Skiing down a wide intermediate run at June Mountain. our friend Denis was topping 46 mph on a beautiful bluebird day. I didn’t try to keep up but was not far behind. Non-skiers would ask if that was safe, and if we were wearing helmets. Yes and yes. It is all about managing your speed. >
For the last month, I have been repeatedly asked my guess on the economy in 2023. Will we go into recession? Should the business leaders I coach go all out, stay on course or pull back severely? It is tricky to forecast 2023. Depending on the industry, and the company any of the above could be correct. >
Entrepreneurs live like orchids who pull moisture out of the air to survive. They pull an idea out of thin air and make it a reality. They live in an alternate reality of the idea they can see in their heads. And, they make a few other people believe in their dream and become part of it. Usually, they struggle for years to make their dream a reality….sometimes decades. And, if they are successful, one day we all see it and buy their product or service.This is living on hope. >
What an interesting week! Twitter falling apart, tech companies laying off, inflation stabilizing but high, stock market going up, mid-term elections going calmly – so much happening. Add to that the continuing Russian defeats, meeting of global leaders over climate change and Xi and Biden about to meet in Indonesia, Hard to know the best way of managing amidst the uncertainty. >
Vistage Speaker Doug Butdorf from Boost Profits grabbed my groups’ total attention when he said “revenue is for vanity, profit is for sanity”. Then, he gave us strategy, and execution to be more profitable. Wow! How about this: do you have regularly scheduled meetings to discuss pricing? 2 hands went up. Do you have regular sales meetings? All hands went up. Regular operations meetings? All hands went up.
Let’s get serious here. Sales are starting to slow down for many producers especially for B2C products. (Business to consumer). We aren’t buying to decorate the home we are stuck in – we are going out to dinner or traveling. This may be your last opportunity to raise prices in this business cycle. Should you wait?
As tedious or difficult as it may seem if you have to do this manually, you should segment your customers. First sort could be gross margin versus volume. If you color code by sales person you might find that the low volume, low margin customers might all belong to one sales person.
And, what do you do with those low volume low margin customers? RAISE THEIR PRICES. They will either become profitable customers or fire themselves. Either way you win!!!
And, btw, are your sales people rewarded for increasing gross margin or are their commissions tied only to revenue? There is an old saying “you get what you measure.” It is important to align your incentives around your mission, values and goals. You may need to reassess your incentives as part of your quarterly pricing meetings.
When inflation was running along below 2% for more than a decade, many of us got lazy in our thinking about price. None of our competitors were raising theirs. That time is long gone.
This week get going. Review your pricing and make some profit decisions. You’ve got all the tools you need.
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Image courtesy of Doug Butdorf, Boost Profits, Inc.
Hiking in the Sierra is one of the best places I know to get the advantage of a vista. From Monterey Vista trail you can see all the way up the middle fork of the San Joaquin River to the Pass that goes to Yosemite. >
Whatever scenario you predicted was most likely or at least probable 6 months ago is probably not worth the paper it was written on. But then again, who uses paper these days?
Sunday night you sit down and plan your whole week. You put the big rocks in first – the most important but not urgent long term thinking time. Maybe, you schedule 2 2-hour blocks on Tuesday and Thursday at your best thinking times for that long range project you never seem to get to. Then Monday starts off with client issues and you don’t get one thing done you had scheduled for Monday. >
I’m hearing from CEO’s and I’m hearing from senior leaders that one minute you are looking at 3 year plans and the next minute you are all hunting for a missing product in the supply chain. Or, you just finally hired an important new team player and a long time team member gives notice. It is like paddling too much on one side of the canoe and then furiously trying to get straight by paddling hard on the other side. It feels like we all have lost strategic focus. Tell me again, where are you trying to go? >
Your company grew 30% so far this year. Yahoo! Guess what? This may cause role changes for you. Are you good with that? >