The Difference is Doing It
In a recent meeting with a turnaround client, I had the following conversation that I believe is valuable to many business owners during this Coronavirus crisis.
“Bob, should we divide up the areas of your turnaround plan and attack each to get this turnaround done quicker?” the owner, Brian, asked. “Yes, the more that you and Jack can accomplish, the faster this company can become profitable and improve the cash flow. My thoughts are that Brian, you should work with Kurt, the sales manager, and grow the sales with the sales team. I believe that Jason, Taylor, Warren, and Michael can increase their monthly sales to close to 100,000 dollars each, which would improve the total sales by close to 200,000 or 2.4 million dollars annually. They should all have monthly sales quotas of between 80,000 and 100,000 dollars. We should put an incentive plan in place to reward them for every month they hit their quota in sales.”
Brian looked concerned. “Bob, can we afford to reward the sales team more money when our bank account is currently upside down?” he asked. “Brian, it is all about the numbers. Think about it: let’s say we put a reward program in place, and sales increase by 100,000 dollars. The gross profit on sales in the past, according to the last financial statement published by your controller, was 37 percent. Therefore, the 100,000-dollar increase in sales will generate a gross profit of 37,000 dollars. If we pay the salesperson 500 dollars for reaching his sales quota, we end up with 36,500 dollars extra to pay our bills.”
“Money motivates people, at least it should if the salespeople are any good. Competition within the sales team also drives them to sell more. I believe that in the sales department conference room on the whiteboard, we should list the month-to-date sales by the salesperson and update it daily. The salesmen are in that room a hundred times a day. If their sales total is fourth or fifth on the list, I believe that it will motivate them to do whatever they can do to get off the bottom half of the list. Posting those daily totals will take someone five minutes each day but will motivate five guys every minute they are standing at the sales counter to increase their sales. Brian said, “I love the idea, Bob. I will have it implemented starting today.”
“Guys, there are many little things we can do at your company daily that will produce better sales results. All we must do is get them done.
My son, Bobby, has a phrase that he uses for his business: “The Difference Is Doing It.” I believe that phrase certainly works here at this company. Posting the daily sales totals does not cost us one dollar of expense but will generate cash from the additional sales.”
In working with distressed companies, I have always believed there is never one issue that represents 100 percent of the company’s problems. Rather, there are 100 problems, and each is one percent wrong. As you fix all the “one-percenters,” then the business will be profitable. Each day, the management team must work on fixing those “one-percenters.” Then shortly after, the company will be generating excess cash and profits for the business.
My name is Robert Curry, and I am an Author, CEO Coach, Keynote Speaker, and Turnaround Specialist. Over the past 20 years, I have worked with more than 70 companies taking their businesses from Loses to Profits. Please click on the links below to read some of my other articles like this one.
Please click on the links below to read my other articles like The Difference is Doing It
Recently, I published two books about turnarounds: “From Red to Black – A Business Turnaround” and “The Turnaround.” Both books are true stories about turnarounds of real companies that I have turned around during my career. In both books, I have shared all my Profit Improvement Recommendations (“PIR’s”). PIR’s helped to grow sales, reduce expenses, improve cash flow, and most importantly, strengthen the management teams.
To our clients, past, present, and future: It is incredible how often we hear a similar message and experience the same issues from new clients. Owners/CEOs feel like they are on an island with no one to turn to for advice. Unfocused employees are draining the company of its energy and funds, and sales teams have forgotten how to close deals. These clients say, in a desperate tone, “Bob, this just isn’t what I envisioned.” Our role is to refocus their efforts, so they can resurrect the original passion and vision that motivated them to start their company. The results, sales, and profits increase sales and profits, plus the ability to manage growth successfully.