Where Would You Want to be When You Have 30 Competitors?
I recently read an article that said roughly 85 percent of commerce in the United States exists in urban areas. If you are in an urban area, with competitors, read on. If you are in a rural area with few competitors, read on anyway… you’ll enjoy it. Let’s say your glass company is in an urban area. How many competitors do you really have?
- Glass companies just like you;
- Smaller glass companies;
- Larger glass companies;
- Fabricators who also sell to your customers;
- Window manufacturers;
- Window installers;
- Home improvement contractors;
- Store front designers and installers;
- Plumbing supply companies;
- Shower door companies;
- Auto glass companies who also do residential;
- Big box home centers;
- Hardware stores; and
- Picture framers.
OK, you get the idea. You have at least 30 competitors. Where do you stand in relation to them? Before you can answer this question, you have to decide which way you want to be compared:
- Gross sales;
- Net profit;
- Number of locations you own; and/or
- Size of your work force.
Again, you get the idea.
Let’s say your goal is net profits. You can’t call up all 30 competitors and ask what their profits are, but you can get a fairly good feeling by looking at their employees. Do they look sharp in clean uniforms? Is their employee base growing? Are their trucks new? What do you hear in scuttlebutt? Now look at your own company using the same set of criteria you have for looking at your competitors. How do you rank yourself on the scale of 1-30?
If you rank yourself as number one, congratulations. You should be proud. Share the benefits with your employees, and work hard to maintain this position.
But what about the rest of us? Are you happy with your profits? Maybe two or three are. The other 26 of us are trying to improve our profits compared to what we feel our competitors are doing. Now for the crux of this blog. If you don’t try to improve, you will fall backwards. There are two, and only two positions for a business, growing or declining. If you want to stay just like you are, the companies who want to grow will pass you, pushing you down the line. You have to continuously work harder and smarter to stay where you are or to grow against the 29. Don’t ever think you can beat this immutable law of business.
By the way, and I’m sure you are waiting for this, there are 30 Major League Baseball Teams, and the World Series ended on Sunday night. Just two teams out of 30 get to this point, and one has to win and one lose. Kansas City played extraordinarily well, and pummeled my Mets, winning by four games to one. They played well and deserved the title. My Mets didn’t play well. Kansas City will try to hold onto what it has, but the other 29 teams will try to improve and get to the World Series. Not one of these 29 teams will be happy doing the same next year as they did this year. Just like your business. Someone will be trying to push you down as they climb.
I had made a bet with our fellow Blogger, Chuck Knickerbocker, who lives in KC, to send a check to the favorite charity of the winner… I am about to send a check to the American Cancer Society, and I am happy to do it. Actually, I am upset about my team, but not about the bet. Here’s to you Chuck!!
So, I did it again—merged baseball and business. But you knew this coming.
Good article. Get in where you fit in. Not to long ago by gross revenue standards my business was 4x what is today. I scaled back the business to save my sanity. Today I run a small shop 3 glaziers, myself and one office staff and I could not be happier. Although my gross revenue has declined significantly my net profit has increased significantly. There is something to be said for margin over volume and I will never go back to the volume model. I guess I lost part of the game in some respect to gross margin, but at the end of the day my business is more profitable than it has ever been and my headaches are now few and far between.