As a business owner or manager, that’s a question you probably get asked a lot.
If your answer is along the lines of, “we’re busier than ever!” or some variety thereof, you may be missing a critical mantra of success. And that is, just because you’re busy doesn’t mean you’re making money.
Busyness is an allusion. Smoke and mirrors camouflaging what’s really going on behind the scenes of a business. If you walk into an office and see salesmen on the phone closing deals, phones ringing off the hook, employees running this way and that—you’d jump to the conclusion that the company is doing well financially. But what’s really going on behind the scenes? Are the salesmen closing profitable deals, or are they slashing their numbers just to get the work and a meager commission? Do they have a dedicated credit manager or accountant making sure clients are paying on time, or is the company too busy with other areas of the business that cash flow is being neglected? Are employees in a position to help the company move forward toward the business’ overall goals, or are they too busy putting out fires and dealing with needy customers who in the end won’t pay their bills?
In order to find that out you need to peek behind the curtain. Dig down deep into the gears of the machine to see how it’s operating. In other words, attention needs to be paid to the company books to make sure it’s being run profitably. Because on the surface a company may appear to be okay, but in reality it could be spiraling out of control because of debt and outstanding accounts receivables.
I should know: my old construction company was the poster child of a good company gone bad. We started off on the right foot, had great funding and a lot of work, but we were stopped in our tracks when our clients began defaulting on their obligations. On the surface it appeared we were doing great—a big backlog of work, more than a dozen field workers, and six trucks out on the road almost every day—but if an outsider peeked behind the curtain they’d see we were in deep financial trouble.
So asking someone “How’s business?” may be a good way to start a conversation, but its open-ended structure doesn’t get to the heart of what you really want to know, which is: are they making money? Sure, when you ask a colleague “how’s business?” it’s because you’re curious about their business as a whole: what’s happening in their industry, what are some of their challenges, success stories, etc. But honestly, don’t you also want to know if they’re making money doing what they do? The open-ended “How’s business?” may get you to that answer eventually, but not always.
So the next time you’re networking, be sure to avoid the open-ended “how’s business?’ and instead ask, “Is business profitable?” or my favorite, “Are you busy in a good way?”
And if someone asks you “how’s business?” be sure to correct them and say, “I think what you really want to know is if I’m profitably busy.”
You might be surprised by the more honest conversation that ensues.