Pruning

To promote good growth sometimes requires a little pruning. Controlling new growth and minimizing “dead wood.”

In business, we often compare pruning to downsizing via staff reductions. However, there are more significant areas to foster growth in business.

Ever consider adjusting a product line to be more efficient and profitable? Or review your customer portfolio from a statistical perspective?

Surprisingly, your highest volume customer may not be your best. That customer could be undermining your profits due to lower margins or overwhelming the distribution of valuable resources (people, equipment, space) to support their needs.

Start the evaluation by making a list of your customers, annualize their sales, identify seasonal trends, determine their product distribution, and compare the activity to the support required. It’s not unusual to discover you may be better off firing a particular customer or change the way you do business with them.

If you need to increase or reduce your workforce, look at the workflow very carefully. As a small business owner once said, “Thinning the herd is easy, just make sure you don’t destroy it by getting rid of the prime bull.”

How many businesses do you know that sent the prime bull packing?
When sales are down, companies often reduce their sales staff. The most common mistake made is underestimating the value of the relationship and trust built between the account representative and the account.

Is there a risk the account will follow the rep to a competitor?
Will the customer feel less important because one of their key allies is gone?

People do make mistakes when pruning so be careful.