All the shop have surplus!? The danger of this.
Are the shops in the red really bad?
When you run shops, some shops will be in the red for sure.
Management reaction to this situation varies.
Close the shops immediately.
Close the shops within certain period.
Because the stores with a surplus compensate for this loss on the whole, the shops in the red can keep on being run haphazardly without a sense of urgency.
All sorts of responses.
My thinking is this.
Assign an excellent shop manager to the shop in the red.
Provide a proper budget and have them perform various challenging projects.
Once in the black, give them the greatest praise and reward
This is because they are building the know-how which is necessary for the company to grow.
When you run a company, a shop in the red will absolutely pop out.
Office worker type, bureaucratic, shop manager is pleased to be assigned to a shop in the black.
The shop manager whose goal is to set up on his own is pleased to be assigned to a shop in the red.
Comparing this to the human body,
To make a surplus means maintaining blood volume in the body
Shutting down a shop in the red is the action to stop the bleeding.
To turn a shop from deficit to surplus is the action of actively going out to get food for the production of blood.
The most important thing!
Often, there is no sense of urgency with a shop in the black.
They may feel pressure to balance meet their budget…
Effort and improvement is not happening, there are other things that can only happen at a shop in the red.
This difference is as different as Maslow’s desire for survival and desire for social recognition.
The optimum is that 3% of all shops should be in the red.
That is where excellent shop managers continue to create know-how for the future.
Enter through the narrow gate!
Effort turns into sustenance. This effort is absolutely necessary for the company’s growth
Innovation and effort, without them a strong corporate entity cannot be born
and when all shops have achieved a surplus, the certain result is that shops in the red will occur again.
Ultimately, managing is this cycle. Thus becoming stronger.
Companies which rode on market trends, growing with no hardship or effort, are fragile.
They cannot improve on their own.
“Companies with too strong a sales force do not have product appeal, because the sales force can sell anything.”
“Companies with too strong a product appeal have a weak sales force, because the product is so good it can be sold without any effort.”
A company we support in a provincial city, will not develop a new business in the heart of a metropolis. First, they develop in regional cities where the population is small.
It is a test of the business conditions whether customers come and are satisfied without active sales.Then, while studying the situation in local cities with a small population, we conduct various marketing events and from these create our know-how.Making it applicable all over the country. This is management’s boon – reward for effort.
I think there are many ways to strengthen companies, so please consider these for your reference.
Assentia Holdings, Inc.
Akira Tuchiya
