Do You Know What You Are Missing In Business?
By Darryl Padgett
Complacency is the "kiss of death" for a business owner. Some business owners have an innate unwillingness to change or to try something new, but the successful business owner wants to know everything about his business. He never says, "Well, that just isn’t something that matters in my business." In business, everything is important. Change is good. Business should always be fun; however, the excitement you feel toward your business can change as time goes by. Do you still remember how you felt when you first went into business?
I have always had a passion for business; I love talking about business with people and have believed for many years that any company can methodically pre-plan for success. Success is providing excellent customer service; having a motivated work force that is empowered to help make the company more successful; having the automation in place that maximizes efficiency; knowing the cost of doing business and pricing work accordingly; having the sales and marketing in place that promotes doing business with your company; having a relationship with vendors that gives you purchasing advantages; being innovative by listening to the customer and employees; hearing their needs then filling those needs; and providing the products and services to your customer that best serves them.
These seven areas can make a company successful. If a company is out of balance in any one of these areas, it can lead to the demise of that company. If you spend too much effort in automation, you can neglect the participation of employees in your overall business goal. If you spend too much effort in sales and marketing, you can overwhelm the company with too much business, which could result in slow or poor service and discourage the customer from dealing with you again.
One area I find most often neglected is employees; an owner who places a low value on his employees will fail eventually. Typically, employers who do not trust their employees will never succeed to their maximum potential. You cannot do it alone. A company that empowers its employees to be a part of the success process cannot be stopped. The momentum is too great for the competition.
Many years ago, there was a large retail store that was running great advertising campaigns that brought in lots of business for them. With this effort, they were only concentrating on the sales and marketing side of the business, and the very successful ad campaign wound up having a negative impact on employees and customers.
The large volume of work to be done stressed out employees. They would have only three lines open for customers to check out. They lost many employees as a result of the fast pace required, and employees did not see any relief in sight. The long lines and long wait to finally get to the checkout counter stressed out customers, too.
Frequently, customers not willing to wait, would leave their shopping cart full of merchandise in the aisle. In the mean time, the competition benefited. The competition’s advertising campaign not only told about having great deals on merchandise, but also promised that anytime there was more than three people waiting in line, they would open another checkout line. The customers responded, and the competition overtook the market.
We all have a strong desire to succeed, however, the things that we think are the most important may not actually be top priority. The following is a list of what it takes to be successful in today’s market.
Finance: Knowing the "cost" of doing business on a continuous basis. Each business has a different overhead. You cannot look at the competition to price your labor. Do you have the tools in place that tell you the jobs that make money and the jobs that don’t?
Most companies have something that they make money at and some things that they do not. Having profitability reports at your fingertips allows changes to be made quickly and effectively to maximize profits. No matter what the competition provides, you need to provide what you do best. You cannot be all things to all people. If you are not making money with an operation, then don’t do it. Every company has a certain amount of debt; however, there is a point at which it will overwhelm a business. Smart use of debt is when you use it to increase cash flow or to leverage it to make a larger purchase, allowing greater margin on part sales.
Sales and Marketing: Be careful of pricing parts based on the competition, including the larger chain stores. They routinely price certain products at incredibly low prices. It gives the impression everything they sell is priced this way. Yes, they do get some sales on that product, but don’t even imagine for a second that everything they sell is proportional to this price; they do make it up elsewhere.
Vendors: They are people too; they respond to you specifically. You are talked about in their office if you always complain about service or pricing. They quite likely don’t care if they do business with you in the future. The relationship you have with the vendor is very important in getting the best pricing arrangement for yourself. If you are paying them late, you are noticed, and it negatively affects this relationship.
Products and Services: Are the products and services you offer unique? Is there an angle that you have that attracts customers to you? I talked to the owner of one business that primarily works on antique engines. At the completion of each engine, he provides a folder to the customer showing step-by-step pictures of the entire rebuild.
Customers: Those pesky customers always call on the phone, always want to be noticed and always want to believe they are the most important people with whom you do business. Giving excellent customer service is critically important to current and future business.
Innovation: Your services must be needed by the public, but you also need to listen to what is being asked. Sometimes the customer will reveal a revenue stream for the company that you are not providing at that time.
Employees: And finally, the people you are paying to be a part of the company are your greatest asset. They will help propel your company into the future. They are the force that will help you maximize profits. By empowering employees, you don’t have to spend a hundred hours a week trying to get everything done yourself.
Is it scary to entrust someone else with something so valuable? Yes, sometimes, but empowering employees is when you give them both the responsibility and the authority to make money-generating decisions.
It could be that the things that are missing are the most important ingredients in your business. I encourage you to take action. There is nothing like having the proper tools and information to make your company successful.
Darryl Padgett is a labor and management specialist at the Pluss Corp., Columbia Falls, MT. Pluss Corp. is a provider of software systems to the rebuilding industry.