QUESTION: My sales have reached a peak in recent years and are now on the decline, while my operating expenses are increasing. I am trying to reassess my business model, to determine the cause of the problem. What can you suggest?

ANSWER: It is common for owners and managers of small businesses to be so attached to their business model that they fail to see and react to changes in technology and the buying habits of their customers.

Just because your way of doing things has been successful in the past is no guarantee it will continue to be successful in the future.

I suggest you begin by separating the products and services you provide into various profit centers. You might find that some of these products and services are profitable, while others are not.

You then have to decide if the unprofitable profit centers can be made profitable or if you should eliminate them and concentrate on growing the profitable centers.

If your inclination is to salvage the under-performing center, you need to re-evaluate the situation. The following are several areas on which you need to focus your attention:

  • Is the product or service you offer the newest and the best in the industry? Or can you better use technology to create better products, reduce costs and improve your competitiveness in the marketplace?
  • Do you know what problems your customers are facing, and are your products and services relevant to their needs?
  • Does your delivery system and turn-around time accommodate your customers’ needs?
  • Have you cultivated a team mentality among your employees? Do they understand your goals and your customers’ needs? Do you have the right people doing tasks for which they are well-suited? And do you reward them for going beyond the call of duty?

Again, I say unless you are confident you can correct conditions adversely affecting your business, you should consider cutting your losses and redirecting your efforts and resources to growing the centers that are profitable.

Yours is a problem that may require some unbiased outside assistance. The volunteer business counselors at Richmond SCORE can work with you to assess your strengths and weaknesses and develop a plan of action that will ensure your continued success.


 Gray Poehler is a volunteer with SCORE Naples. Business counseling on this and other business matters is available, without charge, from the Naples Chapter of SCORE. Call (239) 430-0081 or visit .The SCORE business office is located at 900 Goodlette Road North, in the Fifth Third branch bank building. Office hours are 9 a.m. to noon, Monday through Friday.