Ever find yourself being seduced by the siren call of sales growth. “We need to grow sales”, “We need to get bigger”, “We need to open up more locations.”
More is better, right? Well not always. Not when you’re blindly pursuing growth for its own sake with no clear purpose.
So what if you want to build a great business and a great life, and you’re not interested in world domination?
Scott and I connected when we were both part of an entrepreneurial group that met in Los Angeles a few times a year. I didn’t know much about his business but I took an instant liking to him. He was wildly smart, obviously successful and had that relaxed confidence of someone who was fully engaged in the game he was playing. It turns out he had a passion for hot air ballooning. He always seemed to be coming back from some exotic locale. One in particular he was lit up about was a trip he’d taken with his family ballooning over the Swiss Alps. What intrigued me was he wasn’t bragging about it. It was just clear he knew what was important to him and was loving life.
Later on that day I bumped into him at the airport while we were both waiting for flights. I knew he ran a successful company, but I was curious about the details. “How many people do you have?” I asked. In my mind, based on his lifestyle, I’d made up he had at least a couple of hundred people, if not more. “Lord, no” he laughed … “I have 7 full time”.
Turned out his really successful company that allowed him to travel the world at will was a small mortgage company in Albuquerque, NM.
Scott explained how his guiding principle was “Stay Small and Keep It All”. He’d seen other people in his industry start companies and then proceed to add overhead like crazy. Opening new offices, going on hiring binges, overhead always outrunning profits. They looked “successful” from the outside, but the owners were burnt out and the businesses had weak profits. Which is why a lot of flashy mortgage companies go bust in a weak housing market. It became for Scott a point of clarity.
What am I doing this for?
What do I really want?
Bragging rights that he has the “biggest” mortgage company in NM? He could care less about what people thought of him. Awards, industry recognition, none of that was more important than serving his customers, being ridiculously profitable and spending time with his family.
Scott figured out the one metric that would make the biggest difference was net profit. He realized if he committed to structure his company to be at it’s most profitable, he could get what he really, really wanted.
You can’t buy groceries with “sales”.
Focusing on maximizing net profit dollars he employed just a few core people he paid handsomely. Well enough that they would have no reason to ever leave – his turnover was almost non-existent. He had key customer relationships in place that were based on profound service. He kept his business processes simple and elegant. And when the economy dipped, they kept on trucking because their overhead was so low and his relationships with customers, vendors and staff were rock solid.
He was clearly an entrepreneur who refused to play the same game as everyone else.
So for you.
What if it isn’t about growth for growths sake? What’s the goal behind the goal? What do you really want?
… and what changes will you make to put yourself on the path to making that a reality.