NOTE FROM JASON: Well-run lighting showrooms produce 15% Net Profits or higher and have a growing bank account… but most small businesses in general don’t come close to that. It is my goal to help showrooms get there through simple best-practices that don’t require money, major changes, or (most importantly) a lot of time.
A 15×15 tip is one that lighting showroom leaders can take action on in about 15 minutes. Putting enough of these simple strategies together can grow bottom line Profits to 15% (or higher) with cash accumulating in the bank.
People don’t leave companies, they leave leaders. Especially leaders who don’t seem to care about them. People are only loyal to those who seem to genuinely care, and as their leader there is one thing in particular they want you to care about: THEIR FUTURE. This tip will help you step into your people’s future while subtly inviting them to get more involved in the company’s future.
Repeat after me: I’ll never, ever, ever be less busy or more profitable than I am now. Never. UNLESS I get my people to truly care about the company as I do. A team that cares about customers, each other, and the company is the only way out of the rat-race for me as a leader.
One of the best ways (the only way really) to get your people to care that much is to get them to see their job as more than a job. To see it as a critical step into a future they’re excited about.
There is nothing more important to people than their own future. For many, there is also nothing more intimidating. As a leader, that gives you an unparalleled opportunity.
Take just a few minutes this week to ask a key team member to fast-forward five years into their own future. What do they hope for? What is the “intimidating dream” that they aspire to and wish for but it’s a bit overwhelming to think about actually making happen?
In my experience (if you make it safe to be 100% open and honest) most will tell you that they’d like to be higher up in leadership with your company OR in business for themselves. If you’re smart, that’s ambition you can get behind!
Next do something that will surprise most. Help them take a meaningful step towards that future AND help the company (probably more than you can imagine) in the process: Set an appointment to go over your company’s Profit & Loss together.
Teach them how a P&L works and the key drivers you’ve learned that make a difference in how profitable a business is. Share and teach what you’ve learned about business by using your business as the example.
WHY THIS IS POWERFUL: A basic “must” for any serious business leader is to understand their P&L, yet most employees aren’t trusted with that kind of information. By teaching your people how to read a P&L you’re improving their future by growing their business and leadership skills. At the same time, you’re getting a chance to engage their unique perspective on ways your company could be more profitable AND inviting them to be more aware of it.
P&L training is one of the simplest yet most powerfully effective “invest in my people” training tools that I’ve ever come up with. It’s unbelievably productive. I’ve done P&L training now with hundreds of my employees over the years and I’ve yet to see it fail to produce a meaningful uptick in morale (people thrive when they learn something new and feel trusted) and profitability.
WHY YOU BOTH WIN
Whether you like it or not, your people underestimate the complexity of business and tend to think that the company is just “rolling in the dough”. That assumption makes it easier to be careless or callous with company profits. Most people only do the quick mental-math – sales price minus COGS minus what they understand of payroll and a few of the big expenses. That math doesn’t drop anywhere near to the actual bottom line.
Your people don’t see all the little money-grabbers like merchant fees and taxes and payroll overhead and taxes and dead inventory and taxes and overtime pay and taxes and the computer/vehicle/building repair costs and taxes and insurance and…
…did I mention taxes?
Show and teach your key people a little P&L reality and they’ll be less apt to assume selfishness and more eager to help improve profits, all while you show them that you care about them as individuals by trusting them with and using your company’s P&L to teach real-world business knowledge that they will likely see as valuable to their future.
Jason Petersen owns Hansen Lighting Inc. a lighting company with multiple showrooms in Utah.
Jason acquired Hansen Lighting out of near-bankruptcy in 2004 and turned the company around by implementing outside-the-box systems and ideas. The company is now one of the fastest growing companies in America (#3087 on the Inc. 5000 Fastest Growing Companies list) and has been recognized as one of the most profitable privately-owned retailers in North America.
Jason is also the co-founder of XOLogic and Lit Living Inc.