Small Companies can succeed where Large ones fail

When we measure progress in business there’s a danger that we put quantity before quality.

High volume at low cost is right for some markets but the best place to be, in my opinion, is where quality enhances your reputation and your return becomes sustainable.

Quality usually means your competitors are less and your customers more loyal.

Selling to ten people with profit is better than selling to a hundred people for no profit!

Having surveyed thousands of people over the years all my data says 70% of people will buy quality where the benefits are justified.

Environmental issues, regulation and Health and Safety have created pressures to do things better, usually requiring Investment and changes in methods.

The key is to measure where you get your return on Investment.

Many Companies aim at a percentage return as a guide to success but this can be misleading.

40% of a £100 single unit is £40 but 25% of £1000 single unit is £250.

So the percentage is a poorer guide to actual pound notes and influence.

The deciding factor of choice is the market you are aiming at.

I spent a lot of time selling a tonne of product at £6000 when my competitors were selling an alternative at £400.

Our manufacturing cost was low making the return substantial.

The downside was that it took longer to sell, being more specialist, but the return justified the time.

We never lost a customer because once proven; there was always a reason to justify buying it again as a preferred choice.

I have always argued that sales people should create customers, not orders, because you can predict the outcomes more accurately.

A customer this month, lost next month, produces no stability in results.

Selling on price alone will see your vulnerability increase and your margins decrease.

If you sell £10 Million at a loss and others sell £1 Million at a profit, who will survive?

Every part of a business must be cost effective.

There must always be accountability to ensure these things are monitored.

Taking the risk out of business by doing what you are best at will provide a profit and a future.

A business is an operation but may show a need for a surgical “operation” too.

Staying alive sometimes means facing tough decisions.

Building your business through its different stages of success is crucial.

They are often categorised this way:

•         ‘Micro’ businesses:

–      Less than 10 employees (including Start-ups)

–      Less than £1M annual Turnover

–      Often less than three years in business

•         ‘Small’ businesses:

–      Between 10–50 employees

–      Greater than £1M annual Turnover

–      Usually established more than three years

•         ‘Medium’ or ‘established’ businesses:

–      Between 50–250 employees

–      Greater than £10M annual Turnover

–      Established more than five years

Whilst you may be judged on Turnover it’s far more important to measure your success by profits.

With this focus you will never forget the Importance of revenues.