Profit Mastery workshop coming up in January

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BUSINESS TIPS

By DAVE ERICKSON

I remember meeting with a local small business owner who was frustrated with the level of knowledge key employees had on what drives profits and cash flow.

Key employees would advocate for more and more inventory, just in case it was needed. The owners knew that each piece of inventory had a high cost and the extra inventory would sit on the shelf tying up cash and eating up profits in carrying costs, “just in case.” These same employees would fail to charge customers for work performed because it did not “feel right” to charge for all of their time, even though most customers were in an industry making record profits. Finally, the employees would routinely discount jobs and parts because they wanted to “take care of the customer” without regard to the affect this would have on the business in terms of profitability and cash flow.

You can see from the examples employees had a level of autonomy and were empowered to make decisions.

 

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