Manure Manager

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Adding value to your custom business


April 11, 2008
By Sarah Roth

Guest Column

Are you looking for ways to improve and enhance the service you provide to your clients? This is referred to as adding value and it can have a number of beneficial effects for your custom business. Client loyalty can be improved, new clients gained and profitability increased. This article will discuss several options for adding value to your custom business’ services. Perhaps you will choose to integrate one or more into your business.

Websites – Having a website for your custom business is an excellent opportunity for adding value to your business. Websites allow you to share information with both current and potential clients without having to spend time on phone calls or e-mails. A website also allows clients to find the information they are looking for at times that are convenient for them.

A website can be as simple or sophisticated as you wish. It may only describe the services you offer and provide contact information. Or, you may decide to post photos of your equipment and employees, pricing details, weather information, or a log of your work progress. You may even decide to integrate a customer service area into your website where clients can access personal account information such as a detailed work history or billing information.

Payment plans – Cash flow is a concern for most producers. Producers want to pay the custom operators that they hire, however when cash flow becomes an issue those payments may not rank high on their list of priorities. If possible, you may want to consider offering two or more payment plans for clients to choose from. There are several types of payment plans available. For instance, you may want clients to pay half up front and the remainder when the work is complete, a percentage when you are hired with the remainder paid on a regular schedule, or you may allow clients to make payments on a regular schedule throughout the year. Producers will appreciate the ability to choose a payment plan that fits their cash flow.

If you are considering offering different payment plans to your clients, make sure those that you do offer will result in a cash flow that will be good for your business. This is particularly important for seasonal work, such as planting or harvesting. The majority of your expenses will be incurred while performing your services and you need to be able to pay for or cover those expenses at that time.

Also, you may want to offer different payment plans to clients based on the length of your working relationship with them. During the first year or two, you may want to test their credit worthiness and protect yourself from performing work, and incurring expenses, that you do not get paid for. This can be accomplished by requiring new clients to pay the majority of service costs up front and over time allowing them to move to more flexible payment plans as they demonstrate their ability to make payments.

Discounts can also be used to your benefit when applied appropriately. It can be employed to reward clients for paying on time, to contract for your services by a certain time of the year, or to reward long-term clients. For example, you may decide to offer a five percent discount to clients who contract for your service by February 1. Or perhaps, after a client has hired you for five years you discount your service fee by five percent and after 10 years discount by seven percent. Using discounts can differentiate your business from competitors. There are many different types of discounts available for use.

What would improve the businesses and lives of the producers you work for?

Service offerings – Being a custom operator, by definition, means that you specialize in the services that you perform and offer. However, you can use diversification to your advantage if done correctly. The more client needs you can fulfill, the more likely you are to be hired or re-hired.

When adding to the services that you offer, choose those that complement your core service offering. For example, if your core service is manure hauling and application, you may want to offer to serve on the producer’s advisory committee and offer input on the farm’s nutrient management plan or assist in finding locations where manure can be applied if the producer lacks the acreage needed. By serving in this capacity, you may gain greater understanding of your client’s business goals, challenges facing him in other areas of the business, or opportunities available. You will also have the opportunity to provide your input as to how the services you are providing the client can be altered to improve impact in other areas of the business.

Since you will likely be unable to serve on advisory committees for all your clients, you may, for instance, consider offering this service to long-term clients, those you feel would benefit from your expertise, or those who show great potential for improving their business in the future.

Going the extra mile – Sometimes accidents happen or things out of your control work against you. When these things happen, you should have back-up plans in place to guarantee that the work is completed. For instance, is there another custom operator that you respect that can complete the work? Perhaps going the extra mile means that you are willing to work overnight or drive to a parts dealer further away than the one you normally deal with to secure a needed part for your equipment.

While all these things seem like simply good business management, going the extra mile to ensure that the work gets done and your clients are happy is indeed adding value to your business.

Features or choices, beyond the basic, that improve the quality or impact of your services for the clients you do work for can be considered value-added. Any additional service that you offer your clients can only be considered value-added if it is something that your clients, or potential clients, want and value. Those described in this article may be only the beginning. -end-

Sarah Roth is a senior extension associate in farm business management with Penn State University. She can be contacted at sarahroth@psu.edu


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