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Make Sure Your Business is Legal or It Will Cost You

delzakiyadelzakiya subscriber Posts: 7
edited January 2008 in Business Planning
Yesterday I witnessed a man lose a business that he started to help out the less fortunate. Unfortunately his plan was flawed and he thought he could hide under the skirts of a nonprofit.
He had a mobile storage unit. It was meant for the homeless to put their things away, so they could find work and handle their business without luggage. He rented a  storage unit, you know the kind that they park on a street. It looked like the back of an 18 wheeler, if that gives you an idea, though it was a little smaller.
He charged $1 per day per bag and would throw the person`t items away if they did not pay, without notice or real opportunity to pay.
He had major issues with the clients (better than you) and his actions seemed to be disrepectful to the point of threats.
He lost some of his business because he would fail to be open in the early morning or in the afternoon. Luggage was "lost" or broken, and he had this way of purposely forgetting terms he set or agreed to.
As a reward, he increased the price of the bags to $2 for small ones and $3 for big ones, per day. Does anyone else see the flaw in that pricing? For example, how do you define small?
What was the result?
Several of the clients  called the City (Los Angeles) and he was fined over $1,000 and  forced to close within 24 hours. Why? He never had a license or permit, and failure to do something that public storage owners are required to do. The real reason is that he had mistreated the clients and their property so poorly that he challenged them to do it. They did it, and won.
The reasons he failed are bottomless, but the top ones are:
1. Failure to make sure the business was legal, with valid permits.
2. Poor customer service.
3. Price change according to the mood.
4. He was lazy.
5. All his business was based on one location, with flucuating clients.
Moral of the Story:
Have all your ducks in order and treat your customers well.
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