Herman School of Business
Planning for success...not failure.
You want to sell a million widgets and get rich. So you make a marketing plan to have people become aware of your widgets and decide that by driving people to your product you will make your company a huge success. But, money is always tight.
You get the chance to go on national radio and allow millions of customers to hear about what you have to offer. The money involved is substantial, but you have come this far, and how many opportunities like this will come along. Fifty thousand dollars will get you a nice radio ride on 400 stations. That should sell some product. But wait, now that the radio people know you might spend money they come back and more than double the stations to 1,400 shows. Everyday for 13 weeks. For just another fifty thousand. Gulp, you are now up to one hundred thousand dollars.
Surely you can’t just leap on this deal without advice from someone you respect in the industry. So, as a smart businessman you call a guy who has handled products like yours for twenty years. “Should, I do it?” you ask. He asks how much of the product you now have in the warehouse, and then asks how much is already in the stores, where the radio listeners will go looking for your product. You surely don’t want the guy driving in Des Moines, Iowa to hear your spot, turn into the mall, and ask for your product which isn’t on the shelf. That means making more product, expanding your inventory to super levels. And maybe even paying “slotting fees” to be sure you actually get shelf space. The extra product is another fifteen thousand right now out of pocket. And you better add another fifteen thousand dollars for other costs associated with such a major push.
Your fifty thousand dollar good idea for radio has turned into one hundred and thirty thousand. Now that’s a belief in your product. So do you just roll the bones at the lower dollar level, just putting on the 400 station spots? And then wonder why there are no sales in Iowa, because you didn’t spend the money to have product there. Doing something half-way is almost certainly going to make you fail. Planning to almost do it right and hope all the tumblers fall exactly into place to make you a winner is what I call playing the lottery. Now, mind you, spending the full one hundred thirty thousand will not guarantee you a win either. You could actually end up a bigger loser.
When I started this blog I promised to ‘let it all hang out” and not hold back with you, my readers. The product is my books. The numbers are real. I have the opportunity to demonstrate two Hermanisms at once. I am going to plan for success not failure, and I am going to make the right business decision regardless of money. Gulp. Listen for me soon on a radio station near you.
HERMANISM # 15
Milton Hershey Failed Several Times Before He Created The Hershey Bar. If This Is Your First Failure, You May Have Only A Few More To Go.
- Posted: 4 October 2007
- Comments: 1
- Category: Running a business
I’ve read Hermanisms and have already recommended it and this blog to two clients who run businesses. I’ll let you know what they say.
As for me, Hermanisms is the best practical business advice I’ve ever read in one book. It bridges the gap between anything by Peter Drucker (theory) and the surfeit of written, very targeted, advice about every discrete aspect of running a business. You can probably get by without reading any of them. It’s literally like having your father, an experienced businessman, available to advise you every step along the way and tell you what you need to hear.
Nice work.
Written by BillOGoods on 8 October 2007