,” she explained, patiently.

“I don’t care if you’ve been coming here forever. My waiters are not rude.” The owner proceeded to yell at her. “I never had no problems. Why are you making problems?”

“Look, if you’re going to treat me this way I won’t come back.”

“I don’t care!” said the owner. One of the great things about owning a diner in New York is that there are so many people in the city that you can offend every single customer who ever comes into your diner and you’ll still have a lot of customers. “Don’t come back! I don’t want you as a customer!”

Good for you, I thought. Here’s a 60-something year old man, owner of a diner, and you won some big moral victory against a little old lady. Are you proud of yourself? How macho do you have to be? Does the moral victory make you feel better? Did you really have to lose a repeat customer?

Would it have made you feel totally emasculated to say, “I’m so sorry. I’ll have a word with him?”

It’s easy to get caught up in the emotional heat of the moment when someone is complaining.

The solution is to memorize some key phrases, and practice saying them, so that when you need to say them, you can forget your testosterone and make a customer happy.

“I’m sorry, it’s my fault.”

“I’m sorry, I can’t accept your money. The meal’s on me.”

“That’s terrible, please tell me what happened so I can make sure it never happens again.”

It’s completely natural to have trouble saying “It’s my fault.” That’s human. But those three words are going to make your angry customers much happier. So you’re going to have to say them. And you’re going to have to sound like you mean it.

So start practicing.

Say “It’s my fault” a hundred times one morning in the shower, until it starts to sound like syllabic nonsense. Then you’ll be able to say it on demand.

One more point. You may think that admitting fault is a strict no-no that can get you sued. This is nonsense. The way to avoid getting sued is not to have people who are mad at you. The best way to do this is to admit fault and fix the damn problem.

6. Practice puppetry
The angry diner owner clearly took things very personally, in a way that the locksmith didn’t. When an irate customer is complaining, or venting, it’s easy to get defensive.

You can never win these arguments, and if you take them personally, it’s going to be a million times worse. This is when you start to hear business owners saying, “I don’t want an asshole like you for a customer!” They get excited about their Pyrrhic victory. Wow, isn’t it great? When you’re a small business owner you get to fire your customers. Charming.

The bottom line is that this is not good for business, and it’s not even good for your emotional well-being. When you win a victory with a customer by firing them, you still end up feeling riled up and angry, they’ll get their money back from the credit card company anyway, and they’ll tell a dozen friends. As Patrick McKenzie writes, “You will never win an argument with your customer.”

There is only one way to survive angry customers emotionally: you have to realize that they’re not angry at you; they’re angry at your business, and you just happen to be a convenient representative of that business.

And since they’re treating you like a puppet, an iconic stand-in for the real business, you need to treat yourself as a puppet, too.

Pretend you’re a puppeteer. The customer is yelling at the puppet. They’re not yelling at you. They’re angry with the puppet.

Your job is to figure out, “gosh, what can I make the puppet say that will make this person a happy customer?”

You’re just a puppeteer. You’re not a party to the argument. When the customer says, “what the hell is wrong with you people,” they’re just playing a role (in this case, they’re quoting Tom Smykowski in the movie Office Space). You, too, get to play a role. “I’m sorry. It’s my fault.” Figure out what to make the puppet do that will make them happy and stop taking it so dang personally.

7. Greed will get you nowhere
Recently I was talking with the people who have been doing most of the customer service for Fog Creek over the last year, and I asked what methods they found most effective for dealing with angry customers.

“Frankly,” they said, “we have pretty nice customers. We haven’t really had any angry customers.”

Well, OK, we do have nice customers, but it seems rather unusual that in a year of answering the phones, nobody was angry. I thought the nature of working at a call center was dealing with angry people all day long.

“Nope. Our customers are nice.”

Here’s what I think. I think that our customers are nice because they’re not worried. They’re not worried because we have a ridiculously liberal return policy: “We don’t want your money if you’re not amazingly happy.”

Customers know that they have nothing to fear. They have the power in the relationship. So they don’t get abusive.

The no-questions-asked 90-day money back guarantee was one of the best decisions we ever made at Fog Creek. Try this: use Fog Creek Copilot for a full 24 hours, call up three months later and say, “hey guys, I need $5 for a cup of coffee. Give me back my money from that Copilot day pass,” and we’ll give it back to you. Try calling on the 91st or 92nd or 203rd day. You’ll still get it back. We really don’t want your money if you’re not satisfied. I’m pretty sure we’re running the only job listing service around that will refund your money just because your ad didn’t work. This is unheard of, but it means we get a lot more ad listings, because there’s nothing to lose.

Over the last six years or so, letting people return software has cost us 2%.

2%.

And you know what? Most customers pay with credit cards, and if we didn’t refund their money, a bunch of them would have called their bank. This is called a chargeback. They get their money back, we pay a chargeback fee, and if this happens too often, our processing fees go up.

Know what our chargeback rate is at Fog Creek?

0%.

I’m not kidding.

If we were tougher about offering refunds, the only thing we would possibly have done is pissed a few customers off, customers who would have ranted and whined on their blogs. We wouldn’t even have kept more of their money.

I know of software companies who are very explicit on their web site that you are not entitled to a refund under any circumstances, but the truth is, if you call them up, they will eventually return your money because they know that if they don’t, your credit card company will. This is the worst of both worlds. You end up refunding the money anyway, and you don’t get to give potential customers the warm and fuzzy feeling of knowing Nothing Can Possibly Go Wrong, so they hesitate before buying. Or they don’t buy at all.

8. (Bonus!) Give customer service people a career path
The last important lesson we learned here at Fog Creek is that you need very highly qualified people talking to customers. A salesperson at Fog Creek needs to have significant experience with the software development process and needs to be able to explain why FogBugz works the way it does, and why it makes software development teams function better. A tech support person at Fog Creek can’t get by on canned answers to common questions, because we’ve eliminated the common questions by fixing the software, so tech support here has to actually troubleshoot which often means debugging.

Many qualified people get bored with front line customer service, and I’m OK with that. To compensate for this, I don’t hire people into those positions without an explicit career path. Here at Fog Creek, customer support is just the first year of a three-year management training program that includes a master’s degree in technology management at Columbia University. This allows us to get ambitious, smart geeks on a terrific career path talking to customers and solving their problems. We end up paying quite a bit more than average for these positions (especially when you consider $25,000 a year in tuition), but we get far more value out of them, too.




About the Author: I'm your host, Joel Spolsky, a software developer in New York City. Since 2000, I've been writing about software development, management, business, and the Internet on this site. For my day job, I run Fog Creek Software, makers of FogBugz - the smart bug tracking software with the stupid name, and Fog Creek Copilot - the easiest way to provide remote tech support over the Internet, with nothing to install or configure.

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Mind interval training approach

I mentioned this as a comment to a previous post, but I thought it deserved its own post as well. If you haven’t exercised in a long time and have gotten out of shape, mild interval training is a good way to rebuild endurance and cardiovascular fitness without killing yourself.

Let’s say your exercise of choice is running. Maybe you can only manage to run a few minutes before your heart feels like it’s about to explode out of your chest and you’re forced to stop for fear of passing out. It’s going to take you a while to build up to 30 minutes if you simply run your maximum each day and then stop.

So instead of that, try running 1 minute then walking 1 minute, repeating this cycle for as long as you can. You’ll find that you can go much further without overtaxing your heart and muscles. Maybe you can even go 10-20 minutes your first time. If run 1 walk 1 is too hard, try run 1 walk 2 or run 2 walk 3. Experiment to see what intervals work best for you. If your heart is still racing after the walking interval, increase the walking interval and/or reduce the running interval.

I recommend you aim for an initial interval that allows you to do the most amount of running in a 25 minute period. If you can only manage run 1 walk 4, that’s fine. Take a week to experiment with different intervals if you need to, but find one that allows you to go 25 minutes total (even if it’s run 1 walk 24). You should be physically challenged but not to the point of feeling nauseous or faint.

Once you’re able to go 25 minutes, gradually increase the running time and reduce the walking time. Aim to reach run 1 walk 1 for 25 minutes for an initial goal. Be patient as it may take you a few weeks to get there if you’re starting with a longer walking interval.

Next, gradually increase the running period while keeping the walking period at 1 minute. Go from run 1 walk 1 to run 1:30 walk 1. Then try run 2 walk 1. Keep extending your running intervals until you can manage run 8 walk 1 for 25 minutes.

Now keep those intervals the same, and gradually build your time from 25 minutes to 45 minutes. Don’t worry about distance, and don’t be concerned if you run a little slower. Just put in the time. Aim to increase the total time by about 10% per week, which roughly averages out to adding about 30 seconds per day.

Once you can do run 8 walk 1 for 45 minutes, you can switch to running continuously. You’ll likely find you’re able to do 25 minutes continuously without any trouble. After that you can continue to increase the distance, build your speed, do harder forms of interval training, or just maintain your current routine.

The advantage of this type of interval training is that you’re still spending most of the time in your aerobic range, so your circulatory system will get the benefit of that conditioning. If you’re out of shape, the running intervals will spike your heart rate quickly, and your heart rate will take a while to come back down, so even while walking you’ll still be mostly in the aerobic range. But you’ll avoid burning out from having your heart rate get too high. Walking won’t tire your muscles as much as running, so your legs won’t give out as quickly, and you won’t be quite as sore after your runs.

You can adapt this idea to other aerobic exercises as well. For swimming you can switch to a slower stroke or a glide. For bike riding you can coast instead of pedal hard.

This technique is also useful for distance running. Some people run marathons in a pattern of run 7 walk 1 (or similar intervals), and they often find their finishing times are better vs. when they run continuously. The brief walking periods slow you down in the early miles, but they make up for it in later miles by keeping your running muscles fresh. So you end up maintaining an even pace even through those last 6 miles where many people hit the wall. I once used a run 7 walk 1 pattern for a 13-mile training run, and I finished in 2 hours, which was a good time for me. I felt I was running strong all the way without dragging at the end.

Even if you’re terribly out of shape, you can use mild interval training to rebuild your fitness to a healthy level without causing yourself tremendous pain and discomfort. And it probably won’t take that long. A typical marathon training program can take you from running 3 miles to running 26.2 miles in six months, and that requires much more time and effort than going from 0 to 3 miles.

Physical 1st

If you have many improvements you’d like to make in your life — career, relationship, health — where should you begin? My suggestion is to start with your physical body. Improving your diet and level of fitness will produce positive results in every area of your life because you’ll have extra energy available to you every day. This means more energy to invest in your career, relationships, and mental and spiritual development.

You take your body with you wherever you go. If you’re overweight then you carry that excess with you at all times. You’ll see it every time you look in the mirror and carry it up and down every flight of stairs. An extra 20 lbs may not seem like much, but if you carry around an extra 20-lb dumbbell all day long, you’ll see that it feels burdensome and tires you out much faster. 20 lbs of excess fat weighs the same as a 20-lb dumbbell, and carrying it around all day will drain your energy.

It’s been said that people spend their first 50 years trading their health for wealth, and then they spend the next 50 years trading their wealth for health. But this isn’t a trade that you should make at all.

Losing your fitness can occur so gradually, you barely notice it. Even if you aren’t overweight, if you eat poorly and don’t exercise, you’ll suffer for it. But you may not see the symptoms of poor nutrition and fitness appear in your body right away — they’ll pop up in other areas like a feeling of malaise in your relationship, a lack of ability to concentrate well at work, a lack of ambition, or a feeling of fuzziness in your overall focus. You feel demotivated and don’t know why.

I recall that the times in my life when I exercised the most, I also had the clearest thinking, and I could concentrate for long periods without getting tired. Among the many benefits of exercise are in increase in blood flow, which helps oxygenate the body and especially the brain.

One of the key benefits of improving your body is that you’ll see physical results. When you look in the mirror or step on the scale and see that you’ve made progress, it’s very satisfying. And this self-esteem boost can lead to greater accomplishments in every other area.

Listen to your self-talk the next time you see yourself in the mirror. Is it positive or negative? Are you reinforcing the self-image you want?

Of the many stories I’ve read from people who’ve transformed their lives for the better, physical fitness was nearly always a significant component from the beginning.

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