I like word pictures and especially word pictures that relate to making more money so I was pleased to discover "The Profitabiliy Vice".
It's not my phrase but that of Lynda Roth of LJR Consulting Services, a firm that specialises in information technology, saving money etc - to be honest I'm not entirely sure because as is common in big company consultancy, I don't seem to understand the words used when put together in sentences.
But I love the idea of the Profitability Vice and wish I'd thought of it myself because many businesses are being squeezed by the pressures of:
- keeping customers happy when they demand more service, better quality and lower prices.
- finding suppliers who will reliably meet their promised commitments without holding you to a king's ransom on the prices they charge.
- employees who think that they are owed a good living, regardless of how well the business is doing or who perform well, expect bumper bonuses and then expect the bonus to be included into their basic.
I hope I don't sound cynical but the Profitability Vice or Profit Vice (to make the phrase even simpler to understand), is what I see small businesses caught up in.
Instead of being master of all he surveys, the entrepreneur is left being squeezed and buffetted from all directions (please substitute mistress and she if you prefer).
I discovered about Lynda and Profitability Vice through a Google alert on hidden profits (Lynda writes the Hidden Profits blog).
What's the answer for the entrepreneur caught up in the Profitability Vice?
You need to take actions to seize control of the forces which create the squeeze on profits working back from symptoms to underlying causes.
I'm biased but I believe that business coaching is the answer as it helps (forces) you to look at your business in a new way.
I keep defining business coaching as helping you to get from where you are to where you want to be and that is the basis for my Pillars of Business Prosperity approach.
The first stage of correcting a problem is seeing it and that's why I like the analogy of the Profit Vice. Business owners can hear it and recognise that yes, the are caught in the profitability vice.
Even worse they are being squeezed as the vice closes, costing them money in terms of past profits (never mind the missed hidden profit opportunities), driving them crazy with frustration and in the worst cases, even making people question whether they want to be the boss any more.
What Do You Think About The Profitability Vice or Profit Vice?
Let me know your thoughts on the profitability vice by leaving a comment - just watch for the sneaky captcha that stops the spam robots.
Do you recognise the analogy and feel that you are being squeezed in a vice - or perhaps you have been squeezed in the past but you have managed to break free. It would be great to read your story.
I have been caught in the Profitability Vice either personally or I've seen it happen a number of times. I hare the story of my worst case in the Beer Game - Systems Thinking Fights Back