Automotive & HD Business Management Articles.
Bob Greenwood. September 15, 2013. ( over 4 years ago ) 552 views
Many shop owners today are finding it very difficult to stay “on top” of their business game—the pace of change, and the depth of detail required to look after a successful enterprise—seems to be a heavier burden every year.
This stress can easily place management into various corners from time to time, which in turn forces him/her to do certain, untested/unchartered, business maneuver’s because “results”, “cash flow”, and/or “quick profits” are needed… NOW… but under closer scrutiny, the “perceived glory” resulting from their actions, seemingly outweighs their “misunderstood risks”.
For example: Consider that a competent technician wouldn’t install a wrong part on a vehicle because obviously the part would not fit or work, or if a make-shift/ will-do-for-now part was installed, it would soon fail resulting in a comeback, shop downtime, and lost customer/client credibility. He/she knows the ‘risks’ for doing a job wrong, and fully knows the ‘glory’ for doing the job right.
In business, management must also know the risks, and know the glory, from his/her decisions. Usually, when business is slow, and an owner/manager is pinned in a corner to achieve certain financial objectives, or bills are past due and cash flow is needed to pay them now, or a profit opportunity arises that under closer examination is questionable from an ethics perspective, decisions are being made without thought or regard, to the long-term consequences. For example, a low price based business (always having a sale, marketing cheap labour rates to create a volume shop) must give up something in the service/quality aspect, as you can only run a shop today based on “price/service/quality”… pick two. This in turn, ends up leading to a lousy customer/client base, and/or lost client credibility, not to mention missed profits to the bottom line for not retaining the client “for life” and getting all their work required. Because you didn’t have the time to do everything right in the first place, the volume customer is at the door waiting their turn. You’re now too busy to make any net profit. Management took the risk today (low price instead of the right price) to achieve perceived short-term glory (quick cash flow but no net profit), and truly didn’t/doesn’t know the risk, or know the missed glory lost in the long-term for their decisions made.
The first step is to slow down, and take a deep breath. If, for example, you’re behind in your monthly statement enhance your relationship with your supplier, and discuss a game plan with him, to resolve the problem, and then keep true to your word. Don’t change suppliers thinking you can spread the debt around which in turn you perceive will buy some time. This will fail! You obviously have a profitability and/or cash flow problem, so address it head-on. Do the math, discover your business weaknesses, and you’ll find, with discipline, the problem(s) can be fixed in a shorter period of time than you may think. Math doesn’t lie, your emotions can.