Pumping Up Profits

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Digital Library > Building and Inspiring an Organization > Management development"Pumping Up Profits"

FastTrac brings new focus that helps profits flow

"I've been in business for 20 years, but for the first 19, I was winging it," admits Tom Bowles.

Owner of Aquatic Environments Inc., a pond and waterfall construction business in Ocala, Fla., Bowles was especially frustrated over financials. "I thought it was good if there was a plus at the end of your P&L statement," he says. "But that doesn't necessarily mean you're making money."

FastTrac has shown him a new way: "The course gave me a complete understanding of financials — from forecasting to doing a break-even analysis."

As a result, Bowles has improved his company's profit picture. Aquatic Environments generated revenue of $750,000 in 2003. This year the company is on track for a 50% increase. Overhead costs decreased by 40%, and net profit margins more than doubled from 5%.

Here's how he's doing it:

Focusing on profits. Bowles has stopped selling unprofitable holdover items from the pet store he used to own, such as aquarium fish, and concentrates on his core business. He also jettisoned lower-end items, such as fountains priced under $100, while adding higher-ticket products.

"We realized we couldn't be all things to all people, so we looked back to the core of the business and focused on what generated profits," Bowles explains. "Instead of being led by feelings, we're now led by facts."

Changing venues. Aquatic Environments moved from pricey retail space to a nearby warehouse facility, which provides the same amount of space for half the cost.

What's more, the new environment has a showroom, which allows for better presentation so that products are no longer scattered inside a building and outside on a lot. Everything is now consolidated under one roof with better lighting.

Says Bowles: "Customers have actually said that they're more motivated to buy now because of the atmosphere."

Marketing with a plan. Sporadic, unfocused efforts have been replaced with target approaches, spurred by a marketing consultant Bowles met through FastTrac. Instead of targeting a mainstream audience with newspaper advertising, Bowles now targets real estate developers and consumers with direct marketing.

A revamped Web site that will operate as an online catalog is also in the works. Photographs of customers' homes will upload to the Web site, where customers can access photo-imaging software to see how products look on the customers' own turf.

Staking family boundaries. Aquatic Environments is a family business. Bowles handles construction and installation, his mother oversees marketing, and his daughter supervises accounting and purchasing. A lot of intermingling went on, Bowles admits.

In the FastTrac program, family-business speakers stressed the importance of boundaries. Consequently, the Bowles decided to stick to their areas of expertise and stay out of each other's way. "It allows us to be more productive — and we have better relationships with each other," Bowles says.

Weeding out staff. Bowles reviewed employee productivity and fired five employees who were not passing muster. Tough to do? Not really, Bowles says: "I found out that I agonized over it much more than they did."

Tip: Bowles' mother and daughter attended FastTrac with him, which turned out to be a real plus. "It was easier to initiate change because we were all on the same page," Bowles explains. He plans to send one of his managers through the program. "Also, we were able to compare notes while everything was fresh in our minds. I may have picked up on something they didn't and vice versa."

In addition to gaining financial savvy, Bowles has embraced strategic planning. "Before it was business by fire — my attention was on whatever was burning," he says. "I always used the excuse that business changed so quickly, I didn't have time to plan."

Yet Bowles discovered that planning pays off — faster than he ever imagined. Bottom-line results began to show up within 90 days of implementing new tactics.

"Taking FastTrac was a life-changing experience," Bowles says. "I feel much more confident and in control than ever before."

Writer: T.J. Becker

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