How does a shop know if it’s in proper financial alignment?
Money. As business owners, this is the center of many conversations and worry. It is justifiable. So, is your company in financial alignment with all your stakeholders, e.g., employees, customers, and vendors?
Let’s start with your employees. Currently, in many parts of the country, the unemployment rate is considerably low. Finding great employees is amazingly tricky. Historically, many of the open jobs in our industry are based on a low wage in comparison to other businesses and industries.
Are you having trouble finding someone to work in production? Why would someone want to work for you? You must think like a potential employee. Is the pay you are offering in financial alignment with other positions that they could be doing? When you are underpaying for a more complicated or specialized job, is it any wonder you can’t find the right person? You might want to rethink what you are offering as starting pay.
For customers, financial alignment is a little different. If you are offering a premium-level service, you need to demand premium-level pricing. I know it may seem strange to many shops, but there are many customers out there that not only want better service levels and products but are willing to pay for it.
Many shops get locked into the mentality of the “herd,” where their pricing reflects what everyone else is doing. Instead of trying to compete on pricing and win the race to the bottom, what if you changed your mindset and built your business to financially align with customers that demand better service levels and can pay more?
In other industries, this shows up with first-class airline seats, luxury cars, premium fashion labels, high-end dining, and box seats at sporting events. As businesses, it’s natural to want better customers. Do the services and products you offer match the customers you crave? A shop owner gave me a great response to this exact situation. He had a customer that stated after a quote, “Oh, sorry, but I know a shop that can do this for less.” His response was, “That’s OK. I have customers that will pay more.” That’s pushing toward financial alignment. Not everyone will be your customer. It is OK to hunt for those that match better.
—Atkinson Consulting LLC