It’s easy to like running a company when it’s profitable and
growing. But it’s not a lot of fun when operating at a loss, or with
insufficient profit. When you separate all the various pressures of
being the owner of a larger company, you will find there are very
few problems that can’t be solved through greater cash-flow.
And greater cash-flow comes from taking action on the following
three key factors:
1.
Can the customer base be widened for additional sales?
2.
Can prices be increased?
3.
Can purchases or operating costs be cut?
One place to look is your trade exchange, where both points one and
three are addressed: By working with your local exchange you will
immediately increase your customer base, and bring in additional
sales. And, when spending trade dollars for needed purchases, you’re
acquiring them at your barter cost — which directly cuts your
purchases to the bone!
Additional sales can be illustrated by looking back to the earliest
days of civilization. Our ancestors learned it was easier to survive
when they joined together in groups. In their camps there were two
types of people. The hunters, who brought in the animals for food
and clothing, and the campers, who used the animals caught by the
hunters.
We know that this societal structure worked, and groups flourished.
However, we also know that there was a tendency for the number of
campers to grow out of proportion to the number of hunters. When
this occurred it frequently became impossible for the hunters to
bring in sufficient animals to feed the expanding number of campers
— no matter how aggressively they pursued their prey.
Now the hunters were not fools. They had survived enormous dangers
in the wild. They didn’t need consultants from another camp to tell
them they either had to train more hunters, or force the least
productive campers to leave the community. Which brings us to the
point of the illustration — does your organization have the proper
ratio of campers to hunters? Are there too many campers (salaries)
for your existing hunters to support?
(No matter how small your business is, you must keep close track of
direct and indirect labor costs, fixed and variable overhead, as
well as general and administrative costs.)
Hunters looking for new business don’t jeopardize their lives these
days. But they do get dumped on, ignored, and rejected — often
forcing them to leave for greener pastures. To avoid that
happenstance, and widen your customer base, you should consider the
following questions.
What would happen if you eliminated two campers and replaced them
with fierce hunters? How would your bottomline be affected? Where
can you find more hunters?
