If wish I had a dollar for every time someone told me that their business’s financial challenges are unique! Chances are, however, that a given business’ issues are not unique. What I’ve seen is that across all industries and business types, at some point most organizations face the following:
• Eroding margins or pressures on margins – This can be caused by changes in competition, the costs of acquiring or producing the product, or other things. In relatively new industries the pressure often comes when others enter the marketplace. In mature industries, you tend to see consolidation, so that the family-owned businesses are now competing against much larger players
For example, when the big box office supplies stores entered the market, many local players went out of business. Suddenly these small businesses were trying to compete against a company that could set their retail prices below the wholesale prices that were available to the rest of the market.
• Government regulations – There might be a slew of onerous government regulations that affect your business decisions. You may have to spend a considerable amount of money to get into compliance with environmental laws, such as purchasing trucks with cleaner burning engines. Minimum wage laws may be making your company uncompetitive in your market. Record keeping regulations can be taking up many hours of staff time. If you’re struggling with government regulations, you’re certainly not alone.
• Inability to support growth – As I’ve discussed in the past, many companies fail to budget for growth and plan for the resources and infrastructure needed to accomplish their goals. If you’re doing a great job of bidding and obtaining projects but don’t have the work force, production capacity, physical space or working capital to deliver, you’re going to be in a world of hurt.
Across all industries, businesses strive to provide their services at a competitive rate and create ongoing relationships with clients who value what they provide. In my mind, making this happen comes down to service, service, service. You’ve got to get the order right each and every time. Train your staff to understand the products well enough to be able to provide solutions to your customers’ questions. Make sure everyone on the team, from the order taker to the delivery person, takes the time to thank the customer. And so forth. Because lousy customer service can kill your sales…which can make all of the other financial challenges discussed here irrelevant.