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Friday, April 18, 2008

Running a successful business

Running a business is a bit like doing a jigsaw puzzle. The pieces must fit together perfectly in order to complete the puzzle. If you are missing a piece, or if you have to pound the pieces together, you can't complete the puzzle.


Create a Culture

The first piece of the puzzle is the corporate culture. It needs to be created and communicated throughout the entire operation. There are many tools available to help write a mission or vision statement, but I think it's often best to keep it simple -- one or two sentences -- and describe why the business exists. What is the core value or the daily purpose? Write it down and share it with everyone! Next, create an employee manual that reflects the culture. Again, there are many websites and consultants who can help with employee manuals. In this case, I do recommend getting outside council as the policies and procedures described in the manual should be legally sound and abide by your state's employment laws. Finally, reward behavior consistent with the culture and confront behavior inconsistent with the culture. This will insure that everyone is calibrated to the same standards.

Recruit the Best

The second piece of the puzzle is to recruit the best team to carry out your vision. What do the best college sports teams do? Recruit the best players all the time! When a business is short-staffed, that is the worst time to recruit because you are desperate. It is much better to recruit and network all the time, so the pipeline is full when you need it. Just like college sports teams, when you recruit the best you get a reputation for excellence and great players (employees) want to be on your team. Recruiting gets a whole lot easier when you have a reputation for being a great place to work.

Walk the Talk

The third piece of the puzzle is leadership at the customer level. If the business founder is not on-site 40 or more hours per week, there needs to be someone else charged with the role of business leader. In this case, it is also important that the founder writes a job description for him or herself. The founder needs to be consistent with the message the manager is presenting to the team. It is absolutely counterproductive for the founder to come into the business and start making management decisions if he or she is not the full-time manager. For example, if the founder stops in to drop off supplies and notices the bathrooms are dirty, he or she should speak with the manager and not reprimand the employees directly. Also, if the founder stops in to drop off supplies and decides to stay and help out with customers, he or she should be in proper dress code and have all the necessary supplies to do the job. In other words, the founder and manager need to "walk the talk".

Develop Your People

The fourth piece of the puzzle is to continue to educate and train your team and invest in their pursuit of excellence. Make continuing education an integral part of your operations. Ultimately, every business is about the people who serve the customers, so you need to commit to education at all levels, especially developing leadership and management skills. Set goals for each team member; review performance on a regular basis, and; reward success.

Marketing and Promotion

The fifth piece of the puzzle is making customers aware that your business is available to them. Create a plan and a budget, and execute. In my business, grass roots marketing and PR is the secret weapon to success. We encourage our franchisees to visit every daycare center, preschool, karate school, gymnastics center, dance school, etc. and spread the word . A business' first year goal should be client acquisition, so heavy discounting and couponing is critical to success. With a strong "call to action", your marketing message will drive traffic and client counts.

Business Analysis

The sixth and final piece of the puzzle is analysis. For every activity, there should be a way to measure its success. Remember, you're in business to make money, so while ROE (Return on Effort) may be personally rewarding, if it doesn't have a compelling ROI (Return on Investment), it's not an activity worth continuing. As you analyze your business, you should understand the financial benchmarks that lead to success. Find comparable businesses to which you can compare your financial statements. You should analyze your overall results (P&L), as well as individual activities such as recruiting, marketing, staffing, etc.

(From an article by Joanna Meiseles )

This article was targetted at people starting a franchise, but the key fundamentals are well captured, the only add I would give at this stage is that the first year of a buisness is all about securing and developing customers, if you don't have a strong customer base you have nothing for the future.



1 comment:

Franchise Whale said...

Great stuff! Thanks for sharing, one fresh
idea and you can change the world, keep
up the great work.