ACtion Magazine - May 2014 - (Page 10)
Mind your business
By Keith Leonard, Esquire
hat does it mean to take care of business? What car being offered for sale during an economic recession. It
more than a marketable product or service for turned out that only two vehicles, the Ford Thunderbird and
"sale" does a person need in order for his/her small the Rambler American, were produced in larger quantities in
business to succeed?
1958 than they had been in 1957. Not exactly the best of times
Surveys indicate that some eighty percent of small busi- for a manufacturer to introduce its newest model of car, and a
nesses fail within eighteen months of starting. So, how can fairly expensive one to boot.
you improve your odds? First, every business needs to have
While the Edsel may live on as one of the great failures
sufficient capital to start up the business and keep it operating in the automotive industry, it is certainly not alone. How
for some minimum period of time. However, much more than many readers remember the automobile featured in the highstart-up capital is needed to succeed. A business must talk est grossing film of 1985? I will give you a hint - the car
with its customers and definitely listen to what they have to was capable of time travel and had a "flux capacitor." The
say. Encourage them to identify what the business could have automobile in the film was a real car, not a futuristic car, but
done better, as well as having them tell you what they liked only some 9,200 were actually manufactured for model years
about the business.
1981, 1982, and 1983. The film was Back to the Future and the
Secondly, take the time to see how
car was the DeLorean DMC-12. There
you might be able to set your business
is quite a list of reasons why this car
apart from all of the other businesses in
Make sure the business is failed. The DeLorean Motor Company
the industry; to determine what value
was cash strapped from the beginning
one where money can and chose to open its manufacturing
the business has for its customers that
might be different from the value of its
be made. plant in Northern Ireland. The car went
competitors. And then, once you decide
through a number of prototype producwhat may differentiate it from your
tion changes before the car went into
competitors, find out ways to "educate"
actual production. The workforce at the
the customer base in how your business is different and of factory turned out to be badly inexperienced, necessitating
greater value; and do it in clear language.
additional time for training, and pushing production schedulA business person should also do some self-examination ing back even further. And when the car was finally manufacand recognize what leadership skills he/she does bring to the tured, the only thing high on it was its price; quality control
business, and just as much, what skills he/she does not con- being another problem with the vehicle. In hindsight, it is diftribute to the business.
ficult to imagine how an automotive company founded during
And finally, while it may seem obvious, a business person an energy crisis and at a time when safety and emissions laws
should also make sure that the business he/she chose to start were becoming stricter would succeed; particularly while the
up is one where money can be made at all. There has to be automotive market was in a slump. Clearly, somebody wasn't
sufficient demand for the product or service and a willingness taking care of business. ❆
to pay the price for that product or service from which the
business can make a profit.
In the automotive industry how can the same company
(Ford Motor Co.) that came up with one of the most innoRemember that laws are constantly changing and are
vative and profitable ideas in producing a car (the assembly
often not uniform throughout the United States. Do
line and the Model-T) also produce one of the most historic
not place unqualified reliance on the information in
failures in automotive history, the Edsel? Before it was taken
this article. Always contact legal counsel for detailed
out of production, the Edsel had lost an estimated $250 miladvice.
lion, which translates to almost $2 billion in today's dollars.
If you have a particular issue, law or problem you
would like to see addressed in a future column, please
When that car was on the verge of being introduced in 1958,
contact me at KLeonard@LeonardSciolla.com, or
it was promoted (though not revealed in any advertising until
Leonard, Sciolla, Hutchison, Leonard & Tinari, LLP,
its release date) as an innovative vehicle. However, while it
may have been innovative, the Edsel was also simply a bad
car, with problems that quality control did not remedy before the cars were sold. Further, the vehicle was an expensive
ACTION * May 2014
Table of Contents for the Digital Edition of ACtion Magazine - May 2014
Selling the right things
By the Numbers
Letter to the editor
ACtion Magazine - May 2014