I work in boring, low-growth, commodity industries. Yet every business I work in has margins and growth rates… over double the industry’s average.
Much of business can be boiled down to three stages
- making the sale
- delivering the value
- servicing the customer
Making the sale
Making the sale includes prospecting, meeting, contracts, and any other activity that must occur before you either hand over a product, perform a service or begin production.
I found that the most important focus in this stage is Trust. Building trust is essential. It acts as a foundation.
If the sale is made without trust, it will often crumble down the road. Anything from buyers remorse, to real relationship issues, and possibly legal trouble.
It is very expensive and time-consuming to sell without trust. It is emotionally draining and operationally inefficient.
Delivering the Value
This is what most would call operations.
- If you are a manufacturing plant, this is your production and product.
- If you are a law firm, this is legal research, advice, and representation.
This is what customers are paying for.
Here Excellence is the real key. Creating an operationally excellent company. This can be described as operations which are
You want a creative team. This does not only mean good at design or innovating, but at thinking and problem-solving. You want a team that asks questions.
- Why do we do __?
- What if we tried __?
- Can we acquire that through different means?
- Is there a reason we never tried ___?
Good questions can completely change your operations.
An efficient operation has larger outputs for fewer inputs. Our inputs are always scarce.
- Plant Capacity
- Workable Hours
There are only so many of these things. We need to get more out of them. Maximizing your efficiency can spell disaster and key inputs breakdown. However, ignoring it is not the answer either.
Companies that spend better, work smarter and think longer-term often have higher growth rates and margins over the long term. Sustainable efficiency, this is what is important.
I have noticed that capital allocators do better than capital acquirers. It is better to know how to allocate.
As you creative build and push your inputs, never sacrifice quality. It takes years to build a reputation for quality and days to destroy it.
Quality is something that companies will pay more for (or at least the types of companies you want to do business with).
Always be sure to measure quality impacts from the efficient and innovative actions taken.
Building the relationship
After the above comes the part that will make a purchaser a real customer, a relationship. Service is the most important here.
How can you continually make their life and experience better and more pleasurable?
Do this, and you will build an extremely loyal following.
In building a company, you will do wonders if you keep this small focused list in mind.