Step One: Purchase Profit Enhancement Strategies
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Harry Lay is an expert on profit maximization in small and midsize companies. He has received extensive training on the subject; designed, implemented and managed profit maximization programs in private companies; and speaks and consults regularly on the topic. He says the first step must be to break down employee resistance to higher profits.
Lay insists that employees will resist efforts to maximize profit because they automatically assume that additional profit will simply pad the pockets of the owner(s). Why work to maximize profit to make the fat cat even fatter?
Well, as a business owner, you know that profits are necessary to keep the doors open, to keep employees employed, to pay back debt on borrowed funds that went into the business and bought the equipment and inventory and funded accounts receivable.
As a business owner, you know that you plow most of the profit back into the business. Improved profits enable facilities upgrades and new hires to support growth and drive revenue.
Growing companies are fun to work for. Growth requires cash. Cash comes from profits.
And so, the employee’s impression of what it means to own a business is, once again, different from reality. If your employees think that higher profits will just go to line your pockets, good luck getting them to work hard to make it happen. Sure, they may care for you, but come on!
As the motivation legend Zig Ziglar says, “Everyone listens to the radio station WIIFM, ‘What’s In It For Me.’” So tell your employees what’s in it for them:
- job security
- new equipment or facilities
- additional hiring
- more money for marketing
- promotions through company growth
- incentives and bonuses
Exactly what the benefits will be for your employees is specific to your organization, its needs for cash, and any incentives you may choose to provide. But you better speak to them through radio station WIIFM if you want to move your plan beyond talk to actual results.
Harry P. Lay provided the expertise for this article. You can reach him at harryl@laypsi.com or (918) 743-5800.
This article originally appeared in The Business Owner Journal, the periodical of choice for owners of small and midsize private businesses. All rights reserved, D.L. Perkins LLC. © 2012.
This publication is intended to provide general information on the subject matters covered. It is sold and distributed with the understanding that neither the publisher nor any distributor or advertiser is engaged in providing legal, tax, insurance, investment or other professional advice. The advice of a qualified professional should be sought before any reader applies a concept presented herein to his or her particular situation or business.
D.L. Perkins, LLC is solely responsible for this content.
