“Don’t start a company unless it’s an obsession and something you love. If you have an exit strategy, it’s not an obsession.”
Recently my cooler stopped working and I recalled a person that stopped into my restaurant a few months earlier. He started his own business and I wanted to give him a chance. The owner was not prepared to handle emergencies and stated he would not be available for several days. I was forced to call a more established company and thankfully they were able to provide immediate service.
When a piece of cooking or cooling unit goes down, there is a tremendous amount of stress and chaos on the entire staff. If and when this happens, time is of the essence and customers and money can be lost. To run a good business, it is imperative to have a plan for crisis situations and this business owner was not prepared or equipped to service their customer’s needs. This one of many reasons why businesses fail.
Here are several important tips that I believe will help you achieve success
Tip 1: Have passion and resilience
Being a business owner is challenging and your resilience and resolve will be tested. An entrepreneur needs to have a competitive spirit and a will to win. If you are passionate about what you are doing, this will make it easier to overcome obstacles and setbacks. Always remember why you are in business and then pursue your passion with unwavering commitment.
Tip 2: Have well established money habits
Managing your cash flow is critical for your business. If you are low on cash or have poor money habits, you should avoid starting a business. There is a possibility of grinding it out, but you are putting yourself at high risk for failure. While you are learning and trying to grow your business, the last thing you need is a cash flow problem. Develop good money habits and start growing your personal cash reserves well before starting your business.
Tip 3: Improve your leadership/people skills
A business owner should never stop growing and developing as a person and as a leader. Businesses will either thrive or fail on the quality of their leadership. Having good leadership skills will not guarantee success; however, bad leadership will often destroy your business. John C. Maxwell has written many wonderful books on Leadership.
Key qualities of an effective leader:
Lead by Example
You will lose the trust and respect of your subordinates if you are not setting the standard and practicing what you preach.
Clearly Identify Expectations
Identify and communicate often your expectation of the team.
Value and develop your team
-Your employees are valuable assets and it is important to treat them with respect, dignity and care about their success.
-Get to know your workers and understand what they need to thrive and be successful.
-Have the self-confidence to let your followers shine and be their cheerleader.
-Empower and establish self-motivation. Equip your followers with knowledge and training; If they follow your system, show them that they will accomplish the desired outcomes.
-Give them proper feedback and rewards.
-Teach your team to have a growth mindset and have continuous self-improvement
“A leadership culture is one where everyone thinks like an owner, a CEO or a managing director. It’s one where everyone is entrepreneurial and proactive.”
Tip 4: Do your due diligence
Understand the specific skills and knowledge that you need to run your business. A good approach is the bullets before a cannonball strategy-before you significantly invest money, do your due diligence and validate the idea. This will improve product development and is a cost effective, small investment approach to test your ideas. Testing the market is an excellent way to be engaged with your prospective customers and determine if your idea or product is a good market fit.
Doing research on your competition is also an effective strategy to explore and discover their strengths and weaknesses. This will help you direct attention on improving your ideas and meeting specific needs to help you gain a competitive advantage.
Tip 5: Understand the value of your service
Understand the value of your business and then offer superior services to as many people as you can.
Tip 6: Focus on areas that will make you money
Have a smart plan for allocating your resources and money. Spend money on marketing and resources that give your business a measurable return on your investment.
Tip 7: Learn the franchise model
The franchise model is more successful and does not fail as frequently as normal start ups.
An excellent book on helping startups is “The E Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It”, by Michael E. Gerber.
Key characteristics of the Franchise Model:
Routine inspections to maintain standards
Routinely inspect your operation and keep your employees accountable to what you expect. As a franchisee, I have come to appreciate the benefits of my monthly inspections. This is an effective way to maintain standards and to keep me and my employees accountable to our standards.
Test new products
Before a product or idea becomes operational in stores, test and determine what the customer wants and meet these expectations with high consistency.
Create a system
A business needs to provide a consistent, high quality service that can be replicated time after time. A service that can meet customer’s expectations in the same way every time is an excellent way to earn their trust and keep them coming back.
Dress Code: Utilize a uniform and dress code
Having uniforms will give your business a professional perception.
Have an operational manual
Summarize standards and expectations to create clarity for managers and employees. Establish a system so your employees can function without your constant supervision.
Tip 8: Pay Attention to little things
The little things that you and your employees focus on are often the things that will help you move from being in the red to a cash flowing, thriving business.
Example:
With my employees at Subway, my two biggest expenses are labor and food cost. I instill in my manager to always look at the big picture. With labor, saving 1 hour in an entire day projected out for an entire year can be a savings of several thousand dollars. With food cost, in a restaurant that has an annual gross sales of $500,000, a 1% reduction in food cost can be another several thousand in savings.
These examples show how easily money can be either saved or lost. Little things can add up!
Tip 9: Cost of customer acquisition
Pay attention to figuring out a realistic cost of customer acquisition and if you will realize a high return on your investment.
Tip 10: Delegate and hire out certain tasks
Develop a good strategy on what you should be doing and what you need to delegate or hire out. Too many entrepreneurs get trapped into working too much in their business and not enough time growing their business.
Tip 11: Maintain a Growth Mindset
The market and customer needs can change rapidly and you need to be willing to observe, listen and learn; be willing to adapt and change but maintain a commitment to your main purpose and mission. Pursue and develop a solid mentoring relationship with someone that is successfully running a business. This will help reduce your learning curve and give you opportunities to run ideas through someone.
Final thoughts:
In the story I shared at the beginning of this blog, too many businesses are not prepared to serve their customers. Implementing these tips will help you establish consistent, quality service and improve your chances of operating a successful business. While you are working for others, do your due diligence and focus on the skills and knowledge you will need to be a successful entrepreneur. I encourage you to seek a mentor and listen to their guidance. Making an effort to network and establishing professional connections with skilled and reliable people will help you along your journey.
