Today I was reading a magazine that is read by most people in the restaurant business. I was shocked at the number of formerly successful restaurant companies that filed for bankruptcy. I also read that several old successful companies were upgrading and were opening a record number of new restaurants. It seemed odd to me that some were hurting in this economy yet others were growing. How can that be?
During slow or difficult economic times most companies do what they can to reduce cost in order to survive. Some of the things they do should be done when business is good but the slow down makes the move more critical. Many also stop investing in new products and services that may make them more efficient or increase sales. However, there are times when that may not be the best move.
When customers spend less we all have to compete harder for the remaining business or we could be one of the many companies we see filing for bankruptcy. In today’s business world, if we don’t strive for constant and continual improvement we will lose our customers to those that do. How many great businesses have you seen that started out very successful but eventually faded and died if they did not follow that rule?
I think many companies suffer from following the old saying “If it ain’t broke don’t fix it.” However, if you aren’t moving forward you’re going backwards because your competition is moving forward. I believe that’s the answer to the question.