Henry Ford was one of those amazing innovators that we all wish we could be. He understood machines and how to make them better; he knew how to attract the best people; cast visions for a future that no one else dared to dream; and actually make it all happen. And he had some really good one-liners of wisdom that we continue to see in placed in gifs next to his portrait like this one:
There is one Henry Ford quote that has stuck with me and I quote it often, because it is so true:
“A business that makes nothing but money is a poor business.”
It is a truth I see played out in businesses all the time while consulting.
We know that the goal of a business is to make money, Eliyahu M. Goldratt taught us that in The Goal. A business has to make money in order to survive, thrive and grow. If your business doesn’t make money, then you don’t run a business, you run a charity.
Money is important, hear me on that. But money isn’t the only thing a business makes.
“Money isn’t the only thing a business makes.”
A successful business makes products and services that change and improve lives. A business makes livelihoods for its employees; it makes the engine of economies hum.
And yet, most business owners only focus on the money and the result is a poor business.
- Poor monetarily
- Poor in quality
That is what Henry was talking about.
Yes, some businesses are poor monetarily, not because they don’t have money, but becasue they don’t understand their numbers.
If I had a nickel for every business owner I have worked with that thought “cash flow” was their bank balance, I would be retired in Fiji instead of writing this.
Most business owners got into business because they had a great idea or passion for a product or service. Most business owners are not financially savvy. And the worst part is that they don’t know it, or won’t admit it. If business owners want to be rich, they need to get a handle on their numbers.
“But I hate that part of the business!” I hear you saying. Fine, then find someone who loves the numbers (like me) and have them help you.
Poor in quality:
The monetary part isn’t the only way a business is poor. A poor quality business is usually the result of focusing on the wrong thing. You need to understand your numbers, but they can’t be the only focus of your business.
Your business is about more than your bottom line, operating ratios, and inventory turnover. Your business ultimately is about people.
People don’t buy from companies, they buy from other people. When you take care of your customers and your employees, the money will follow. When your focus is only on the money: people will not follow, will not want to work for you, or will not buy your product or service.
When you focus on the people (both your customers and your employees): You will have customers who are raving fans, loyal and engaged employees, and you will have money as a side benefit.
The value of your business goes beyond a multiplier. How strong is your team? What is your employee turnover, your customer satisfaction? Those are the things that make your business valuable. The people are what make your business rich instead of poor.
Will you take Ford’s challenge?
Will you take mine?
Will you seek to change the things that make your business poor?
Need help with that? I’m here for you.