Image of a typical cattle drive from Harper’s Weekly magazine, circa 1867

Is your business heading in the right direction?

Think about that for a few minutes.  If you have a clear objective for where you want your business to be in 5 or 10 years, you can be relatively secure in knowing that your company is headed down the right path.  Granted, economic conditions may change in three years.  Government intervention may lessen in six.  Market conditions could change tomorrow.  The goal is to know which trail you want to ride, stay as close as possible to that route, and be ready for obstacles along the way.

The trail boss hired by ranchers in the late 19th century knew which trail he needed to use in driving the cattle to the markets in Kansas or Colorado.  Depending on the season, he anticipated weather conditions such as the rains the cowboys might encounter.  There were strategies in place to keep the herd healthy along the way.  Heavy rains might force them to hold tight for a few extra days to let the swollen rivers subside before trying to cross.  Dry weather might cause them to slow the pace but keep moving until they could find water and grazing grasses.

Your business should be prepared for the conditions it will encounter along the trail, too.  A warmer than normal winter might reduce your snow blower sales, so reducing your inventory is a potential strategy to keep your expenses down.  Is your sales force moving products with the highest margins?  Have you analyzed whether the market has changed for that product, or the service that generates the highest profits?

Allow me to share a classic example from the optical industry that I am confident is repeated in other industries:  A super sales person is at the top of her game and generating substantial commissions from the volume of sales she brings to the company.  The boss (or sales manager) looks at how much this sales person is getting in commissions and believes that she’s earning way too much.  She gets called in to the office and is told her territory is being reduced and/or her percentages are going to be cut back because she’s “costing the company” too much money.

Stop and think about this all-too-common scenario.

A sales representative sells your products.  That creates orders which generate revenue – and profits – from the sale.  The representative earns a commission for bringing business in the door.  You want more sales, but at less cost to the bottom line or, as the reality points out, at the expense of the person responsible for manufacturing those sales.  Ever wonder why so many sales people leave a company they appear to have been doing well for?  Ask them if their percentages or territories were cut back.  I’ll wager the answer will be “Yes.”

If you’ve really thought about it, the opposite scenario should be the rule.  Expand your top sales representative’s territories.  Give them a better percentage to generate more business … unless you don’t want more business!

The company who lost that stellar sales representative is now, two years later, wondering why their sales are down and why their competition is doing so well.  Guess where she went to work as an in-demand sales representative?

Your business needs to be clear-headed and focused in its direction.

Brand Irons is one of those companies that can help you determine if you’re on the right trail.  If you have a business plan, take a look at it and see if it still makes sense to be going in that direction or if a new path is worth investigating and developing.  If you need a strategy for your business, it’s to your advantage to bring in an independent, third party perspective to ensure it’s appropriate for the market and to advise on which trail may be the most lucrative and profitable over the long haul.

Imagine how the buyer might react if a trail boss brought in a herd of camels to be sold at the cattle market.  All that effort for naught.