Reilly learned everything you need to know about creating an egregiously profitable business on his first day of 2nd Comm in UCG in 1980. The only trouble was he didn’t realise it at the time and most certainly didn’t apply it.
Shaw wasn’t far wide of the mark when he quipped that ‘wisdom is wasted on the old, and youth is wasted on the young.’
‘If you owned a business how would you double the profitability of that business in six months?’
At a time when students were more used to being lectured to this Socratic approach to learning was almost disarming.
Mick Byrnes, their Business Finance lecturer, had scored the highest marks ever in the M.B.A. the previous year in UCG. He was a veritable financial wizard and Reilly fully expected a detailed riposte.
He was frankly underwhelmed when Mick unveiled an acetate slide with three bullet points.
- Increase Sales.
- Decrease Costs.
- Increase Prices.
Reilly suspected there must be a lot more sophisticated stuff to doubling the profitability of a business and mentally checked out of the lecture.
It was almost a case of déjà-vu for the second lecture. Jim Ward, the newly appointed Professor of Marketing, came with a serious international academic reputation. Reilly fully expected a high-brow, high-content and didactic lecture.
He was mildly disappointed when Jim too, began with a question.
‘If you were going to open a hotdog stand, and you could only have one advantage over your competitors … which would it be …?
There was any amount of suggestions from the 150 strong lecture theatre.
‘Location! … Quality! …. Low prices! ….Great taste! … ‘Curry Sauce,’ said Tarps, who at that time was going through a phase of applying curry sauce to everything.
Jim, as was his wont, let it go round the houses until eventually the students ran out of answers.
Theatrically, he then uncovered a slide with just three words.
‘A STARVING CROWD.’
‘Think about it,’ said Jim. ’You could have exorbitant prices, terrible hotdogs, and be in the middle of a field but if you’re the only hotdog stand when the Pope comes to town (he would) you’re going to sell out.
Reilly was about to dismiss this also as being puerile and academic before being reminded of an incident at the Rose of Tralee the week before.
Reilly, and a slew of Roscrea buddies, would descend on ‘the beautiful vale of Tralee’ each year for the annual festival. Midway through the first night Tarps arrived back into the pub with the biggest candy floss Reilly had ever seen.
‘Where did ya get that,’ says Reilly, who was born sucking a sweet tooth.
‘Some fella from Kiltullagh is down a side street and he’s churning them out to beat the band,’ says Tarps.
Reilly observed him closely as he stood in line. He was a broad shouldered man with a chat for everyone. He looked mildly intellectual if it wasn’t that he was a candy floss man. And he seemed to have insatiable energy and enthusiasm.
‘You have a way with people,’ says Reilly as he waited for his candy floss.
‘It’s the day job,’ says candy floss man, ‘but I’ve found it’s great for business. If you’re nice to people they’ll come back to you time after time.’
‘You’re a social worker?
‘I’m a Principal of a national school.’
‘Pull the other one,’ says Reilly.
‘I will,’ says candy floss man. ‘If you bring three of your buddies back here I’ll pull you a free candy floss for yourself. And I’ll only charge you todays prices. The price goes up again tomorrow as I’ve discovered there’s a lot of hungry people here.
On June 21st last, Reilly interviewed Pat McDonagh, the MD and founder of Supermacs, before an audience of the good and the great of the Limerick business community in the Castletroy Hotel. Reilly has done this several times in the past and always ends the session with one last question.
‘Pat, you operate in excess of three hundred separate businesses, across a variety of industries, almost all of them highly profitable. What is the most profitable business you ever operated?’
‘Reilly, the most profitable business I ever ran was selling candy floss on my school holidays at the various festivals around the country.
‘There was almost an insatiable demand for the pink sugar on a stick that I sold for 50p a shot. I calculated that the material cost of the sugar and the stick was less than 2p a shot; the machine I used was a Kenwood cake mixer borrowed from my Mother; the rent and rates were free; and the labour was my own. That, Reilly, was the most profitable business I ever operated.’
Business is simple. Keep it that way. Here are 6 steps to double your profitability in the next 6 months.
- Double your ambition. Many people play too small. Guys like Pat McDonagh see a bigger picture.
- Find a starving crowd. They’re everywhere.
- Make them an irresistible offer. Reilly shares an example of the formula for an irresistible offer here. Please go to https://omaille.ie/double-your-profitability-in-6-months-with-smacht-2×6/
- Wage an ongoing and relentless war on costs. Many of us learned how possible this is during Covid.
- Raise your prices. As Dan Kennedy famously said ‘There is no strategic benefit to being the second cheapest in the marketplace, but there is for being the most expensive.’
- Double your accountability. Research by Dr Gail Matthews of Dominican University has proved conclusively that your chances of achieving a goal go up dramatically when you commit to an accountability partnership.
‘Find a growing market. Growing markets are like a tailwind. They make everything move forward faster. Declining markers are like headwinds. They make all efforts harder. There are three main markets that will always exist: Health, Wealth, and Relationships. The reason that those will always exist is that there is always tremendous pain when you lack them. There is always demand for solutions to these core human pains. The goal is to find a smaller subgroup within one of those larger buckets that is growing, has the buying power, and is easy to target.’
- What’s your ambition? Is it to hope you make a profit or is it to double it?
- How hungry are your crowd?
- How good is your offer? Could it be twice as good?
- What costs can you eliminate from your business today? There will be some.
- Raise the price of at least one aspect of your business.
- Commit to an audacious profit goal and hold yourself accountable to achieving it.
AN IRRESISTIBLE OFFER.
If you’re seriously interested in doubling your profit in 6 months please go to