Business Blog - What the Ferengi Rules of Acquisition have Taught me About Owning a Real Business
May 13, 2014 | By: Chris Gronde
Ok ok ok...first off I would like to say that I (Chris) am a huge Trekie! (Brandy is a closet Trekie) So, with that said, some of you may immediately close this blog post, while others might get super excited and read further. I just ask, if you own a business or want to, that you hear me out for a moment!
The other day Brandy was out shopping with one of her girl friends and I was at home with the boys and decided to have a mini Star Trek: Deep Space Nine marathon (a la Netflix). One of the main characters, Quark, is one of the large eared "alien" race known as the Ferengi. They are a male dominated society whose entire life is dedicated to making profit. (and when I say male dominated, their females are not allowed to wear clothing...just to put that in perspective) They live by a set of 285 rules, "The Rules of Acquisition", that teach them how to remain profitable. Most people, even in the show, just scoff at their entire race as little trolls who are backwards thinking and don't fit in the 25th century, and on most cases I completely agree and just enjoy them as comic relief to the show. However, as Quark was reciting the rules of acquisition while talking about the bar he runs on their space station for which the show is named, I realized that there's several of the rules that many of us small business owners can learn from! (and a few that we can't). Here are just five of my favorite rules for real life business use:
Rule of Acquisition #17 A contract is a contract is a contract ...but only between Ferengi.
We follow a lot of forums and blogs that have a lot of people wanting to break into the business of photography and many times they complain about things like clients who cancel on them last minute or want refunds for ridiculous things or a plethora of things that should have been spelled out explicitly in a well written, binding contract. No matter how much you charge for your photography, whether $50 a session or $10,000 a wedding, you NEED to have a contract and you need to STICK to that contract! Let your client know that the contract is there to protect your rights as well as theirs and you can avoid SO many issues.
Rule of Acquisition #21 Never place friendship above profit.
This might be a hard pill to swallow for some and seem a little harsh, but hear us out for a second, especially for those that are just starting out. When you start a business, naturally the first place you are going to turn to is your friends for support. The problem falls into when that friend thinks they can squeeze a deal out of you because they are your friend. We have fallen prey to this problem more than once. Unfortunately, the clients we have had who were supposed to be our "friends" before they were our clients have more than once turned out to be some of our worst clients. They expect to not be charged as much, circumvent our contract, and rush turn around time for their photos before other clients because they are our friends. They simply did not respect us as business owners. They thought by being our clients they were doing US a favor by giving us their business and in return we owed them something more than the stellar service we already provide. Which ends up hurting or even destroying friendships. Now don't get us wrong, we have some FANTASTIC friends that are clients; but they appreciate us as photographers and business owners. We finally talked to a friend who owns a bakery; she told us that she does not offer "deals" for friends because of this fact. This also falls back to the 17th Rule of Acquisition which we previously mentioned. If they respect your friendship, they will respect your business.
Rule of Acquisition #57 Good customers are as rare as latinum (their currency)-- treasure them.
When it comes to small business two of the biggest things that can increase your bottom line is word of mouth marketing and repeat business! Both of those things require you to really appreciate your good clients and show them that they are appreciated! Does this mean giving them huge discounts? Not really. Not every client out there is just looking for a discount. Your GOOD clients will know value when they see it. They can get pictures from anywhere and if you think you have the best pictures out there...you're wrong. Somebody out there is better than you. What you can do though, is provide them with an unforgettable experience from beginning to end. From your first email, to the packaging of their photos, make them feel appreciated and they will come back to you and bring friends!
Rule of Acquisition #218 Always know what you're buying.
This is another one that I have especially for the newbies out there, but naturally for everyone in this business. Since 1839, photography has always been a two part deal: 1 part art, and 1 part science. In the old days the science was more about chemicals and developing. Today, the science part is more about technology and software. Know what you're buying! Do your research and know how the software or camera or lens or lighting is going to help your bottom line. Do you want it because it will help an aspect of your business grow or because it's the new cool trendy thing to have in photography?
Rule of Acquisition #255 A wife is a luxury ... a smart accountant is a necessity.
This one I put mainly because it makes me giggle, but there is a little bit of truth behind it. Brandy is a entrepreneurial business major and she knows her stuff when it comes to keeping us out of the red, and we grow exponentially every single year and I treasure that! Yes, we also now have a CPA who does our taxes as well! As a small business, it's not a question of if you get audited, it's a question of when you get audited, and there is probably an obscure tax law out there that you didn't know about. You need a CPA who knows the federal laws and especially your specific states laws! In your state is giving a CD of images considered a service or a product, and is it subject to sales tax? What's the best way to get a tax deduction for vehicle use? Can I charge this meal as an expense? Your CPA is going to keep you out of trouble!
So, although much of the Ferengi rules of Acquisition contains frivolous amounts of greed and selfishness, there are several that have real sound advice for business owners. You can't always be the good guy in business. It's not personal...it's business! If we had millions of dollars we would probably just travel the world shooting weddings for free to people who deserved to have beautiful photos, like Extreme Wedding Makeover: Photography Edition, but alas we are not millionaires and need to make a living and choose to do so by owning our own business like so many hard working Americans do, and even more did so before them. The next time I get into a business discussion, I plan on having one or two of these rules ready to quote!