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Business Series Installment 2
Growing and growing up are two different things. Those objectives may even compete, in a twisted sort of way. What happens if your business isn’t performing? You might feel compelled to try to grow it up in a hurry. You might look for new ideas, new ways, the next best strategy, anything to get it moving.
Where does the kick in the butt come from when things are just steadily climbing along? Or, when the company is profitable but not growing?
In my own career a decade or two ago, I used to say I was trapped by moderate success! That clearly applies in this case study. The company has grown but it hasn’t grown up. It hasn’t truly evolved. The employees say we are trying to solve today’s problems in the same old ways we did in years past. We add revenue and just do more of the same. We hire more people into the same model. We all run faster. Once we are all running fast enough, we add another body or two. Soon enough, they will be running full out too. Hire more. Repeat.
What do we find upon close examination? All kinds of opportunity to increase productivity, profitability, cash flow, and equity value. Most of this is low hanging fruit.
People doing the wrong things.
Our leverage model hasn’t been questioned in years. We could change the cost structure, pricing, and profitability, just by re-configuring the service model and compliment of people.
Pricing is out-of- date. Leaving a lot of money on the table.
Customer-by-customer results are obscured. The information isn’t readily available, but the employees point out the wide inconsistencies. There is a lot to be learned and new decisions to be made, once the numbers and facts come under a microscope.
Customer value can be enhanced. The value delivered to customers hasn’t evolved much either. There is an opportunity to deliver more, get paid more, increase profits and accelerate growth.
These are examples. There’s much more we could talk about, and maybe we will in later installments. For now, this list makes the point. Good companies that can be better. Except, the decision-makers are too close, too busy, and too successful. Sort of…
In Installment 1 from last week, I made the point that business owners need to “step back to break through”. Now that we are starting to put some meat on the bones, what does that really mean? What should you do?
First off, my list is pretty far down in the weeds. But, you could start there. You could start by having these conversations and looking for your own specific opportunities. You could ask: As we have grown top line (or not), how has our business evolved? What might be crying out for a deep dive? Not a bad line of introspection.
Very often these little gold mines almost jump off the page. We just have to know how to look. And, we have to look. I submit that this type of examination of almost any established or maturing business will yield big dividends.
Very often these little gold mines almost jump off the page. We just have to know how to look. And, we have to look. I submit that this type of examination of almost any established or maturing business will yield big dividends. If you feel compelled, jump right in and get started.
Diving under the hood is exactly what I did with this company. However, that wasn’t Step One - not by a long stretch. Here’s why. Consider what you are thinking as you read this. It may be something like: “Sure, there are always things we could do better.” Or: “This may make a lot of sense for us.” Or still yet: “We’re all good. Nothing to do here.” Whatever the response, the next point will too often be: “Time to go fight the next battle. We’ll get to that later.”
That’s why it almost never works to start in the weeds. Trying to execute the “what”, without being clear on the “why” and the “where” (as in where you are trying to go) tends to go nowhere.
In the next installment, we’ll do what I did with this business owner: Step back to break through. We’ll start looking at the why and the where. Until then, live life well! Life’s too short to drink cheap wine. And, way too short to spend it doing things you don’t want to do!
Recommendation #1: Write a one-page narrative of how your business could perform higher. What would it look like? What might the end result be? List out the five big changes you’d create.
Recommendation #2: Now, as always, flip the coin to look at your life. Same thing.
Recommendation #3: Create a 10-point scale for each of your business and life. Rate them now. Then, rate them from the place of having fully realized the creations you see from Recommendations 1 and 2. Contemplate your future.
Through this series, I am walking through a significant family-owned business case study. I can see the business and owners changing in big ways, right before my eyes. They aren’t broken. They are creators, and you can see it on the balance sheets. This is the opportunity to create from success. To create a new dream even better, and with way more grace and ease, than the first one!
Managing Customer Profitability
How to Articulate Your Value Proposition (is a great place to start!)
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