Edition 363 – Pinching The Inch
I wandered into my favourite coffee haunt early one morning and something was different. Very different!
Right near the front door was a dead patch. It was a dilapidated garden that had become a parking spot for old furniture. It wasn’t untidy, but it was a little unsightly. Except for this particular morning.
The furniture refugees were gone. What was left of the old garden was cleared out. In its place was new timber decking, some decorative pebbles and a small table and two chairs. The contrast between one day and the next was sensational. As one of my coffee colleagues Brian remarked “he’s pinching the inch”.
The cafe owner had just increased the capacity in the courtyard by two seats. In the whole scheme of things, it may not seem a lot. However, if you took a very conservative estimate of two additional patrons spending $10 each per hour, those two seats have the potential to earn this entrepreneur an additional $50K per annum in revenue. In the hospitality game, this could be the difference between marginal returns and significant capital value.
Over the years, I’ve ventured into plenty of businesses where, if they pinched the inch, they’d have made a significant impact on the business.
From the manufacturer whose factory resembled a form of organised chaos, with one corner seemingly reserved for broken down or redundant machinery and all the while complaining they need to expand their premises. If only they took a moment to, firstly, tidy up and secondly, look at their production flow, they might lift output by 5% and bank some cash from the sale of old machinery. The additional 5% would have been a significant positive impact to their net profit. A second location would not have been.
Or the retail outlet that had a blank wall crying out to be covered up, preferably with shelving and stock, to help propel to the customer walking towards an alternate product line that perhaps they’d not previously considered. “I don’t know if I want to spend the money on the shelving” was one of the negative comments that left the owner’s lips. “So you don’t want extra revenue” was my quick retort.
To the professional practice that allows client meetings and the hours on the project to run overtime, then proceeds to, at the end of the assignment, write off the cost over-runs as easily as you and I take out the garbage every Sunday night. I’ve seen this number exceed 20% in some professional practices – the equivalent of a day a week that they’re working for free.
What are the small changes that can create a difference in your business? Not significant, but enough to say “that was worth it”. And, when you’ve taken a moment to reflect on that, consider the impact on both your bottom line and your bank balance.
This Week’s Tip
“Often, the smallest steps create the biggest impact.”