Over the past several years I have written articles regarding product and service pricing and have made recommendations to my clients regarding the pricing of their products and services. These suggestions were based on my belief and experience that most businesses can pass on at least a 2 to 3 percentage price increase in their respective products and services to their customers each year and should do so annually at the same point in time, say January 1st.
Few customers if any will even notice that small an increase. If you are not doing this type of systematic pricing increase, your bottom-line profitability is going to suffer because the costs associated with running your business are increasing. If you don’t increase your pricing, you are simply absorbing the increases in your expenses (wages, insurance, rent, utilities, taxes, office supplies, advertising, and, the list goes on).
One example I like to use to demonstrate this point is to take any year-end income statement for your business and add 3.0% to your revenue figure; see what that does to your gross profit margin and your net profit margin. Most business owners I ask to do that exercise will come back and tell me they are amazed, and they all wish they would have done something like that sooner.
What prompted me to write this article about increasing pricing for products and services is the present inflationary market we are experiencing. With the last published inflation rate of 9.1% (a 40 plus year high), if you are not increasing your product and service pricing right now by at least 9.1% your bottom line will be greatly affected in a negative way for 2022. I would almost guarantee you that you are experiencing increases in almost every expense item, like the ones I mentioned earlier.
Avoid the Wait
Further, if you wait until next year to increase your pricing, we could be operating in a much different business environment, perhaps a recession, and then it will be very difficult to pass product and service pricing on to your customers.
I recently heard of one business that decided to do a 25.0% increase in its service fee and add a 5.0% monthly fuel surcharge to its pricing, and it experienced had no questions or complaints.
I know and understand passing a double-digit price increase on to your customers might not be possible in every situation due to differences in competitive environments. But I would guess you could pass the inflationary rate of 9.1% on to your customers as a fair increase.
Lastly, I also know and understand that by increasing your product and service pricing you might feel like you are adding to the inflationary spiral. However, if you don’t increase your pricing as stated above, you will be simply absorbing the increases yourself in the goods and services that you have to pay. A simple saying, I have stated over the years might apply here: “Do you want to pay your mortgage payment, or do you want to pay someone else’s”?
Silver Fox Advisors is proud of our members and would like for you to get to know them better.
Dr. Ken Wells is one of our newest members. He is a seasoned executive with extensive corporate health experience spanning clinical medicine, health benefits, public health, and pharmacy. He is an Army reservist, flight surgeon, and pilot.
Ken serves as Vice-Chair of our CEO Roundtable Committee and an active participant in several of our programs including our recent Lunch & Learn on April 7th when we returned to an in-person gathering at the Houston Racquet Club. Ken joined a panel of other Silver Fox Advisors and updated those in attendance with information about “Hot Topics Facing Business Today.”
If you would like to learn more about Ken or join Silver Fox Advisors, visit our website.
Welcome to 2022. Yes, we have entered a new year. Like many of you, I have reviewed my accomplishments and plotted a course for this new trip around the sun.
As for me, I have chosen a noble task.
I want to help 10,000 business leaders and company owners become Better Bosses. Let’s start with WHY.
For a long time, there has been a saying among HR professionals. “People join companies but quit bosses.”
Have you ever felt that way? I know I have.
The individuals who get promoted into management jobs and/or start businesses rely on chance and circumstance for ways to figure out how to lead a team. Experience tells me that most fail in some way or another.
I think it’s time we seriously focus on making our bosses be accountable for better behavior.
First, let’s be real. In western commerce and so-called ‘big business’, we have this strange tradition of promoting the brightest bulb on the string to be a supervisor when a spot comes open. The logic goes something like this.
“Sally is our best producer. She would be the best one to lead this team.”
WRONG! Instead, we usually end up ruining the best producer and frustrating the team because Sally doesn’t do well leading people. (No knock on Sally. It could be a Bill or a George here too.)
In the case of the entrepreneur, this person has an idea for a product or service. So they start a company. The idea takes off. Pretty soon the owner knows they need a bigger team to keep things going. Hiring begins and the fun starts.
Like the promoted high-performer, most small business founders seldom know how to manage people.
In both cases, you can hope for a collection of positive experiences with prior bosses to model good habits, but guess what? Those folks had their own journey arriving where they were. So did you really get a good lesson?
Nature or Nurture?
Then there is another thought. In the halls of most business schools, you can find a raging debate among academicians about whether leadership is born or bred, nature vs nurture.
I’m not going to rehash the whole debate here. Instead, I will say this. I have met and worked with clients who clearly have more natural talent to be a leader. They have a sixth sense of reading people and making decisions. They are comfortable at the podium speaking to a team or a whole organization.
These individuals do shine in positions of leadership, running companies. And, like professional athletes, they get better with coaching to help them refine the natural-born skills they seem to have.
I wanted to play sports in school. But growing quickly to six feet tall before any notion of hand-eye coordination kicked in limited my future in athletics. Obviously, I was NOT a natural-born athlete. The few things I’ve tried since then, like golf or tennis, have required hard work.
On the other hand, I have worked with clients who did not start with “natural” leadership ability. Instead, they embraced the need to be a leader. They worked hard to learn concepts, principles, and values they could use to become better leaders and, hence, better bosses.
Therefore, my observation is simply this. Some people may be born to be leaders and get better with training. Others can learn to be better leaders with the right coaching, hard work, and commitment.
Back to Human Resources
I knew a global HR professional who boldly led a charge to redesign his company’s entire HR role. His premiss said, “If we trained better managers, our people problems would go away.”
While the company didn’t accept the theory outright, they did permit him to test it with a large global project he was assigned to support. The results were never empirically proven, but the overall success was positive based on exit reviews and employee feedback.
The idea is solid. Better bosses can make a difference in the way work teams view the company. More importantly, it impacts the quality and quantity of work contributed by employees.
Add to the above factors the rapidly changing world of work today in the face of COVID lockdowns, remote working, and workforce change.
Studies are beginning to emerge wherein labor pools are voicing one common theme. People are tired of toxic cultures created by bad bosses. Here are a few of these studies:
Management teams who have historically ignored employee feedback are being systemically voted out of office. No, I don’t mean literally, because there is no such vote. But symbolically, they are receiving a “no confidence” vote from people walking off the job. The “Great Resignation” it is being called.
In essence, the modern workforce is saying “Enough!”
Should You Be Surprised?
If you are in a management position, now is the time to take action. There is always time to review what you do with your team. You can make a change.
Want to be a better boss? Here are a few tips to help get the journey started.
First, disconnect from the tradition and legacy of your company’s “less than” culture. Take a serious inventory of the standards enforced by tradition. Does the culture rely on command and control leadership styles?
More specifically, does the culture rely on any aspect of interaction that serves to diminish an employee’s status? Is it customary to always talk down to the people below you by job grade?
When an employee brings bad news, are they subjected to ridicule and admonishment?
Break that chain. Treat people with respect. No one deserves to be subjected to harsh emotional lashings for trying to do their job.
Next, decide on an intentional change in the way you look at your responsibilities.
Shift your thinking. Can you do more to represent your team? Are there better ways to show your support for them?
Then, upgrade your communication ability. Are you the best communicator you can be?
Step outside your own box for a moment and get a read on the way your messaging lands. Ask for some 360 feedback about your communication style and effectiveness.
Just because you say it, doesn’t mean people get it.
Make your communication a true two-way exchange. State your issues, then ask for feedback on the spot. You can start with a simple ask from your people, “Please tell me what I said, in your own words.”
Also, don’t rehearse tragedies.
This is aline I picked up from the hit TV show “Blue Bloods.” It means don’t dwell on the bad stuff going on. If something fails, make a one-time review of why, learn from it, then move on. Don’t keep dredging up the negativity.
With this also, never use a team or individual fail to justify a ‘public execution.’ Good people fundamentally know if they made an error. You as the boss, don’t have to keep reminding them of it.
Finally, learn how to read the room.
Pay attention to what is going on around you. If people seem on edge about a problem that is in front of them, you have to handle the problem first. Then you can announce a new piece of guidance or instruction. You can’t teach a sailor to tie a knot when the ship is sinking.
The New Year
Turning the page on the calendar is a great way to reset your own focus. Please take a moment to think about how you manage and lead your team.
Can you be a Better Boss? We all can do something to up our leadership game. Why not join me in making 2022 the year of the Better Boss?
On Tuesday, October 12, the Houston Better Business Bureau hosted its awards gala, honoring recipients of the 2021 Awards of Excellence.
Annually the BBB sponsors the contest to highlight the great work being done by the small business community in the Greater Houston area.
Judging for this contest is done by members of Silver Fox Advisors. Our advisors spend hundreds of man-hours reviewing the packages submitted by business owners, selecting winners in each of the various categories.
In the cover photo, are Silver Fox Advisor members (from L to R), Donnie Roberts, President, George Connally, Herb Kalman, Mark Miller (judging chairman), and Rich Hall. Not picked is Joseph Tung who co-chaired the judging team with Mark.
Congratualtions to all the winners. You can see more details on BBB’s website.
Greetings from your Silver Fox Advisors – 2021 has certainly begun with a BANG! As I write this newsletter, we are experiencing the coldest winter air mass in decades. The records are not yet in the books. But suffice it to say, it is cold in Houston!! The process to get COVID vaccinations continues with more and more of our friends and neighbors finding providers to administer the shots. Plus, the business climate is changing too as owners make critical decisions about their plans for the new year.
In this edition there are several announcements and pointers to share with you for this month.
We have two important downloads for you. First, the Greater Houston Partnership issued its economic outlook in January. You will find this information helpful as you finalize any business plans for 2021.
Next we have an excerpt from the IRS outlining the tax credits for employers that have been extended under the CARES Act. Please take a look at this important information that could impact your business tax picture.
Both handouts are available for download by clicking the button below.
We are honored to have a special presentation for our monthly Lunch and Learn coming up February 25th at Noon. Mr. Chris Manske will be presenting. Chris is a wealth manager, running one of the largest funds in Houston. He has written a best-selling book titled “The Prepared Investor”.
On behalf of Donald Roberts, William Herman, Doug Thorpe, Joseph Tung and the rest of the leadership of the Houston Silver Fox Advisors, you are invited to attend a rousing mid-day webinar and hear Christopher Manske, CFP® speak about how professionals can use their natural inclinations to their advantage in a well-researched talk about the patterned response. Mingle with some of the most exclusive professionals in Houston and enjoy Mr. Manske’s talk titled, Just Following Orders.
This will be a virtual event. There is NO CHARGE for admission, but you must pre-register to save a seat.
On another note, we are sad to announce the passing of one of our founding members, Mr. Bill Spitz. Bill was a mentor’s mentor. He was a guiding light and a strong entrepreneurial force in Houston for many decades. You can read more about his life and legacy here. https://silverfox.org/remembering-the-mentors-mentor/
2021 represents the 35th anniversary of the Silver Fox Advisors. Since 1986, the organization has been serving Houston area businesses and owners. While we are proud of that history, we know, as modern business leaders ourselves, that we must press on with new and innovative ways to connect with our audience. You have our pledge to grow with you.
If you need an experienced business advisor to help you with your business, visit our website or give us a call.
CASE STUDIES Silver Fox Advisors works with small business owners, CEOs, and entrepreneurs to help objectively solve problems. Drawing from extensive experience, a Silver Fox mentor or advisor provides keen insight to help business leaders solve daily business challenges, make key decisions, and follow through with strategic planning, plan execution, and policy/procedure documentation for the …
Books by Silver Fox Advisors Several Silver Fox Advisors have written books sharing their business experiences and expertise. These books contain information that you may find helpful to you and your business. We encourage you to click on the icon below to review the listing of these offerings. Houston Legends History and Heritage of Dynamic …
Houston’s Memorial Park is one of the crown jewels of Houston’s unique culture. Join us on June 25th as we hear from Shellye Arnold, the President & CEO of the Memorial Park Conservancy. The mission of the Memorial Park Conservancy is to preserve, restore, and enhance Memorial Park for the enjoyment of all Houstonians, today and tomorrow. Memorial Park Conservancy is a private, nonprofit organization that operates and maintains 1,100 of the Park’s 1,500 acres.
Shellye joined Memorial Park Conservancy in 2013. Since then, Shellye and the Conservancy leadership team have grown the organization from 3 employees to over 30 and from a $500,000 annual budget to over $30 million in operating and capital expenses. Working closely with partners, Shellye and the Conservancy developed a long-range Master Plan for Memorial Park in 2015; initiated capital improvements and transitioned management and operations of 1,100 acres of Memorial Park to the Conservancy in 2016; and in 2018 secured approval for a plan to deliver over $200 million of capital improvements in Memorial Park by 2028.
Fundraising is underway for this Ten-Year Plan for the Park, with catalyst funding from the Kinder Foundation. This is one of the largest urban park restoration efforts underway in the U.S. Project Partners in this public-private partnership include the Houston Parks and Recreation Department, Memorial Park Conservancy, Kinder Foundation, and Uptown Development Authority.
The team is focused on:
Restoring the Park’s ecological systems and creating greater resiliency
Reconnecting the Park’s land, waterways, trails, and people
Consolidating compatible uses together in appropriate areas
Tending to the land and the Park’s cultural history, maintaining balance through responsible management
And enhancing the overall Park experience and amenities
Shellye brings a background in executive leadership and change management from her nearly 20 years at Cisco Systems, Hewlett-Packard, Compaq Computer Corporation and McKinsey & Company. Having studied public policy,
Shellye spent the first part of her career with the Texas State Legislature, the Texas Department of Commerce, and the U.S. Department of Commerce. She previously worked as a volunteer in the Dominican Republic, Mexico, Paraguay and Peru delivering public health programs and speaks Spanish fluently.
Shellye holds a BA from the University of Texas at Austin and a Master’s Degree in Public Policy from Princeton University’s Woodrow Wilson School. As a native Houstonian, Shellye cares deeply about Houston’s parks, bayous, green spaces and the wildlife that inhabit them. Shellye volunteers in animal rescue and from 2011 – 2019 served as a leader for Girl Scout Troop 21, the nation’s only Girl Scout troop composed of women with differing learning abilities.
From the President of Silver Fox Advisors
Silver Fox Advisors’ President Bill Herman stated, “Memorial Park is actually larger than Central Park in New York City and is a Houston gem that is going thru a significant enhancement. Come and learn about Memorial Park’s long-term vision.”
This special presentation will be held via webinar rather than the Silver Fox Advisors normal meeting format at the Houston Racquet Club. You must register for event by clicking here.
Today the Silver Fox Advisors announced their newest member, Mr. Henry Florsheim. Mr. Florsheim was elected a member at the May 14th Membership meeting held virtually.
Bill Herman, President of the organization welcomed Mr. Florsheim by saying “Henry has an extensive and highly recognized career as former Managing Director of Houston’s ABC-TV Channel 13. His passion for the community and its growth are well known.”
Mr. Florsheim is retired from ABC-13, but is involved in numerous community activities including board seats with Interfaith Ministries of Houston and DePelchin Children’s Center. He is a former board member of the Houston Food Bank and Theatre Under the Stars. He volunteers with BakerRipley and serves in various voter registration activities for Harris and Fort Bend counties.
Silver Fox Advisors are proven business leaders who advise, consult, and mentor business leaders, CEO Roundtables, and entrepreneurship programs.
Silver Fox Advisors have been sharing their knowledge, experience, and skills since 1986. For more information visit: ww.silverfox.org