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Better Before Bigger

Entrepreneurs love growth. We want more revenue, more head count, more offices, and more territories . . . Revenue is our eternally bright shiny object.

Look no further than the “Lists” published by the business magazines’ ranking the fastest and biggest. All these lists are based on revenue. Everyone in the business world is intoxicated by revenue.

Lets face it. Revenue is sexy. The sales department is where everyone likes to hang. Do you want to go partying with the sales or finance department? Enough said.

While no company can exist without sales and it is true that “if you are not growing, you are dying”, there is a dark and dysfunctional side to revenue.

When a company goes after market share for the sake of market share, the results are predictable. The cycle goes something like this: firm drops prices, customer’s buy, market share is gained, firm becomes capacity restrained, quality and service levels drop, brand and margins erode. In the meantime competitors react by dropping their prices. Otherwise known as the race to the bottom. Yuck!

This exact scenario took place in Vancouver’s painting industry over the past three years and unfortunately; Wolfgang was an active participant in the race. Lots of hard lessons were learned.

Thankfully, there is another way: focus on getting better before bigger.

This means focusing you efforts on operations. Yes, boring old operations. You know, the grumpy department that gets dirty every day, the people that “keep it real”, and the customer facing people. Cherish that department, train your operations people, systemize your business, follow-up in the field and then train them again. For every dollar spent on marketing and equal dollar should be spent on operations.

I’m not saying neglect sales and marketing. I’m not saying to forgo growth or risk. I am saying that the operations division is the key to your success. Get that part of your business right, deliver an exceptional service or product and guess what? The revenue will come more easily, with lower acquisition cost and at a higher margin.

 
Dave Notte

About the Author: Dave Notte

Dave Notte is the founder of Wolfgang Commercial Painters, one of Metro Vancouver's largest commercial and strata painting companies.
 

Wolfgang Commercial Painters

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