Small Business 101

I get calls from folks I worked with before retirement. Recently, one called asking to use me as a reference on her resume. We had a long conversation about the usual, who is where doing what, etc. We then got into an analysis of the operation of a small used car lot she managed under my supervision. Seems she still has issues with my way of doing things. I had to ask her why, after my retirement, her lot closed within six months. The lot produced a profit under my direction.

Small business operators have a tool, mostly ignored, that can help focus on what matters. This is “Cost per Minute”.

How many minutes, per month, is your business open? What is your monthly operating cost? Don’t know? Shame on you. Divide the monthly operating cost by the minutes you are open. If you have never done this, you will probably be shocked.

In the mid 1990’s, my employer had me organize and manage off premise car sales. We held sixty over a thirty month span. The cost? $32 per minute. Our dealerships were run in a most frugal, if not downright cheap, manner. No frills. Our operating costs were around $122 per minute.

Generating income per minute became a focus. Every problem can be overcome but time gone cannot be recovered.

Employees respond well, if grudgingly, to clear goals and practices. The ten minute gab fest around the coffee pot isn’t very enjoyable when you are focused on the cost per minute and revenue per minute. You want your program to work? Walk the walk and keep you pie hole shut. Find some other way to feed your ego. Your employees may have to listen to you in order to keep their paychecks. They can choose, if they so desire, to subtly sabotage your program. You really have only the power to fire. Don’t worry about being liked. Worry about being competent. Your employees want to know you have what it takes to keep the business going and keeping their jobs safe.
Focus on what is crucial, ignore the touchy-feely, and be successful.