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As a business owner, you know what it’s like to lie awake at 2 a.m. Maybe it has happened when you are excited and full of new ideas for your business. More often, it’s because you are worried about issues you will face the next day. Sometimes, it’s because you just woke up with the solution to a problem. I’ve experienced all those emotions about my businesses over the years. Awake at 2 o’clock? is where I share them with you, and hopefully help with answers that will let you sleep.
John F. Dini, CExP, CEPA
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Small business owners are the Hunters of the 21st century. We are 3% of the US population, and yet we create over half of all American jobs. As Hunters, we may not be inclined to manage by the numbers or stick to systems. Are you a Hunter or a Farmer?
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How prepared are you to exit your company?
The Assessment breaks down the four major categories of exit readiness; Finance, Planning, Operations and Revenue/Profit.
Tag Archives: business planning
Technology and Bunker Hill Tactics
In a small business, underused technology could be considered a “Bunker Hill” error in using your competitive capabilities. Last Wednesday, June 17th, marked the 240th anniversary of the Battle of Bunker Hill. Ranked as the 6th most costly battle of the Revolution in terms … Continue reading
2 Responses to Technology and Bunker Hill Tactics
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You Can Go This Far, but No Further
When someone starts their first company (especially a technician as defined in my book Hunting in a Farmer’s World) he or she is usually the sole key employee. She (I’ll use one pronoun for readability) does the hands-on work of … Continue reading
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3 Responses to Selling Your Business in a Buyer’s Market
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Great blog of course! I am a Baby Boomer and fortunately and unfortunately I started my business 5 years ago, taught myself and like some of us “I have a unique chocolate business” that I am finding out non too soon that 1) I am my own worst enemy because I designed my company to fit only me 2) like John said, I cannot find someone interested in buying my company because they don’t want to work as hard, spend 24/7 building the business etc. I know I am not alone and for me this again is a real nightmare wake-up call. However, I still am very excited in steering the company in a different direction in the next 5 years hopefully and like a lot of business owners, I will be able to sell the company or the equipment to the highest(?) bidder. Thanks for the great blogs!!
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Your article is one of the most realistic on the topic. Hopefully buyers and sellers (and their advisors) are paying attention.
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A Machine is Coming to Steal Your Business
We accept, almost without question, the idea that technology can make us more efficient. No small business owner would dream of replacing his or her PC, email and copier with a room full of typists. How enthusiastic will we be when a machine can … Continue reading
4 Responses to A Machine is Coming to Steal Your Business
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I love technology but what you wrote is scary stuff when you think about it.
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Perhaps another and more immediate threat is that technology is enabling global labour sourcing. For example, the development of cloud based accounting packages is promoting New Zealand accounting practices to look to India for routine number processing. Fewer jobs for NZ accountants.
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Invisible Discounts
In the words of the late, great Father Guido Sarducci of Saturday Night Live fame; “I canna teach you everything you need to know about business inna fiva minutes. You buya something, and thena you sell it for more.” A … Continue reading
3 Responses to Invisible Discounts
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Good article, and I agree completely.
A discount is an incredibly expensive give away as it comes straight out of your bottom line. Every penny is additional profit you could be making, and to give away anything you don’t need simply amounts to charity. This is even more damaging when it is what I call a Post-Sale Discount – one you voluntarily offer after the customer has already agreed to buy.
I saw this in all its destructive glory with a client of mine who owned an upscale optical store. He was always complaining about the pressure on his margins and never made the kind of profits he should. We analyzed his problem up and down, but it wasn’t until I bought a pair of glasses from him that I saw the root cause of the problem.
I picked out what I wanted from his inventory and knew the price for both the frames and the lenses before I was measured up. I was happy with the price, but when the time came to pay, he suddenly took 10% off . This took place without any prompting on my part, and I probed into his sales process in a way that I hadn’t thought about before.
It wasn’t just because of our relationship, and it turned out that he did this on virtually every sale. He couldn’t really explain why he did it and while he root causes might lie in a general lack of business confidence, it had simply become a habit that had been integrated into his sales process. His other salespeople followed his lead and the practice was costing him substantial lost profits.
In my case, the sale was $1,000. His gross margin of about 50%, which after overhead probably would have generated a net profit of about 10%. After the discount, his gross margin fell to 40% but his net profit on the transaction after fixed overhead actually disappears, making the transaction a break-even!
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I find this interesting. I am finally at a point where I can honestly give a quote, but I always need time to figure all areas for the final proposal and then I make sure I record all parts of the quote so I don’t end up giving added materials for free. I am a small business, so with experience and time, I will probably have to learn the hard way at times.
Thanks for the blogs!
Cathy -
I agree and I am going to meet with my Mentor today to make some adjustments, I know I am giving discounts and for a small business , I cannot do that. Thanks, great reply.
Thanks, I love reading history and getting the story behind the story.
Usually a new hire will bring to our attention features and options we were not aware we had. I have encouged out of office one day tech class, and they have always paid off.
One of the best ideas we set up a few years ago was a “sales” email address, with all emails received in that email address forwarded to a sales2 email address. The sales2 address is viewed by the managers and myself. We can view customer communication, but the responsibility is still with order entry.
Allows management to review, be aware, and get involved when needed.
We only view sales2 and delete. Deleting from sales 2 does not delete from the orginal sales email address.
I love the analogy thank you! It made me think of the civil war as well. A major contributor to the north winning the civil war was communication. The Telegraph was key to passing critical information from the battlefield. Coupled with the strategic development of railways it enabled the North to immediately request supplies and troops and report enemy positions, and then had the means to deploy resources quickly and accurately.
Business lessons can be learned from this history. The use of the Militia’s smooth bore muskets support the need to adapt to new demands, the telegraph reinforces the effectiveness of communication directly from the front line and down from leaders. The railway development teaches us to deploy both strategically and tactically.