Surviving & Thriving
In Mature, Competitive, Tight Margin Industries:
When Less Can Be More
December 11, 2014
In Mature, Competitive, Tight Margin Industries:
When Less Can Be More
December 11, 2014
A satisfied client writes,
"It [the app] is for any business that has laborers doing sales related tasks:
It is mainly for companies that have working owners who have trouble keeping on top of labor, and for companies who have work forces who need to be "incentivized" and motivated."
"It [the app] is for any business that has laborers doing sales related tasks:
- Pest control
- Furnace duct cleaners
- Landscape maintenance companies
- Window washers
- Painting contractors
- Janitorial companies
- Furnace repair
- Appliance repair
- Upholstery shops
- Auto detail shops
- Landscapers
It is mainly for companies that have working owners who have trouble keeping on top of labor, and for companies who have work forces who need to be "incentivized" and motivated."
This year I've been privileged to be trusted by several clients with the creative freedom to solve problems that had, in some cases, troubled them for decades. Their attitude was, "Here's this problem. I have no idea what to do or how to approach it. Please solve it."
They had been lowballing, underestimating, and tripping over their own brains, suffering confusion over percentages. Because they trusted me completely, I could solve their problems, and did.
For me, they were like puzzles. I had no preconceived, ready-made, cookie-cutter, one-size-fits-all solutions readily at hand. I had to study the problems, then invent their solutions. They trusted me to study them; and because they did, everybody won. Part of the challenge involved researching best tools & practices, and deciding whether to make or buy.
Two of the most noteworthy cases were in the building and janitorial industries, which are both characterized by:
They had been lowballing, underestimating, and tripping over their own brains, suffering confusion over percentages. Because they trusted me completely, I could solve their problems, and did.
For me, they were like puzzles. I had no preconceived, ready-made, cookie-cutter, one-size-fits-all solutions readily at hand. I had to study the problems, then invent their solutions. They trusted me to study them; and because they did, everybody won. Part of the challenge involved researching best tools & practices, and deciding whether to make or buy.
Two of the most noteworthy cases were in the building and janitorial industries, which are both characterized by:
- maturity,
- tight margins,
- a pragmatic, expeditious workforce,
- fierce competition, and
- an intense temptation to under-cut and lowball.
Here, Dan discusses "Addition by Subtraction" or in other words, how less can be more. He shows how sometimes firing pivotal employees, vendors, or customers can result in better business.
One advantage my clients have over their competition is that they have clear, definite goals in the Lifetime Savings Plans that I wrote for them, and that their business plans and budgets are designed to achieve. Their focus isn't on "beating the competition." They're really competing with themselves to achieve their own goals.
In so doing, by focusing inwardly they become industry leaders, leaving competition in the dust. They know how much money they must make, they're confident and unashamed, and they know that low-balling won't work.
Seeing how it's a losing battle, they don't play the under-cutting game. Instead, they add by subtracting, firing anyone who urges them to play it, and moving on to do business only with parties who are interested in mutual benefit and synergy and in growing a sustainable industry; for when an industry is sustainable, everybody wins. Vendors make a good living, customers enjoy consistency, dependability, stability, quality, honesty, and fairness, and employees receive humane compensation.
One advantage my clients have over their competition is that they have clear, definite goals in the Lifetime Savings Plans that I wrote for them, and that their business plans and budgets are designed to achieve. Their focus isn't on "beating the competition." They're really competing with themselves to achieve their own goals.
In so doing, by focusing inwardly they become industry leaders, leaving competition in the dust. They know how much money they must make, they're confident and unashamed, and they know that low-balling won't work.
Seeing how it's a losing battle, they don't play the under-cutting game. Instead, they add by subtracting, firing anyone who urges them to play it, and moving on to do business only with parties who are interested in mutual benefit and synergy and in growing a sustainable industry; for when an industry is sustainable, everybody wins. Vendors make a good living, customers enjoy consistency, dependability, stability, quality, honesty, and fairness, and employees receive humane compensation.
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A Macroeconomic Example: Housing. Another larger, more macroeconomic example of the corrolary, "Subtraction by Addition" or "More is Less", is the real estate bubble of 2008 and the consequential economic downturn that sent disruptive ripples through the rest of the economy and is still affecting us today.
This happened because through sloppy lending, more buyers were added to the market. People without incomes or assets, who really had no business shopping for houses, were lent mortgages they couldn't afford to pay. By entering the market, they increased demand for housing and drove up prices. Then when they defaulted on their mortgages, the bubble burst. We're still recovering from the whole debacle. The lending industry underestimated the consequences of its carelessness, and the education system underestimates the importance of sound economic education. Had borrowers been better informed with the kind of knowledge offered here at Making End$ Meet, they wouldn't have applied for the mortgages and shopped for the houses. Instead, they would have focused their efforts on earning and saving toward the day when they could participate sustainably in the housing market. But as it was, we had a toxic combination of sloppy lenders and ignorant borrowers. The results are now before us, and will be for quite some time. |
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Refocusing on the Microeconomic realm - the economics of the firm, and the Janitorial industry in particular - with no disrespect intended toward Dan and his excellent product, another example of adding by subtracting that I learned this year is how spreadsheet solutions and skills are making a comeback.
You see, Dan invented an amazing, cutting edge, state of the art solution to the problem of writing proposals in the janitorial business that I encourage and can help deploy. However, what I also learned is that, as I indicated above, often the workforce in mature competitive industries is pragmatic and expeditious. They're focused on producing results with minimal bother. They're reluctant to buy into complicated technology. They want quick fixes.
Furthermore, even if they weren't so reluctant to buy into exhaustive systems, their choices are bewildering and are proliferating exponentially all the time. There's a glut of PC, cloud, and mobile-hosted software out there now that's designed to solve every problem under the sun. Below see, for example, the cluttered variety of apps I noticed last June while researching the CRM space. When they're just trying to solve a few key problems, who has time to comparison shop all those choices?
You see, Dan invented an amazing, cutting edge, state of the art solution to the problem of writing proposals in the janitorial business that I encourage and can help deploy. However, what I also learned is that, as I indicated above, often the workforce in mature competitive industries is pragmatic and expeditious. They're focused on producing results with minimal bother. They're reluctant to buy into complicated technology. They want quick fixes.
Furthermore, even if they weren't so reluctant to buy into exhaustive systems, their choices are bewildering and are proliferating exponentially all the time. There's a glut of PC, cloud, and mobile-hosted software out there now that's designed to solve every problem under the sun. Below see, for example, the cluttered variety of apps I noticed last June while researching the CRM space. When they're just trying to solve a few key problems, who has time to comparison shop all those choices?
I discovered that less was more.
Pragmatic, expeditious staff found exhaustive systems . . . well, exhausting. We determined that although it cost more up-front, making and owning a solution that really solved the problems at hand, and only those problems, was more sensible than renting an exhaustive system that fixes things that weren't broken and answers questions nobody was asking.
So we made a couple of mobile-friendly spreadsheet files that solved their problems: bidding calculators that prevent low-balling and ensure profitability, and progress logs that let them know how they're doing. They were, and are, delighted.
In so doing, I discovered the irony that instead of making spreadsheet design skills obsolete and replacing them, the sheer abundance of PC, cloud, and mobile-hosted apps is actually making them more valuable and in demand. It's another example of how less can be more, and of Pareto Optimality: focusing on the critical few things that yield the greatest results.
Can you relate to any of this? For help making less more, please contact us.
