Given the current economic dynamics and the distractions of an election year, it becomes imperative that business leaders keep their focus on the bottom line. Unfortunately, the lessons of navigating the pandemic challenges are still alive and well. The conditions have changed, but there remains a whole bunch of marketplace issues that directly impact business and team members.
Everyone has heard from some source about inflation and its impact on families’ spending on food, housing, and transportation. These same challenges affect not only the team members but also directly affect the business’s operations. It is simple for one person to raise the concern that a given hourly wage does not provide for a fair living. When this gets addressed by providing an increase, the business will have fewer capital funds to operate and deliver the goods and services to the marketplace. They, in turn, need to raise prices to cover these costs, which, depending on the circle of the cash in the marketplace, the worker ends up paying more for their goods and services, reducing the value or effectiveness of the wage increase.
This is a very complex ebb-and-flow challenge that the media banter about like it is all too simple to fix. Money does not grow on trees, and it appears that money consumption takes place like a dollar-eating plant monster.
As leaders, we must have routine discipline for evaluating our business’s financial, operational, and human metrics. These KPIs or measurement markers are the indicators by which sound decisions can be made to allow for enough movement to enable our staff to participate in the organization’s success while not placing product or goods acquisition by the customer at risk.
As a business builder, JKL Associates has had the honor and pleasure of working with some outstanding leaders over the years. Many of these leaders were highly effective at the operational aspects of their business. They understood the financials enough to stubble through a P&L review with their CPA/Accountant. They navigated the ups and downs of the human resource part of the business. Overall, they used their best judgment with their information and what their gut indicated and moved forward. Sometimes, it worked out great; other times, it was back to the drawing board for a different way to make something happen. Once they adopted a discipline to monitor metrics, their businesses stabilized and grew.
The key was in adopting not only the discipline but also the right metrics to monitor, understanding what the metric was indicating, and then taking appropriate action to address the matter. In some cases, it was a realignment, and in other cases, it was leveraging a better outcome and taking advantage of a better way to make a positive contribution. When these leaders stepped back and decided to upgrade their mindset to that of a business owner and then to an asset developer, their compass pointed them in a much more productive route to a better outcome.
Years ago, JKL Associates was introduced to Mike Michalowicz and his book Profit First. Initially, JKL Associates was like most small and medium-sized business owners: We had our act together and were turning a profit. Why look at such an approach? After being interested in its potential value for our clients, we instituted the process with some refinements to our needs, and away we went. What a surprise and a good one. Even though things were positive, this approach upgraded not only the profit but also put in place refined discipline and caused more strategic application of decisions to be made. Not only does the measurement system give a different view into your finances, but it also causes improvement in all the other business areas to cause consistent upgrading of people, operations, and customer experience.
If you are intrigued by our experience, please get in touch with us for a conversation. Call JKL Associates at FL (407) 984-7246 or MI (313) 527-7945.
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QUESTIONS OR COMMENTS – EMAIL US AT PARTNERS@JKLASSOCIATES.COM OR CALL OUR OFFICES – MI AT (313) 527-7945 FL AT (407) 984-7246
Celebrating 30 years of Delivering on “Promises”
