Is your business really okay?

You own your own business. The first (among the first) question someone asks you is, "how many people do you have working for you?" People ask me that all the time. Isn't that sort of primitive? Like, "he has many cattle and many slaves".

Okay, you're a CEO---Wow! CEO of a $350 million dollar company. That's impressive! No, it isn't. That's as out of step as measuring your success in cattle holdings---unless you're actually IN the cattle business.

What I'm getting at is that we tend to measure the wrong things. And because we measure the wrong things, we take the wrong actions when those wrong things go in directions we don't like.

As sales fall during recession, businesses take two counter opposing actions:

1) Cut people

2) Fight to preserve sales.

Why? Why focus on sales? Sales will go down. That's what a recession is. So protect margins.

You may have to let some people go to stay profitable. But don't start there. If losing people is a necessity, you've waited far too long to act---it's your fault. You quit and let some capable management take over.

It's amusing to me when a company like GM announces that they have lost 12 billion dollars or some such absurdly high figure in a quarter. A month later they start laying workers off. Does that mean 12 billion dollars slipped away and nobody noticed it until the accountants handed in the quarterly report? If so, that's really bad management.

When signs of recession appear, they are all around us NOW, get everyone to work on distinguishing your business as the best. THE best. Quality, reliability, service, shipping---every aspect of the business needs to be the BEST.

Next, plan for sales to drop a bit. Don't slash your prices to preserve sales. Lose some sales and preserve your margins. Plan to be smaller (sales, inventory, production) and profitable.

Look at the retail stores going into Christmas. They'll load up with merchandise. Half the stuff will be crap. By the first week in December they'll be slashing prices to get rid of the crap. The last week of December they'll be practically giviing away the crap. But by jingle, sales will stay even with year over year sales! So what?!

Why not buy better stuff but less of it. Buy far less crap and keep your margins?

And if you sell the same crap as everybody else? You're back to where I started this post...DISTINGUISH your business. Beat the other crap peddlers with great and innovative service. It's easy if you know how.