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December Cleaning
Ever since our pre-historic ancestors felt the need to eliminate cave clutter after a long, cold winter, humans have been doing what Grandma used to call spring cleaning. Businesses should take a lesson from Og and Granny, and conduct their own version of spring cleaning, except on a different cycle. To a great degree in the contemporary marketplace, and especially in the small business sector, a new cycle is marked not by the spring thaw, buy by the calendar striking Jan. 1. And while Grandma did her cleaning after the thaw, businesses should have theirs completed before the New Year. Consequently, I’ve coined the term “December cleaning,” and here are some examples of what it looks like. Besides basic cleaning, even if you’re not a pack rat, like me, you’ve probably accumulated unused stuff. And don’t try to tell me you don’t have a technology graveyard somewhere on your property! Whether it’s an old computer, a printer, or a chair; even if it’s not broken, if it hasn’t been used recently, it’s worse than clutter – it occupies valuable space. Convert it into cash, give it to someone who can use it, or give it a proper burial; just get it out the back door. If you have unproductive people who you’re convinced can’t be redeemed, don’t take them into the New Year with you. The timing may seem insensitive, but it’s just an unfortunate coincidence that the holiday season coincides with December cleaning. The truth is, there is no good time to let someone go. And you should be thinking about helping your productive keepers start their new year with the best teammates you can find. If you have uncollectible accounts receivable (A/R) – and who doesn’t? – don’t saddle those losses on a new year. Take the hit this year and start January with as clean an A/R list as possible. No, bankers don’t like charge-offs. But they like inflated A/R caused by your denial even less. Organize customers by the most profitable – A’s, to the least profitable – D’s. Worship the A’s, cater to the B’s, encourage the C’s, and let the D’s learn the meaning of self-service. And to have a really clean customer list, you might even have to fire some customers. Same song, different verse. Categorize inventory from the most profitable A’s, to the least profitable D’s. Stock lots of A’s, some of the B’s, maybe a couple of the C’s, and never let one of the D’s spend one night under your roof, unless it’s paid for. Then, cut your losses and convert old inventory into cash to buy the most current inventory for the New Year. In today’s fast-moving economy, a clean inventory requires management practices that make products available to your customers just in time, not just in case. Write this on a rock…
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