If only I knew this sooner!
There have been many times in my career where I found myself saying “if only I knew this sooner – I would be so much better off today!” Surely you have caught yourself saying the same thing in your own career. We all receive information in varying doses, connect dots differently and reach conclusions on our own time. My goal for writing this post and future posts of this nature is to help you gain career knowledge sooner by drawing upon my personal experiences to provide examples and increase understanding. If successful, I will start a series of posts called Career Advice for Advancement and continue sharing knowledge that I wish I knew sooner in my career.
While the primary focus of Jeffalytics is tips and tricks in the Digital Marketing and Analytics world, these bits of career advice are much more universal in scope. Please do feel free to share with any friends and colleagues who you feel may benefit from this additional depth of knowledge.
Understanding How Profit Margins Affect Business Decisions
When you graduate from college with a tangible, in demand skill and no formal business training you are starting off in the middle. In my case, I started a business at 24 with the understanding that I could make websites and people would pay me for them. Not only that, but they would pay me more than I could make at my job as a government employee. I knew very little else about running a business at the time and by starting in the middle it took several years to learn the lessons that may sound obvious to you already.
One of these lessons I learned was the importance of margins for running a business. Several seemingly unconnected experiences helped me realize just how important margins are for the health of a business. When these experiences are looked at upon the same plane, it’s easy to see why strong margins are so important for business success.
Business Example #1: Nucor Steel
It all started with the book Good to Great by Jim Collins. As I was reading through the examples of companies that outperformed the stock market by 3x over a period of 15 years, I noticed that one of the companies mentioned was Nucor steel. This particular company piqued my interest because the steel industry happens to be where my father in law worked throughout his career.
Hoping to win over my future father in law while dating his daughter, I started talking to him about Nucor steel to see if he could corroborate the story found in Good to Great. While his opinion as a former competitor to Nucor was not as glowing as that of Jim Collins, he told me something that was just as valuable: They were a highly profitable company because they had great margins. [Continue reading]