The METS Season Is Over, But Yours Is Not
We don’t have this luxury in the glass industry. We can’t stop for the winter, spend money on talent, and start over at spring training. So, what are you going to do if your glass shop isn’t in the playoffs?
Let’s figure out why. Actually, that is easy. You didn’t make enough profit. Now, we ask why again.
- Not sell enough?
- Sell at prices too low?
- Spend too much on materials?
- Spend too much on labor & benefits?
- Spend too much on overhead?
See, you only need to attack five areas.
How do you know which ones to attack? Ask your accountant to tell you. If he/she can’t, you have a bookkeeper and not an accountant. Spend the bucks, have your books reviewed each year by someone who will analyze your books, not just tell you what you have and how much taxes to pay. A good accountant should also be a business advisor and should repay their costs many times over.
How do you find that accountant? Ask your friends who own a similar size business to yours. Go to aicpa.org to search for accountants in your area. When you select an accountant, be clear on the scope of what you want done, and don’t give open-ended assignments. Get a firm quote before you give a go-ahead on any project. Remember, you don’t want a bookkeeper. There are enough basic computer programs, like Quicken, to run your business. You want help in analyzing the numbers that Quicken can give you.
I think we most often fall into the trap that says more sales will solve the problems. Not always so. Sometimes, your sales are just right for your business, but your margins are too low. Or your overhead is too high. Just piling on sales is not often the answer. More sales with a low margin actually creates more losses!
Be selective on your bids. Bid the jobs where quality is as important as price. When it is government work, and the lowest price wins, unless you know you are a low-cost provider, steer clear. Bid the private work where relationships and open bidding will allow you to shine.
I am sure that every business in America has picked the low-hanging fruits of simple cost reduction and employee count. But there is always more. Look at every expenditure you make. No exceptions. Just because you have bought something in the past is no excuse to buy it now. Make every dime going out of your checkbook valuable to the profitability of your business. Sign each and every check yourself and ask, do I need this now? Better yet, if you use a purchase order system, you should be the only one to authorize for a month. There should be no such thing as an automatic or open ended purchase order. Every single expense is controllable. Some more easily than others, of course.
Are you paying rent on a signed lease? Go back to your landlord and discuss the current market conditions. Many landlords will be glad to reduce rents to current market prices based on a one or two year extension. Try for five years at a reduced rate. If you don’t try, you won’t get it. I have a client that went back to his landlord and received a fifteen per cent reduction with a four year extension. Huge dollars.
The headline on this blog mentions by beloved METS. They fell apart again. You can’t blame your success, or lack of, on an injury or a key employee going into a slump. As far as you are concerned, it is only the bottom of the third and you have to keep playing.