Leveraging the Real Superpower of a Cheetah
In a recent meeting while discussing the challenges of satisfying demand in the midst of interrupted supply chains, shortages of labor, and input costs that are anything but stable, the board president reminded the group of the Cheetah…
The Cheetah is the fastest animal on the planet. It has been clocked at speeds of 75 miles per hour. The general assumption is that “speed” is its superpower and why a Cheetah never misses a meal. But their real superpower is about something else they can do extremely fast; change speed and direction.
Researchers have found a cheetah can slow down by up to 9 miles per hour in a single stride! It’s their ability to quickly change direction and readjust their course that makes it extremely hard for any other animal to escape, once in pursuit. In fact, the researchers found that Cheetahs typically don’t run faster than half speed when they are chasing their prey. Yes, half speed is still fast (30-35 mph), but in comparison (for the Cheetah) it means more control for those quick adjustments.
Let’s face it, we are in a rapidly changing business environment. With nearly every input cost rising, if you aren’t watching your bottom line closely you could be operating in the red and not even know it. Many small businesses live in a cycle of sell first and see what is left after the dust settles vs a Profit First mentality.
The sell first model is never recommended, but in a normal business climate where input costs are relatively stable, businesses can usually get away with annual adjustments to the prices of their goods and services. But when every input cost in your business seems to be on a pogo stick jumping up a set of stairs, annual adjustments are not enough. If you sell commodity products, this can be even more challenging because the inputs you can typically predict are out of your control.
Agility in your business….
One of the biggest advantages small businesses have over large corporations is the ability to make quick adjustments; to be agile, to adapt quicker in a changing market. A small business has a lot more Cheetah in them than a Fortune 500 company with layers of management and bureaucracy.
In our current business environment, rising input costs are impacting all businesses regardless of size. Though they are less agile, the reality is larger corporations typically have more eyes on their financial numbers than their more nimble counterparts. So even though a small business has the ability to quickly adjust a price up or down, they are rarely the first to do it. It’s not because the small business can’t adjust, it is because they aren’t watching their expenses close enough to know they need to!
You must know your numbers and know them as close to real time as possible. A good place to start is coming up with some quick ratios you can monitor to see how well you are performing, if you don’t know where to start on this a trusted advisor could provide you some insight. Maybe you need a Chief Financial Officer or Controller, but don’t feel like your business warrants this full-time position. If this sounds like your situation, there are lots of great options for out-source or fractional CFO’s that should be able to help you get a better financial snapshot of your business.
The bottom line is the business environment is ever changing, but there are times when those changes come at a breakneck pace. This is one of those times. We can debate all day what is causing it, but that doesn’t change the fact that it’s happening, and it is likely impacting your financials. The question is are you on top of it? What are you doing about it? Are you making quick adjustments? Are you leveraging the real superpower of the Cheetah in your business?
As always, we value any comments you have in the space below.
Chris Steinlage Kansas City Business Coach