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08/24/2010

Is Your Company Filled With Hunters Or Campers?

It�s easy to like running a company when it�s profitable and growing. But it�s not a lot of fun when operating at a loss, or with insufficient profit. When you separate all the various pressures of being the owner of a larger company, you will find there are very few problems that can�t be solved through greater cash-flow.

And greater cash-flow comes from taking action on the following three key factors:

1.    Can the customer base be widened for additional sales?

2.    Can prices be increased?

3.    Can purchases or operating costs be cut?

One place to look is your trade exchange, where both points one and three are addressed: By working with your local exchange you will immediately increase your customer base, and bring in additional sales. And, when spending trade dollars for needed purchases, you�re acquiring them at your barter cost � which directly cuts your purchases to the bone!

Additional sales can be illustrated by looking back to the earliest days of civilization. Our ancestors learned it was easier to survive when they joined together in groups. In their camps there were two types of people. The hunters, who brought in the animals for food and clothing, and the campers, who used the animals caught by the hunters.

We know that this societal structure worked, and groups flourished. However, we also know that there was a tendency for the number of campers to grow out of proportion to the number of hunters. When this occurred it frequently became impossible for the hunters to bring in sufficient animals to feed the expanding number of campers � no matter how aggressively they pursued their prey.

Now the hunters were not fools. They had survived enormous dangers in the wild. They didn�t need consultants from another camp to tell them they either had to train more hunters, or force the least productive campers to leave the community. Which brings us to the point of the illustration � does your organization have the proper ratio of campers to hunters? Are there too many campers (salaries) for your existing hunters to support?

(No matter how small your business is, you must keep close track of direct and indirect labor costs, fixed and variable overhead, as well as general and administrative costs.)

Hunters looking for new business don�t jeopardize their lives these days. But they do get dumped on, ignored, and rejected � often forcing them to leave for greener pastures. To avoid that happenstance, and widen your customer base, you should consider the following questions.

What would happen if you eliminated two campers and replaced them with fierce hunters? How would your bottomline be affected? Where can you find more hunters?



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