Monday’s= Small Business
If you do any amount of business reading you hear about the problem with silos in an organization. The complaint is that a department never interacts with another department to the detriment of the overall organization. An example is – the sales department focuses on sales and would happily sell to a client who has little ability to pay because they only care about sales. The credit department on the other hand is only concerned about avoiding bad debts so they don’t want to sell to anyone unless they are an amazing credit risk. These two groups do not talk to each other because they live in figurative silos. It is up to the President or CEO to make sure that the organization is making the most sales that it can to customers who can pay.
A small business owner has fewer of these problems. If you have separate personnel responsible for collections and for sales then it is likely that they talk to each other all the time since they would be near to each other in a small office. It is easier for people to see the connections in their work when there are fewer people involved. The business owner is still responsible for making sure that they are making the most sales to customers who can afford to pay, but it is an easier task than when you are dealing with entire departments.
Conventional wisdom is that everyone should have a stake in the net income of the business. Bonuses should not just be based on sales for the sales department, but also on overall profitability. Everyone should pay attention to this issue because a business needs to be profitable. Focusing on metrics that exclude profitability is not the answer.
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