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Loading ...Retail sales are up. Stocks are up. So why are so many independents down? They aren’t making money.
Truth is, many never have but it took the economy to pop like a balloon to bring them back to earth. It was a crash course in reality. But why does it persist?
Is it that the owners are enamored with being “the boss?”
Does their wife have an endowment she is supported by, so their business hasn’t really had to make a profit?
Do they have a husband who has another job and this has been a hobby?
Do they like to buy pretty things regardless of whether they sell?
Maybe they own the building so rent is cheap. But the reality is you have to pay attention to your business fundamentals before it is too late.
You’re either taking out a profit or you’re putting in money. Period. When you continue to pump money in with no letup, you have to ask if this is a viable business or not. Many owners discover they’re subsidizing their customers by not pricing correctly, being over-bought or staffing so their friends have jobs.
I heard a speaker last week say you could double sales by just asking more people to buy. If you believe that or you think saying, “I refuse to participate in the recession” will result in more sales, I think you’re delusional.
Much like after 9/11, we are in a different environment than many of us have ever faced. We can’t hide from the truth – business is work.
A marriage is work. Raising kids is work. We see what happens when people don’t take care of those things.
When you’re in denial about your business, the financial results can be devastating. When it closes, everyone sees what the owners should have seen.
Some business owners I read about in the papers and online seem OK with hoping for better days, not working on them. But isn’t that fairly naive, almost child-like? For them I’d suggest now is the time to take off the bib and put on the apron.
Put another way, if you’re happy being in denial and driving blind in the car, you are on a collision course with reality.
If you want to know what you can do about it, get a copy of Phibbs book, You Can Compete: Double Sales Without Discounting. It is the backbone of scores of businesses’ training programs because it teaches his methods for making a business successful. Download more free tips at his website. Follow him on Twitter at http://www.twitter.com/theretaildoctor.com
Good post, Bob. I agree that too many independent’s really only look at whether they’re making a profit only once a year, when their accountant slides the financials under their nose. Otherwise, they merely check in on the bank account every few days, and if more cash is going out than coming in, they figure things will turn around. This downturn has been a wake-up call to many.