Tips for quality service
Utilizing Your Money
by Carl Tompkins
In growing their business in a profitable manner, some glass shop owners overlook many resources that exist in and around them that could provide an incredible amount of assistance if they are utilized properly.
In my last column, I looked at two such resources (your personal commitment and time) and outlined what needs to be done by management to get the most from each.
Now, I’d like to turn my attention to a third resource: money. It is a great resource that needs better utilization.
Considering money a form of capital, business mogul J. Ogden Armour stated, “Capital can do nothing without the brains to direct it.”
The best thought process to use in determining where money should be spent is to follow the financial principle of investment verses return.
All too often I witness people in our industry willing to invest large sums of money into ventures under the impression that “as soon as the money is spent, the big bucks are just going to start rolling in.” The result is frustration and disappointment.
It is important to note that real investment never centers just around money, but needs to include consideration of potential return, effort, expertise and time to produce results.
You must have the answers to these four questions before you sign any checks:
1. What potential gain is possible through this investment?
2. What efforts must I apply to support this investment?
3. Do I have the expertise to enable my efforts to pay off?
4. How much time must be extended to allow for this investment to pay off?
I once asked a fellow, “Why did you spend so much money on yellow page ads?” He thought it was the thing to do because the yellow page representative showed him the same investment made by his competitors, but he had no idea if he was earning any return on his expenditure.
Here we find that the effort required should have been in gaining expertise on potential returns, how his ad should have been constructed, how to measure returns and how long it may take to earn those returns. Finding the most trusted expert was what the glass shop owner needed in order to answer these questions before investing.
In another case I met a man who invested thousands of dollars to join an association of other glass shops, who soon thought it was a terrible investment when not one new job came in the door due to his new membership. He had a clear understanding of the potential return and time required, but didn’t understand what steps and activities he would have to take to gain any new business growth; consequently, none were taken and no return was earned. His expertise did not matter because no action was taken.
For money to provide a better resource, follow the concept of investment verses return by having answers to these four questions. If the answers are not good, find somewhere else to invest your finances.
In my next article I will discuss the final resource necessary for success: people.
Carl Tompkins is Western states area manager for the Sika Corp. of Madison Heights, Mich. He is based in Spokane, Wash. email@example.com
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