The Cost of Inaction.....

Article By

Peter Wilkinson

Director - Tipping Point Advisory

Mining is one of the toughest businesses to get into and ever tougher to stay in. Occasionally someone manages to ride the commodity price wave (think Fortescue Mining). Most companies though like BHP, Vale and Rio Tinto need their eggs to be distributed across more than one basket.

Even more so though, these businesses are all about minimising lost opportunity. Think about the process of extracting iron ore from the Pilbara and transporting it via rail to port. Every trip to port is worth in the order of $2M in product and every lost trip due to breakdown, “act of God” etc is $2M that the business is never getting back again.

So what outcome are you trying to achieve with your business? The infrastructure construction industry has a real head of steam up – particularly across the East Coast of Australia - with the consensus being at the commencement of 2018 that engineering and construction is in a “general expansion” phase. If you want to relate this to the stock market, this sounds like a “bull run” to me.

If things aren’t going so well for your business now, you might like to consider what sort of market environment you’re waiting for to achieve the success you’re after? If you’re convinced that now is the time to be “in it” – as many are – you might consider what specifically needs to be done with your business to generate the performance you desire?

You might also consider for a moment the cost of not acting – the money you’re leaving on the table due to your inaction. Remember that the Construction industry is traditionally subject to sharp corrections (again think stock market) and history shows that no “bull run” lasts forever.

This is not intended to be a “call to action” in a sales sense (although if you feel the need to act don’t hesitate to reach out….). I’m encouraging you to pull out your calculator - probably a HP 15C if you’re from my era - and get clear in specific Revenue terms what inaction is actually costing you. Just like the miners do, you will find this to be a powerful motivator for action in your business.

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