Is the Juice Worth the Squeeze?

Is the Juice Worth the Squeeze?I love this question, so I’ll say it again; Is the Juice Worth the Squeeze?

What do I mean?

Let me give you a simple example of just one area of business where you should be asking this question. Ultimately, it can be applied to many areas. Some of you will be aware that I ran my own Hardwood Flooring business for over 12 years.  What you may not know is that I got into the business completely by accident.

At the time, I was working as a Sales and Marketing Consultant (as I do, again, now) but a friend of mine had set up a Hardwood Flooring Company with a partner.  It’d been running for a few years but, as we often hear, partnerships don’t always run smoothly and my friend suffered a bit of a disaster. He ended up on his own surrounded by problems caused by his partner.

He called me one day to let me know that he’d had enough and that he was going to let the business collapse because it was just too much to handle on his own and too stressful trying to resolve all the problems behind the scenes.  I persuaded him to let me come to work with him for 6 months as a last attempt to turn things around (I was just coming to the end of a 12 month project and had planned to take a couple of months off). Hardwood Flooring in a Hallway

One of the first things I did was take a close look at the work that he was doing and, as finances were difficult, I wanted to make sure that the pricing structure was providing the necessary gross margins to make the business profitable.  I carried out an analysis of every installation carried out during the previous 6 months, all the while, asking that wonderful question, Is the Juice Worth the Squeeze?

To cut a long story short, what I found was that, in general, the margins were good.  However, about 1/3 of their installations were relatively small jobs, in terms of the floor area, installing hardwood flooring in hallways.   It seemed that hallways were very popular. Hallways are also the most complicated from an installation perspective; Small areas of flooring with lots of doorways, all of which, take time to install.

My friend had a standard way of pricing that didn’t take account of this and, consequently, the margins on hallways were minimal at best and more than half of the installations cost him money. In fact, in many cases he’d have been better off giving these customers a cheque for £100 NOT to do the work.  Hence the question, Is the Juice Worth the Squeeze?

And now you understand what I mean, don’t you!

In this case the answer was pretty straight forward.  I designed a new way of pricing hallways that took account of the complications.  It wasn’t difficult to do but without carrying out the analysis and asking THAT question, the company would’ve continued to lose money on hallways.

A Question For You - Is the Juice Worth the Squeeze?So, what other areas in your business do you think you should be asking the question, Is the Juice Worth the Squeeze?

Please leave your ideas in the comments section, below. And remember to share this with other business owners in your networks.  I’m sure that they’ll thank you for it.

Have a great day,

Steve Bimpson

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