Category: Uk Business Sales

Making Money From The Inside Out IN Knightsbridge

It is a well-understood axiom of the business world that there are two ways to improve the bottom line of the business.  Stated simply, those two ways are to make money or to cut costs.  Now no business can cost cut their way to profitability.  But by the same token, waste and excessive internal costs for any business can eat away any profits that business is enjoying.  So to get ahead in a competitive business environment, both methods must be employed.

When a business turns its eye to cost cutting, there is a stated or unstated business objective that the business owners will discover significant bleeding of revenues that are going on within the systems of doing business.  So if those systems can be improved to eliminate that waste, the business would literally make money from the inside out because the overhead of the business would drop so dramatically.

The usual progress of such a cost saving campaign by a business is to find “the low hanging fruit” first.  By that we mean that in order to satisfy the demands of management, middle management will identify superficial savings in hopes of satisfying the requirement.  Hence switching from disposable cups to mugs or cutting back on break room amenities often go on the chopping block first.

Sadly, while there may be some superficial savings to be found in such places, the significant introduction of efficiencies for any business lie at a deeper level and take a more in-depth process of locating problems with how things get done internally.  The methodology of finding these “money pits” within a business is often called “Process Improvement.”  The concept of process improvement is to diagram a particular business process from inception to completion and document the stages it goes through, the handing over of authority for the process and to pin point places where inefficient methods are causing excessive cost in executing that process en route to the final stage of process completion.

Routinely, the areas of business structure that most often identified as being candidates for a process improvement examination are…

*    Excessive overhead between departments.  Departments within a business are notorious for taking on the atmosphere of a fiefdom and becoming resistant if not suspicious of other departments in the same company.  When that happens, department managers will introduce paperwork and unnecessary processing to cause “work” to move to his or her department from another or for completed jobs to continue along their path.  This excessive overhead can be costly at the department level and bog down the business as a unit enough to actually reduce the profitability of the organization.

*    Communication problems.  A business process moves through the organization as each department or entity adds value to the process through to the completion of the job.  However if communications between departments or people along the process chain are flawed, a process can grind to a halt and wait for hours if not days before the missed communication is discovered and the work is put into the cycle to be completed.  This slow down or break down in communications can be a tremendous drain on the company.  To correct the problem, modern tools of communication should be reviewed so each significant person along the chain is quickly made aware of work that needs to be done and can signal to the next agent that their step is complete and that the process is moving to the next stage.

*    An inefficient IT infrastructure. Out of date computer programs that are not integrated with each other cause needless work to be done to take data from one system and moving it into the next computer program only to be entered again at the next stop along the chain.  Standardization and integration of data and systems will introduce huge efficiencies to the process.

By streamlining the process of moving a business requirement from inception to conclusion, we can remove much of the inefficiency and waste that has become inherent to that process.  We can introduce up to date integration designs both at the IT and process level to quickly move the process from one department to the next upon completion.   The outcome is a streamlined organisation that is no longer “bleeding money” due to inefficiencies and as such is making money “from the inside out”.

Looking For Cheese In Business Sales

Every now and then a business book comes along that revolutionaries how the business world views an area of focus.  One such book had the amusing title “Who Moved my Cheese” by Spencer Johnson.  This short book that is illustrated like a children’s story has some profound ideas in it that will radically change how any business approaches the marketplace in business sales.  It is a book that has had his biggest impact in helping employees who have been displaced view their job change.  But the ideas that are made simple in “Who Moved my Cheese” can impact virtually every area of business dealings.

The book communicates its message through a story of a mouse who finds that the place where he can find his cheese is no longer reliable.  The mouse’s friend continues to go to that same place to find more cheese only to continue to get hungrier and hungrier.  But the hero of the story finds the new location of his cheese.  When he finds his new source of cheese, he not only is astounded by the bounty but that even after telling his friend of the new source of cheese, that friend continues to insist that his cheese will be there where it always had been before and that in fact, the hero of our story is mistaken about the new location of cheese.

This, obviously, is not a tale about cheese location.  It is a parable of how to handle change.  The core value being taught by “Who Moved my Cheese” is that we cannot always look to the same resource for our supply.  Markets dry up, businesses go through slumps and have to lay good people off and revenue streams change.

But one thing is for sure.  There is always a new reservoir of funding somewhere in some market.  And the wise business can foresee a change in the marketplace well in advance and make the changes they need to make so that they go where the money is, or move with the cheese to find the new source of rich funding and tap into it.

It is more than just a parable about looking for a new job.  But it sheds light on the plight of the unemployed.  So often someone who loses their job gets stuck in a mental cycle of waiting for their old job to hire them back or looking for an identical job in a very similar industry.  However, if that industry is under economic pressure or if the business paradigm for that industry has changed dramatically, there may no longer be rich sources of funding and employment availability there that was once so reliable.  In short, the cheese has moved.

This lesson has rich wisdom in business beyond the employment scenario.  The businesses who have learned to be adaptable in a changing marketplace  in knightsbridge and have made the changes to follow the changes to the new source of “cheese” are the businesses that survive decade after decade.  The grocery industry has seen that kind of change.  Many grocery chains went belly up waiting for the cheese to come back to the old paradigm.  But others saw the invasion of the big discount stores such as Wal-Mart and found ways to combat that change, to find new niches in the industry where an untapped market need existed or to compete in the new business paradigm.  Other industries where such dramatic changes have forced businesses to find out who moved their cheese are the record industry and the book sales business environment that have been so heavily impacted by internet sales.

But those businesses have survived.  And if they can be aggressive and adapt and change with the markets, it’s a good example for all of us as we continue to look for the new source of “cheese”.