Are you concerned about profits? Would you like for your business to be in a class of its own?
Not to oversimplify, obstacles to profits result from two basic barriers: External and internal challenges, or a combination of both.
External difficulties include challenging, complex issues in competitive marketplace forces. True, the economy is a factor. Unfortunately, many companies don’t have competitive intelligence. Their inaccurate assessments lead to using the wrong marketing channels, budget, or branding.
And yes, internally, many organizations in businesses and the public sector mistakenly ignore shortcomings in how they operate. Instead, they believe that a magic wand – a better marketing focus – will solve all the problems.
Hopefully, such organizations eventually learn that even a world-class marketing approach can’t overcome the internal factors that impede the control of costs, performance and quality.
Candidly, as a business-performance consultant, here’s one of my first epiphanies – best-practices in marketing will not help a client who doesn’t operate a business well.
Here’s another awakening about management — most internal problems stem from poor stewardship and fear. Fear is apropos here as acronyms – FEAR – “frantic effort to avoid responsibility” or “false evidence appearing real.”
Fear also leads to arrogance. I like the famous Peter Drucker quote: “Arrogance is being proud of ignorance.” Remember, Avis made a ton of profits despite being a second to first-place Hertz. Not by slashing prices, but Avis maintained an image consistent with its 1960’s branding slogan – “We try harder.”
Consider these common symptoms that trigger internal challenges:
- A lack of self-esteem by the business owner. Cockiness is not confidence. Celebrating prematurely over ostensible successes only leads to disaster.
- Not listening to the right counsel.
- Engaging in self-doubt repeatedly, reversing course even before a qualified strategic plan is completely implemented. Marketing is not a 100 meter dash.
- Procrastination. Ignoring problems and hoping they’ll go away.
- Improperly inventorying products.
- Not working well with vendors.
- Hiring the wrong people, and poorly motivating or supervising workers.
- Using gauche business etiquette, such as a failure to send a handwritten thank you note to centers of influence and customers.
What’s the solution? Consider a famous statement by Louis Pasteur: “Chance favors the prepared mind.” Therefore, to be prepared, it’s vital to perform a strategic analysis – of your strengths, weaknesses, opportunities and threats.
Start by asking the five Ws:
A well-operated business learns the right answers to such question and develops an action plan. That must include an operations checklist for all salient functions in likely scenarios, and for special situations.
But you’re not done. It doesn’t end in operations-preparation.
For a thorough action plan for maximum profits, additionally here are three key questions to ask:
Do you mentor your employees?
You and your managers must perform ongoing coaching; explain the why along with what needs to be done.
Do your customers love you?
Your company must take all the steps to earn fans among your customers, so they remain loyal customers and will refer others to you. A case in point – there’s a grocery store near me that I patronize, but only when I’m in a hurry. I shop at competitors whenever I get the chance, particularly, the stores with employees who say “thank you.”
How would a journalist report on your business?
Do what you have to do in order to provide value and earn respect.
Develop and implement systems in every facet of your business. You’ll save time and money, and, of course, you will increase profits. Fears about profits will be alleviated. Your business will be in a class of its own.
From the Coach’s Corner, here’s related reading:
- Case Study: Mistakes Companies Make When Losing Profits
- Hottest Tactics to Beat Your Competitors
- Human Resources – Profit By Not Letting Your Stars Become Free Agents
For maximum attention, nothing beats a good mistake.