Having done just about everything one can do in the business world myself, from working as a trainee to managing a huge chain of retail stores and ultimately running my own business, I think I can, with some expertise, tell you that there are ways to do it successfully and there are ways not to be successful. A word of really good advice on how to run your business: do the former and avoid the latter!
Why do I mention it today? Well, for quite some time now, I have been observing the demise of some of the greatest American business institutions and thinking to myself “why did that happen?” Every time it does, from Blockbuster Video to Radio Shack and from Lehman Brothers to the now-on-life-support Sears and Kmart stores, I think about what might have been done differently to help avoid that disaster.
I know that in some cases “the times they are a-changin” and technology sometimes (like the Blockbuster Video demise) may be the big reason. But it isn’t the only way things could have gone for them, is it? Perhaps they could have done some things differently and adjusted to the 21st century? Well, despite that kind of “technical” thing, there are some things that just make absolutely no sense when trying to run a successful business. That brings me to today and a prime example: the U.S. Postal Service (USPS).
The USPS and Its Ever Growing Problems
Granted the USPS isn’t a typical business like Al’s Bar and Grill, but it has exactly the same requirement that all businesses have to have in order to be successful. You may or may not know that the USPS is an independent agency of the United States federal government, is responsible for providing postal service in the United States, and is one of the few government agencies explicitly authorized in the U.S. Constitution.
While it can trace its roots back to 1775 during the Second Continental Congress, (Benjamin Franklin was appointed the first Postmaster General), the Post Office Department was created in 1792 from Franklin’s operation and elevated to a cabinet-level department in 1872. In 1971, the USPS became an independent agency, meaning it is now a “for-profit” entity and can and should make a profit. Spoiler alert: it doesn’t. It has been losing tons of money for years and only stays in business because the U.S. government subsidizes it. Each year it gets billions from us, the U.S. taxpayer! Don’t you wish your business could get that kind of support?
A Potential Solution
I had an idea about 20 years ago and sent it in to the Postmaster General. It was a pretty simple suggestion on a great way for the Post Office to make some extra income. I suggested that they sell space and license the stamps for advertising. It’s not anything new these days, is it? Almost everything is selling space and naming things for fees like “bowl games”, sports venues, and just about anything not nailed down. No one objects to it and I have even thought that it might be suitable for things like sponsoring public school books and equipment for sports teams and music programs. Before you object to my “commercial” proposal on some moral grounds, think of it as legal ways to take the financial burden off we the people and in the case of the Post Office, the U.S. tax payer!
Keep in mind that although there is no sponsorship currently, we are not objecting strenuously to having stamps feature many less than traditional items/people these days. We have Elvis stamps and Star Wars and Star Trek stamps just to name three.
Why is the USPS in Such Bad Shape?
On the surface, one can use the Blockbuster Video scenario as the main reason why the USPS is in such hot water. After all, using the mail has been in decline every year over the past 25 years mainly because paying bills, mailing letters, and getting ads have been replaced with other methods so that the act of buying stationery and a stamp is a fading custom. In fact, when I look back at my own behavior, I can recall that years ago I would spend about $10 a month mailing out 20-30 bill payments and that has been totally replaced today by paying my bills directly online or the through my bank for free. That’s the way it is and should be for everyone. If you’re not doing that, you are probably wasting a lot of money and time.
But paying bills isn’t the one and only reason you might need a stamp. Some of us still send birthday cards, seasonal greetings, and even correspond with people by mail. Not as much as we used to, but some.
Lawyers and other professionals still use the mail and stamps, and of course there are always those who use postage for commercial purposes.
But there are some other reasons the USPS isn’t doing well, and they have to do with some basic business rules.
Business Rule: Increase Your Average Sales Check
When you run a business, a prime example of what you want to do is to increase your sales dollars per transaction. It’s like thinking that if you ran a restaurant and you sold sandwiches for $5, you might want everyone to buy a very profitable (for you) fountain soda along with it for another dollar. That $6 sales check will make you a very nice increased profit over the $5 sandwich-only check. Some will add the drink and some may not, but if you make it a special deal, like sandwich and drink combined for $5.79, the customer will save and you will be guaranteed a bigger profit than if you served each individually and missed out on some drink sales (when they ask for water as I would!). Think McDonalds value meals and you’ll get the idea.
The USPS doesn’t get this at all. A few years ago, I used to buy stamps in booklets of 20 for $9.80 (each stamp was 49 cents). Then, for no reason I was ever able to determine, they lowered the price of first class stamps to 47 cents and the booklets then were sold at 20 in a booklet for $9.40 cents each.
Today I purchased my first booklet this year with the stamps increased to 50 cents each. To my amazement, the stamps are now in groups of 10 at $5.00 each, a reduced sale of almost 50% from earlier. Reducing the average stamp purchase by 50% is just plain stupid for them and simply awesome for me. I probably won’t need to buy stamps again for another year! But it’s not just buying stamps!
I am not even going to go into the concept of the “forever stamps” and how ridiculous that is for their long term business plan. If you don’t know what I am talking about, Google it!
Business Rule: Make It Convenient for Your Customer
The USPS is such the opposite of convenience. For one, they are woefully understaffed and if I didn’t know better, I would think that are trying to move as slowly as possible. They are staffed as if we live in a place where no one else lives and not in the heavily populated NYC metropolitan area. To make matters even worse, I went to my local Post Office and when I arrived at 12:45 p.m. I was greeted by a sign on the door which read:
“We are closed for lunch from 12:30 to 1:30 p.m. for your convenience!”
😣 Is any explanation needed?
Following Business Rules Leads to Success
If you are in need of a brief list of the “what not to do” variety, then there it is in a nutshell. Besides the two examples I have just listed, these are a few of the “must do” rules that will make or break you every time. If you don’t do them, or you see them not being done, you may soon see that business fold its tent and disappear. Sometimes it happens quickly, and sometimes it takes 244 years (like the U.S. Postal Service), but it will happen!
Business Rule: Advertise, But Only If You Need To
Does the Post Office really need to advertise? Yes, they have competition these days from UPS and FedEx just to name two, but seriously? Is there anyone who doesn’t know they exist and what they do? Why do they run those silly TV commercials all the time?
Business Rule: Be Innovative
Your customers want you to be on the cutting edge of technology because they are on it. Make sure you’re using the internet and advanced ways of selling and servicing in the 21st century. Good personal service and technology are not mutually exclusive.
Business Rule: Stay Ahead of the Curve
Look at your business and find ways to increase sales and profits every day. Almost every business that fails flirts with success and then never makes changes or tries to improve until it’s too late! The goal isn’t just to get the doors open, but to keep them open and profitable. It’s a marathon and not a sprint to success!
Business Rule: Be a Smart Planner and Spend Wisely
Treat all money as if it is yours because it is in two senses: the investment and the potential profit. Even more so if it’s borrowed money from a bank. You can’t assume that a fairy (or U.S. taxpayer) will bail you out…it just never happens that way.
So there you have my take on the how and how not’s of running your business. The business world is full of failures as about 80% of all new businesses flop. It is amazing though how many of us ignore that fact and still give it a try and secretly want to work and run our own enterprises. It seems so difficult and yet it really comes down to common sense, doesn’t it? I hope that you take just a few moments to examine that and if you are heading towards entrepreneurship, give yourself all of the tools you need to make it a real success.
Do you run your own business? What are you doing to be a successful businessperson? Are you worried that you may not be on solid ground? Are you making increased profits or operating at a loss? Will you be in business next year? Do you want to be?