Best in Class
November 06, 2017
My daughter is in a high school marching band and every year they compete in UIL competition. They also compete in smaller festivals and contests in preparation for the UIL contests. They will compete against other schools in their same class (6A) for recognition and awards.
These smaller events are important because they offer the opportunity to perform their routine in a contest environment before they do it for the UIL contest. The band usually does very well garnering the awards for their class and sometimes as the best overall. The problem is that for some of these smaller non-UIL contests, we may be the only 6A band that shows and participates. So, it’s a given on winning the Best in Class award when there is no competition. It can make it hard to know how good you are with nothing else to compare to and can lead to a false sense of security.
I have teased my daughter about the tough competition at these events and we laugh about it. I also tease her about being my favorite daughter. She gives the funny look and reminds me that she is my only daughter, only for me to say, “Best in Class”! Then we have a good laugh!
What does this have to do with business? When you are a small business in a small community, you may or may not have any or much local competition. On one hand, that is a great place to be. It offers you the chance to maximize your profitability, especially if it is a product or service that is highly in demand, or highly desirable.
The problem is how do you protect that position? First, you don’t get slack about maximizing profits. This doesn’t mean just to charge as much as you can. It means to make sure that you are keeping expenses as low as possible and avoid wasteful spending. Second, how often do you look at your financials? When was the last time you really looked at and analyzed your Income Statement (also referred to as the Profit & Loss Sheet)? Look at the last sentence in the first paragraph. It applies to business as well. In the lack of competition, we can develop a false sense of security.
What to do? Keep up with what is happening in your industry. What are competitors in other towns doing? Are they expanding or positioning themselves to expand? Are they looking at your town? This was a lesson learned from my father. He owned a small floor covering business in a small town about 40 miles from a large city. He worked hard to provide great products with excellent service. He was well respected and successful. But, every once in a while he would see installers at a local residence and know that he didn’t sell those people the flooring. They had gone out of town for it. He would be insulted by that, not because they went elsewhere, but because they didn’t give him a chance to offer his best.
To truly be best in class, know and understand your financials and your financial position, know your competitors and what they are doing, and maximize your profits and profit potential.
“Business Tips” was written by James Leavelle, Business Development Specialist of Angelo State University’s Small Business Development Center. For more information on the topic of this article or the services of the ASU · SBDC, contact him at James.Leavelle@angelo.edu.