A "how to" narrative.

1. To Fix or Grow A Regional Company Selling Commercial Products
A personal philosophy used successfully over a 20 year career.
Be customer focused to gain sales. The more they like what you do, the less likely they are to
use your competition. Explore ways to improve services: product delivery, return policies,
technical assistance, etc. or hosting free training clinics, especially with help from vendors. You
want them to feel good about your company. Insure friendly service and a friendly atmosphere.
Consider sponsoring occasional lunches, fishing trips, attendance at sporting events, etc with
your employees who serve them. Exceptional customer service and goodwill can be a very good
investment for sales, and nothing happens until you sell something.
Be prospect focused to gain customers. Know your market and identify prospects suited to your
goals and capabilities. Try to determine the decision makers and anticipate what might concern
them about making a change. Use print material when first offering your services so that the
information can be easily passed along, and like all good advertising, it should clearly state how
the prospect will benefit.
Be cautious to never promise more than you can deliver. No business is better than bad business.
Use the right people. To use Sun Tzu’s analogy; if you are going to move a large stone down a
hill, select one that can roll easily and merely get it started. Like selecting the stone, hiring those
with the right attributes will help assure success, and there are some very good tests available for
that purpose. Define expectations and maintain the tools, training and communications needed to
have an effective team of employees.
Respect and use the fact that everyone will have an opinion. See that all instruction is provided
with the reason for why it is needed for better acceptance, and seek out relevant feedback.
Occasionally visit with lower level employees at their workplace. It can convey understanding
both ways and sometimes be a revelation.
Using incentive programs in which everyone gets a share can produce a team spirit for improved
performance. When announcing a goal with cash rewards, consider handing out large bills as
“feel good” money. It provides a taste of what can be achieved and generates enthusiasm.
Evaluate everything. Just like controlling expenses, evaluate employee time utilization and the
use of assets. Try to devise a productivity measurement for specific jobs. Assess the dollar value
return for each advertising and marketing effort, and consider the cost efficiency of equipment
and inventories. Calculate the net return on assets for each income producing activity even
roughly allocating expenses and assets if need be, but all performance should be measured.
Always try to find better ways of getting things done. Review reporting and operating
procedures: why and how they are accomplished. A great solution to a past problem may not
even be relevant today, but once done, most things tend not to be undone.
Be Vigilant. Review cancelled checks and credit card statements. Do not allow goods to be
received into inventory off of packing slips or invoices without an actual count. Track down the

2. cause of all inventory overages and shortages to the extent that it is reasonable. They can result
from flaws of different types, and may even be the result of a more serious problem.
Use a good purchase order system for efficiency and security. For example, have a separate PO
series for each department. Each one written should show where the material or service went and
then reference the vendor invoice for review and approval by the department manager and
general manager before processing for payment.
Know your business. Good decisions require accurate information; and accounting statements
must clearly show what a manager needs to see. Insure that your chart of accounts is accurate,
and use a monthly change-in-asset schedule along with your balance sheet to monitor security
and asset efficiency. To determine progress, every line item on a P&L should show monthly and
year-to-date results with a comparison to prior periods or averages. For a better measure of profit
contribution, consider using an adjusted gross margin: deducting costs that result directly from
making individual sales such as commissions, freight and taxes and then adding any
miscellaneous income directly resulting from sales.
Have a first hand knowledge of customer satisfaction with field visits or some other means of
obtaining their opinions. Utilize daily pulse reports for cash flow, sales calls, parts sales, labor
sales, work in progress, etc. or whatever indicators that measure your success and/or allow you to
address potential problems in the early stages.
Plan for the future. In any business, change is constant. It can pose opportunity or be a burden
for those who do not act in time. Know what is happening in your industry and market. Be alert
as to how products, information and ideas might be useful and what others are doing elsewhere.
To replicate the success of someone with whom you will not be a direct competitor, try to
arrange a visit to garner their expertise. Most are proud to show their accomplishments. But
before implementing a new activity, consider the downside risks and project a timeline for
income, expenses, and every resource that will be required.
Prepare an operating plan annually using an eye-in-the-sky perspective. View the company in its
marketplace and what is to be expected with industry and economic changes, products, and
competitor activities. Then prepare pro-forma operating statements for the results you expect,
line by line for the next twelve months. This plan can now be used to project a cash flow chart,
estimate future asset needs, and to measure performance and progress in conjunction with your
monthly statements. Future changes can be made if needed to maintain a realistic expectation.
Be effective by selecting the right goals, tasks, tools and people to achieve good results.
Be efficient by always finding ways to conserve on time, money and resources.
Be obsessive about continually improving every aspect of your business.
Be concise. Simplify everything. Clutter detracts from focus – be it physical or verbal.
Don’t be surprised. Always inspect for what you expect whenever change is implemented.
By Roy Spencer
Copyright, Roy Spencer, 2012. World rights reserved. Reproduction prohibited without express
written permission.