Are we frightened of change – we are in new times with new rules, and resistance to change might be holding us back!
How many businesses miss out on profit making opportunities through being too stuck in their ways?
Are you one of them?
Let me ask a few blunt questions.
During the current period of economic uncertainty we are facing in the world, it is still not uncommon to see two similar size businesses in the same town where one is extremely profitable and yet the other is performing poorly.
What is often the reason? I know it is dangerous to generalise, but I do find that the successful business often will have a different “culture” to the struggling business.
Let me start with some positive thoughts.
I strongly believe that every business integrates a positive “profit culture” into its everyday working fabric can’t help but suceed.
I believe there are too many employees working for businesses who do not understand that they have been employed to help the owners of that business to make a profit.
Profits give the business choices, whether to invest in better equipment, in better facilities, in better staff, in more wages, etc, etc, whereas lack of profit gives the business no choice other than to survive.
Is high customer satisfaction and profit mutually exclusive? In my opinion, it is not.
I believe that the better the level of satisfaction, the more we can charge, and the higher the profit that can be earned.
Although it is relatively easy to do, I am astonished at how many businesses resist the need to change their mindsets and continue to work in exactly the same way as they have always worked.
One of the easiest ways to come out of this recession, intact and expanding, is to explore ways of increasing your margins – yet I am faced with so many businesses wanting to cut their prices in a way that will ruin their businesses.
Are too many of us like elephants?
When a baby elephant is tied by a small chain to a thin stake in the ground, it knows it has to stay there until someone moves it. When it is older and massive, all that is needed to keep the elephant stationary is a small chain and a thin stake in the ground, even though it has the power to make its own decision. That is the same for too many business owners and managers – their mindsets are closed when they need to be open to other possibilities.
After all, as the old saying goes – “if you always do what you have always done, you will always get what what you already got”.
It is not uncommon to find that many business owners and managers have had little or no business management training.
If there is one major area where we can all improve as business people, it is in the area of setting and sharing vision and goals for our businesses.
As Mao Tse Tung once said – “If you do not know where you are going, any road will get you there”. So the first thing we all need to do is question our objectives, and ask if we have ever shared with all our team members what exactly we expect to achieve as a business both in the short term, and the longer term.
Despite all the books that have been written on the subject, there are basically four fundamental ways to increase your profits, and these are?
1. Increase your number of customers, and keep them
2. Increase the price you charge
3. Increase the number of times they buy from you
4. Reduce your costs, and improve efficiency
Of those four items, only one relates to cutting costs, and yet when I talk to businesses about increasing profits, so many focus on cutting costs. I do not have space to expand on these areas in this article, but I have been able to successfully apply all these principles to all types of businesses.
Let me end with a positive resolution for us all, now that summer is here – let us resolve to do everything possible to introduce a “profit culture” into our business and, in doing so, improve the quality of our customer care, improve the morale of our team, and improve our profits.