CNNMoney.com ran an interesting piece recently about the myths we follow in business, and why we should get rid of them. Here are the myths they suggest we ditch:
1. As you grow, so will your margins. That wasn’t the case for one casting company, as the story details:
(The company) won a municipal contract to create a precast building façade in 2009. The trouble was, the $5 million company had to lease extra equipment to do the job. Sales increased significantly, and gross margins declined by 3%.
If the revenue comes at a high cost, it may not be worth it at the end of the budget sheet.
2. Competitors are unfriendly. Sure — some are. Everyone’s trying to make a profit, after all. But do you put off the idea of contacting competitors just because you assume they will be nasty? Who knows — one cold call could lead to a joint venture. Products made by different companies will be different in some way, after all.
3. You know your market. I, for one, am consistently finding that I don’t know how much I don’t know. Have you done the research to prove that your product won’t be well-received, or are you assuming so? The story’s example:
(One strategy officer) was certain that only big companies wanted his firm’s software, which helps users predict which clients will be the most profitable. But surprise! After encountering a midsize firm that wanted something like it, he undertook market research that showed that others did too — only for a lower price — and launched a new version.
Think about how much money that company would have never made, had the officer not bothered to find out that his product really was in demand.
4. You must provide a custom product. At times, sure you do. But could you offer a one-size-all approach of your product at a reduced rate? Would more people buy your product that way?
5., and probably most important — You know it all. Unfortunately, it’s a fact of business that communication is rarely optimal, and often, those up the chain are the last to know about things. Insist that you are kept up-to-date with the happenings in your company, especially things that are losing or saving money, so you can act quickly.
Are there any other myths that you followed in business that turned out to be false?