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Are you spending as much time planting beans as you are counting them? A company I know includes the following statement in a list of guiding principals printed in its employee handbook: “The pursuit of profit through reduced cost and improved efficiency, which will create a beneficial environment for employees and a continuous supply of services and products for customers.”

The statement is fine as far as it goes, but it unfortunately focuses on cost control instead of revenue building to make a profit.

The past 18 months or so have been among the worst ever for industrial and construction distributors. The business slowdown has forced everyone to take a close look at expenses and cut anything that either didn’t improve the bottom line or grow top-line sales. In times like these, distributor executives are grateful to have a topnotch accountant or financial manager keeping an eye on spending.

Having said that, however, you want to be wary about focusing too much time on cost cutting and bean counting. Although every dollar saved drops to the bottom line, you need to spend an equal amount of time — if not more — developing and revising your strategy to grow your business and increase market share.

I have nothing against accountants. Every business needs managers and numbers crunchers thinking about how to get the most yield from what it has already planted.

Today’s successful (surviving) distributors must think strategically, not just tactically. You need marketers who can gather critical intelligence about customers and competitors to help you make informed decisions about how to expand your reach into new customer segments, launch new services and grow your market share.

This editorial appeared in the July/August 2002 issue of Progressive Distributor magazine. Copyright 2002.

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