The Green Bay Packers, winners of the last Super Bowl, were able to take home the Lombardi trophy.  This trophy was named after the legendary Green Bay Packer coach Vince Lombardi who coached the Packers to wins in the first two Super Bowls (this was in the 60s for those of you too young to remember).  However, when Lombardi took the coaching job at Green Bay, the Packers were a long way from a Super Bowl caliber team.  In fact, the story goes that when Lombardi saw the Packer's first practice he told the team at the end of practice that they were going back to the basics.  The next morning at the team meeting, Lombardi held a football above this head and told the team, "Gentlemen, this is a football!".  Now that is basic!  

Given the state of the economy the past fews years, many business owners have been forced to remake their business models.  These business owners have also had to go back to the basics.  Forget about the things you want, determine what you need and get rid of all the rest.  It is a matter of survival.   So in business, what is equivalent to Lombardi's statement "Gentlemen, this is a football"?  It can be summed up in the phrase "earn a profit".  This is true no matter the condition of the economy.  If the economy is good or bad, businesses must make a profit.  Profit is not a dirty word.  I would also submit to you, that a business should not be content with being marginally profitable.  The objective is to maximize profit.

So how do you maximize the profit of your business?

Maximize sales of profitable products and/or services - the challenge is to focus the effort of the sales force on the promotion of the most profitable products or services.  All sales are not equal.  A shift in the sales mix to more profitable products or services can substantially improve your bottom line profit.

Work with customers that allow you to be profitable - just as all sales are not equal, all customers are not equal.  Some customers always work on your sales force to reduce the sales price.  Other customers may never complain about your sales price, but they are "high maintence".  They constantly return products or they call in for service that they always need performed immediately.  In either case, customers that whittle away at the sales price or customers that are "high maintenance", your profit is reduced.

Keep your cost model in line with the current business climate - business owners that have been around longer than ten (10) years alread know this one.  The challenge is to never forget it.   In spite of what you hear from the media or politicians, business cycles are a natural occurrence in the business world.   Successful business owners adjust their business cost models so they can be profitable in good times or bad times.  A bad business climate is never a good excuse to accept long term losses. 

Reward your best employees, replace your worst employees - this is hard; no question about it.  Many businesses, especially small business, become like families (many small businesses are families).  In spite of feeling like a family or working in a family business, it is still a business and it has to make a profit.  Businesses that consistently make a profit hire and keep good employees.  Consistently work to identify and reward your top performing employees.  These are your superstars.  Your competition would love to hire them away from you.  Those employees that are not top performers should be trained and motivated in order to encourage them to become top performers.  Finally, you must deal with the employees that consistently perform below acceptable expectations.  If they cannot be re-trained or assigned to another position where they can perf0rm at an acceptable level and are compensated accordingly, then you must help them fnd another job.  Work aggressively to help them find another job.  They will be happier and you will be more profitable.

Constantly seek to remake your company to stay ahead of your competition - every business has competition.  Every business will always have competition.  You cannot escape this basic fact.  Competition comes from other businesses that do what you do or competition comes from new technology or changes in consumers' desires or trends.  Small business owners must always look at ways to better serve their customers.  In any business, the CUSTOMER is KING (or QUEEN!).  If customers are asking you for something and you do not provide it, then the customer will get it from somebody else.  Listen to the cusomer.  Change your company as often and as frequently as necessary to provide your customers with what they are willing to purchase from you at a price that allows you to make a profit.

"Gentlemen, this a football."
"Earn a profit."

Whether you are winning Super Bowls or operating a business.  Never forget the basics.

B2B CFO® provides CFO services to small and mid-sized businesses up to $75million in sales on an as needed basis.  We do not use contracts.  Our relationship is built on trust and integrity.  We want to be the trusted, long term financial advisor to the owner/CEO of the business.  If you want more information about the topic in this article or want to know more about B2B CFO®, contact Dave Davenport at 817-673-8180 or ddavenport@b2bcfo.com