How can you ensure your business has staying power?

Tony Passmore, owner and chairman of the Passmore Group, looks back on a business that has grown and thrived for almost 60 years and spells out the factors he believes have helped it survive and get to where it is today

Someone once said “10 minutes is a long time in politics”. Heaven knows what they’d think if they’d been working in the KBB industry for almost 60 years, as we have been at Passmore Group. So, despite everything that’s happened since 1965, why are we still here? What’s the secret? Simply put, the key to our success and longevity is a combination of many factors, such as providing a good-quality service, getting and retaining the right people, managing our business effectively and adapting to an ever-changing world. So, what factors should you be considering?

All about people

The KBB industry is a people business – whether it’s our customers, our staff, our supply chain or all our stakeholders. They all have differing needs that need to be met.

Customers need good-quality service and value for money. So, get to know who your customer is, understand what they need and then give them what they want – consistently every time. Respect, nurture and look after them and never take them for granted – repeat business and referrals don’t cost anything, but are the lifeblood of any established business.

Staff need training and development, as they are in many cases at the front end of your business, especially as it grows. Make them as good as they can be, give them autonomy and freedom. Support them when they’re down and praise them when they’re up. Create a succession plan in all areas of your business for the next generation.

We aim to inspire loyalty and trust. Respect your supply chains and work closely with them to help achieve your mutual goals. And get the best advice from your accountants, insurance brokers, bank managers and business consultants. They give an objective view of your business, often being able to see problems and solutions you just can’t see.

Our world has changed a lot over the past 60 years and we have had to constantly adapt to market, social, economic, “Always be aware of what’s going on in the world around you and be prepared to adapt and change” political and, increasingly, technological challenges. Always be aware of what’s going on and be prepared to adapt and change.

Try reading ‘Who Moved my Cheese’ by Spencer Johnson and ‘My Iceberg is Melting’ by John Kotter. Do your SWOT analysis regularly – maximise your Strengths, minimise your Weaknesses, explore any Opportunities, and mitigate any Threats – and form strategies to deal with each.

Numbers that count

Most businesses know what their sales figures are, but this can often not tell the full story. Know the numbers that really matter.

Gross Profit Margins are key and we report on them job by job. This isn’t always possible for many businesses, but try to do it often, monthly if you can, but quarterly if not. Then look to maximise this by becoming more efficient, buying better and smarter or even reviewing your prices.

Know where your best leads come from and how many you need to keep your order book healthy. Know your footfall, best lead generators, conversion rates and measure the return on your marketing spend. Know your overheads, as the difference between Gross and Net Profit Margin is overheads. These can easily run away with themselves without you realising.

Get good financial advice whenever you can. Your accountant should add value to your business and not just prepare your accounts and tax return. Other numbers to measure include returns or stock levels, complaints, conversion rates and average orders – then set targets to improve or maintain them.

Above all, keep an eye on cash. Most businesses fail when they run out of cash. Make sure you can easily repay any borrowings and keep an eye on slow payers. Make hay in the good times, but keep a bit back to cover the bad. If you get knocked down, get up again. Be optimistic, get a work/life balance, celebrate the successes and understand and learn from the failures. Most of all, enjoy building a business that will stay the course.

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