Tag Archives: profit

Is Greed Good? | A Look at Business Vision and Profit

Originally posted at Pro/Vision Coaching.

As our friend Gordon Gekko once pointed out, “Greed is good.” It is the oil that keeps the economic machine running, the grease that lubricates our free market, and the sludge that is produced from our toxic waste sites. I contend to you, how good is greed?

http://www.youtube.com/watch?v=PF_iorX_MAw

Our free market economic system relies on one very simple premise: supply vs. demand. Without demand, there would be no reason for supply. Without supply, demand would rise so high that even reasonable adults would transform into raving lunatics running on pure bloodlust for the next Tickle-Me-Elmo. Welcome to the holidays.

“After Target decreed that Black Friday would start at midnight Thanksgiving night and that employees must report to work at 11 p.m., an Omaha worker, Anthony Hardwick, posted a petition at Change.org asking the company to move the official start of Christmas shopping back to 5 a.m. Friday. Response from workers and others has been stellar: 192,000 signatures by Monday.” CNN.com

Each year we have watched these stores open earlier and earlier, tempting shoppers with great deals at horrible hours. It’s simple (and good business): this time of year there is an inherent rise in demand for the holidays. Because of that rise in demand, supply becomes in danger. Small stores cannot keep supply on the shelves and the wholesale market caters to those who can continue to keep demand on the rise. Big-box stores such as Target and Walmart have the infrastructure to handle holiday demand, keeping a relatively decent supply of products on their shelves for the shoppers. Obviously they want to sell more than other stores, so they compete with each other; if Target opens at 4am, Best Buy will open at 3.

The people that stand to be hurt are the employees, all of whom have significant gripes against their big-box employer (see americanrightsatwork.org to see examples of offenses). Not only do people have to be there during open hours, but stocking, delivery, preparation and clean-up work are needed also. Can you imagine shopping in a Target ravished by holiday shoppers with no clean-up? Not fun. Truth be told, though, in this instance, the stores are only responding to the public. If no one shows up to go shopping at 2am, do you think Target would remain open at that hour? No.

Thus, the question remains. Who is to blame? Is it the big-box stores? Is it ourselves? Is it a flawed economic system? Is it Cap’n Crunch’s? Gordon Gekko was right. Greed IS good – at least to a point. Greed is the emotion that pushes us to be the best doctors, inventors, teachers, producers, etc… in a free market economy. This is based on the simple principle of competition. I want a better life and to reach it must do better than others. Good business coaching focuses on this – VISION. This can be a good thing, because in order to reach that, we need the help and cooperation of other people. Thus, the “if you profit, then I can profit” ideal was born. As communal greed grows, life grows. It builds cities, national parks and green energy.

This philosophy fails when restraint dies, giving us no control over our material desires. Greed without restraint pushes us to dangerous ends that destroy others and search for our good at the cost of others as opposed to the good of all. It is this mentality that leads to corruption and is the cause of many of the symptoms our economy currently faces. When we look to help ourselves with the point of doing it at someone else’s expense, we cross the line. That greed does not rebuild our economy.

Maybe the best lesson this holiday season is a classic proverb that can help us look at things from a different approach. “It is better to give than to receive.” If we all give, then we all will receive; if you profit, then I can profit. After all, I would want my children to receive the best education possible so they have the opportunity to reach their potential. If I keep cutting the wages of our teachers, then I am not promoting good greed that grows a community (and my children’s future), I am just being selfish.

Selfishness is not vision. Vision for a better life for yourself and others is a great thing and the ultimate description of profit.

Whether it’s Baseball or Business, it’s All About the Numbers

Take me out to the ballgame; take me out to the crowd.

Buy me some peanuts and cracker jacks; I don’t care if I ever get back.

What a beautiful stanza to a gorgeous song that represents all that is right with this world. Baseball. The greatest game ever played, especially if you are in business.

I can already see the bevy of comments that will hit me on this post about my obsession, and specifically why I chose to write an article like this at this time, so at least I’m prepared. Yes, I just attended an entire series at Safeco Field in Seattle, though for the sake of my current city popularity, I will decline to admit my favorite team. The first comment to guess correctly wins a prize that will be revealed at the end of this post.

While attending these baseball games, one cannot avoid being smacked in the face at a seemingly constant stream of statistics. “In June 2010, Felix Hernandez won the American League Pitcher of the Month Award for his flawless portrayal of Felix the Cat in the local theater’s rendition of Rent 3D: Alley Cat. This was his 5th AL PoM Award in 6 possible months.” Obviously that means he had a good year. You know he did well because NUMBERS DON’T LIE, at least not like your Uncle Herbert.

So what? Who cares that I can make up odd baseball and pop culture connections? Here’s why: it’s all about the numbers. If you need to know how many baseballs you need to sell in order to keep your store open, you must rely on the numbers. Take a look at this – did you know that the average operating budget for a Major League team was $84 million dollars in 2009? The Seattle Mariners’ budget was at $98 million. Their average ticket price was $30. So how many seats did they need to sell to cover their expenses? Knowing they play 82 home games, the equation becomes simple:

(# of tickets sold x $30) x 82 games = ticket income If ticket income had to match operating expenses, the equation would look like this: 98,000,000 / 82 = 1,195,122 (income needed per game) / 30 = 39,837 (seats that must be filled)

Safeco Field has a seating capacity of 47,878 for baseball games. That means Safeco would have to be at least 83% full each home game to make budget. In 2009 (according to ESPN), Seattle averaged 27,116 tickets sold per game. Going back to the original equation, that means Seattle pulled in $66,705,360 in ticket income in 2009. Put that into the next equation: income – expenses = profit. $66,705,360 – $98,000,000 = $-31,294,640

OUCH! It’s a good thing they have other ways of generating income. Do you? Do you know what your income needs are and where they are coming from? The moral of the story is this: numbers are cold, hard, and factual. They will tell you the real story of your business in a way that would make J.K. Rowling look like your Uncle Herbert. Use them, do not be afraid of them, hate them, but above all trust them. The best businesses know it’s all about the numbers.

And, by the way, the prize is a cup of coffee and a pleasant conversation.

Dangerous Distractions | Small Business Owners and Technology

Originally posted at Pro/Vision Coaching.

Since we are a firm of business coaches, I feel a burden of responsibility to warn you all of potential threats to your business. Our goal is to ensure the longevity and success of each small business owner with whom we work, and because of that, there is a vital news item that I must warn you about.

I have become convinced recently that the game Connect 4® is evil. You may think I have completely jumped off the cliffs of reality here, but do you know how many grams of carbohydrates are in each piece of that game? Ok, seriously, it is evil, and not just for the carb content. The effects of that game pull itself out of the fun and light-hearted past and into the scary present of the adult world in which we live and work. Take the story below about a guy named Rod Jones-Swatrzburg from West Spencer, Virginia, as published in the Secret Adult Gamer’s Monthly Circular.

“The online app version of Connect 4®, known to smartphone users as link4® has become quite a crazed sensation. With the ability to play games against live opponents any time of the day or night, countless people have succumbed to its temptations. At the center of our story is former business owner Rod Jones-Swartzburg. He started a fly-fishing business five years ago, specializing in fancy lures. His business was surviving, despite his self-admitted ability to market, and he was even getting close to being ready to hire his first employee. That is, until he downloaded the link4® app on his phone. Though the games only last a minute or so, he found himself losing hours at a time on his device. Hours turned into days; days turned into weeks; and unbreakable habits formed. Before long, no more lures were being made, supplies dwindled, and his store closed down. When interviewed next to the cardboard box he currently calls home, his only reply was, ‘May I borrow your phone for a minute?’”

This is obviously a tragic story of senseless over-obsession is a smart phone, but the temptation is real. The scariest part is that game is known as a “gateway game”. In other words, people that participate in the link4® world very easily find themselves deeper than they ever imagined, some even going all the way to the World of Warcraft® stage. According to a local gaming-health expert, “If a person walks through the online gaming door, it is rare that they are able to go back. There is a reason why the gaming community is growing exponentially (and gets used), while gym memberships grow exponentially, but never actually get used.”

Time is a precious thing, and it’s only worth spending in the right ways. It’s not renewable (such as money, carpet stains, and Charlie Sheen’s temper tantrums) and therefore must be treated with respect. Guard yourself, keep a constant watch on your profits, and never turn down a free apple pie. For these are where the rewards come.

That’s interesting, I just got a notification on my phone that someone wants to play a game…

http://www.youtube.com/watch?feature=player_embedded&v=Oyfvj5rkteE

Being Organized is for the Birds

Originally posted at Pro/Vision Coaching.

A crumpled piece of paper sits quietly on the floor, its jumbled words holding a message of deep significance, yet silenced by a single hasty act. My dastardly scheme is succeeding; as long as it can survive in its spot until 5 o’clock, the paper’s message will be forever destroyed at the hands of the night-time clean-up crew.

Who am I? I am disorganization, your single greatest enemy to profitability. It is my goal to keep your business down, your efforts up, and your profitability in complete disarray. I keep you from putting away your files, from cleaning up your workspace, and from systematizing your production. I work alongside my good friends distraction, hurried, and anxious. The longer you keep from paying attention to the growing pile of stuff sitting in front of you, the stronger I become, and the longer it will take to put me down.

I thrive in environments of low accountability, low visibility, and low commitment. And it doesn’t take much to get me started. All I need is for you to leave that one item un-dealt with, giving me just enough space to flex my muscles. Oh, and no one is immune. I can break into any safe or any system you put up to protect against me. Why? Because I already live inside you.

I have one weakness and one weakness only – constant vigilance. A plan that you are completely committed to that does not allow for one thing, item, or piece of information to be left out of place. You may think you are a “natural organizer” or admit to obsessive compulsive behavior – but both of those are fallacies – obsessive compulsivity may lead you to clean up a lot, but that has nothing to do with organization. Good organization is not needing to constantly clean up your desk, as it stays clean through continual acts of organization.

I’m not worried. Very rarely do I come across someone who has the will to defeat me, which is probably a good reason why many small businesses fail, they just don’t do what it takes to stay organized. And how can they? They are probably taking too long looking for stuff, too busy catching up on work they under quoted, or too frayed because they are trapped under a pile of junk.

You think you want to fly? I keep you from walking. Besides, I can’t imagine why anyone would want to fly anyway; leave that for the birds. They don’t have to be profitable.