Is Your Gingerbread Business House Built Solid Enough To Withstand The Coming Storms?
As many of you read this, my guess is that you are going through a myriad of emotions because, at the moment, business is as good as it has ever been. However, some of you may have noticed a few storm clouds on the horizon.
For example, the market has cooled a little. While this may seem like a negative trend, those of us that remember a few previous economic cycles can assure you that this “cooler” market represents a more normal sustainable rate of growth.
Another challenge you may be experiencing is a shortage of labor. Right now, labor is unbelievably tight—so tight that you can’t even get to most of the work you have because the labor you need is simply unavailable or too expensive. If those two factors weren’t enough to give you pause, material prices are continuing to increase.
Have I made you feel good yet?
Last month, I suggested you and your team build gingerbread homes together. Did you build them to withstand the test of time? In order to make a candy house that will stay up, you need three things: 1) a great foundation, 2) good walls with a roof made of solid material, and 3) icing done to the right consistency so it dries rock hard and holds everything together. Consider this—your business is no different.
The Foundation: The foundation for every business is the value of the product you sell. Most of us instantly think of our product as better than other similar products. But, do you know why it’s better? Is your customer’s experience part of the reason? In any business, the experience our customers have with us is a large component of quality. In today’s fickle society where how we do something is so easy to copy, why we do it becomes paramount.
Your product or service needs to be good. That is the ante to get into the game, but the value of a product is not measured entirely by functionality. Lots of companies have products and/or services that get the job done. What you need to know is why some of those companies succeed while others fail even though their product or service seems the same.
Two key mistakes that lead to failure are cutting corners and producing cheap products or services. Cutting corners to save time and money may work when the market is starved for what you offer. However, basic economics tells us that as soon as demand slows, a company offering inferior products or services will be crushed because buyers will not only have more options, they will also have better options. Companies that do either of these things are the first to go out of business as the market levels itself out and pumps the brakes.
Another factor that is sometimes overlooked is the customer’s experience with the company. If you are not monitoring how your customers feel about your product or service or response to their concerns and complaints, you are missing an important bit of data.
It would be impossible to discuss the specifics of this process as it relates to each company because for each company it would be slightly different—suffice it to say each of you has multiple opportunities to enhance the experience of your customers. Whether you do it or not is up to you. The quality you bring to the relationship with your customers (both physical and experiential) is the foundation of your business house. Commit the time and money to make it solid while you can.
The Walls and Roof: The walls and roof are made of the data you collect and analyze to make sound decisions. Those decisions will be based on this data as well as some educated guesses. Although I would never tell someone not to listen to a ‘hunch’ or ‘feeling’, I always encourage my clients to back up those hunches with sound data. At the very least, I suggest that they generate and evaluate data before following that intuitive inner voice because I have found that sometimes the data will lead to a change of course. This directional change often helps refine your original “hunch.”
The process of collecting and analyzing data including logical, thorough financial reports, cost of acquisition, marketing reports, and job costing is a good place to begin. Careful collection and accurate analysis of this data is critical. Too often, I talk to business owners, execs, and managers that think they have real data when in fact, the data they have is useless because it has not been monitored consistently or collected based on the correct indicators.
Good data—properly monitored and evaluated, can protect you from the metaphorical storms that bad or poorly executed plans can cause, much like the walls and roof of a house, if carefully planned and constructed, can protect a family from the wind and rain of actual storms.
Finally—The Icing: My favorite part. This is the sweet stuff that pulls everything together or causes it to collapse if it is the wrong consistency. This final piece is your people. Are they committed? Do they understand their job? Do they feel like they are a part of something? Do they understand what you do, how you do it, who is supposed to be doing what, and why it is important? Now is the time to find out exactly what they know and how well they are using that information.
It is also the time to protect these valuable assets—make sure they are doing their job with enthusiasm and commitment, but also make sure that they are being managed with sensitivity and care. Your competitors are nipping at your house constantly for the best sweets, I promise you. Better be sure they are secure.
Some of you think you have a few weeks until the next ‘race’ starts. I have news for you—it already did. Many of your competitors are already running. Better start catching up! Most people wait to invest in training and outside help when things are not good, but if you wait until things are bad, you probably won’t be able to afford the help you need. It’s a lot easier to spend money to strengthen your house when finances are good and the approaching storms are still on the horizon. Invest some time and money in longevity now. Then go make it happen.
Nearly every company ‘survives’ a great market. What will yours do as things cool a bit? Will you be around to read this next year?
For help with this as well as anything else in your business, contact our team today for a free consultation at (832) 356-4585 or firstname.lastname@example.org. Until next time, have a wonderful holiday whatever you decide to celebrate, and be the rainmaker for your team today!