It’s all about the numbers

I have been working with a maple syrup producer recently.  It is a very seasonal business with large fluctuations in production driven by the weather.  They have been selling wholesale and looking at increasing their profit margins by moving into the retail markets by developing an online store.  Everything was on track until Mother Nature decided to throw a curve ball.  The crazy spring weather reduced production by 35% from last year.  There was barely enough production to cover the wholesale orders.

The retail expansion plans were shelved until next year.  At least until we started looking at the numbers a bit more.  We had been looking at equipment purchases to package for the retail market and had some solid cost numbers on the equipment and the cost of production for each stage of the operation.

The aha moment came when we asked the question “What if we bought high quality syrup on the wholesale market instead of producing it ourselves?”  When we compared our costs to wholesale prices, we found that not only could we make money by buying wholesale and packaging for retail, but we could make as much money as producing it ourselves.

By shifting our focus and looking at different ways of reaching our goals, we came up with a way to continue the growth rate.  The original focus was always produce as much as possible and sell what you make.  Shifting the focus to finding a way to sell maple syrup instead of produce as much as possible seems like a small change, but it will mean the difference between an average year and a very good year.

The question is, what small changes in your thinking can have big impacts to your business?