Travels with Jim follows Jim Huston around the country as he visits with landscapers and helps them understand their numbers to make smarter decisions.
During college, I’d often work construction jobs in the summer. Occasionally, I’d work on a dairy farm in Maine owned by an old-timer named Lincoln Partridge. We called him “Link.” Link had euphemisms for most facets of life. “Three things are impossible,” he’d say. “First is climbing a fence that’s leaning toward ya. Second is kissing a girl that’s leaning away from ya. Third is making someone else successful.” Often he’d add, “It’s like trying to push a rope. You can’t do it.”
It’s what I do.
I often go into the offices of new clients who are either losing money or barely breaking even at the end of the year. Ninety-nine percent of the time, the problem is in their pricing, production or lack of volume – or a combination of all three.
For potential new clients, once I explain how I might help them improve their bottom line and provide some references, it’s somewhat of a “no-brainer” to hire me to help fix the problem. Either you want to make money or you don’t. It really comes down to doing a simple cost-benefit analysis. “If I pay Jim $X, what are the chances that I’ll get back more than $X?”
Business entrepreneurs are constantly conducting hundreds – perhaps thousands – of cost-benefit analysis scenarios when making business decisions. “If I purchase a $60,000 skid-steer, how will it impact my bottom line? How will it improve productivity? How might such a purchase lessen my risk by making me less dependent upon labor?” This is how successful business entrepreneurs think. They’re constantly analyzing the margin. If I do $X, will I realize revenue more than $X.
I insist that my potential new clients subject me and my services to such an analysis. If they don’t understand the concept or can’t do such an analysis, perhaps they shouldn’t be in business for themselves. If they refuse to do such an analysis, they definitely should not own a business. And I probably don’t want to work with them.
Fix then bid.
Somewhere on the interstate in the Midwest, I received a call from a young green industry contractor with a design/build installation company. He had talked with some of my clients, whom he knew and who once had problems similar to the ones he had.
He was considering employing my services. His sales the previous year were just shy of $1 million. However, at year’s end he had barely broken even. He knew that something in his company was wrong but had no idea what it might be.
We talked for about 20 minutes. He told me that he fully expected to sell and install at least $1.5 million in 2017. I told him that I could come to his office in about 10 days and we could diagnose and fix his problem(s) at that time. The 2017 season was about to start in full force and it would be good to correct whatever was wrong before he priced and installed a lot of work. For whatever reason, he thought that this timeline was too aggressive and he decided to do the $1.5 million in sales prior to addressing the problem.
The logic of his decision totally baffled me. He did $900,000 in sales and barely broke even. Now he wanted to do twice that amount without addressing or fixing the problem(s). Why would you not want to first fix the problem?
My conclusion was: 1. He either did not understand the purpose of a business within a capitalistic system. 2. He wasn’t really serious about identifying and fixing the issues. 3. A combination of both 1 and 2.
Don’t twist their arm.
Toward the end of this conversation, I was careful not to attempt to talk this young contractor into a consultation. It’s my philosophy that a new client needs to do his or her homework, talk with references, have clear and realistic expectations and really want to work with me. Arm-twisting is counter-productive. Otherwise, he or she won’t be mentally and emotionally prepared for our time together.
Reflecting later on this phone call, I wondered why this young green industry contractor didn’t get it. Did he not understand that the purpose of a business is to make a profit? Perhaps he didn’t understand how to do a cost-benefit analysis? Or perhaps I did not give it my best shot?
It was then that I remembered “Link” Partridge’s advice and his three things that are impossible. You encourage and support people and you give it your best shot. But when it’s all said and done, and in the final analysis, you can’t push a rope!