Lessons from Star Oil
Several weeks ago, I was a guest at the Chief Executive Forum, which began the session with a tour of Star Oil given by Mark Fitz, a sharp, highly capable executive whose witty, cheerful manner belies his business acumen. As he eased our group through the Star Oil facility, it became very clear that he had an iron grip on his business and the industry in which it operates. Here is a summary of some of the topics he covered--a subset of the areas Red Fender advises its clients on as they tackle growth and expansion.
The Knowledge Advantage. Being slightly more knowledgeable than your competition can give you a huge advantage with your customers. The more you know, the more capability you'll have to solve your customer's problems better than your competition.
Benchmarking. Setting up a regular benchmark or KPI measuring program can help you measure progress, track performance, and make any necessary adjustments. If you check the state of your oil on a regular basis, you'll know when it needs changing.
Search Out New Opportunities. Mark's company purchased a container of oil drums for scrap metal prices and turned that inventory into a new business, cutting costs and bringing in a fresh source of revenue. Always look for opportunity, even when it comes from non-traditional places.
Mark Fitz
Learn What Affects You. Mark told the story of a new dam that was built in China and its dramatic impact on commodities pricing—a cause/effect relationship that caught many off guard. While you can't be a seer, you can still learn what forces might have a positive or negative effect on your business and put together a strategy to deal with them.
Depth and Breadth. As you consider what direction to take your business, depth is as important as breadth. Before adding new products or services, spend time strategizing where you want to go and if it's worth the time, effort, and money required to get there.
Look Beyond What You See. Mark bought a tanker truck for a new business idea that did not pan out. Instead of furloughing the truck, he got the idea to use its compartmentalized body to store his oil inventory. This re-purposing of a non-productive asset worked so well that that he bought more used tankers. While it may not look pretty in the yard, this innovative idea gave Star Oil a flexible fuel storage system that helps keep the company fleet-footed and ahead of its competitors.
Price Negotiation is Good. Don't be afraid when a customer asks you to reduce their cost of doing business with you. So long as what they're asking for is fair, price reduction requests can indicate an eye towards growth and an opportunity to further cement the relationship between you and your customer. Also, don't be afraid to ask the same thing of your vendors.
Can Technology Help? Mark embraced leading-edge RFID tracking technology to automatically identify his customers and the fuel they were using. If technology can play a role in improving your business (and it has a definable return on investment), don't hesitate to incorporate it.
Cover Your Overhead. No business likes living from one sale to the next. Wherever possible, create recurring revenue to help cover your overhead.
Politics and Business. Mark is very active in several business organizations and political groups. He says that his activism helps him stay on top of regulation, monitor trends, and keep his finger on anything that may affect his business.