Building a Strong Foundation

Recently, we’ve been working with a mid-sized distribution business to strengthen their operation. This meant realigning the organizational structure, setting objectives for all levels of the business, implementing KPIs, creating position outlines, identifying profitable target markets, market position and streamlining the sales processes. It was a large but ultimately successful undertaking.

The company was now poised for growth!

The problem was – as happens in many cases – their growth started eating up their cash, and to some degree, their short-term profitability.

If you plan for this, as we had, it’s a predictable and manageable outcome that is really just a short-term pain leading to a long-term gain. But no matter how prepared for it you are, it can still come as a shock, as was the case with this particular business owner. Logically, he knew we were doing the right thing, but his emotions were starting to make some noise.

In the end, he held to his plan and is now reaping the rewards of this decision. But we definitely had a tough few months along the way. What helped him to stay the course was the confidence he had in the plan we were implementing. Cash-flow, sales, and profitability projections, not to mention the logic of the plan itself, helped give him the support he needed to hold the course.

It is important to remember that the costs associated with building a solid infrastructure are in reality, an investment.

It’s funny how difficult it is to see the great results that await you when you’re focused on the short-term. Of course, you need to manage your cash flow if you are going to survive, but business does not grow in smooth steady fashion – it grows in steps. And sometimes it actually dips before rising back up.

So make the effort to get better.  It’ll pay off for you eventually, and when it does, you’ll never look back (except maybe to wave “goodbye” to your competitors).

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