Profits Aren’t Everything, They’re the Only Thing: No-Nonsense Rules from the Ultimate Contrarian and Small Business Guru
by George Cloutier
“Business comes down to how hard you work, how smart you work, in good times and bad. Do more. Get more. And be ruthless in your quest to make money.” George Cloutier (p. ix)
Cloutier is consistent with the above statement throughout his book. It is a book that Gordon Gekko would love because the relentless theme is the priority of profit and the choices a business person must make to keep and maximize it.
His no-nonsense rules are spot on: monitor your numbers and manage your cash flow closely as it is the lifeblood of the business. Fight hard for every sale, weed out bad performers quickly, manage your collections and payables to your advantage, and reward profitability. He forces readers to face the reality of their actions on the success or stagnation of the business when they are tempted to blame the markets, economy, or others. Focusing on collections and managing the budget are practical knowledge but businesses will take their focus off of it to their detriment. Nothing new here but my experience has been that some businesses fail to execute proper management of these pitfalls.
His section for family business (“the best family business has one member” is worth considering for any family-based business. I have seen the negative effects he desribes on non-family employees in certain businesses I have been involved with in the past.
The author supports a compensation structure that is built partially, or in some cases completely, on performance goals. Sales, he says, should be 100% on performance as salary for sales positions often creates mediocrity. However, he also states that the boss has to be a tyrant and the rule for employees is “Don’t think, obey.” My experience has been that when you hire the right employees they can often save the owner from himself. Every owner has blind spots and weaknesses and good employees can provide strength and vision to compensate for his human frailty. His Profit Rule #9 “I Am Your Work God” and #14 “Teamwork is Overrated” were difficult sections for me to read as it seems unrealistic for the business environments I have worked in. I have been in dictatorial businesses as he described an not only were they unpleasant to work in, they weren’t that successful. The lord of the castle model might be perfect for certain businesses where a strong top-down hierarchy is essential for productivity and profitability and the employee primarily contributes labor, but in knowledge-based industries I think this approach would lead to consistent employee dissatisfaction and turnover. The average professional would probably like to to invest in his business but would likely hate working for him.
I’m sure his Profit Rule #4 “Love Your Business More Than Your Family” will guarantee high profits. He states that you must make the choice between your business and maximizing profits or living in financial mediocrity because of outside decisions. Either way, he says, you must make peace with your decision. If you spend time in worship then do it but get back to the business. Remember your competitors are relaxing but you can use it to build up your business and maximize your profits. He does allow that you can spend time on other pursuits when your business flourishes though I doubt that someone who has sacrificed his family, true spiritual growth, and service to others will reach a point where he feels he can do so. If a person follows the author’s advice, I hope he does not marry, and certainly does not have kids, so they will not feel the abandonment or neglect that would be the product of such a narrow focus.
I have chosen to be less successful than I could be (though I am considered quite successful in business) to have a close relationship with my wife and kids, serve others, and enjoy life as I live it. I have known too many who have died long before retirement who sacrificed today for a tomorrow that never came. While I can recommend much of this book I think the short-sighted thinking in this section will make a person miserable in the final review of life regardless of how popular, rich, and profitable he is.
Maybe you can’t have it all, but it is better to have the things that really matter in life. The most profitable things in a person’s life will not be found on a balance sheet.
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