On Sunday, around 4 p.m., Elaine asked me to go to one of the local farm stands to get some fresh corn for dinner. “Sure,” I said. The closest two stands were sold out; no big surprise, as it was near the end of the day. So, I went to Fred’s, and herein lies today’s blog—for Fred stopped selling corn, the most important food for a farm stand this time of year.
Here is his story:
Fred stopped selling corn about three weeks ago, because his customers were rude and he wasn’t making any money on the corn. It seemed that customers would tear down the husks on the corn, and if there was a slight blemish, they would leave the ear there. By noon each day, he had more blemished corn then sellable corn, and he was losing money. When he asked customers not to pull the husks, someone said to him that the stand down the road let them do it. He told this customer to go there to buy corn. The customer said they were too expensive, so they came to Fred’s.
farmstand glass shop are you? Are you doing the work that your competitors are not, but you find this to be hard, or money-losing? It is tough to stop doing a certain type of work. Revenue is down, but your rent didn’t go down. How can you possibly turn down business?
While there is no proof, I am pretty sure 10 percent of your business revenue takes 30 percent of your labor and related costs. By losing this business, your net profit can actually go up! Look at your different revenue streams and decide which ones are profitable and which ones are not. Is it just by tradition that you keep doing something?
Is it doing late-night board-ups? Great customer service, but really expensive in labor cost. And the guys that specialize in board-up are less expensive. Maybe you are better forming an alliance with a board-up company to take care of your customers. You’ll get less revenue, but you keep the customer happy and still get the glass replacement.
But, let’s take a step back. What is going to replace this lost business? My general rule is to add 30 percent new products or geographies to your company yearly, and get rid of that 10 percent that is dragging you down. Bottom line? You should be able to gain 20 percent in revenues. Go to the glass trade shows, read USGlass, and see the new products. Ask the sales reps that come in what is new, and don’t be afraid to take on new products. That is the lifeblood of any business. Add something new and get rid of something that is dragging you down.
I’ll talk more about this next week…in the meantime, can you help me get a dozen ears of fresh corn?