« Would you like 20% Growth 3 Years in a row? | Main | How to Destroy a Business – Part 2 »

Feb 7
How to Destroy a Business

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When I got the call to come to the back, I knew that things were going to change. Funny how those instincts just come to the surface.

When I got there, I was asked by one of the husband/wife co-owners of the business for my advice. I was the manager of their store; the one that I wrote about growing at 20% a year for 3 years in a row.

She asked me this question: Do you think that I should hire my brother to work at the store? He had been recently fired from a job situation that had gotten somewhat ugly and had involved, indirectly on a contract basis, the store that I managed. So there was professional connection to the company that fired him, but no connection to this specific business as far as the worker was concerned. It was a deal connected with the owners but not with this business.

From a long time of experience in the business world, I without hesitation, told her that the great majority of times it’s a bad move. I gave her a couple of examples from my own experiences.

There was respect there so she listened, but in the end decided to do it anyway.

The next move I saw them make was quite a surprise to me. While they were never quite as frugal with the store as they should be, they still operated within limits that the store could support.

But with the hiring of her brother, just nothing was too good for him. They decided to put him on commercial sales to boost that side of the business. While that in and of itself wasn’t a bad move, the next move was horrible. They bought him a brand new truck to do these calls and deliveries with.

The cost of the truck in proportion to the stores sales couldn’t come near to being justified. The person that he replaced had a small, little truck that was more than enough to do the minute amount of business being done at the time. But since it was brother, he got it.

I knew at that time that the stores days were numbered and possibly worse.

Next post we’ll get into the subsequent series of errors and the cost to the owners.

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