Avoid denial. Managers who expect to grow and prosper must look at their businesses as objectively as an outside analyst, so beware of kidding yourselves. The following statements by business owners and managers can be the kiss of death to profitability:
1. I've seen competition come and go for years. I'm the third generation and I'll survive just like my dad and granddad did.
Nothing could be further from the truth. The graveyards are full of business owners who were content with the status quo. Some change is essential. If you want different results, you must commit to doing some things differently than you have done them in the past.
My suggestion: Avoid breathing your own exhaust for too long; schedule visits to successful businesses outside your trading area. Borrow their best ideas and begin implementing them in your business. This is the best way I have found to stay ahead of the competition. No matter how successful you think you are, there are many owners and managers out there running their businesses more efficiently than you are.
2. There are no more good people left for me to hire. We have to settle for other companies' rejects.
This is simply not true. There are quality people in every community, you just have to set high standards and look for them until you find them. Make hiring a process, not an event; continually be on the lookout for good people. Don't wait until you have an opening to begin.
Good people are like good ideas, they're rarely going to come looking for you. You have to spend enough time to find them.
3. We have the best service in town.
Says who? Service is in the eye of the beholder. I know one business owner who recites the results of his customer satisfaction survey each time he loses a customer. He refuses to admit that his service may not be so great in the eyes of those customers who have left him to do business with the competition.
Good service is relative. Until you begin measuring service and comparing how well your company performs in the current period versus previous periods and comparing each aspect of your service against that of the competition, it is difficult to effectively use service as a differentiator.
Answer the questions: "What are the odds that an order we receive will be shipped complete with no backorders? What are the odds that our deliveries will be delivered by the time we promise that they will be there?"
4. If it ain't broke, don't fix it.
This mentality allows businesses to overlook innovative marketing or operational techniques that may be superior to their current way of doing things. There was really nothing wrong with that old Burroughs bookkeeping machine you replaced with a computer system. It wasn't broken, but it sure was obsolete.
5. We don't have time for training and we can't afford it. As long as our people have good product knowledge, that's 90% of the battle.
If you don't think you can afford to train your people, how much do you think ignorance is costing you?
In the absence of training, your people eventually become obsolete. An example is the difference between one year of experience 20 times over or 20 years experience.
Exposing your people to new ideas and new ways of doing things more efficiently and more effectively is a great investment. As an example, how much more gross profit do you believe your business could generate if your outside salespeople were more effective at dealing with pricing objections? To gain this expertise, your salespeople must be trained and then practice what they have been taught.
6. My competition won't allow me to earn an optimal bottom line.
Opportunities for 6% to 8% before taxes are available to any manager serious enough to develop a profit plan and the personal discipline to work the plan.
Even in recent history when so many building supply businesses were losing money year after year, there were those out there operating in the same marketplace with the same set of circumstances who were disciplined enough to make a profit in spite of the lousy economy.
Take personal accountability for the fortunes your business does or does not earn.
Bill Lee is a business consultant, columnist, speaker, and seminar leader who works extensively throughout North America. He also is affiliated with Lee Resources, a Greenville, S.C.-based consulting, training and publishing organization.