Well, it’s time to leave the dolphins of Jervis Bay in peace and instead come back to this series of articles about achieving business success in 2012, the Year of the Dragon! Again, I’m taking a lead from Duncan Bannatyne’s 43 Business Mistakes…And How to Avoid Them to tee me up for this piece.The Great Scot first reminds us that if it ain’t working, you need to do something about it! Yes, he’s onto something here. It’s the old adage that if you always do what you’ve always done, you’ll always get what you’ve always got. This year, I’ve radically changed Dragon’s marketing strategies, inserting steroids where there were once only Beroccas. There are so many business levers, from pricing and promotional strategies to place and product attributes that any businessperson worth their salt will be constantly “trying a lot of stuff and keeping what works”, particularly if they are either seeking a niche they’ve yet to find or endeavouring to move onto a higher growth curve.
Next comes the need to identify all of your costs. This is great advice, particularly for those of us who try to ignore/repress/forget the true costs of doing business so that we can pretend that our profit outcomes look as good as possible! The kinds of costs that can bite you in the backside are those such as holiday and sick pay for permanent employees, compulsory superannuation contributions, and the need to retain some cash to pay the taxman when he comes knocking! One of the “killer costs” I try to forget that I face is that associated with buying toner for the printer. The price of toner cartridges for most printers (and my Brother in particular) is grand larceny. It is simply obscene. If you ever come back, invest your money in a printer company!
The next tip is to avoid being carried away by your revenues. Your dream may be to get sales to $100,000 and then to $1 million, but if you’re not making solid profits on these revenues, who cares? I recall that Dymocks Booksellers cared nothing for the profits of their franchisee’s stores but only for revenue since their royalties were based only on those. No wonder so many of their stores have closed or been sold off in recent years. As Bannatyne remarks, “turnover is vanity and profit is sanity”.
The final tip for this blog is to ensure that you understand cashflow. As I quickly learned in the book trade, being even 1 day late in paying the bills of the major publishers meant that one’s supplies were immediately and abruptly cut off. There was no mercy. The key is to ensure that you retain enough cash to get you through those times when revenues, on their own, are insufficient for your fixed costs like rent and wages. In the book industry, as in many other sectors, winter was the time for ensuring that one’s reserves were enough to survive the bleak weather!
So, Duncan Bannatyne continues to give us much food for thought. We’ve only just hit #20 in his list of mistakes (which we can better frame as success tips), so prepare for further articles in this series!
