Growth Wizards(TM) Growth and Profitability Strategies for Wholesale Distribution

Breakthrough Business Productivity for Wholesalers

2010-06-07T01:13:00.001-04:00

Author Neil Gillespie shows wholesale distributors how to achieve breakthrough productivity in their business by integrating market strategy, operations and marketing efforts.

He also talks about a unique business management model he calls The Profit Triad, a unique integration of strategy, productivity and marketing metrics and best practcies to drive ROI. You won't see this anywhere else.

This is a must read for every independent business with over 25 employees especially wholesale distributors.

Throw In The Towel - Or Get Creative

2010-04-21T13:10:00.000-04:00

Sometimes you might feel like throwing in the towel... and after a speech like this.. you may feel exactly that way about your business if the economy doesn't start cooperating big time...

Larry the Liquidator said that if you get increasing market share of a decling market you're in big trouble. Many of us did that. Larry would tell you that your company is dead. But is it? Watch the clip. Then read what I have to say after watching.

If the economy doesn't come back... then you'll have to look for different avernues for growth...

I'm hunting for the video of the solution to Larry The Liquidator's plan... but it goes like this. Penelope Ann Miller, the daughter of the CEO played by Gregory Peck, and the attorney for the company, found a way to re-purpose the technology that made copper building wire and make airbags for Japanese car-makers just about the time when it was mandated for cars to have them. How can you use your resources to market and sell into emerging or different markets? It's critical to growth and perhaps survival to figure it out.

This meant that the wire company in the movie had to change a lot that it did in terms of manufacturing,marketing, channels, sales, just about everything. But they did it after they were faced with a death sentence by Mr. Larry The Liquidator.

There's a lesson to be learned here. The lesson is that all is not lost if you use your creativity and re-purpose or expand into a different market using your existing base of resources in a little different way.

How to Sustain Double Digit Growth Despite The Recession

2010-04-09T11:40:00.001-04:00

I was flying back from Las Vegas on Wednesday after getting some coaching for how to run my growth coaching business on Tuesday and Wednesday.

I had the pleasure of sitting next to a couple of guys from an electronics company that was a contract manufacturer for consumer electronics manufacturers. One of the men was the Vice President of Engineering for the company. I asked him how they were doing in the recession. He said that they didn't miss a tick on the clock and were clipping along at a double digit growth rate, even since September 2008 when the wheels came off the economy. All this while competitors were collectively down 20 to 30%.

I asked him if they were doing certain things like seeking to help customers with their applications, talking with them about designing new and better products, asking marketing people what they were thinking of before the products were even submitted to engineering for design. As it turns out, yes, the company was doing all of these things.

But most encouraging, he told me about how they approached the recession.

Double Digit Growth From Doing the Opposite of Competition
"The media was talking about it in late 2008 and our competitors began to cut back inventory and expenses. Their whole mentality changed and they began to shrink back from approaching customers to generate new ways to help them with their products. Our CEO decided to step up our customer contacts."

At that point I drew a diagram of my prototype organization that can be found in my book "Discover Your Core, Then Go For More". I showed the roles of marketing and engineering and added that they needed to get together and go out and see customers in teams to discuss customer needs and design issues and products they hadn't even started designing yet instead of cloistering engineers in their labs and cubicles.

The VP of Engineering wholeheartedly agreed. And instead of the usual lamenting that he agreed but his company had cut back expenses so much there was no money or inclination to do that... he told me that they STEPPED UP the activity and brought home some nice additional business from customers they never sold anything to before in addition to existing customers that gave them more business. The result was sustained double digit growth despite the recession that hit their competitors so hard.

So let's review what happened here.

1. The CEO encouraged it and PARTICIPATED in making many of the calls. This set the tone for the rest of the organization
2. Other key sales and engineering people followed suit.
3. They did the opposite of their competitors, who cut back this activity and cloistered engineers back at the office
4. The tone of the conversation with customers was to help them with design issues: things that added real value for them: they became a strategic advantage for their customer with their core asset: engineers
5. The sales people set up the appointments and the conversations, framing up the conversation so the engineers could enter the conversation and add value.

Textbook execution, but too bad most people do exactly the opposite of this. Somebody can do this. Why not you? Ah, but you need to know how to approach the customers.

First: who really adds value in your company? Not just with products, but in how you serve the customer. You'll be surprised what you can accomplish when you let people that provide solutions, even picking and packing solutions, listen to the customer first hand. Your warehouse manager is an engineer, believe it or not. Give your people a chance to see and respond to the customer. Teach them how to ask the right questions to get the customer to share real issues and show your people what is going on in their place of business first hand.

You can find out more about this technique in my new book "Discover You Core, Then Go For More" in chapters three and seven. Watch for it. In the meantime, give this a lot of thought. Seeing more customers more often is part of the answer. The other part is how you approach them and with whom. Set up your people to see and hear customer issues first hand and you will be amazed at what they come up with.

Get connected to customers again. Pick the right ones, other people's customers, too. Then get in the right kinds of conversations and investigations.

Big Game hunting distributors, bag cash!

2010-04-07T10:47:00.007-04:00

If you haven’t been on Safari in a while you will see really big elephants (elephants= really big non producing inventory…and some gazelles) you might be surprised at what you might find. You are looking for product that can be converted to cash.

Why hunt for cash? You need it now. Banks are not exactly pushing money at most distributors.

As you search for that elusive big game (CASH) in your game preserve (aka your warehouse) you’ll want to look on top of the shelves, behind boors, in old boxes that are back in a corner or maybe they are out in a remote storage. Or maybe it’s on your delivery trucks or underneath stacks of old paper reports. While you are at it look in your sales person’s trunk. Check your computer and see where all the samples are. Get your arms around it.

If’ you have a process for defective products, check that bin or area where you store it. Suggest you turn that over to the manufacturer and get the credit back ASAP. I suggest that you get credit or cash as opposed to replacement product. It will depend on the manufacturer.

How about lost inventory that never got logged into you system or product that you wrote off and still have in the warehouse? As to that lost inventory that didn’t make it into inventory, you may not remember that it screwed up your cycle count and service levels. You probably ended up ordering extra product, which in turn caused you to invest more money in your inventory. Hopefully it is still moving like a gazelle and you are getting paid for it. If it has moved into the slow moving (elephant category) then you need a plan to turn it into cash. But you have to find it first.

What to do with that elephant inventory? You’ve probably sent back as much inventory to the manufacturer as they’ll take for now. We are not suggesting that you dump the inventory, but rather start a process that let’s you sell of that portion of the inventory out of your market.

Some suggestions:
• If you are in a buying group, have some discussions with distributors out of your market about letting them sell and you ship product to their customers. I know there will be some manufacturers who will be up in arms. But unless you have a contract to keep certain products on the shelf and you are properly compensated in a timely fashion, co-sales may be the way for you to generate some cash.
• E-Bay may be a viable place for you to get some cash out of at least a portion of your elephant inventory.
• While no one likes to talk about it there are gray market buyers who for years have been buying manufacturer production over runs. Here again you need to satisfy yourself that this product is not going to come back and bite you like a poisonous snake named ‘cheap price’.
• Along with the gray market buyer, you might consider a pre-arranged auction. For this to work, you should move the product off site and be as quiet as possible about the auction. This is not where you should invite your customers to come bid on it, particularly if you plan on staying in business in that market area.
• Consider talking to an exporter. The trick here is to make sure you get paid here in the USA before you ship.

Just remember this business is all about the cash. So get out on safari in your warehouse and find product that can be converted to cash.

Are your Employees Treating SPAs this Way?

2010-03-25T21:06:00.002-04:00

Obviously this guy didn't care about spending of the other guy's money.

If you're a distributor, your employees may not care about doing all the work to claim SPAs more often and get your money back fast. Neither will the manufacturers, except a few that have bothered to go EDI on SPA claims.

Get smart. Get on electronic price notifications and map these in to your system for fast loading. And claim using EDI. Negotiate with the manufacturer to get your money next week on claims made this week.

Make sure you have clean product and price data or none of this works. See our earlier post. If you're having cash flow issues, you need to do this fast. If you're not, do it before you do. It's YOUR money!

Stealing the Ball from Competitors Part II

2010-03-24T16:31:00.001-04:00

In a prior post I mentioned how to wedge in to competitor's accounts.

Maybe you can learn how to wedge into competitors accounts by watching soccer players. When you observe how a competitor is perceived by customers very closely, you can suddenly snatch away an account when the competitor "isn't looking" and doesn't expect it. Think about it. I could watch your habits for five days, your comings and goings, and tell you exactly how you take the garbage out, get the paper, mow the lawn, forget to close the garage door, etc. I would know more about these things than you would. Because I paid attention.

So pay attention to how your competitor is performing for their best customers and be ready to pick up the ball and score when they leave an opening.

Wedging into Competitor's Accounts

2010-03-22T01:52:00.000-04:00

Want Market Share from Competitor's Accounts? Remember how you got a girlfriend!

Companies often make the mistake of targeting other companies. That's fine in industries where direct sales doesn't dominate the marketing mix.

But more often that not in wholesale distribution dominated channels, the job of taking share depends on breaking up the relationship between "good old Joe" at the competitor and the account you want. So let’s turn to good old Joe. How do you break up his relationship with the account?

I'm going to use an analogy that every guy knows because he's probably tried it or seen it done in high school or college. And ladies have seen it done too. Maybe that's how a guy got you!

Generally, if you’re a guy, and you want to date a girl that’s dating the other guy, you do two major things. You start doing things so the girl can get to know you, and you evaluate the other guy for weaknesses you can exploit. Here’s the drill in detail:

1. You start doing things so the girl can get to know you. You throw compliments her way. You send notes. You call. You make notes of the things she likes, places she likes, and the things she likes to do. You send her information about those things. You get her birth date. You invite her to come to the game in which you’re playing. You go to the game she’s playing or the concert in which she is starring. You send her your Facebook profile, and maybe your Twitter username. You do all this politely and without embarrassing her in front of others. You find out about her parents and siblings. You make a point to engage with them at events. You take an interest in them and what they do. If you get to know them you might ask them about her and what she likes, but not invasively so. You might mention that you admire her for some specific talent, character trait or accomplishment. You might find out what she wants to do with her career and what school she wants to attend. Be smooth, not geeky. Get her to know you by seeking to know her.

2. You evaluate the other guy and keep an eye out for an opening. Most importantly, you look for her reaction to what he says and does. You watch how he acts in public around her. Does he pay attention to her or look around? Does he flirt with other girls around her? Does he smother her? Is he a showoff to get her attention or be admired by those around him? Is he shy? Does he give up easily? You watch how she interacts with him at public events. You watch her reactions to him, her facial expressions, and body language. You watch for signs about things she doesn’t like but is reticent to talk about with him. You wait for the opening, the screw-up. You never say anything bad about the guy. You just say and do the opposite of all the things he does wrong. You win with diligence, attention to detail, and persistence. You win with offensive strategy. This is the essence of it.

Many salespeople spin their wheels quoting customers and then receive a “Thank you for your proposal, we decided to stay with our current supplier. We would be happy to consider you again in the future.” You receive this or a similarly disappointing response.

What happened? They took the proposal and the ideas from it to good old Joe. You might have been low on price and offered a few unique services, but Joe scrambled, lowered his price a bit, and got his company to do the most important additional services on your proposal.

The customer really did not want to switch. He or she wanted to stay with good old Joe. What happened? You didn’t develop a relationship. You didn’t position yourself in a way that boosted your stock and made them realize they should sell Joe’s.

Now that you know how to get a girlfriend, let’s see if you can do that on a grander scale: the multiple account full court press.

The Salesman/Key Prospect Matrix

The real share positions are not distributors with customers in this business unless the owner is very connected to the account contacts. The real share positions are salespeople with accounts. If you recognize that, you will array your competitive landscapes accordingly so you can see the true battlefield.

The whole science of military strategy is based on battle positions and what you can do from those positions. So, you need to know the strength of those positions in addition to where they are.

You probably determined distributor positions by market segment to evaluate the strength of competitor positions. those are not really attackable positions. You need to go deeper.

Now you’re going to list the top 50 to 100 accounts in the territory by segment in rows, what they are worth in annual business, and the top three competitors’ salespeople in the columns, so you might have more than one column per distributor. Go down the columns and list who is #1, #2 and #3 by account. Plug in the sales they get if you know that, but at least list their relative positions at the top 50-100 accounts in the segment.

Involve your salespeople using an Excel spreadsheet and a projector. Again, depending on how much you can trust them, bring in supplier reps to help you fill in the missing information. The news about what you’re doing would send a cold chill down the spine of your competitor with this one. Keep it quiet.

Using this information, if you know a competitive salesperson’s strengths and weaknesses in addition to the distributor’s service capabilities and lines, you can put together a full court press on multiple accounts simultaneously with almost the same “positive opposite” approach for each. This is the kind of thing that rattles a competitor. You can create mismatches this way, just as a football team does with misdirection, pulling guards, getting the other team out of position and double teaming players left to defend on the side of the field you chose to give battle.

It’s extreme;y effective when you stay with this approach long enough to see it start working. It has been known to cause salespeople to quit and go elsewhere, maybe to you. Be prepared for what happens and don’t try this if you are faint of heart or if you want your competitors to like you. Quite the opposite will result.

If you want to give battle, you have to see the battlefield and apply pressure at the precise points where your approach will win. Good hunting, growth warriors.

Remember how you got that girlfriend.

Distributors Rebuild for Recovery

2010-03-18T13:43:00.001-04:00

Distributors Rebuild for Recovery

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Hold on To Your Hats - Wave II of the Financial Crisis is Hitting

2010-03-17T16:44:00.000-04:00

If you haven't heeded what Allen and I have been saying about the economy in our "Out of The Fire" series regarding continued credit tightness.... you need to watch this more than ever.
The residential sub prime crisis was bad. The bubble it represented burst and some things went back down to the pre-bubble inflated state. Others went right past the low water mark, like housing.
Industrial production is down to 2002-2003 levels. Housing is 75% below it's peak. Commercial Construction is 33% off it's peak. Credit is virtually non-existent for small business. And now it's about to get a lot...... WORSE.
Why? the banks are going through round two of the big asset value meltdown. I don't need to say more. Listen to Ms. Warren, who chairs the congressional oversight committee.

Business Still Not so Hot? Go On A Safari

2010-03-15T13:09:00.000-04:00

“Go on Safari with the way my business is? Allen Ray you have lost your mind!” says a mid-western distributor friend last week.

Here's the point: It got your attention.

"The big game that you need to hunt for is “CASH”. Finding cash in your business is open season and there is no license required.

Need a reason to Hunt for Cash? Here's some:

· Haven’t paid yourself lately?

· Bank won’t loan you money?

· Having to put cash into your business just to survive?

· Gross Profit gone south on your existing business?

· Selling ‘more stuff’ and not covering all your cost?

· Got too much of the ‘wrong stuff’ sitting on the warehouse shelves?

· Matching up paper to claim SPA’s? Takes forever to get SPA credits?

Neil Gillespie and I laid out possibilities in the post on Sunday March 14^th, of where a lot of your cash may be tied up in SPA’s. Many distributors don’t treat SPA’s as a RECEIVABLE….this is a mindset issue that you seriously need to consider changing. Take the steps now. SPAs as a receivable issue, needs to be front and center, just like your other receivables! How do you get paid back on SPA's sooner? Handling paper is NOT the way to do it.

Here is a tip that will help you start to automate your accounting by letting your computer match invoice/receiving documents and purchase orders and this may not cost you any money! It starts with the product and pricing data you run your business with. If you use a commercial product database such as the ones that Trade Service Corporation offers, you might want to contact them directly about matching your data up with their benchmark databases. The Custom Data Service (CDS) allows you to cleanse product database that you run in your ERP system…..it’s free for the asking. But you have to ask!

Hint: Questions are directly related to possible gains: but Action is required on your part.

Why clean your data up?

Clean, accurate price and product data is the foundation to several automated functions that your ERP system can perform. Several examples are:

1. SPA (rebate) collection velocity. Collect sooner using EDI

2. Generate current inventory velocity.

3. Increase Back Room velocity in purchasing, accounts payable, warehouse and account receivable. This is a long term project you can work on your own.

4. Pricing productivity (make more money per line item right now)

5. Sales productivity. We'll get into this more later on.

6. Greater Gross profit per order.

The recommendation is that you get your price and product file cleansed and start moving

toward back room productivity.

Be on the lookout for the new video series:

Seven Great Myths about Pricing or as some might say: The Seven Deadly Sins of Pricing.....

that series will be followed by step by step moves to get your inventory moving again.

In distribution, it is all about the cash. We don't make stuff. We pay for it, spend money to get it to people and they pay us for doing that. So start looking around!

Go on a Safari and hunt down the cash!!!

Cash is better than an American Express Card. And you can't grow without it.

SPAs: The Hidden Source of Cash

2010-03-13T20:49:00.000-05:00

The SPA Collection Lag is a Huge Hidden Account Receivable

Allen Ray and I were talking a couple of weeks ago on a Go-To-Meeting session. Allen kept asserting that the cash tied up in SPAs was pretty big. Of course we knew that already from the study we did a few years back with IDEA.

So I decided to flop it up in a spreadsheet and calculate it together. Here's what we came up with:

In this first example, a $100 million distributor with 30% of their business in SPAs at an average 40% discount from book would have uncollected SPA balances of over $3.3 million dollars. Ow. That's if the distributor is claiming manually.

If they claimed using EDI (assuming product database is cleaned up and SPA price notifications are received and load via EDI accurately)... and the distributor worked it out with the manufacturers to credit on Monday following the Friday they submitted claims... they would generate over $3 million in cash. Take a look... it's real. Worth putting someone on the case?

Example copyright Neil Gillespie and Allen Ray, 2010

In this example, the distributor might have a lot of State and local government business with 50% off book, and 50% of their sales in SPA business. This is a LOT of money, folks. Double Ow.

Example copyright Neil Gillespie and Allen Ray, 2010

Question is... how much would you spend to get your SPAs on EDI claiming? $$50 grand? What?

We'll keep this up on a tab so you can look at it again and again if you don't believe it.

Grow Your Business In Any Economy

2010-03-13T10:07:00.001-05:00

Author Neil Gillespie discusses seven myths about growing your business. Owners and managers need to dispel these myths before they can effectively grow, then learn the more than 12 ways you can actually grow business in this tough economic climate.

Click Here

Out of The Fire (of this terrible recession)

2010-03-07T14:45:00.000-05:00

Out of The Fire

Words and Music by Neil Gillespie

I made my way up through the warehouse,

And I got to here with a lot of hard work

I built this business with these hands, the sweat of my brow

So please forgive me when I wonder what to do now.

With a sudden flash, the party was over

The fire roared in and took all my gains

And I don’t know how I’m gonna get it all back again

And my people are looking at me all in pain.

I made my way out of the fire

But Lord, above where do I go now?

To get back to where I was

Just a couple of years ago,

I will go where I need to go,

But can anyone lead?

Found my way out of the fire,

Now can anyone lead?

Why don’t they want what we have to offer anymore?

When will the customers come back?

It feels so helpless, and in his time each man is Cain

Nothing I used to do to seems to work again.

So I’ll make my way back to the warehouse

I’ll automate with a lot of hard work

I’ll build this business back so we won’t go through this again,

Cause this time I’m gonna do more than ever before…

I made my way out of the fire

And now it’s clear what I’ve gotta do,

I gotta do more than just

The things that we used to do,

Gotta do new things for new people,

And I gotta lead

Learn to do new things for new people,

And I gotta lead

Learn to do new things

For new people….

And I gotta lead.

Guest Growth Wizard: Robert L. Webb

2010-03-06T23:49:00.000-05:00

From interviewing Bob Webb, a turnaround specialist, I learned that what he does is needed by every company... and perhaps that is the way we all need to view our companies at any point in a business cycle... we're always in a position to generate more cash from assets and increase productivity!!!

Bob Webb's Website

Which Customers are Killing Your Profits? The Same Ones That Can Really Improve Them!

2010-03-05T22:49:00.000-05:00

That's a good question. If you would like to increase sales and improve profitability dramatically at the same time, where would you do it? Naturally, at the customers that were numerous but unprofitable. But which ones?

The customers that are killing you are the same ones that can dramatically increase your profitability. They are the frequent customers that are giving you small orders. Take a look at this chart.

1. Measure your average order size for the company for all customers with $5,000 annual sales and up
2. Measure your average order frequency for all customers with $5,000 annual sales and up.
3. Measure each customer's order frequency and average order size against the averages. Mark them high or low. For example: a high order size (greater than the avg.) and high frequency gets a high-high.

4. How to rate the customers

High OS, High F = Best customers: give these special privileges: they are keepers

High OS, Low F = "Big Shot" customers: they need a frequency program

Low OS, High F = Frequent customers: give them incentives and promote a broader product mix to these based on the market segment to which they belong.

Low OS, Low F: = Unless you spot some big companies in here... relegate them to credit cards, these are tentative customers... jamming up your throughput and getting in the way of serving your best customers.

Frequent customers have the most potential for improvement

I've looked. It's amazing and there for the taking. You just need to do some MARKETING. You grow your sales and you grow your profits dramatically if you move frequent customers to BEST customers. Here's some reasons why this is great potential and so powerfully profitable:

1. Frequent customers typically find YOU. They wanted a brand you carried. They may have grown to over $10,000 a year but nobody made an effort to sell the whole product mix. Do it! It will pay off big when your average order size goes up against... the relatively fixed costs of servicing an order.

2. Frequent customers typically yield order sizes where the gross margin doesn't cover the transaction costs. Why? They found the brand they were looking for and don't buy much else. Your competitors are getting everything else.

Go ahead, figure it out. For a simple calculation, divide your operating costs by your number of orders. that's your average cost per transaction. It will stagger you when you compare this to the average gross profit per order of frequent customers. Then you will know what to do.

Six Ways to Grow Despite The Economy (I Lied about that)

2010-03-04T21:16:00.000-05:00

All right everyone. Have you had it yet? Are you still waiting for the economy to get better? It's not going to get better by much. So we have to get better at a number of things.

I Googled ways to grow in a recession and you know what I found? Not much. Practically none of it was about real growth, which is basically focusing on markets in a different way and focusing on different markets. Lot of things about selling sharper, some about keeping cash flow healthier, some about collecting receivables. But not a lot that focused on getting more from customers in different ways other than selling more stuff and finding more customers. There are more ways to grow than that and more ways to do those things as well. Here's an expanded set of growth methods. You need to have something going in all of them to diversify your growth portfolio as well.

By the way, there are actually seven more ways packed into number six for a total of twelve distinct strategies to grow.

Ways to Grow In Any Economy:

1. Keep more of the growth you already got. This isn't growth you say? Try looking at the customers you lost last year. How many were because of something you did or didn't do? What would have been your results if you didn't lose them because of those reasons. Do two things. Fix the reasons, and offer current customers special privileges that qualify. Others will want to qualify by getting in the exclusive club, too. But that's really what the next one is about.

2. Get More from Existing Customers. There is a science to this, and it has to do with identifying where your have potential to get more. Aside from the power of the special privileges idea, measure your average order size and frequency for all customers that buy a minimum. Then categorize all customers based on whether they are higher or lower than average on order frequency and order size. The Best customers are high on both measures: Keep them happy with special privileges. The frequent customers are killing you. Their order sizes probably don't cover the costs of servicing the transactions: Find out what they are cherry picking you on and market a fuller basket of goods and services to them. Make them want to get into the exclusive club. This is the biggest initial profit improvement opportunity you have.

3. Position in Higher Growth Segments Early. Place your bets, everyone. If you get higher share of the faster growth segments, your overall growth will be better than competitors. Don't wait until a market matures: the profit potential is all gone, you won't be known in the category, and it will be harder to compete once others have advanced up the learning curve. Find out what you need to do now and start doing it.

4. Create Demand. Can't be done, you say? Do you think that all your customers and potential customers are aware of all their issues? Do you think they have any problems for which they are not aware of a solution? Do you think there are no women that complain about their kitchens, or bathrooms or lighting or window treatments and want solutions? Identify the seven biggest problems in a niche application. Then talk about them. This will awaken demand for a solution... which you offer... next. But make them click through to your website to get the answers... after coughing up their contact information.

5. Wedge into Competitors customers (next blog entry... this is too much fun and there's enough here for a whole post!!)

6. Move into adjacent markets... (again... for a whole blog post after the "wedging" strategy, there's seven growth techniques right inside this one)

Find Your Way Home to Growth

2010-03-02T08:52:00.000-05:00

I was out in Vegas at a conference February 24-28 to learn how to be a better speaker and marketer. My friend and I went to a blues bar and heard the most stunning rendition of Steve Winwood's "Can't Find My Way Home". It was forlorn and touching and reminded me of all my friends in the wholesale distribution industry.

So where's home? Back to prosperity, back to feeling good, back to not feeling threatened. Back to safety. Back to growth.

Remember Dorothy in the Wizard of Oz? She wanted to leave home and then spent the whole movie trying to get back home. And Wow.... It seems like everyone has escaped to the storm cellar like Dorothy's family in the Wizard of Oz. We're riding out the poor economy and waiting for something to happen. And some of us are Dorothy, wandering around and searching for the way to get back "home"

This is especially bad since we forgot our growth skills when the economy was booming and we didn't need them. What I sense now is that we've lost confidence.

Let's get back to what makes things grow.... starting with the most prolific growers on the planet: trees.

Trees grow by putting out extensive root systems to gather solid nutrients and oxygen from the soil, also water. They deliver these nutrients through a cellular distribution system to bud clusters that create new branches on the outer part of the tree. The tree makes food for itself by reaching for the light (photosynthesis). Trees devote 80% of their total energy to creating "meristem" cells: intense areas of growth in two areas: 1. Bud clusters that create new branches and 2. Cells on the outer part of the cambium, or the core of the tree that distribute nutrients to the rest of the tree, especially the bud clusters... the most intense areas of growth.

Let's make a parallel to that with your organization.

Solid nutrients and oxygen = getting knowledge
Water = Inspiration from hanging around the right people
Reaching for the light = reaching for the truth about customers, how they run their business, how they need to run their business and how you can help them

So I ask you... what new things are you and your people learning to do? Who are you hanging around or learning from to learning new things and get inspired? What questions do you have of customers and how are you investigating what customers need? How are you getting better and getting your message out to customers? How are you learning to use resources better with your knowledge and inspiration "distribution" system that allocates resources to these areas?

Make like a tree. Put down some roots into learning how to do new things, get into new markets, learn about customers, learn how technology can increase productivity, improve cash flow, improve your marketing, get your message out to customers.

Get out of the storm cellar. The storm is not what you think it is. The economy won't return to save the day, but you can make your own "day".

Growth is all about making the unknown known. Whatever it is that you don't know about your markets, or don't' know how to do, learn it. The unknown is your friend. It is the key to growth.

Dorothy, after all, found out that it wasn't the wizard that was going to take her "home" at all. It was within her to do that for herself all the time.

Make like a tree. Somebody holds the key: You.

Take it Steve. Take us Home.

Steve Winwood: Can't Find My Way Home

Come down off your throne
And leave your body alone
Somebody must change
You are the reason
I've been waiting so long
Somebody holds the key
Well, I'm near the end and I just ain't got the time
Well, I'm wasted and I can't find my way home

Come down on your own
And leave your money at home
Somebody must change
You are the reason
I've been waiting all these years
Somebody holds the key
I'm near the end, and I just ain't got the time
Oh, and I'm wasted, and I can't find my way home

But I can't find my way home
But I can't find my way home
But I can't find my way home
But I can't find my way home
Still, I can't find my way home
And, I ain't done nothing wrong
But, I can't find my way home

“Never in my lifetime did I expect this would be so severe!”

2010-03-01T11:08:00.000-05:00

“Never in my lifetime did I expect this would be so severe!”

“The value of my business evaporated 30+% before my eyes. I couldn't stop it! I don’t have time to figure out what went wrong. My banker can’t or won’t help. Cash is short. I am tired and it is no fun anymore. I have no clue when this will end".

Sound like you and your business?

All types of distributors are expressing the same type of bewilderment at the loss of business value that they have witnessed during 2008-2009. Tough choices were made to survive and some have hunkered down. Others relish the challenge to rebuild. Which are you?

But, first things first! Generating cash and profits should be at the very top of your list as you move forward. Here are some rules you need to live by:

When you sell product, whatever it is, you need to cover all your cost and make a profit! That may mean that you change the settings in your ERP system to establish a floor on gross profitability that you must have. Don't let your people hit the panic button and discount the whole order!
Look at your operations in a profoundly different way. Why? The old way isn't working. You gotta change your back office if you want to rebuild your business. Can you do it?

On this lighter side, there is a time when you may recall the Miller Lite Beer ad: Less Filling….No, Taste Great Taste……What a mental argument and it is not about the beer right now! It is about how do you gain operational productivity (to grow GP dollars) and grow your business at the same time? What to know how?

Growth Wizards will offer up both sides of that argument….because you don’t want to grow your business without profitable productivity! Selling product for the sake of selling product, won't grow your business value.

Remember, you just went through adding variable cost in this last burst of what you thought was growth. Do you want to build your business on the same false allusions again?

In the end, you’ll want to change the way you operate your business! Want to explore some alternatives? Get signed up @ http:// growthwizards.com

Profitable Growth for Wholesale Distributors

2010-02-28T08:29:00.001-05:00

http://8stepstogrowth.com Neil Gillespie's Profit Triad and The 8 Steps to Breaktthrough Growth are the most powerful growth concepts wholesale distribution has ever seen.
Get the first two chapters of this soon to be released book for free.
These concepts are exactly what you need to climb out of the recession by creating market leading productivity and an expanded vision of growth opportunities in multiple directions
Respond now and you'll be one of the first to get a special offer on the pre-release version of Neil's complete book.

Max Growth is Dead

2010-02-28T02:50:00.000-05:00

Obituary
Max E. M. Growth

February 14, 2010
Valentine’s Day

Max E.M. Growth, husband of Minnie M. Growth,
father of Prophet Abel Growth and Mora Munny,
died of gross disappointment in the economy
and lack of belief that he could change the prospects
for the business he loved.

It was a steady decline in the will to live than began in late 2008.
Heartbroken and weary,
wife Minnie said he just didn’t believe in anything anymore.
“It was like someone threw a match in our barn
and burned it all down. He just couldn’t take it any more.
One day he just didn’t wake up.”

Max was loved by every small business in America.
He was a friend to all.
Everyone wondered what happened to him,
but did nothing to revive his spirit.
They simply wonder which of their friends will be next.

Have You Given Up,

Or are you ready to consider different ways of reviving Max

You never before considered......

Creating Demand

Taking share from competitors

Getting into new products and services

Serving new types of customers

Vertical Integration

New Store Formats

Geographical Expansion

Recession Still Got You Down? Take a Walk

2010-02-12T09:11:00.001-05:00

I'm going to demonstrate one example of looking at opportunities with a new set of glasses that reveal growth opportunities you didn't see before.

But "Mom" is running your business, so you're kind of limited. She's the one that told you to stay inside until it stopped raining. Well, the rain is still coming down, or at least it's still cloudy. The thing is, it's raining on all other kinds of distributors in your town as well. Everyone is sitting back and staying inside until the rain stops, for the most part, the "rain" being the lousy state of industry demand.

All independent distributors could be missing out on an opportunity of a lifetime, though.

Let's look at the case of five independent distributors: an electrical distributor, a plumbing distributor, an industrial distributor, an HVAC distributor and a safety distributor in an extended metro area. The electrical distributor has five branches, a small central distribution center on a large plot of land and an excellent business system. The other distributors have a good name in their respective trades but their systems are not nearly as good and they are single locations.

The Electrical Distributor Owner calls them all together to talk about merging. The discussions go well until somebody says "We'll lose our product expertise if we have salespeople sell everything." "Customers will hate it." "We'll lose market share." And he would be right. Except that's not how you do it.

Depending on the nature of the business, there is an appropriate way to integrate a growth initiative. When there is a lot of overlap in customers, but you need specific product expertise in a trade, the right strategy is to integrate back room operations but not front room operations. You could integrate purchasing, warehouse, delivery and accounting. But you would probably keep separate inside sales, technical support personnel, pricing and outside sales for each of the trade groups.

This way, you would gain some amazing density of business in the territory. That gives you a natural productivity and cost advantage. But you would have to work with your business system provider to consolidate orders taken by different inside sales people, your web storefront, or EDI orders from stock that are to be delivered to the same place. You would have to re-engineer picking and packing to make sure different departments in a plant got their individual packages. But you certainly would not want two trucks going there each day if you didn't have to. The big bang for the buck would come from the gross margin per order picked and delivered against the logistics costs, and the consolidated warehouse operations. (see my prior post on density)

There's only one thing wrong. You're all independents. You all want to remain independent. But that's what's keeping you inside until the rain stops. Put on your raincoat and trot down the street to somebody else that's in the same boat as you in another vertical. You both could stand to gain. Then go see some more of your buddies.

You may be thinking I am crazy. But that is precisely what I saw HD Supply planning to do before they pulled the plug on Nardelli (Bob Nardelli, former GE Executive and Home Depot CEO). Stockholders didn't have the patience for the plan to bear fruit, which would have taken 5-10 years. So they cut him loose. The thing is, his plan could have added another 6-10 points of profitability on sales to the bottom line at least, and improved asset turns as well. They couldn't wait.

With the coming commercial real estate meltdown ($2 trillion of properties coming up for refinancing in 2010-2012 that are 30-50% down in value against loans that are now higher than the value), credit will remain tight and business growth will be curtailed. I don't' see demand heating up above 2-3% growth until 2014 or after. So you have plenty of time, and no "stockholders" other than yourself to hold you back. Make the call to the other guys and start something going. Work on a new "Profit Triad" together. If you don't know what "The Profit Triad" is then look over to the right sidebar for past posts. Or get a hold of my new book, available in March. You can get the first two chapters that talk about the Triad for free by going to www.8stepstogrowth.com.

I know, I know. It's hard. You're grieving. You're still mourning the "death" of 1/3 to 1/2 of your business. You put all that effort over the years building your business and it feels like somebody just threw a match into the barn and burnt half of it down.

But let me tell you something. I know a guy that just won a lawsuit where someone was wrongfully suing him for every penny he had. It went on for eighteen months. After getting very depressed, and feeling no motivation to make one more dollar that someone else was just going to take away unjustly, he finally decided to do something for himself. He went to a meeting of extremely motivated, smart entrepreneurs put on by Glazer-Kennedy Insider's Circle and came back energized. He wrote a book. He started doing videos... planned a whole new business platform. And why? To help you. He had a story to tell, and he wanted to tell it to you to get you out of your funk.

That guy was me.

So listen up. Stop feeling sorry for yourself. Get out and take a walk in that rain over to some folks down the street that felt just like you did.

The rain isn't what you think it is. Getting out in it will refresh your soul. Mom was wrong.

Starbucks in the Bathroom? Who Woulda Thunk It

2010-01-27T01:02:00.000-05:00

"We've got too much of everything and it's all the damn same."

"Starbucks ran out of places to put Starbucks except the Men's rooms of Starbucks"
"You don't need a Best Buy on every corner"
"You don't need Chili's, an Applebee's etc... four of the same type eating places in the same intersection... 3 of the four are unnecessary".
"We only need so much of the same stuff"
"The dreadful sameness that has occurred in the marketplace is a big, big problem"

- Dan Kennedy at a Philadelphia Glazer-Kennedy No-B.S. Marketing Meeting

Legendary marketing genius Dan Kennedy spoke at a Philadelphia chapter of the Glazer-Kennedy "No B.S." Marketing Organization last month. Yes, I am a member and an avid fan of the "professor of harsh reality". He explained that during the boom, when there was easy money and high incomes, "dreadful sameness" could exist. But not any more. Now you need a PROFOUND REASON TO EXIST, something that sets you apart from the other players in your market.

if the market is 30-35% down vs where it was, the worst 1/3 of competitors will get flushed out. Or at least the potential is there for that to happen if the smarter bears eat the dumber bears' lunches. Kind of like Jack Welch's "decimation" strategy. The market gets rid of the bottom tenth of performers if the market slips 10%. If you are third on everybody's buying list, you're not going to make it. You have to be first in perceived value. How? Have the rules changed? Yup. But we're standing around like deer in the headlights wondering what to do. Eat some lunches. But learn how to eat first.

Money moves for a reason, but not for the reasons we expect.

Kennedy explained that there is always a certain amount of money in circulation that moves. There's less of it, sure. But it moves for very definite reasons. Some of the money is parked. Private capital is tied up in bank accounts. It's like a new form of "civil disobedience". In Beverly Hills, the number of purchases being delivered to homes has gone up 20X in the last 20 months. They're embarrassed to be seen carrying packages down Rodeo Drive. They are respecting other people's recessions. But the money does move if you get at the reasons that will make it move, or ways to get around their objections that satisfy their desire to buy without being seen. It's one of the reasons luxury cars are taking it on the chin. There's a war on success going on. Stay tuned.

We've Stopped Trying

The good news, Kennedy says, is that some of your competitors are gone, or soon to be gone, and MANY ARE JUST NOT TRYING. They're standing around waiting for the market to come back. They think doing anything else is futile, and it has reduced the number of people really competing for the available dollars. Are you one of the competitors standing around?

The point? It's time to start go after the competitor's business but in another way you may not be used to. What's that? You have to be about selling something other than "stuff". Sure, you still bill for the stuff. But the reason they buy the stuff is what you need to get at.

This is me: You need to make it about the relationship with the customer and not just product usage. There are many facets to the relationship that are not about the "stuff" you sell. When you understand how to make your business about more than products, you will take share from competitors in your business. They will gravitate to you if you research what "it" is, respond to "it" and tell your story. Somebody is always going to be cheaper on the same or similar stuff. So don't compete on that alone. In fact, it should be a smaller part of how you compete. Much smaller.

Think of all the things you personally thought about buying this month but you didn't. Why not? Were you being responsible by not buying? Kennedy says people buy stuff from a source (or not) because their decision is aligned with a strong personal interest. What IS that? If you are selling something that is not aligned with a strong personal interest, you are fighting an uphill battle. So, you have to get to know your customer's very strong interests in this new rules market. What compels them to do what they are doing? Or not doing?

Better Drawers or a Great Anniversary Present?

Dan tells a story about closet remodeling. He went to a store but didn't buy. He thought he really didn't NEED better closet organization after all. Do you really need better more organized drawers, or do you want to satisfy your wife for your anniversary? If the closet is something she's been bugging you about for a couple of years, put a piece of jewelry in her favorite drawer when the installation is completed for your anniversary present. you'll be golden. If the salesman would have sold an anniversary gift instead of solid wood drawers, he would have gotten a sale. He though he was in the closet business. He needs to be in the marketing business, says Dan. Marketing gets at the real reasons for buying.

Dan goes on to say that people are wrong about money more than half the time. He says you must align what you sell with people's most driving personal interests, and you will avoid having to be the lowest price on everything all the time.

Ask the Right Questions of Customers and Yourself

OK, now this is coming from ME. So what are your customer's driving personal interests? How well do you know their business and how it works? Could you put together a pro-forma operating statement of their business if your life depended on it? Do you really know how they make money? What their PROFIT TRIAD looks like? Do you know how they look at segments of their business and how much they do in each segment? Which makes the most money for them? How? How you could help them be successful in each? Have you asked them what it takes to be successful in each? Which segments they think have the most potential? What new adjacent businesses THEY are thinking of getting into? Do you know the business owner's hopes and dreams for his business? What his personal goals are that the business has a role in fulfilling?

Could you put together a flow chart of their work processes so you could actually describe how your services help them and exactly where? At your industrial OEM customers do you know what marketing is working on in terms of new products that will eventually trickle down to engineering at an OEM customer? Have you figured out how to help them early in the design process?

The more you focus on what YOU do, the more detached you become from your customer. Learn your customer's business better than you have ever before. Learn it like you had to operate it to make money in it.... better than any of their competitors.

If You Hang with Turkeys, Can You still be an Eagle?

Dan has one more piece of great advice: the principle of associations. You may be saying "This stuff won't work in MY business". He says "you cannot outperform your most persistent associations".

If you hang out with a bunch of people that hold certain outmoded beliefs about how things work, you will not be able to outperform them. They will suck you in to their belief system over and over again, and your performance will not change.

OK, me again. I have found over and over again that a really good idea gathers a lot of attacks. It is viewed as insane at first. You have to beat it into people's heads rather than worry about somebody stealing it.

So keep selling that stuff and doing what you do. Just like your competitors. How's that working any more? The alternative is to find a way to really understand your customer's business. You won't get that out of a report, either. It only comes to those that care enough to investigate it personally.

If you're an owner, and haven't visited a customer in a while, or asked them some really great questions about how their business works, maybe you ought to set the tone for the rest of your company. Get out and do it yourself at the top levels.

If you'd like a set of questions... send me an email at 8stepstogrowth@gmail.com. I'd be glad to oblige. Once you start this, you're going to love it, and you'll get the hang of it. It will feel foreign at first, like learning to play golf the right way after you learned the wrong way. Your customers won't want to let go of you, though, once you get in the "swing" of it.

“Judge a man by his questions rather than by his answers” - Voltaire

Hammers will be Hammers.. What else can they do?

2010-01-26T00:49:00.000-05:00

Ever hear the saying that if someone has a hammer, they will try and make everything look like a nail?

I predict there will be detractors of THE PROFIT TRIAD. They will say it has nothing to do with sales and that's bad. Well, it just happens to START with Sales. The detractors probably don't recognize that Sales is a driver of Density on top of THE PROFIT TRIAD. They are simply hammers looking for nails, hoping you'll stick to thinking of your business in simple terms that favor their limited approach. Density, after all, is a strategic concept, a strong reason for getting sales and market share. It makes you more productive in your territory and with increased volume, sets you up to create economy of scale by automating operations and driving productivity. Productivity builds on density. GP$ per order leverages both.

You need all three: Density, Productivity, GP$ Per Order. Sales comes under Density. If all you're good at is sales, and there are many that are, you're missing out on the opportunity to send about 300% more profit to the bottom line. Do all three.

So why would someone be a detractor from the Triad? By doing this, they will try and make you think that a complete toolkit in a toolbox doesn't have any hammers. They will hope you won't look in the toolbox. They will make you think it is lacking something so you won't look. They will take advantage of most people's tendency to stay with what they know and forsake what is different and new.

So take a look in the box and read my upcoming book: "Discover Your Core and Go For More".

See for yourself. It'll be out next month.

Now for more about the completeness of THE PROFIT TRIAD.

At the very top, in the leading position of THE PROFIT TRIAD, is Density of Business. How do you get Density? Leading Market Share. How do you get Leading Market Share? Sales, right? Not so fast. Leading value comes first. Then sales.

You can't sell and promote your way to success for very long if you don't back it up with value. And believe me, you're among a bunch of competitors that are essentially selling the same stuff right now and suffering because of it now that customers can be ultra-choosy. So let's just sell harder, right? Sell smarter, they'll say. Whatever. They would be right about that, but may not be able to explain themselves. Here's what selling smarter might entail in this new environment.

You need to do something different to win in this "new" environment. Something that offers value beyond the stuff you sell and takes a hard look at the elements of value in the customer's new set of recession-intensified terms. You have to nail that and appeal to that better than ever vs your competitors and that will take incredible understanding of your customer more than ever before in your life. You don't discover what to do by thinking about what you do. You study what the customer does.

"Discover Your Core, Then Go For More" is not only full of information on wedging into competitor's customers, but other growth strategies as well. And there's a dynamite chapter about "3D Marketing" that helped Roden Electrical Supply harness and focus the sales energy of suppliers and sales people at all points of sale. It focused joint efforts on selling a broader mix that drove profitable sales because there was a three point, PROFIT TRIAD plan behind everything we did.

Oh, the next thing they will try is to convince you that you can't absorb all of this anyway. "This is a simple business."An appeal to the less industrious tendency in most people. Are you one that will fall for that?

Then there will be the "This is Nothing New" argument, to which I say "I never heard YOU talk about it." And how about showing me someone that did? Actually, I have seen people talk about Density, and I've indicated those in my book. And you can get plenty on productivity, but not quite like you'll find it in the book. Different people talk about Gross Profit Dollars per order. But none with the force, importance, and understanding of how to achieve it it in my book. And nobody talks about the exponential power you get with the integration of all three and the understanding of the relationships of all three.

Finally, they will capitulate, and start aping us. They will put different labels on the three things and claim the concept as their own. That's how you know what you have on your hands. Observe the pattern of their behavior. Apes have no foundation or substance or real understanding of those they "ape". They just show you the outer gestures on the "surface". Could they suddenly have gained deep understanding of the Profit Triad concepts overnight? Why did they start defending their approach and suddenly come over to the other side and claim they are better at the very thing they attacked at first? Makes you wonder. I hear there's a lot of politicians jumping ship, too. November's getting closer.

Life is too short. When I see something that somebody does that is great, I appreciate it for what it is.

Yes, sadly there will be attacks... which should make you wonder... why? Is there something they fear about this?

So just get the book and find out for yourself. Look on the sidebar for a special offer on the first two chapters.... FREE. I guarantee you won't be disappointed. Unless you let the detractors talk you into sticking with just hammers.

Welcome to Growth Wizards(TM) - Allen Ray

2010-01-24T12:26:00.000-05:00

Hi. I'm Allen Ray, President of Allen Ray Associates. The Economy is not yet growing. That doesn't mean there's nothing you can do to improve your results, either in productivity or growth. In this video I make the point that learning your ERP system better can automate your back office and put 2-4% more profit on the bottom line. After optimizing productivity you can get out on the growth trail with ideas and direction from my co-founder of this site Neil Gillespie plus, other guest "Growth Wizards" we'll have on this site. We want you to keep coming back here for knowledge and inspiration.

Why should you? You'll return more profit to the bottom line as you grow when you don't have to add so much variable cost: mostly people. Business flows more smoothly, people are happier, profits are higher. Watch the video. Take the action it prescribes. Generate cash from existing operations. Use it to get out on the growth trail - Allen

Click Start button on bottom left of Video

Three Things That Will Change Your Business Forever - Neil Gillespie

2010-01-19T20:33:00.001-05:00

Is this the first time in your career that you are truly concerned about how to dig out of the rubble left behind by the recession?

That's the way most of the distributors we surveyed feel. They feel like they put a lot of effort into learning their business, building their business only to have somebody throw a match into their building and burn 30, 40, 50% of it down.

Well, there's hope. But it means you will have to think differently. Adopt a new set of lenses to view both productivity and growth. If you adopt these two new things, you can generate cash from productivity and invest it in new ways to grow that you never considered or might have written off before. Let's start with a new way of viewing productivity: The Profit Triad.

(Click Start Button on Bottom Left of Video)

Have you ever scratched your head at traditional financial measurements based on operating statements and balance sheets?

Do you view finance, marketing and operations as separate disciplines with their own set of unrelated measurements?

Have you ever wished you knew how all these measurements worked together so you could drive profitability with ACTIONS rather than a spreadsheet?

I can tell you that I did too. It always bothered me that people viewed things in this "dis-integrated" way.

I had to find a way to show the relationships between 1. Value Positioning & market position, 2. Operations productivity and 3. Marketing & Sales.

Something always stuck in my mind that the financial measures came out the way they did because the market strategy and operations strategy worked together. But how?

After helping Roden Electrical Supply grow 500% and triple profitability in 10 years, and studying how companies like Amazon and Southwest did it, I hit on THE business model for any company to integrate all these measures to drive profitable growth.

The Profit Triad rearranges everything you used to do into a holistic blend of marketing, productivity and margin generation measures that I believe will make more sense to you than any accounting approach ever did. Because you're a business owner, not an accountant. This is for business owners.

The Profit Triad focuses activities to optimize three drivers of profitable growth in a business. Adapted for any company that sells and delivers services to customer sites, these are Density of market share per square mile at the top, Leadership productivity at the bottom left, and Gross Profit Dollars per Order on the bottom right. All other Productivity and financial measurements fall under these three. They also leverage each other marvelously, one enhancing the other. I'll talk about how in a subsequent post.

Want to learn more? Take me up on the offer to download the first two chapters of my new book. Then return here and tell us what you think, or ask us questions by clicking comments below.

Get your FREE copy of the first two chapters of Neil Gillespie's new book by clicking here:
Discover Your Core, Then Go For More.

The Metaphysics Of Growth

2010-01-15T11:29:00.001-05:00

Allen and I created a presentation on our survey yesterday, submitting that you have to allow yourself to think differently about productivity and growth. Why? Because Growth happens when you break free of an old pattern in favor of a new one. Then you step back and consolidate before doing it again. That's the pattern of growth. It is exactly what is in my Eight Steps to Growth Method, and exactly what Salim Ismail, a major league angel investor and innovation guru says in this presentation.

I remember my days in GE, where I would go out into the market and study competitors, customers, our people, other companies in similar but different spaces, to learn what to do and how to do it. I'd spend 3-6 months learning and 3-6 months planning the system and implementation, in cycles. Most of my associates thought I was nuts. Why didn't I pay more attention to the day to day? There ain't gonna be a day to day if you don't get out in front of it.

Take a listen to this.... it's profound. You can use the controls to jump ahead if you get impatient.

Salim Ismail Metaphysics Of Growth

View more presentations from Rashmi Sinha.

How to Grow Despite Low Economic Growth

2010-01-07T16:01:00.000-05:00

The Economy lost another 85,000 jobs in December. UPS is cutting 1500 jobs. The GOVERNMENT lost 21,000 jobs in 2009. Is it getting better? Not really. The Wall Street Journal says the 7.2 million jobs lost in this recession won't come back. We're still purging the weakness out of the economy. Meanwhile, the best ways to grow YOUR business based on my growth formula are: 1. Customer retention. 2. Wedge into competitor's customers. 3. Product and Service Adjacencies. Why? They are all based on either keeping your own business or getting into somebody else's existing demand.

Adjacencies are most important because they offer the highest potential gains. What's an adjacency? A commercial cleaning service, for example can also sell, clean and change floor mats. They can water plants. This can be very profitable because you add gross margin to cover the fixed costs of sending crews out. The trick is learning how to study a business quickly, then provide the product or service better and more productively than a competitor.

Allen Ray and I conducted a survey of distributors in different verticals in mid-fall. We asked how they dealt with the recession and how they were planning to go forward. Here are some of the results of our survey of distribution on the Recession and what distributors did to survive it, plus what they intend to do to climb out of it.

If most didn't expect things to be this bad, then they probably won't expect things to stay stagnant, either. That could turn out badly, because it will cause them to stay as one trick ponies. Will you be one of them? Or will you start protecting customers, taking share and adding adjacency growth initiatives NOW?

Stay tuned for more results.