Make it up in volume…

Much has been said about making money.  Losing money?  A little less popular of a topic.  Not as glitzy I suppose.  Glitzy or not, we don’t have to be a sage, seerer, or soothsayer to know the most common way businesses go out of business is losing money, true? 

Not having a firm grasp of costs (which results in losing money) has plagued companies throughout the ages.  I quoted a former IBM CEO earlier this year: 

There were times when we lost money on every PC we sold, and so we were conflicted - if sales were down, was that bad news or good news? 

Louis V. Gerstner, Jr.

I spent my entire career selling modern technology to business executives.  Each deal was hotly contested by multiple vendors.  Each client would share a few common goals – cut costs; improve margins; have reliable data to make better decisions; etc.  The client’s evaluation committee could get quite political.  My advantage?   I knew Todd: 

Todd's Political Principles 

·         No matter what they're talking about, they're talking about money.

·         Truth varies.  

One of my client stands above all the others.  Not solely because it was the largest sales transaction I ever closed; but because of the business justification their VP and Controller, Pete Krejci, shared.

At our very first meeting Pete said: 

Gary, I’m probably going to spend $2 million with Oracle; I’m willing to spend $50k just to ensure it works. 

An interesting introduction, don’t you think? 

I sold Pete’s company, UnoVen, Oracle’s Enterprise Resource Planning (ERP) system back in the day.  UnoVen was a joint venture between Unocal Oil Company and Venezuela.  Unocal had a refinery on the southeast side of Chicago; Venezuela had the oil.  UnoVen sold their finished products through a couple hundred gas stations in the Chicagoland area. 

UnoVen had the usual goals – cut costs; improve margins; etc.  But in Pete’s case, he was having a particularly hard time getting his division managers to realize the importance of reliable data for making good business decisions.  He explained his business case this way: 

Gary, what keeps me up at night is when I tell my division managers we’re losing a penny a gallon at the pump, they respond; don’t worry.  We’ll make it up in volume. 

And that is how businesses go out of business.

                                                            GAP

When life gets tough we could get a helmet… or… we could leverage the peace and share the power of a positive perspective.