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Note: Jeff Morrill, Author and highly successful Serial Entrepreneur, provides today’s guest blog, Do You Take The High Road to the Bottom Line?
Jeff Morrill co-founded businesses in automotive retail, real estate, telecommunications, and insurance that generate over $100,000,000 in annual revenue. His achievements in building profitable and ethical companies have been featured in a variety of national media including USA Today, Automotive News, and Entrepreneur Magazine Globe.
Author E.L. Doctorow said of driving in fog at night, “You can only see as far as your headlights, but you can make the whole trip that way.” He was referring to the art of beginning a novel, but his keen observation also applies to business and life. You can’t prepare for every possibility at the beginning of a project. For most things, you have to get started and figure it out as you go.
My brother and I opened our first company, Planet Subaru, in Massachusetts on October 2, 1998. John was thirty-two, and I was twenty-six. We did not begin with any financial wealth. We had some modest savings, and we borrowed a few hundred thousand dollars to purchase and capitalize on the business. Then we borrowed a few million more to pay for all the cars.
We were perilously leveraged, so we needed to achieve profitability immediately. The predecessor dealership, Norwell Subaru, had opened in April, went bankrupt in August. They lost a half-million dollars in between. So we were well aware of the need to take the high road to the bottom line on all counts.
As a little kid, John had always wanted to be in the car business, and sure enough, he had wound up working at Ford Motor Company in Detroit. I ended up in the car business by accident. I was interested in public service. During college, I interned with the Lieutenant Governor in Virginia, where we had grown up. When I graduated in 1994, he didn’t have any openings on his small office staff. But he offered me a job in the service department of his business, Don Beyer Volvo.
During the years we spent working for others, John and I discussed a dream to open our own business. We would offer an alternative experience to the high-pressure sales tactics and questionable ethics of the typical dealership. I began calling people who were advertising dealerships for sale. After plenty of dead ends and false starts, I found a couple of guys who had crashed their Subaru store in Norwell, Massachusetts. They needed to sell the store quickly.
Nine weeks later, Planet Subaru sold its first car, a brand-new 1999 Outback, to a retired couple from Hingham. We sold thirty-four new cars and six used cars that month. (Nowadays, we sell hundreds every month.) We worked seven long days a week and posted a tiny net profit of $713, a herculean accomplishment for the first month in business.
Ever since that first month, we’ve been taking the high road to raise the bottom line. Here are just a few examples of how we do that:
Even today, car dealerships and many other employers hire the same sort of person, disregarding those who don’t fit a particular profile. We seek applicants that other dealerships generally don’t recruit. For example, the very first salesperson we hired was a woman. To this day, it’s rare to see a female sales representative in a dealership.
Our selected female candidate had no experience but quickly became our highest performer. We recruited another excellent salesperson after he was fired by another company who was not appreciated. We promptly acquired overlooked talent by taking the high road and seeking people who were not well represented in the industry.
In 2011, we installed a massive solar array on our roof to power our entire showroom and reduced our carbon footprint. It cost a fortune at the time, but the system has since paid for itself in savings. We will enjoy free power for decades to come. Plus, the project continues to increase our revenue by attracting impressed customers from all over.
We donated a vehicle to our local river protection organization and covered it in Planet graphics. It’s a rolling billboard that communicates our commitment to clean water. We support organizations doing good work in the community, and their members support us with their purchases. We strive to model taking the high road to the bottom line.
Some people tell me that we’re naïve to invest so many resources in expanding our workforce’s diversity, focusing on environmental stewardship, and supporting local non-profits. They say we should focus on net worth rather than planet worth. But they have not seen our financial statements!
I believe our unusual approach makes us more profitable, not less. We have a more robust workforce because we invest extra energy and time in recruiting diverse candidates. We spend less on utilities and facility maintenance because of our numerous environmental upgrades. And every day, customers drive past other dealerships to do business with us because we share their values.
Our effort to take the high road gets even better. We make more money by charging our customers less! Like most businesses, we depend on long-term relationships. Why? The cost to acquire a new customer is much larger than the price of satisfying a repeat customer. We organize our processes and pricing around creating customers for life.
For example, we sell almost all of our new cars at a deep discount, without a customer even asking. We make less on each transaction, but our customers trust us to give them competitive prices, eliminating the headaches of shopping around. Our annual sales volume continues to increase every year, and our profits continue to grow.
Perhaps you’re skeptical and think all this sounds too good to be true. I’ll address some common questions I hear when sharing these ideas with other business owners and managers.
What about all the people who get rich by thinking about no one but themselves? Unfortunately, some businesspeople exploit others. They make money looking for the quickest buck without regard to the collateral damage. They privatize all the benefits in a transaction for their advantage and outsource the costs to everybody else.
For example, some private equity firms break up established companies, fire hundreds or thousands of people, and walk away before all the leverage causes bankruptcy. These dog-eat-dog business strategies often devastate entire communities. But even if this approach works (and it doesn’t always), I argue that these people could have made even more money growing the long-term value in companies instead of blowing them apart.
And if society needs to lose for you to win, the price of your financial wealth is moral poverty. Just because something might be legal doesn’t necessarily mean it’s right or smart. In the short term, you can often get away with anything. In the long term, what goes around has a way of coming around. You will reap the harvest of whatever seeds you spend your life planting, so choose them carefully. It’s always best to take the high road.
If an entrepreneur spends so much time and energy focused on other stakeholders, who takes care of the stockholder?
I’m not suggesting that you operate your company as a charity. It’s Planet’s consistent profitability that powers our community investments. You can lose money or go bankrupt if you fail to execute all the fundamentals of running a business successfully. The elements include expense control, cash management, legal compliance, and many others. What I’m recommending is that you design your business practices, so stockholders and stakeholders succeed together.
For example, expanding your hiring pool to include members of underrepresented groups accomplishes the following:
a) Improves your workforce
b) Gives those team members a good income and career path
c) Supports the overall economic health of your community.
The Above Elements Create The Win, Win, Win.
With so much emphasis on doing the right thing, who defends the business from predatory people? I was always the skinny kid, and I did not appreciate being bullied, so that meant I got drawn into fights. And unfortunately, I would later find that the business world isn’t a lot different than the schoolyard. You will encounter people who will intentionally or unintentionally try to screw you over.
I do a better job swimming around these sharks than I used to, but I still need to guard our businesses against people who would try to harm or cheat us. Just because you’re committed to doing the right thing by taking the high road in business doesn’t mean you have to let others take advantage of you. Sometimes you need to make tough decisions so you can preserve your business to serve all the people who depend on it today and into the future.
When comparing our financial results to those of our competitors, I can confidently say that we have a more profitable business model, despite the naysayers. But what if I’m wrong, and we don’t produce the absolute highest possible profits? What if all I can say I did with my career was create great jobs for overlooked people, improve the community where I live, and still earn an abundant living? That sounds like a pretty good life to me.
Perhaps these ideas seem counterintuitive, but they’re hardly radical. Think about other paradoxes in life:
- You get more love by giving more
- You get luckier by working harder
- You get happier by worrying less about your own needs.
Likewise, the best way to grow profits over the long run is not to obsess narrowly on this month’s gains. Instead, create enough value for other people, so they want to do business with you instead of somebody else.
While building that value, you need to consider the other impacts of your actions on the world. In economics, external factors include the costs or benefits of a transaction that affect other parties. The issues can be positive, negative, or both at once. When you drive across town to recycle your aluminum cans, you reduce landfill usage. But running your vehicle also releases harmful emissions into the atmosphere. None of us live in a vacuum. Almost everything we do generates outside factors, many of them negative.
Similarly, when we focus exclusively on our wealth without regard to the collateral effects, we can damage the ecological and social systems. We depend on these to produce profits in the first place. Collectively, we face a staggering array of problems that threaten our very survival as a species. Our carbon pollution causes rapid global warming. Our exploitation of animals spreads deadly pathogens. And our economy destabilizes governments by creating a growing wealth gap.
We have a moral obligation to run our businesses in a way that minimizes negative outside factors and increases benefits to society. A pledge to take the high road to the bottom-line may sound like a fantasy but is worthy of consideration.
Perhaps you are doing well, but that doesn’t mean the world is functioning morally or sustainably. Would you be satisfied with a society that allowed 20 percent of its children to live in poverty (as we do today in the United States) if your child had a one-in-five chance of growing up poor and disadvantaged?
Philosopher John Rawls described just this sort of question in his book, A Theory of Justice. If you were to build a society from scratch and make all new rules, would you create a system with so many deprived people if you might become one of them? He suggested we look past our favorable circumstances by using a “veil of ignorance” to forget our existing station.
Rawls’ idea is similar to the technique your mom suggested for sharing a candy bar with a sibling. One person cuts, and the other gets to pick the piece, encouraging the first to slice fairly. And when we step outside the bubble of our good fortune, we see how urgently we need to improve everyone else’s access to the same quality of life that we enjoy. You can make decisions in your business that contribute to building a just, sustainable society.
Historically, “robber barons” such as Cornelius Vanderbilt and Andrew Carnegie earned their wealth in unsavory ways and then gave it away philanthropically at the end of their lives. Wouldn’t you prefer to run your business and your life so the world might benefit all along, instead of after you’re retired or dead?
You can serve others as you go, so you don’t need to clean up your damage later. Consider these words from the Book of Ecclesiastes in the Bible: “I know that there is nothing better for people than to be happy and to do good while they live.”
As an entrepreneur, you don’t have to wait until the end of your days to make a difference. You can improve the world today by the way you choose to do business. You will enjoy more abundance, better relationships, and a more meaningful life, too. In summary, my recommendation is to take the high road to the bottom line. To learn more, please visit my website by clicking here.
For More Insights: Visit Elinor’s Amazon Author Page
Courses and Workbooks Now Available; Click the links:
- Create the Smooth Sale (returning and referring)
- Inspired Quotes for Business and Life
- The Smooth Sale Get HIRED! Course and Workbook
- The Smooth Sale Course for Entrepreneurs and Salespeople
Related Blog Stories:
- Do You Want To Be A Person Of Influence?
- Do You Pursue Your Dreams?
- Are You Contemplating A New Direction?
- Do You Know Why Cross-Culture Adaptability Matters?
- Do You Realize How Far You Have Come?
Sales Tips: Take The High Road To The Bottom Line
- The sales motto is to work for a win-win, where all parties benefit.
- Hiring a diverse group of employees provides a more robust solution for business.
- Consider how you would react if you were the buyer; sell appropriately.
- Ask clientele why they purchase from you upfront and then continue.
- Repeat and potentially leverage what clientele enjoy about the service you provide.
- As a business owner, work with others who think and behave similarly to you.
- Ask clients which other services might interest them.
- If you are unable to help someone, refer them to the person who can.
- Strive to earn a returning and referring clientele by taking the high road to the bottom line.
- Celebrate Success!
Today’s insights are provided to help you achieve the Smooth Sale!
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