3 Small Lessons: Power in an Arm's-Length Transaction

Stop. Give yourself a few minutes off to think. What lessons have you learned while running your own business?

You may not ever take the time to realize the valuable tools you already have — and can share with fellow entrepreneurs — because you're too busy thinking about the next day's phone calls, meetings, and production deadlines. But over the years, you've learned lessons, lessons that apply not only to your small enterprise but to practically any business.

That is the theme of this column: three lessons learned by an entrepreneur about how to be more successful at what he or she does.


Three lessons learned:
1. It's all about the relationship.
2. Fill other people's needs.
3. Deadlines make things happen.


For this first column on the subject, I spoke with Mary Forrest, who owns Secret Garden Soap Inc., which offers handmade soaps with names like French Lavender, End of the Day, and Hundred Acre Wood.

After careers as a flight attendant, a practicing attorney, a mother of two and a children's theater manager; the tipping point to start her own business came in the mid-1990s when she took a trip to southern France.

"I felt that everything was fragrant — the flower market, the bakeries, the restaurants, even the air in the countryside was herb-scented," Forrest said. A visit to the famous perfume houses in Grasse refreshed her longtime interest in the power of fragrance.

Six years ago, she connected the dots between her interests in herbs, gardening, fragrance and kitchen cosmetics, and began learning how to make soap. While completing courses in soap-making, lotion-making, essential oil blending and natural perfumery, she started her business. Here are her three top lessons.

1. It's all about the relationship.

Corollary: Know what your business is – not just in your own eyes, but in others' eyes as well.

As a producer of retail items, Forrest has learned many lessons about selling one-on-one to customers, working with retailers and suppliers, and the most effective ways to package and market items. All these lessons fall under one category, she says: "It's all about the relationship."

That doesn't mean just getting to know her customers, she says.

"A business relationship is different," she says. "Different from friendship, different from a competition. Lawyers describe it as an arm's-length transaction."

She says it's important to recognize that business relationships are based on how others view your business. For instance, Secret Garden Soap is her passion and outlet for creativity, and it also happens to be a business that makes a nice profit. But it looks different through others' eyes:

*For customers, Secret Garden Soap is an opportunity to give gifts to friends and family.

*For retailers, it's a product that they hope will sell and bring in more customers.

*For packaging and design consultants, it's a customer with deep pockets.

Forrest learned this lesson the hard way, when she consulted with a family friend who is an experienced designer. She thought they were collaborating, but when she got an unexpectedly large bill from the friend, she realized her first mistake was not discussing the costs for the service upfront. But her larger mistake was forgetting that the design consultant saw her not so much as a friend but as a customer who could be charged, just like any other customer.

2. Fill other people's needs.

Corollary – Ask questions and listen to the response.

The first lesson flows right into this second one, which focuses on listening to what other people need. Like many entrepreneurs, Forrest used to talk up her product by detailing the artisanal nature of her soaps, which are made from high quality ingredients, in small batches, using traditional methods. But it turns out that many retailers don't care so much about those details. Instead, they want to know how it will sell, what its price points are, and where to position it in the store.

"Instead of selling by talking, I've learned that it's more about interviewing people, asking them questions to find out what they want," she says. "It's actually freeing – I always felt that I needed to talk about my product and to educate my customers, but it takes the pressure off me when they answer my questions."

So, to fill the needs of others – which helps to sell more product – she's learned that 'What do you need?' is a good question to ask. And then she listens to the answers. If she has a product that suits that customer’s needs, then there's a possibility of a sale. But if she doesn't, there's no need to waste time. For instance, a resort manager once inquired about having Secret Garden supply soap for all the rooms at the resort. When she asked him more questions, Forrest learned that he was looking for a 30-cent bar of good-smelling soap, wrapped and labeled. "We didn't need to talk anymore," she says.

3. Deadlines make things happen.

Corollary – Deadlines also help separate the trustworthy types from the slackers.

Because very few people do things on time, Forrest has learned to build extra room into her schedule, so that she isn't handicapped by others' slowness … or by the Post Office being closed … or by the printer breaking. For example, her graphics designer recently called to say, "I've got your labels finished." The problem is that it was Wednesday, her sale event was on Saturday, and he lives in Ohio. No way were those labels going to get to her in time to be useful.

Now, when she needs something from a supplier, even if she doesn't have a hard deadline for a sale event, she makes one up: "I have a sale on Tuesday," or "I need the labels by Monday." And she feels bolder now about saying, "I'm sorry, I need it sooner than that." The corollary to using deadlines is they help you find people you can depend on. You need to stick with the people you can trust to do what they promised, when they promised it.

Human nature being what it is, Forrest has also found that she can use the same psychology on herself by setting an early deadline to get her product made and packaged. When all else fails, she says, set a deadline.

Now it is your turn to share what you've learned while owning your own small business. Send me an email and let me know these three things:

1. What kind of business you own
2. The three lessons you would like to pass on
3. An e-mail address I can reach you at

Put '3 lessons' in the subject line of your e-mail, and please send it to me at foxsmalltalk@hotmail.com . This will be a regular Small Talk topic, and I look forward to hearing what wisdom you all have to pass along.

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Susan C. Walker, who also writes a personal finance column for FOXNews.com, works for Elliott Wave International, a market forecasting and technical analysis company. A graduate of Stanford University, she has been an associate editor with Inc. magazine, a newspaper business editor, an investor relations executive for a real estate investment trust and a speechwriter for the president of the Federal Reserve Bank of Atlanta.