One challenge that I ‘ve with every leader that I meet, no matter their degree of succeeding, is to help them realize where the flows are in their company. Every business has flows. These “escapes” are the facets of the company which aren’t running optimally or economically. The challenge for the majority of leaders, particularly entrepreneurs, is the procedures they utilize to direct and handle the company and this causes them not to correctly identify, discuss, and address chances for profit, growth and productivity. These flows are generally considerably bigger than they understand.
The Leaky Bucket Principle
As a visual, as all businesses have leaky buckets, I like to refer to this as the Leaky Bucket Principle. Among the reasons I hated bookkeeping was that I discovered that you can do an excellent job of getting credits and debits right and go out of business. It frustrates me that there isn’t any financial statement where an owner is able to see the various things a company does not do right and much more significantly their escapes are not being captured by them. Places where they’re losing cash. Often those amounts are a lot larger in relation to the amounts they’re getting. Over time these can add up to huge amounts, and there isn’t any method to monitor them.
As an example, an organization and I met that did over $200 million estimates this past year, but just $16 million in sales. Now the actual issue is the way a number of these estimates could they’ve had after we shut all their flows due to broken relationships, pricing errors, and other dilemmas that might be dealt with by the organization?
Is your company running at peak performance?
Where the possible flows are in your company pail, have you ever identified? Step one toward upping your company success would be to correctly identify the “flows” and to work toward patching the places wherever your gains aren’t completely being captured.