A recurring battle for us is the struggle for sufficient credit for our dealers. We usually find a solution because we not only rely on credit insurers, but often also set our own limits. We frequently significantly increase the limits of credit insurers at our own risk.
If that does not work, we often find a creative solution, for example, the reseller does not have enough limit, but a great end customer does. While we do not do business with end users, we do charge the end user the agreed price at the request of the dealer, and then pay the margin to the dealer. True, he dealer will not have turnover in the books, but full profit and he loses the risk.
If turnover really needs to be in the books, it can also be arranged so that the end user pays us in trust. Yes, such a conversation with an end customer is dumb, but do not worry. If I have a great software solution, but am just a small company, then a large well-known end customer has understanding for such a solution. They are not hearing that for the first time.
Credit limits are important to us all, like the air we breathe. Unfortunately, some entrepreneurs do not even think about how to improve their creditworthiness. And that annoys me.
This mainly affects small companies that suddenly get a large order, and then quickly need a credit limit of 500,000 euros, although only a mere 20,000 euros of their business is capital stock. Sometimes one wonders why we should take more risk than the entrepreneurs themselves.
I often hear, »My end customer is the billionaire company John Q Public Inc., so they will definitely pay and then Jarltech will get its money.« Maybe. But if my dealer messes up or the end customer claims that the solution does not work as it should - than John Q Public Inc. simply does not pay. If the dealer has tight finances then things can quickly go bad, especially if you cannot wait three years for a Supreme Court decision with 100 expert opinions.
Perhaps it will help one or the other to hear how I, 25 years ago, unfortunately without any capital, started to build up and maintain the creditworthiness of Jarltech.
Each new balance sheet was sent to the well-known credit insurers and credit bureaus on the day of publication, fully transparent and with commentary. My banks, or as it was at the beginning only one, additionally received a monthly report with order numbers, plus some information about what kept us busy. Although no one had asked for it. This builds trust.
If you do not want to publicize numbers, you usually have something to hide. For the sentence »I do not give out any numbers, otherwise the competition will get them«, there is only one translation, which reads: »The numbers are too bad to show.«
Even those who have not studied business administration (to this day I have not seen a university from the inside) must understand what equity ratio is. And if this is only important on the balance sheet date, then I have to manage this key figure and not have an unusually high inventory on this day or drive a maximum credit line utilization, which unnecessarily drives up the total assets and screws up the debt ratio. Banks and insurers have their rating systems, even if they sometimes dont really fit.
What we also do: if we have profit carried forward in the company, which I cannot or do not want to distribute to myself anyway, then I can occasionally adjust the capital stock to the size of my company from the companys own funds. We just did it again in May. It just looks better and the bank knows that it is more difficult for the owner to run away with the money.
Another classic mistake is a reorganization. »We are so successful, we have just opened a new company especially for this area«. Yes, only then it is completely new and without any credit history, so for the time being it is not creditworthy. Unless a parent company is liable for it, in a way that everyone can see in the commercial register.
For our decisions at our own risk, it is true that the customer who puffs up the most (especially with regard to his million dollar limit with our competitors) usually walks on the sharpest razor blade. If you look at Google Earth for the credit decision and find only a garden shed at the address instead of the company headquarters shown on the website, then the case is quickly clear ...
However, I must also say that some credit insurers make funny decisions. Because there are not so many of them anymore, their power is simply very great. If an insurer suddenly sees an increased lump sum risk for an entire country or an entire industry, then one or the other innocent party may actually be affected.
As mentioned at the beginning, we almost always find a good and quick solution. Credit risks are part of a distributor's core business. But, we are not a venture capitalist. If a customer pays well, we are there quickly, at our own risk. And I am pleased that we are not bound by any ratings and are sometimes also allowed to make a gut decision, because people in our industry know each other.
Complaining – the national pastime of the Germans
Let’s be honest, we Germans love to complain – about the weather, football, the economy, politics, etc....
Let’s be honest, we Germans love to complain – about the weather, football, the economy, politics, etc. This unites us all – regardless of our social class or political affiliation. Complaining is a national pastime in Germany. We love to grumble about high prices, the shortage of skilled workers and the weakening economy, while at the same time discussing our next holiday or the four-day week. Please don’t get me wrong, I am all for everyone taking a lot of time off and having a good rest – the only thing that bothers me is the fact that we love to see everything in such a gloomy light! We have to start working together to find solutions, because what we forget amidst all the moaning are our own abilities.
No, Germany is not falling apart! Germany still has a lot of untapped potential. We have people with great ideas, curious and inquisitive people (yes, even among Gen Z), a high average level of education, a high degree of legal certainty, a consistently strong industry, very good research ... and yes, we also have the capital. But we have to stop complaining and focus on our strengths. We are capable of innovation, we can be or remain market leaders in many areas, but, at the same time, we have to be open-minded. Even if one area collapses, we can successfully develop and expand a subsequent one. These are our strengths. However, we have to accept the challenge – be it in society, in politics or in the economy. Burying our heads in the sand won’t help us.
We are once again facing enormous opportunities for our future – whether in medical research, industry, the energy sector or, of course, across the board in the field of AI. And that’s just what comes to mind. There is, of course, much more. Let’s work together to develop new ideas that will advance us not only as a society, but also as a business location. There is potential out there, it just needs to be tapped! And by the way, we’ll have less reason to complain!
The road to success: do we really have to get worse at everything?
Last week I had a conversation with a customer that left me speechless....
Last week I had a conversation with a customer that left me speechless. Our sales department asked me to speak to a customer on the phone who doesn’t buy from us because we supposedly supply end customers.
No problem, I thought. I called and explained that this is exactly what we don’t do, and that this is a key promise to our dealers. There are extremely rare exceptions – only if a vendor forces us to or a retailer explicitly asks us to. But that almost never happens.
Then it turned out that there was a misunderstanding: the customer said that we also supply small retailers. My answer: »Yes, we do and we have to, based on our contracts with the vendors. Our competitors do that too.«
»All correct«, I hear, but then it got exciting: »Your large competitors are not interested in small customers, so they are poorly served. At Jarltech, small dealers feel comfortable because you provide great service.«
I didn't know whether to laugh or cry ... A customer doesn’t buy from us because our service is too good? I hadn’t expected that.
But don’t worry, contrary to the headline: We will continue to endeavour to offer every customer the best service we can!
Why is good service so important again?
I'm writing to you today from China. Here I have learnt once again why good service is so important....
I'm writing to you today from China. Here I have learnt once again why good service is so important. If you want a customer to pay more than elsewhere, then you have to make the difference! You have to know what they like and anticipate their wishes.
Here in Shenzhen is the Grand Hyatt Hotel – I was here at least six times a year before Corona – and even stored some luggage in Shenzhen, so that I only had to fly with hand luggage. Liquids and such ... that was difficult on the plane.
It’s been over three years since I was last here, and I arrived to be greeted by an armada of hotel staff. My beloved Coke Zero was waiting for me in the car outside the airport. My luggage, which I hadn’t expected to see again, had been stored for three years and completely cleaned for my new stay. Everything was hanging in the wardrobe and the bathroom was neat and tidy. My razor was charged and my chargers stood on the desk. Of course, the fridge was full of Coke Zero and the white wine I had last drunk three years ago. Even the room service knew what I liked to eat.
That’s what hospitality really is. And we have to do the same at Jarltech. Always write down what our customers want and like. And when I go out to dine with a customer, I need to know whether they are vegan or if they don’t like pork, for example. Some customers want to be called and courted on a weekly basis, whereas others find this rather annoying. Some still prefer paper catalogues, others believe it’s environmental pollution. And all the better if a customer returns after three years, and I still have it all written down somewhere. Jarltech may not be a hotel, but we are a service provider that has to differentiate itself The difference is always in the details.
The world's smallest chef gives a guest performance in Usingen
It's finally back on: Our 3D projection dinner show »Le Petit Chef« will be back in our restaurant »Uwe and Uli« (www.uwe-uli.de) from the 11th of October...
It's finally back on: Our 3D projection dinner show »Le Petit Chef« will be back in our restaurant »Uwe and Uli« (www.uwe-uli.de) from the 11th of October 2023 to the 30th of April 2024. Personally, I always have fun enjoying delicious food with a bit of a show. Come by sometime – it's also great for Christmas parties with up to 20 people. And if you're a customer of ours, why not have your sales contact invite you next time you visit Jarltech? 😊
Have fun with the little chef!