I remember reading somewhere that John Wooden never specifically prepared to face an opponent, instead focusing on the fundamentals of his team. While I certainly can’t argue with John Wooden’s results, sometimes it’s worth considering what the competition is doing in order to ensure that you’re not falling behind.
I was speaking with a client the other day and we were comparing their lease costs as a percentage of SG&A expense versus other companies in the sector. My client’s ratio was significantly higher than his competition and I suggested exploring why that would be so. Perhaps it was just an anomaly. But perhaps they were spending more than necessary on facility costs. We both understood quickly that increasing real estate savings was a quick way to free up capital and re-invest in the company.
Identifying an opportunity for savings is the easy part. Looking for answers is where it gets a little more challenging. It requires understanding where the competition is located, what kind of buildings they occupy, and how their overall setup is configured. This is the heavy lifting of the project but can reveal how best to move forward.