As always, Mitch’s knowledge of our
industry allowed him to add a very personal touch to this presentation.
Mitch is a partner in M.S. Ackerman & Co. LLP specializing in individual
and corporate taxation as well as mergers and acquisitions. Mitch also
works with the AICC… Association of Independent Corrugated Converters.
He began is talk with the statement that
“there is no substitute for profits… it’s no longer possible to buy low
and sell high!”
Following are the 10 Steps to
Profitability presented by Mitch.
Work Your Niche – you have two choices
to be profitable… be the low cost producer in your business
OR dominate your niche. This can start with a SWOT analysis of your
business… Strengths, Weaknesses, Opportunities and Threats.
Hire managers with Passion. Hire only
natural leaders. Show people you care. Install formal
performance measurement systems. Have regular meetings to discuss
Know your costs. This step has been
moved from #5 to #3 because it is becoming increasingly important.
Focus on contribution and keep it simple.
Deal from strength. Don’t let a
customer, vendor or an employee see weakness. Stay away from
temptations to price cut.
Don’t coddle sales people. This is
really a spin off of #4. Don’t overpay and fear the loss of a sales
person. Pay incentives based on new accounts. Let them know where
the company has an edge and motivate them to sell it.
Initiate Waste Control. Too much waste
can kill and every cent saved in waste goes right to profitability.
Motivate employees. Delegate! Listen
to them and empower them. Make them feel they can contribute.
Forge vendor relationships. Treat
vendors like you want to be treated by YOUR customers. Show them
loyalty and fairness and they’ll take care of you when you need
Be a Booster. Be perceived as the
“home team”. Support the local community and get involved. Local
businessmen like to deal with people close to home.
Be careful with capital. Withdrawing
too much capital from a business can be as deadly as not investing
As a reality check, at least once a year
you and your key people should go off-site for a day or two and have a
“no holds barred” review of your company. Listen to your people and
agree on at least two to three… but no more than six specific
objectives. Create a measurement mechanism for each to track your
progress. Most importantly, communicate these objectives to all of your
For more detail on this topic from Mitch,
see the March 2000 issue of Paperboard Packaging.