When common business practices do more harm than good...

Many common business practices may do more harm than good to business health.

Examples include:

1. Making business decisions on fixed cost heavy gross margin analytics

2. Training customers to respond to your regular month end sales push

3. Cost accounting which encourages over production to reduce unit production cost and increase profits.

4. Aggressive year end inventory reduction impacting customer supply at the start of the new year, without effectively managing cash for the rest of the year.

... and you may have your own favourites to share.

It can take brave business leadership to stop these bad habits, but for the courageous the returns are high.

What do you think? Do you have a minute to vote in our Poll?

We would be keen to hear your thoughts in the comments section like the following example:

These are all bad but I especially get frustrated if I hear about a month end (or quarter end) sales push. When you start doing it, you are generally bringing sales forward by incentive. Of course that means that unless you do it again the following month the next month will be weak. So you end up getting trapped into doing it every month. And then it is only the first month which is really better than it would have been otherwise. BUT, not only does it “educate” your customers to wait for the incentivised sales push (lowering average prices), from a supply chain perspective it stacks demand at the end of the month which is less efficient than if orders are stable from week to week. So overall results in lower prices and higher cost…..!

Input will be used for future Arkaro blog posts , so we should be keen to hear the views from many. Please do feel free to share the Bad Practices Poll with your network.

Thank you!