Obvious Adams Ways of Improving Your Small Business Profits

From 1999 to 2001, I traveled across the country helping small business owners and their staff make their businesses better.  It’s pretty hard to explain how we did it because it’s just so unbelievable.  It’s so unbelievable, about the only way I can think of to help you understand it is to go through, case by case and talk about the real results we achieved.  In some cases, it was business as usual after I left.  In others, the differences were pretty major and unexpected.  I’m bound by our agreement to keep the clients anonymous. 

I’ll start with an early case, and the ideas were often so obvious, you might even respond by saying “so what”.  Anyone could have seen that.  That was, frankly, frequently the response of my clients.  So why didn’t they do anything about it???  Because as obvious as it was, they procrastinated, or didn’t dig deep enough to see the actual implications to their business.  Procrastination is our evil big brother whispering into our ears that it can wait, or that it’s not worth doing right now.  To choose the easier, softer way.  In the words of one of my wise mentors, we’re always, “Getting ready to get ready to get ready.” 

 So as a business consultant, I would look for things the ower was obviously procratinating about, and apply my best persuasive efforts to get them to implement things into their businesses.  Think about it.  If I visited your business today, and you were paying me $195/hour to crawl under every rock I could find to look for opportunity, don’t you already have a pretty good idea of what I would find?  Things that could probably get you sales you needed to buy that new piece of equipment that would make you more efficient, and improve the morale of your employees.  Something that would reduce your labor so significantly, that you might be able to price more competitively and win more bids? 

Have you ever wondered why it seems you have just enough money in the bank to pay your business and personal bills?  Do you know the real numbers, based on your fixed and variable costs, what a difference it would make to your bottom line if you increased sales by 10%?  Does the “Breakeven Formula” work for your business?  Or does reality require a more advanced in-depth analysis? 

Did you know that the “Breakeven Formula” is really just a beginning?  Did you know there really was such a thing?  For example, if your business involves delivery trucks, trucks that drive around servicing customers all day, you can pretty much take the breakeven formula and throw it out the window.  In your case, a 10% increase in sales will improve your profitability much more than a retail store with cost of goods.  The contribution margin, which is the difference between your revenue and your total variable costs that goes toward overhead and profit gets larger as sales increase with certain type businesses.  

I wonder, if you knew the true affect on your business of a 10% increase in sales, how long you would continue to procrastinate on analyzing your top 20% customers?  How long would you procrastinate having that customer appreciation night you’ve been putting off because it’s too  difficult for you to implement?  I know how it is…I own a business myself.  Making the time to implement good ideas is difficult in the midst of serving my customers, prospecting, putting out fires, doing administration, working on my marketing, etc. etc etc.  I could keep three people busy implementing all the good ideas that have been suggested to me…it’s really tough to decide which ones to get started on. 

 Anyway, if this sounds interesting to you, tell me about what you’re putting off.  What obvious ideas can we encourage you to get started on.  I’ll be getting started pretty soon telling you about the cases mentioned earlier…real life cases where obvious ideas made a huge difference. 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s