Are You A Banker, An Accountant Or A Merchant?

True Merchants Somehow Get To The Other Side

Style is so important in the world of business success.  Great success has some interesting rules.  The rules of the road for performing successfully include how much style an owner applies to the canvas of operations.  If the business owner is operating a bank, the style of play is a bit different than if that same owner is operating a mechanic shop.  Did you know that?  Not only will the clothing look different, but the language will not be the same.  I doubt the auto mechanic would do very well if someone hired him to manage a local community bank.  On a similar note, I doubt the bank manager would make a very successful auto mechanic shop owner.  The required style for each operation would be violated enough to interrupt most of the needed components for producing successful results.  If you are a banker, do what bankers do.  If you are an accountant, do what accountants do.  If you are a merchant, do what merchants do.  If you are an auto mechanic, do what mechanics do.

I see a few business owners try to function outside of the style they need to perform.  Some retail owners try to become bankers in their operations.  Do you want a good tip?  Don't try that.  It will not work well.  Some retail owners try to become accountants in their operations.  Do you want another good tip?  Don't try that.  It will not work well.  Some retail owners are merchants at heart and those are the ones who perform the best in that model.  If you are an owner who is trying to manage a merchant into becoming an accountant or banker as your retail manager, you are leading that merchant into the halls of failure.  Your numbers will not produce the desired results you imagined to eventually appear with that kind of leadership.  Quit dreaming.  Making this kind of move is like trying to mix oil and water together in a bucket expecting the two to blend into a foamy substance.  Not going to happen.

The banker who tries his hand at managing an auto mechanic shop may clean out the filthy place and toss away all of the unused, discarded engine parts littered all over the shelves and floors of the corner places.  That banker might believe a cleaner shop will appear better to the customers this shop attracts.  The banker may gather up all of those discarded pieces and take them to a scrap shop and convert them into cash to improve his financial reports.  The banker might get excited about converting dead inventory into working capital.  What a great move, right?  Wrong.  It might look good on the financials to move dead inventory from the liability side of cash flow and turn it into a smaller asset, because it was discounted to discard it, that now has the ability to become part of some new working capital that can be immediately cash liquid.  What a great banking move.  What a stupid mechanics shop move.  A good portion of the 'gear-head' trade just became shocked at this move to eliminate having those retired parts disappear from their library of future access.  The discarded inventory of old parts were not dead assets.  They were active marketing tools.  The real mechanic understood this reality.  The banker did not.  The two styles will not mix well.

If you are a banker trying to operate a retail business, this kind of description will piss you off.  As it should.  However, the truth needs to be understood if you truly want your retail operations to produce better financial results.  Get rid of the banking mentality.  Those types of operational styles will not work well in a retail model.  Know the difference and teach yourself how to accept these differences.  If you fail to recognize this truth, you will never produce great retail results.  Never.  You might as well quit trying.  You will be wasting your time as well as everyone else who is waiting for success to appear.  It ain't coming.  Period.

By the way, banker, the failure will be your own fault.  How does that one feel?  It does not feel bad because you will never accept that truth.  That is why you are a banker and they are the merchants.  Neither one of you agree to the rules of the road that each of you believes should be traveled.  I have found great bankers in my retail life.  I have found great accountants in my retail life.  The best ones have never tried to advise my merchant heart how to or how not to do what I do for a living.  We think differently.  The good ones recognize this difference and respect it well.  Both my bankers and my accountants have often described to me how they do not understand what I do to make retail work well.  Both like the results that show up in our business models but do not fully understand how those results eventually appear.  I have actually listened to an extremely great accountant ask me how does that place do what it does?  She was totally mystified by the continued good results.  My answer was this, "I don't know.  It's a mystery to me."

Retail is a very different beast.  If your business model is selling stuff to the public, it is involved with retail rules.  If your heart does not match what a merchant heart does, you are likely having trouble making your business model produce continued success.  You are likely fighting against the wind.  A lot of the tiny little decisions you are passing over as unimportant are not and the ones you are likely considering of great importance don't matter much.  You are likely doing some banker moves and cleaning out the old discarded engine parts while at the same time losing the customers who are interested in hanging out where those parts are resting.  You believe the immediate working cash is far more valuable on your balance sheet than the future trade you gain from the 'gear-heads' who walk the outside world recommending your shop to non-gear heads needing mechanic work.  The dead inventory was quietly managing your word of mouth advertising.  As a banker, your immediate benefit from the new cash conversion will be short lived.  You now have a new problem developing.  Your negative word of mouth is destroying your future foot traffic creations.  Your future volume will be compromised.  Good luck spending more advertising dollars to gain back what you quietly lost.  I hope that cash conversion you did can pay for the future advertising you will need to spend.  Otherwise, banker, you lost.  Your future balance sheet will be destroyed.  At least you will own a clean shop!  If that was your goal?

Are you a banker, an accountant or a merchant?

It Is Sometimes A Mystery How True Merchants Win 

There is a difference.  Although the differences are so subtle they may not be easily defined, there is a difference.  The leaders who recognize how to win at the retail game are a rare breed.  They do not operate in rational ways.  They have a sense for adjustment that nobody else can feel.  If you are a banker and you are trying to operate a retail business successfully, hire a merchant.  If you are an accountant and you are trying to operate a retail business successfully, hire a merchant.  Do not for goodness sake try to change your banking ways into building the retail model your way.  Do not for goodness sake try to change the retail model into an accountants way.  They will not work.  Get a merchant at the wheel.  Get out of the way and allow that merchant to figure out what to do.  They will operate better if you permit them to get lost into the way they drive the machine.  They will eventually begin to win the driving game of your business model.  Once the merchant gets a grip on how the wheel works in this model, they will drive it better and faster with time.  Get a merchant in charge of the decision making, not a banker and an accountant.

Spots on a leopard are permanent.  Do not try to change the spots on a leopard.  It will not convert the leopard into a squirrel.  Bankers are bankers at heart.  Accountants are accountants at heart.  Merchants are merchants at heart.  Do not try to change the spots on a leopard.

I have a close friend who worked the best part of his life in a government office environment.  He was good at what he did.  He has a long list of great success.  He grew tired of the place where he performed his living.  He wanted to become a small business owner.  He now tries to sell stuff to a specific group of the consumer public.  He does not possess the merchants heart.  He did not hire a merchant to steer his model.  He is trying hard to convert the spots on the leopard into something it will not become.  He is programmed to do his work in a completely different fashion.  The conversion is quietly killing his efforts to succeed.  The things he misses to do he does not see.  The things he thinks are important to do are not.  A merchant with a life of bloody noses can smell these differences in a heart beat.  A banker and an accountant cannot.  There is a difference.  It might be too slight to actually describe, but there is a difference.  The real results find their way in the end.  The real difference will likely never be able to be described in a qualified and quantifiable way.  Each missed move may look too tiny to matter.  Yet in the long run, the lost foot traffic will grow into something that cannot be endured much longer.  Future growth will not appear.  The leopard will still look like an intelligent leopard.  The merchant will stand on the sidelines and see what needs to be done, yet remain silent.  The model will continue to fail.  More wrong moves will lap the circle of the previous wrong moves.  The model will continue to fail.

Get a qualified merchant in charge of the steering wheel.  Then get away from the bridge and the steering wheel and permit that merchant to make it or break it.  If you are a banker, bite your tongue and allow your properly chosen merchant the freedom to decided how to make that model sing.  Do not question how that merchant does what they do to make their retail models sing.  Somehow I believe even the merchant does not always know how it is done.  They just trust deeply in their heart what needs to be done when it needs to be done.  They can 'feel' it.  It is a second sense that so many bankers and accountants do not feel.  The difference of a minor move today might only be a tenth of a percent...but in five years matters to make a 10% increase in profitability.  That is how silent success can be.  Only a merchant understands the true value in what that statement means.

Good luck choosing your merchant driver.  That is the real test.

Until next time...