Mattress store that grew but not in profit
Support and systems in place to sustain fulfillment and meet customer expectations.
Expand your offerings
Build on your area of strength – do more of what you do well
Build on high margin offerings
Systematize selling- memberships, systematic offerings to customers
Expand your footprint
Expand your production/speed- Chick Fil 2 lines
There’s a difference between growth and scaling. You can grow, but it doesn’t necessarily mean that you’re profitable.
And then you have scaling where you have infrastructure and support systems in place so that you can sustain the fulfillment and meet the customer’s expectation. You can grow, but you can just piss everybody off because you’re not good at it. There’s companies that have grown so big that they’re no longer good. Their customer service is just horrible or their fulfillment is horrible.
“Growth” doesn’t mean you’re profiting.
I had a mattress store…and we were growing, but we grew negative in profit. We added three locations but our profit went down, Our revenue went up, but we were taking lines of credit, we reduced our margins to sell more, and then because they were further locations, they were harder to staff. It was a nightmare. But we had “growth”.
I’ve scaled companies, but with scaling, you fortify. And the illustration I use is Risk, as inthe board game. If you have one army and it’s holding your continent but only protecting from one direction, you technically have that continent, but it’s not going be around past your next turn.
Well, you’ve grown, but you didn’t support it. You didn’t fortify that area. I want you to think scaling, not growth. I want you to picture this massive infrastructure in place. How do we do that?
Expand Your Existing Offerings
You can sell some new things, but what do you currently offer that just fits right within that niche?
Build on Your Area of Strength
Do more of what you do well.
Build on High Margin Offerings
What do you offer that has the highest margins?
Build memberships and processes to get customers into your doors. Make buying EASY.
Expand Your Footprint
Know where your target customer is and expand into those areas.
Expand Your Production/speed
Chic-Fil-A in many places has expanded to two drive-through lanes. They have a system of ordering and paying through associates that stand outside so that when you get to the window, you pick up your food and go. Speed up your existing systems through new techniques and new technology.