FutureVisionsSM
creating sustainable
results in growth and performance
Talent may
result in a big top line, but wisdom results in a big bottom line. I used
to think that if you have talent, you can succeed in business. Nobody told
me that talent may result in a big top line but may not necessarily result
in a big bottom line. You can be talented at sales and even client
service, but it takes business smarts to translate those talents into
profits.
There are at
least twenty expenses, from advertising and salaries to insurance and rent,
that can eat your profits if you don't know how to control them. Likewise,
talent won't prepare .you for the changes that take place when your business
grows. When my company first began growing, I assumed it also would become
more profitable. As my client volume increased, I thought I would get better
volume discounts on materials and increase my profit margins. I was right
about the volume discounts, but failed to foresee the extent to which my
other costs would increase.
If your
business is growing, you need adequate profit margins to cover the cost of
growth. As you move from a one-person shop to a full-fledged business, you
may become less efficient. There are more salaries to pay and higher
insurance costs, among numerous other expenses. That's why it's easier to
get a good deal from an independent house painter, for instance, than a
house painting company.
Even though you
may have a natural sales ability or a talent for developing new concepts,
you have to focus a lot of energy on learning about business. It’s always
better to learn from other people’s experiences than from your own mistakes.
Find a mentor, join business organizations, and read periodicals. Above all,
keep your eye on the bottom line.
To do so, you
must have control of your business. Control is neither as mysterious nor
elusive as I had thought. Control boils down to two things: knowing what is
going on and making sure what you want to happen actually does.
Knowing what is
going on means you have systems in place that give you the numbers you need.
You know how much inventory you have, how much you sell each month, what
your receivables are, and what your expenses are.
The other half
of the equation is making sure what you want to happen actually does. That
means you have to monitor your systems. I decided, for instance, that every
finished frame job should come with a tag that reads, "Thank-you for your
business." I could have told everyone what I wanted, but it would have made
no difference unless I put a system in place and monitored it.
For the free top tips for small service-businesses, send an email to bs@futurevisions.org with
"free MWS top tips for small service-businesses" in the subject and nothing in
the body of the email.
