The long-term implications of selling on the basis of price is that you will likely lose your customers to a “dirty price cutter.” You must provide value in another area; price cannot be the primary value for customers. There is only one exception to this rule, and that is if you happen to be the low-cost producer of a good or service. Even then, price competition can destroy a market over time. Determine another way to be of value to your customers and then strive to be the best in the world in that area.
Growth is great! However, when going through a growth spurt, cash flow is going to take a hit. When you see this situation building, be preemptive. Meet with your bank well in advance of the cash crunch and provide a professionally-organised presentation of what is occurring. Banks will normally provide you with more credit when things are going well.
This is most important for all banks in all countries. Its a simple business and they don’t like shocks. They too have to manage expectations, make provisions for doubtful debts. A business that shocks them is like a business out of control. If you are out of control, you are perceived as a poor risk and less likely to get additional credit. The other secret is to ask for more than you need.
PJ Timmins TAB Ireland
As part of following the TAB Strategic Business Leadership (SBL) process to develop our Personal Vision, all TAB Business Owners – regardless of their age – have looked at creating Succession and Exit Strategies. We realise we need a plan to reach the next level in the Circle of Life. Having a plan means we can focus on moving toward that positive goal, knowing how we will replace the positive elements of Business Ownership. Without a plan you may find retirement the unhappiest time of your life.