Its all about business.

Archive for October, 2007

Activity and decisions, there effects on your business

Oct 29

Posted by Steve Gray in Excellence!, Growth, Leadership, Negotiation, People!, Personal Development, Risk Management, Starting out in business | No Comments

Have you ever thought about the activity and decisions that takes place in your business, or in your life for that matter? Let’s get a handle on things to explain more about what I mean.

Active and inactive – It’s either one or the other and not much in between, of course at the either end there can be a lot or a little of each.

Reactive and proactive – the other aspects to activity one being positive and the other negative.

A situation takes place, e.g. an employee makes a mistake, a proactive stance could be “Well you made a mistake, did you or are you able to learn from it?” reactive could be “YOU DID WHAT! what will that cost us!!! Oh No!!!”

An inactive stance would be to do nothing and an active stance is to do something. The question is how do you make the decision and do you think much about it?

Okay enough of the basics, which way you turn with this can have a solid bearing on outcomes in your business, in the case of staff if they keep getting reactive responses from you on all issues, after a while they will not tell you anything. On the other hand if you are always proactive they can (in time) see you as a “soft touch” a person that always sees the positive even though it may be doing great damage to the business.

The flexible approach is to be able to flip responsibly between each area, you could choose to do nothing, something, react or be proactive. Lets pick another example, a person slips on the floor of your shop, you could do nothing (inactivity) and perhaps act as if it did not happen. Yet if you react and tell them off for not seeing the puddle on the floor it could go against you as well. A proactive stance might be to offer them assistance (but probably avoid mentioning that it is the companies fault.) and see if they are okay.

The choice is up to you, so you hope the decision you make is the one that is the best option all round.

Here’s the point about all of this, it’s about making decisions and often snap decisions at that. Many people say making decisions is hard and that can be true, the challenge is to make more of them (even poor ones) so that you get used to making them often and therefore get comfortable with making them.

Once comfortable with making decisions you can check consciously if they are reactive, proactive or inactive. Then in time you will probably make more of the right decisions automatically.

Rich with the gifts of life

Oct 27

Posted by Steve Gray in Excellence!, Growth, Leadership, People!, Personal Development, Planning, Risk Management, Starting out in business, The Board Room | No Comments

Business can be fickle, some succed, others fail, some just plod along making just enough to struggle on even though the market might be very buoyant.

In the end many will say business is just about money. Yes and no… I like to think I get more than just money out of what I do. In many cases I get a great deal of satisfaction out of being in business.

I recently came across a summary of the success classic Think and Grow Rich by Napoleon Hill, its simple, practical and highly effective… the thing is you need to know that richness is not about money… its more about the things. Things like how you feel, what you won, what you control, what you develop, what you create, Its all there you just need to know the simple formula for making these things happen.

Hills book was based on the success of many people and using extensive research he was able to distill the results into this classic.

Knowing that it’s easy to implement helps, but you have to be able to overcome procrastination, other peoles intervention, fears at all levels, above all you have to accept abundance is the norm, not the exception.

Stop now and think, am I rich with the gifts of life, or am I merely existing and chasing my tail… If you are ready to take on a full and rewarding life then do so by reading or re reading the classic.

The business success points

Oct 26

Posted by Steve Gray in Excellence!, Franchising, Growth, Planning, Risk Management, Starting out in business, The Board Room | No Comments

Over time I come up with a list of business success pointers and change it, the order does not matter much I think all the points are usually of equal importance.

Then I think about it some more, weigh that up against things I see and arguments I have in my head about how things are and what I am seeing. So for now as at Oct 07 this is “The list”.

  1. Effective systems - Production – Management – Marketing – Risk management. No not systems to create a bueracracy but systems to create elegant flows of the right information and resources to the right place at the right times. Checklists, operational procedures etc.
  2. Excellent products and services – With the right ones in place the profit margins are easy to sustain and even build on. Think apple’s Ipod, it really was just another MP3 player, but the design and the hyoe compbined made it a stand out performer, everything else (generally cheaper) paled into insignificance. It is clearly No 1 in the market If you were able to produce stand out products and back it up with service second to none then you would clearly have a siner.
  3. Clear aims and strategies - Marketing – Operations – Management, from profit to HR issues clarity of the aims and strategies (the how to’s in the system) will (and does) make every bit of sense, your people will know what to do and when, and chances are you let them develop the aims and strategies and so they are hell bent on bringing them to fruition. Make sure innovation and leadership are a part of the aims and strategies, if not add them NOW, business requires organisations that can and do make positive use of these two.
  4. Clear mission and vision – And I don’t care how small or large the organisation is have something you can hang a mantra on, so you and your people can chant it silently and know it permeates everything your organisation stands for. Then imagine, what if each division had its own mission and vision… could be useful for larger organisations wanting to take teams to a fresh level.
  5. Growth and development strategies - This probably comes out of the mission and vision along with the aims and objectives, the aim in short to make sure the business is able to develop and grow in effective ways… It might be profit to begin with, then more staff to share the load… then, well its up to you, check out your aims and objectives, if they don’t fit to this area alter them now.
  6. Brand image – People, customers – suppliers – prospective and existing staff should be able to say they know the organisation and perhaps what it does by the brand image. Clarity of communication here will build pride all round and leave a professional image in their minds. Look at the logo, the slogan (if you have one) then all the marketing materials, signage adverts THE WHOLE SHEBANG and see if it’s a rock solid image that is being presented.
  7. Customer focus - No customers no business, so get vital about focusing on them, are they treated like royalty? Should they be? They bring $$ in to the Co… so go all out to make them feel fantastic, so much so they want to come back with their friends and buy all you have! Suggestion make it sustainable, there is no use to a focus that becomes fuzzy over time and is not sustained.

That’s the list, pull it apart, print it out and hang it on the wall, throw darts at it to figure out what to do next, I care not, I just know that this list of “stuff” works and will make a difference. date for implementation… NOW!

The impact of the “stages” of business

Oct 25

Posted by Steve Gray in Franchisees, Franchising, Growth, People!, Personal Development, Planning, Risk Management, Starting out in business | No Comments

Describing business in terms of its stages, infancy, adolescence, maturity and so on is a great way to sum up the situation, but there are impacts and of course differences in each.

So in the development of the franchise from the start up infancy stage, through to maturity there are some different challenges to face that would not ordinarily show up. here’s an example, for some it will be starting out with an understanding of why they pay a franchising fee, then doubting its value when the chips are down, then up again as things turn around.

The question is will the franchisee ever fully regain the respect they had for the fee in the first place. Chances are no… Some of the edges may well have been chipped off. But its all part of the stages and this up and down attitude can happen multiple times in the course of each stage.

The challenge therefore is for the head office team and peer mentors to be able to recognise the situation and then be able to do something about it. Even if it is just a list of things to look out for, or a reminder list of what the franchisee fee covers, or even in the newsletter or Co blog it outlines more ways the franchisee fee gets used each month.

These sorts of reminders can go a long way to clearly showing the franchisees how they are being served and the value of that service.

For the non franchise business it may well be a case of looking out for challenges as they arise (e.g. why am I spending $x on insurance) then looking at the peace of mind that can bring and the potential hassles it can prevent, then move on from there.

In business there will always be stages to go through but its up to us to be able to handle the challenges within each.

Up the downhill or how to look at challenges.

Oct 24

Posted by Steve Gray in Excellence!, Franchisees, Growth, Innovation and Creativity, Personal Development, Planning, Risk Management, Starting out in business | No Comments

In a previous article I mentioned business being like a roller coaster with its ups and downs… This time lets look at some of the causes of this “uppsy downsy” situation.

1. I feel flat – This can be from a build up of things not going too well, everything else can be okay but the flatness you feel can cause your downhill attitude to rub off. Be aware of this happening and endeavour to keep the team in high spirits. One waqy to do this is to say “I feel a bit flat today, things have been busy and I’m a bit worn out, its not so much the team here but the workload, so guys, cut me some slack if I seem a little grumpy” This clearly states the situation so they don’t have to feel as though they are at fault.

2. $$ down you are up – You know the work load has been steady and the accounts go out at the end of the month, but the expenses are piling up and there will be too much month at the end of the money! You feel okay but the word is out that the $$ are short… the undercurrent hits the team like a dumping wave in the surf, they can hardly come up for air… In a one person business this can be a double edged sword, and who knows next month when you are flush for cash the work may well slide off the scale (the bottom ind of it!) Therefore aim to build your cash reserves to cover these situations, build a buffer between you and the bottom of the $$ jar.

3. Personal dramas – Your personal life is just that PERSONAL, so keep it that way, there are times when the “chips are down” and you want to “throw in the towel” Again this is like No 1. on the list, you can communicate to the team that things are not great for you right now, so they know its not them. Then get on with things…

4. Lack of skill – You want to do a job for a customer but you are not sure of how to go about it, so you sweat on it, lose some sleep and get yourself all knotted up… over what? Often its as simple as asking someone who has done this type of job before or doing some research to see what’s involved. If you still feel you can’t do it, ring them and say so… Better to walk away with your ego in tact than make a real mess of it working under pressure.

5. You are over it – Business seemed like such an idealistic dream at first… then reality set in, long hours, low pay (how did that happen!) and the rest of the hassles that can come with being out on your own. Take a reality check is business a long term thing for you or a short term hope for the best scenario. It’s okay to start a business, it’s also okay to close one down. To be good in business there is a lot that goes into it and sometimes the only way to learn that is the hard way.

6. Permanent bad attitude – Some people seem to be born a little grumpy, or maybe you just became that way. Acknowledge it and do some thing about it. The staff turnover will be enough to put you off being in business for too long if you have a bad attitude.

That’s the list for now, maybe you have a few things you can tell us about in the comments?

Art and business

Oct 21

Posted by Steve Gray in Innovation and Creativity, Risk Management, The Board Room | No Comments

An often overlooked area of business is the art scene.

Diverse in its offerings, Art is often seen as the realm of the rich (in mind and $$). And can offer the purchaser more than just a decorative device, it can also boost their stakes in the up and up of social climbing as well as their investment assets.

Although often seen as a lofty pursuit, the need for artists to communicate and the want for purchasers to invest in visual literacy and one up-manship is solid. However a challenge arises when people arrive on the scene with limited knowledge of art and how it fits in the scheme of things. So here is a quick guide. Note I am more specifically talking bout painting and drawing here, not the crafts so much.

1. Contemporary - Considered to be the cutting edge of what’s taking place in the art world… New players abound, your research for pieces to invest in should focus on longer term artists of repute who have earned the title of contemporary artist. However the new players can provide the art lover with fresh perspectives and emergent investment opportunities.

2. Mature contemporary – These artists have been selling for years, some have passed on, some are still with us, but the work has gone from owner to owner being auctioned off in the revered art auction houses. Usually a much lower risk than an emergent Contemporary artist and often no where near as expensive as a classic.

3. Classics – The bigger picture of art from the past, from high level well renown artists to others of little note. Again in the bigger auction houses and from antique dealers, usually these works are for the “bigger players” in the investment market.

4. Leisure – The art works of people who create for enjoyment, some of these works attain a level of notoriety (often localised) However their value is often in the technique and style rather than the ability of the works to communicate contemporary themes. Often these are hobbyists that sell to help supplement their income or pay for their materials. As an investment they offer little in the way of $$ return as the artists often have little recognition to the active investment art world, any value is often sentimental.

5. Decorative – Renovation and do it yourself shows on TV show how to ‘take a canvas and tun it into your own piece of art’ the aim is to decorate a wall or space. This is all about colour and design basics and not about art for art sake. The images are usually meaningless and serve only as decoration, therefore they are not expected to appreciate in value.

There are probably a whole host of categories in between that fill various gaps but for now the above list is a starting point.

When looking at works of art you now have a perspective from which to view and assess them. So when asked “What do you think of our latest acquisition” when Aunt Millie points to a new painting in the lounge… you can start out with a discussion using a few of the points above. “Oh Aunt Millie, its rather colourful and fits the space nicely, tell me all about it…” then listen to hear how it was purchased, for what purpose, decoration or for investment.

For the artist they can take the list a see where they are at and or where they might be aiming, for galleries they can clarify their position and see who or target market might go for.

From all sides the list gives a starting point to understanding so the business of visual arts might be more clearly defined for all parties.

Uphill, down hill is there any in between?

Oct 19

Posted by Steve Gray in Excellence!, Growth, Human Resource Management, Personal Development, Risk Management, Starting out in business | 1 Comment

The road we travel in business is a rough one at times, then it gets smooth and before we know it it turns to a dusty track with giant potholes.

I’m talking about the everyday challenges we face, be it in getting enough customers, having enough profit, ensuring staff are happy and the $$ are still rolling in…

For many in business it’s like a roller coaster and few things seem to placate this, just experience over time that tells you “here it comes again!”

Apart from experience the business operator needs to have a way of dealing with these situations to ensure they can come out on top, mentally, physically and emotionally (at least!) so to be prepared for these challenges consider a survival kit to help you on your way.

1. Get educated – If its marketing that’s a challenge? Find out how to do it better, If it’s leadership.. FIND out how to be a better leader. Get educated, take short courses, read books and implement it to make it work. I appreciate your time is precious but making time to get this one right will pay big dividends in the long run.

2. Get connected – Find a group of business people you can bounce ideas off, a business forum that provides an active place where ideas get ‘flipped about’ can be useful to help you see others are in a similar boat and there are ways out of it.

3. Hang Loose – Take some time out from your usual routine, go to a park, take a river walk… I care not for the details but give yourself a break… on your own is good, and leave the mobile phone in the car! Rain hail or shine this short break can do wonders to boost your emotional immune system and creativity.

4. Make it inspiring - The workplace is where you spend a lot of time, take a look around and say how inspiring is this place…. Now make alist of what to do and do it bit by bit if you have to, but make it happen to inspire you and your staff.

There you go a few points to help you on the road to business success. It may still have some potholes and challenging uphill sections but the goal at the end just got a fraction easier.

Aussie franchising gets teeth…

Oct 18

Posted by Steve Gray in Franchisees, Franchising, Planning, Risk Management, Starting out in business, The Board Room | No Comments

The ACCC (Australian Credit and Consumer Commission) in Australia has released a document to assist franchisees in buying a franchise. The doc outlines a bunch of details about how to find a scam franchise (rare) a glossary of terms… (had to I guess) and a range of things to look out for (good logical stuff).

Problem No 1. The horse has probably bolted by the time a prospective franchisee reads the document… It’s true, people get ideas in their head and run with it… They go to an accountant (maybe) chat with a “Solicitate” (sic) (maybe) and jump in the deep end. Did they go to the ACCC Web site? (Heck why would they…) shouldn’t the info be on the government business website? (Probably is…)

Problem No 2. They buy based on emotion – We all do, some of us go a bit further though and check out more details (logic and facts.)

Note how they are interlinked, jump in, and emotion.

The idea of starting a new job, a new venture, getting started, getting going… You might feel invincible at the thought of going into business, you might feel that the choice you have made is right (hey if it feels good do it right?)

Chances are most people that buy into a franchise are probably not fully clued up about business, its pitfalls as well as its earning capacity. Mos may find the difference between marketing and promotions a challenge, let alone the income and turnover differences question or the net V’s gross profit question. (Sorry guys you’re only as good as what you know…)

The ACCC have done the right thing (basically) however they could have mentioned that an emotive decision is not always a right decision and possibly save a whole lot of heartache and money hassles.

Who do you want to sell to?

Oct 18

Posted by Steve Gray in Finance, Franchisees, Growth, Planning, Risk Management, Starting out in business | No Comments

Of course you want to sell to people… that makes sense (until they invent a robot that can spend cash…)

BUT, what sort of people? Rich ones? Poor ones? Ones that work? Ones that play? Ones that have too much time on their hands? Ones that make decisions on BIG buying opportunities for a BIG business…

Whichever it is you should be sure that you can target the right people with the right offering and make sure it has a great profit to boot.

Low profit is fine for high turnover items in some instances but it all depends on your business, the costs to bring the item to market and all the rest of it. Remember you are in business so the aim is to make a profit, FIRST AND FOREMOST!

Too little profit means low cash reserves, which means a risk is being undertaken, the list goes on. So you should be thinking about what sort of people to sell to (to ensure a good profit is made) and what to offer them (product’s and services/s) then you should be able to focus on more effective ways to deliver that to them.

Go ahead and think about the ideal customer you would like to sell to, then build the picture from there, the results could well be amazing…

For more information of customer profiling… click here.

The circle of business a guidepost to understanding

Oct 17

Posted by Steve Gray in Excellence!, Planning, Starting out in business | No Comments

Years ago I put together a guideline to assist my clients in fully understanding what’s involved in a fully blown business, and for those working in one area to better understand the other areas around them. The result was a PDF file like this one.

It proved to be a useful device and I share it with you so you too can see the depth involved in a business.

I aimed to include all areas of the business but still find things I need to add from time to time.

Use it as a a guidepost to understanding, in time as you grow your business you can see the areas that need development and those that are already strong.

Enjoy…

Innovation and the fight to make it work

Oct 16

Posted by Steve Gray in Excellence!, Growth, Innovation and Creativity, Leadership, People!, Personal Development, Planning, Risk Management | No Comments

An article by Kirsten Le Mesurier in the Age on innovation struck a chord.

The premise of CEO’s and senior exec’s saying innovation must happen… rarely works, it’s often a directive that can be buried in red tape and politics. Too many times the ideas are wanted but the process becomes a durge and in no time people resent the “new thing on the block” in this case innovation. For most it’s business as usual but with more headaches.

Organisations need to think carefully about taking on innovation as a systemic device as well and not just as a think tank option for new products and or services.

Innovation should (in my view) be about involving all, and working towards creating elegant buisness options, not just some products and services to make the profit look good.

“Brand You” trademarking…

Oct 14

Posted by Steve Gray in Excellence!, Innovation and Creativity, Leadership, People!, Personal Development, Planning, Risk Management | No Comments

In a previous post I mentioned trademarking as a development tool and I discussed “See something – Do something” It’s a nice simple model for business but it can be taken further than a business context, here’s how and perhaps why…

In the branding stakes there is a lot of mention these days about “Brand You” If you look at yourself as a device or commodity (how strange) branding is therefore important, on the basic personal level a resume is the marketing ‘hype’, and your actions (should you land the job) are the results. In a decent brand the hype or spin matches the end product… So the same with Brand you. It’s about congruency, things working in alignment.

I am sure you have met people that are full of ‘hot air’ and they say more than they do, well in their case there is a low level of alignment between their words and actions. that’s where this newer idea of trademarking comes in.

Using the premise of “See something – Do something” the astute brand developer, would say I have things to develop in me that will benefit me and then probably benefit the company, in the long run. This is fairly standard personal development thinking for some of you whilst for others it will seem like a new thing ripe for the picking.

In the business context the see and do device is relatively easy to work out (focus on marketing – operations and management) bu for the individual its a bit different. However in the business owners context they could map across from the business context, by noting “In each of the areas of the business I can influence, how well do I do those things?” leadership therefore becomes an issue, the management and then communication, then time management.

So make a list of the areas you want to improve then do your level best to chip away at those areas to make them count, not just for you, but for the business as well.

Is it a turn-key business, or a tur-key’s business…?

Oct 13

Posted by Steve Gray in Excellence!, Franchisees, Franchising, Planning, Risk Management, Starting out in business | No Comments

Buying a franchise can be a great way to get into business, (if you have not heard that line before you have not been looking into franchises for long.) and if it’s a ‘turnkey’ operation you are probably getting an even better opportunity, one that has all the bells and whistles on start up and a system to be reckoned with.

The term “turn key” relates to being able to turn the key in the lock to the front door and the whole thing is set to run. It doesn’t need more than a good dose of training, the cash to buy the franchise, and a solid helping of the right attitude to add to the skills base.

Some franchises offer this and over time many have learned how to make the business work really well (lots of mistakes and challenges being solved can do that…)

Other franchises offer a more bare bones approach, sure they give you a degree of support and training but after that you are on your own, in your area working to make the business work. If you complain too much they might answer back with “Hey what did you expect for what you paid?”

Like anything you get what you pay for. Those in the know will research the business, will not take the sales persons view as being the only one, and just because a franchise has a heap of members does not mean they are all floating merrily on the millpond called tranquility.

The difference between the two is not always evident to the new business person, they might be venturing into their first business and thought a franchise was the way to go (in some cases it probably is.) The first look at a business idea can be daunting, exciting and loaded with emotive drive. So seeing the differences and knowing the implications of them can be hard.

The start up businessperson with ‘blinkers on’ can be a hard mule to shift, they might only see the straight and narrow missing out on the bigger picture which may well have reality painted all over it. To make sure you are going to get a sustainable business opportunity and not just become another ‘statistic’ you should make sure you ask a lot of questions, questions to help you appreciate and understand what you need to know and not just what the sales person wants to tell you.

Like anything you buy you should go into the situation with both eyes wide open and have a solid grasp on what’s really taking place. Sure if you chat to enough franchisees you will find a whinger and that could put you off, or better still an ex franchisee with a major axe to grind.

My suggestion, take the time to really know the difference between a real turnkey operation and one that might make you look like a turkey, the pain it saves you will be well worth it!

Buying a franchise… a reality check.

Oct 13

Posted by Steve Gray in Finance, Franchisees, Franchising, People!, Planning, Risk Management, Starting out in business | No Comments

When buying any business (or any asset for that matter) it’s advisable to do your homework. Logical? YES! Practical… Not always. In the case of a franchise they (the franchisor) often has the power of numbers, “X number of franchisees can’t be wrong”, (yes some can be ‘wrong’, but they may not want to admit it.) Of course there are other ways the ‘numbers’ can be glossed over to make things look rosy.

It’s time to take a look at the reality for some.

Let’s look at some basics, there are large, small and medium franchises, and most have the basics of a good business so let’s take one group and single it out for viewing… the small franchise.

To begin with you have a reason for looking for a business opportunity, perhaps you want to get out and about more than a job stuck behind a desk, good reason, but in reality the numbers involved might not add up to all you want them to be. Sure money is not everything, but we are talking business so there needs to be some profit, otherwise you are running a charity or a hobby.

The smaller franchises are often to do with home or business services, gardening, dog wash, cleaning, handymen, and so on. The Franchisor offers the business for sale, you want to run it, and away you go. So lets break down some basic costs and look at what happens when it’s all added up. Remember you are in business to make money so you may well be making money to pay for a lot of things BEFORE being able to pay yourself.

Note: I have not put in any figures for any of these as they will vary greatly from business type, to business type and then between various Franchises.

Franchise purchase price – A one off amount, some people take out a loan for this amount, while others may have a redundancy package, savings or an inheritance they will use. Either way it’s money spent on a potential asset, in this case the asset should be one that can appreciate, not depreciate… At the end of the process if you choose to sell your ‘asset’ you would like to think you made this amount back in earnings (perhaps it shows up as profit) or if you can sell the franchise then you would hope to make this amount back in the sale price.

Franchise fees – Monthly amount to keep the head office wheels in motion – area supervisors – master franchisees – admin costs – systems development – Training – Call centre operation, the list goes on. It should be seen as a fee you pay that provides great value to you, and not as a fee that bleeds you dry each month or is seen as a burden of some kind.

Vehicle - Many of the small franchises mentioned require a vehicle, some require specific signwriting which may be part of the initial franchise outlay. You may have a lease on that vehicle, you may have to tow a trailer and want to use an existing vehicle (either way you have an outlay vehicle or trailer).

Overheads – Every business has these, phone, home office, computer, mobile phone, materials, fuel, tool maintenance, liability insurance, sickness insurance (You may well need it!), uniforms, the list can go on and add up quickly.

Marketing fee – This is usually deducted by the Franchisor with the monthly franchise fees and covers some of your marketing costs that the main company will do. Sometimes they want to do more and may ask for an extra levy to be imposed, this depends on the contract and how they can go about it, it can be legitimate but an extra cost to be aware of.

Wages – If you have staff they want to be paid, so think of the workers insurance, the holiday pay you have to cover and so on. If you take a wage out yourself you have to look at it carefully

Profit – The bit left over after all the expenses are taken into account.

There it is, the list of costs, if you look into these for the business you want to buy, you now have a starting point to fully evaluate the situation. This will give you a solid objective viewpoint to work from and not an emotive one which is so often the case with someone going into business for the first time (or even the fifth!)

In an ideal world after the expenses, you will have paid yourself and have a profit to put into the bank and watch it build. However in reality the opposite can also be true, which can shatter a dream in no time flat. Be aware that this can happen.

Remember the statistics do not lie (they may bend the truth a little…) so take a look with both eye’s open. A little known fact is that many franchises are seen as being a great business model because people often appear to last longer in them than starting their own business, true BUT note that most are in contracts that have them paying fees for the duration of that contract. So instead of a business going ‘belly up’ after 12 months it looks like 3 or so years have passed and even then it may be just a transfer of ownership to the next person looking at a business opportunity. On paper it looks rosy, in reality it may not be. And that’s just the start…

For more information on Franchising click here.

Profit is number one…

Oct 12

Posted by Steve Gray in Finance, Growth, Innovation and Creativity, Planning, Risk Management, The Board Room | No Comments

Anything else to do with your business MUST therefore be about supporting the profit.

Before people go all money crazy though and start saying “business is all about taking and here’s another example.” I say if you are not making a profit you run a charity, and as this article is about business it’s therefore about profit. AND of course there are other ways to profit other than making money.(if your people advance their skills and are happy with that might be just one example.)

lets look at what I mean…

Marketing – This should be driving or directing people to your business, so they can buy and you make a profit from what you sell.

Management – Ensures things run well – so that your profit can be maximised. Sloppy management would mean unnecessary overheads, therefore wasting profits.

Operations – making sure things run smoothly here is vital, often this is the workings of the business and needs to be running well, imagine if stock levels ran low and demand went up… oh bad move.

Sales – No sales no $$ in, then you have an impact on your profit… not good!

Service – People vote with their feet, no service, they move on. Again not good for the profit.

Human resources – They provide (or at least should…) great people, great people systems, great training and elegant payroll options to ensure the people in your organisation are effective and efficient at what they do, if not they are eating into the organisations profit.

Wealth systems – Your profits go here to develop passive income options and leverage the $$ better. If this is not working your business may as well not make a profit… (hard words but true). Your team works hard to make the profit, now make the profit work hard for the business.

All of these impact on the profit, either the gaining of, or the use of it. To make sure you are having an impact on it take a deeper look at all of the above and get to work on those things that can make a positive difference to the profit. You might like to start with this.

7 Steps to finding your most profitable target market by Emma Rhoades (Guest Blogger)

Oct 11

Posted by Guest Poster in Excellence!, Innovation and Creativity, Starting out in business, The Customer Service Dept, The Marketing Dept, The Operations Dept, The Sales Dept | 3 Comments

So often people delve into advertising their business, without much thought to the process. This not only a huge waste or precious $$, but it leaves your business vulnerable to cash flow problems. Taking the time to research exactly who your most profitable customer is, will ensure you receive a higher return on your advertising investment.

  1. How many products or services do you have? Is it 1-2, or 30-40? Write them all down individually.
  2. Write down who buys each product. It’s ok to overlap a few people here. Try to make it as detailed as possible. For example, mothers with children 0-2 yrs, men who like golf, etc, rather than mothers and men. The more detailed you can get it, the more profitable your advertising can be!
  3. Work out your profit margin for each of your products. For example, how much would you make if someone bought your product. Again, the more detailed you can get, the better.
  4. Take your top performing product and have a look at who buys this. You may have more than one type of person on that list. Choose one person to start with, and think about the type of person they are. Do they shop online, do they read magazines- if so- which ones??
  5. Do lots of research!! Find these people and ask them! Ask them what type of magazines they read, ask if they prefer to shop online of offline etc. Don’t try to skip this step; otherwise you will be flying blind in your advertising. These have now become one of your target markets. Do this for all of those who purchase your products.
  6. Once you know more about them, you can start looking around for places to advertise. Don’t be tempted to go for the cheaper option- always make sure that it is getting directly in front of your target market
  7. Start with one product at a time and one customer type at a time. Always start with your most profitable product or service, and this will ensure you get a higher return on your advertising investment.

Today’s guest blogger is Emma Rhoades.

Emma owns advertising business Diva Promotions. She aims to give women with their own micro business highly targeted, cost-effective advertising campaigns. Visit www.divapromotions.com.au today to book into your next campaign and start growing your business! Emma can be contacted via the website, admin AT divapromotions DOT com.au or 1300 76 36 76.

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See something, do something…

Oct 11

Posted by Steve Gray in Excellence!, Growth, Human Resource Management, Innovation and Creativity, Leadership, People!, Personal Development, Planning, Risk Management, The Customer Service Dept | No Comments

Earlier in 2007 I did a post on Trademarks not what you think… It gave some starting points and some background to an idea that is really all about values and beliefs but does so in a more street smart way.

I thought it was time to pull out a few more and explore how they can be developed and a bit about why they can be developed (e.g. the end product of doing all this.)

Trademarks, the notion is that it sets you apart from anybody else that might have a similar business name (in the traditional use of the word), but beyond that it says “This Co does things in certain ways, ways that set it apart.” so the same with our trademarks.

It can be used to provide guidelines and information on bigger picture things in the business Marketing – Operational issues – Management. Then of course it can go to smaller issues within each area right down to the last ‘nut and bolt’

One key to using “Trademarks” is to utilise an overall device to assist with the development of each area within the framework lets call it a mantra.

“See something,
Do something”

If one person in the organisation saw something that was not “right” within the organisation they can invoke this mantra and take it from a saying to a thing to be acted on. If anyone says we can’t do that ‘because…’ then the person putting forward the idea need not feel put down, they were just doing what was asked of them, their aim might be to look deeper to find a way that can alter the first point they raised.

An example a customer service indiscretion is witnesses, you would (under ideal circumstances) report it as a matter of urgency or act on it immediately in some other way (take action) as it would effect a key area of the business (Customers!). If a mistake was spotted in an advert, “see something, do something” should then kick in immediately before it’s too late. (Again a key area of business and one that needs to be right.)

Using this simple mantra can give the business a developmental edge in all areas… so what to do, how to go about putting it into practice… make a sign “See something, do something” and put it up, everywhere! email people in your organisation about it (keep it brief) and support it at all levels, (from the customer down…)

Next, make a list of all the key areas in the business (to raise awareness) and give a few examples of how this system could be used in each, then start developing the business from that stand point. If profit is down, start with that, you will soon see what things are preventing your profit from developing and so you will be able to action those things more strategically.

Imagine, you know have a way of creating an improvement culture in your organisation simply and effectively. So go ahead, you have seen this now do something.

Franchising and the “family connection”

Oct 10

Posted by Steve Gray in Excellence!, Franchisees, Franchising, Growth, Innovation and Creativity, Leadership, People!, Personal Development, Planning | No Comments

In the world of franchising there are many chances to connect with the Franchisees and the Franchisors, meetings, conferences, and the initial training. As the leader of the franchise (or franchise division) or as the franchisee, search for more ways to connect with each other. Then pass on that ‘connection’ attitude or skill to your team/s.

In the process of business you will soon find you are part of an organism or a family if you like, some members you may never see (like distant cousins) and others you see often as they are very close. In franchising it’s the same with lots of family type links, The challenge is to make sure the links lead to solid loving relationships and not just sibling rivalry or a runaway “missing person”.

In the start up phase there will be lots of connection opportunities (if any) but as things more through to adolesence there is a chance that the connection can be come frayed.

The challenge is to overcome the disconnection and cause people to work together in harmony (as much as possible.) Importantly it’s a two way street and both parties need to be aware of that and do their bit to make it work.

One situation where this can happen is in training. the Franchisor can be training the Franchisee and they can pass it on to their staff and train them as well. This could be leadership skills, mentoring skills, delegation, and negotiation skills, the list could be endless.

Training can be formal or informal and why not do it over the phone, via a short video on the internet, or face to face at a franchise meeting. What ever way you do it, it can be ongoing, and benefit both parties. Over time the franchise ‘family’ will experience grater connectedness due simply to both parties being engaged in a worthy process.

Business first, then…?

Oct 9

Posted by Steve Gray in Finance, Franchising, Growth, People!, Planning, Risk Management, Starting out in business | No Comments

You start the business and then… Well apart from working hard to make it sustainable…

A few things first, let’s make a list. Why did you get into business? Is it turning out how you wanted? Is there a profit? Is it providing a better life for you? If not when will it do that?

Note how I end up with the lifestyle side and start with the business side? That’s my focus in many of these articles, because I see people drop perfectly good jobs wth 4 weeks annual leave (here in Australia anyway) and in the most part security, for what? Hassles and more stress, more responsibility and the list goes on.

In buisness I figure you have to fight vigorously to make a profit (and sustain it, then celebrate the fact you got your goal.) So what’s next.

  • Wealth?
  • Peace of mind?
  • Less stress?
  • Less hassle?

Does all that lead to a better life? I hope so. Then pursue that, make a plan, set a time line then do something radical, halve it! Not the quantity of the results but the time frame. Get the results in half the time… What would it take to do that? Is it possible, is it feasible, is it out side of your threshold? Push that thought around for a while and figure out just how to make things fit.

I suggest that if the goal is a really worthy one you will be in a poition to make it happen in the shorter time frame because you truly connect with it. If there is no connection then try another goal, keep searching until a truly compelling one hits you. then go  for that.

Whatever the goal, make sure it’s one that gives you a better lifestyle. All work and no play makes for a dull person!

If you head up a franchise, what goals can you assist your Franchisees to set? What goals can they assist you to set too! Push the boundaries, go for gold, and if you come in second place the silver medal will still be quite valuable.

Whose money is it?

Oct 8

Posted by Steve Gray in Excellence!, Finance, Franchising, Growth, Risk Management, The Board Room | No Comments

In franchising there are fees of all kinds, franchisees are contracted to pay. Marketing and Management fees are often the main ones.

The fees are used for a multitude of things and are vital for the main company’s day to day operation. The money is therefore a fee paid for the provision of some service, the right to use the brand etc. I would like to put forward an idea to make a positive difference to the franchises.

Many franchises offer successful business opportunities (that’s why most people buy a franchise), however research shows there is a fair bit of turnover in the industry as people discover that franchising may not be for them (for whatever reason and there are many).

To offer a start up incentive, lots of franchises also offer an income guarantee for a start up period and then the franchisee is out on their own and hopefully running the business very profitably by that point.
All seems well, until… something goes awry, and the franchisee wants to pull out… “No you can’t do that the contract says you keep on paying fees until the end of the contract period,” for some this is a burden they endure even though they are no longer in the franchise. The pain is felt on both sides

Suggestion, the management fee could include an amount that goes into a Franchisee debt reserve fund (it’s just a compulsory savings account really) and over time as it’s added to, it could build into a sizable amount. If for instance $50 per month was taken from the management fee to add to this fund the amount is not noticed (for most) and it compounds with interest on top of that.

At the end of the contract if the person pulls out they get their compulsory saving back (no more, no less) if they continue on they could be eligible to take just the bank interest on that amount out and use it how they wish. The advantage is they have a device that is growing for them, if they pull out altogether they get the basic amount, if they stay in it gets much bigger as it compounds.

I am not putting the idea forward as a complex device, in fact the simpler the better (one big account in trust) and separate balances each month.

The aim, to put forward the idea of wealth development, and then make sure they are doing it in their business by the Franchisor leading by example. In a complex business environment it’s of ten the simpler innovations that make the biggest difference.

For more articles on franchising click here.

The fragile business

Oct 7

Posted by Steve Gray in Finance, Franchisees, Franchising, Growth, Innovation and Creativity, Planning, Risk Management | 1 Comment

No matter what sort of business you are in, it’s only as good as the next crisis is. Has that got you thinking? I hope so. You see many business people chip away at the coal face to get ahead, but do not stop to think about how to handle major challenges that might arise. Of course we do not want major challenges to arise but they can.

Example, imagine a franchised business, lets say it’s in an early phase of development and the main company has sold a few territories and is pushing to sell more. But the offering turns out to be a flop, (e.g. customers did not want a garden watering service…) so things start going downhill. When push comes to shove they end up with no more sales, no more fees in and it goes belly up.

Well apart from a poor business concept how well the main company does will also depend on what they do to develop their wealth.

Consider this. If the income stopped for the Head Office of this organisation, how long would it last? Answer, not very long (often it’s allegedly about 2 weeks for most). For the business owner/s this means their dream has gone up in smoke.

BUT, what if they had developed a “wealth creation program”, or a “debt reserve fund”. Often its as simple as a separate bank account where a % of funds from all income goes. Over time it compounds and provides a growing liquid asset. This is left alone to grow and provides the main company with a solid foundation to build on (The key is to never spend it.) When it builds, some of it can be put into other forms of investments that can be liquidated fast if need be (shares for example) to do this effectively I would suggest a % be agreed upon to retain cash in the reserve fund (cash is king…)

Although I have used a larger organisation as an example, it can be done (and in my view should be done) by all businesses.

The aim, to build a foundation that keeps the business solid and even if things go “down the tubes” the future has at least been allowed for, obviously the longer the business can run the stronger the foundation and if need be the security can be leveraged against to start another business (hopefully a MUCH better one than the first!)

For more articles on franchising…

What do you get for the money?

Oct 6

Posted by Steve Gray in Finance, Franchisees, Franchising, Planning, Risk Management | No Comments

Most (if not all) Franchises have a franchise fee, (it’s a monthly fee usually) designed to keep the head office “humming”. It’s generally separate from a marketing fee, but that might be on the same invoice you get per month. So what do you get for paying that? I guess the Franchisor will have an answer for you that “covers their butt” but in reality what do you get?

Look, some will suggest I have put on my cynical ‘hat’ and am talking sour grapes… Perhaps that has some truth to it. BUT it’s a great issue and one that all current and prospective Franchisees should be asking about sooner rather than later, and one that Franchisors have to be acutely aware of. Think of how many Franchisees are in a group and then look at how many franchises there are world wide, and growing! the amount would be staggering per month.

So you shell out a management fee per month?

  • Perhaps you will get a support person to watch over a bunch of Franchisees – If that happens in your franchise group, does the number of support people match or better the industry average? How often will you see them? how specifically will they work with you? Have they been a franchisee before ? Or are they bringing employee mentality and or attitudes to the role…?
  • Perhaps it goes into developing new systems – Things change so that can be useful, but what if someone created a new system and it failed, you still paid for it? Perhaps the new system will save you a fortune, in time or money…?
  • Perhaps the fee goes into organising the annual conference – If you have one, but wait that’s usually a separate fee… so the organising cost should come out of there? SHOULDN’T IT? Whoops a slight oversight from head offices viewpoint.
  • Perhaps it goes into training – You go to the franchise meetings don’t you? well you get training there??? hmm maybe not… Well at least your fees go to the meeting room hire.
  • Perhaps it goes into the end of year function… – Well for some it might, but for others well that’s separate, so no joy there.
  • Perhaps it goes into a marketing development fund – No that’s surely under the marketing fee. so if the Co is spending management fees on marketing there is a false economy going on… Perhaps the Co should be altering the management fee amount down and the marketing fee up, same total but different results, one more accurately reflects the real situation.
  • Perhaps it goes into building a new head office – Hey why aren’t they leasing? There are tax benefits to that in most places… Oh the CEO has a company that is into real estate development, oh that’s a bit different… no?
  • Perhaps the company wants to create a great web presence complete with franchisee intranet – Better hope they pick the right sort of web developer or the $$ might just be going out the window… or is that Windows® he he.
  • Perhaps some is going into a debt reserve fund, or a weatlth development fund so the company can build its cash wealth and not just its branches and image.
  • I know, it goes into processing the monthly fees!

The point. To find out where the money goes, it should be available to the franchisees as a graph, a pie chart or similar so they can know where the money goes, and so their Franchise Advisory Council can advise based on facts, not on here say and good will.

Is your Franchise group showing you the “money…” or are they showing you a chunk of “PR” that makes the “money” look good?

For more information on franchising.

Competition saves your business money (and headaches).

Oct 5

Posted by Steve Gray in Finance, Starting out in business, The Operations Dept | No Comments

In an age of competitive business activity its nice to know there are benefits to the end user from this competition and in the communications industry in Australia there are now about 40 different telco companies operating. This brings prices down for the end user and also means the companies have to find new ways to impress the customer.

As most telco’s offer web hosting and internet services these are areas ripe for development. For example if your business is relocating can they organise to have that done for you with less hassle, fuss and so on? Can you get unlimited emails and unlimited tech support.

Perhaps your business is bigger and requires multiple lines or a PABX (in house exchange) ask if they can do that too. Add that to the internet services like big download allowances, only your downloads counted on the service volume and you are starting to get the picture of how you can save money and be provided with great services.

But in business its important to have that all important edge… How about 1300 or 1800 number set up for a low monthly fee. That’s would be it for me, the finishing touch in a range of services that benefit your business.

How about lost time? Time is our most valuable asset these days, and the measure of a good supplier is often what they do when something goes wrong, not just when everything is going well. Recently a friend of mine had an interesting experience. When a new neighbour moved in, somehow his fax line ended up permanently “crossed” with the new neighbours main incoming line!

Luckily for him he uses an independent retailer for his telco needs. With a single phone call the situation was resolved by his personal account manager who saw the issue through from start to finish. A single point of contact that meant less time explaining what the issue was, and a lot less grief! Of course, the independent retailers still have to deal with the big “T”, so we still can’t expect miracles…..

A lot of these advantages can happen by utilising an independent retailer with lots to offer, so haggle, ask lots of questions, find out more about ways to use the competitiveness to your advantage and you might just get more than you hoped for.

Tom’s on the money…

Oct 3

Posted by Steve Gray in Excellence!, Finance | No Comments

In the article I have linked to, Tom Peters has a good heads upon investing , investors and the gender difference, once again he’s on the ball showing all and sundry that differences count!

Tom’s investment blog post

Of course there are differences, and the scope that this article alone provides is enormous, if you were selling investment products, would this article be of value to you? YES! If you were selling ANYTHING to females, might the profile insights be of use? YES!

Tom has been on this bandwagon for years and will not stop. Lets hope the message to sell to this  target market continues…

A fresh approach

Oct 2

Posted by Steve Gray in Human Resource Management, People!, Planning | No Comments

If you are hiring employees, the usual take on things is to try and match the person you want via assessing their skills an abilities as well as attitude and qualifications.

So you place an advert and put in the role and some Co details, then wait for the cover letters and resumes to arrive. In the final phase you wade through the applications (or pay an organisation to do it,) then get the likely few to attend an interview. It all takes time and time is money…

Consider a fresh approach, one that can turn the process around and give you a few ‘good’ applicants. Place an advert with minimal info, let them know the role and a few basics (really basic basics…) and invite them to send in a one page “response”, a question like… “tell us why this role would be of value to you?” can soon sort things out. From these responses you should be able to gauge if they have the determination for the role, the motivation to bother taking your “fresh approach”.

If nothing else it will save you a HEAP of time in assessing candidates the old way. If you get a lot of responses consider a group session where you outline the role further and hold 60 second interviews… That should sort things further for you! First impressions can (or should) be very telling.

I found something interesting…

Oct 1

Posted by Steve Gray in Excellence!, Innovation and Creativity, Leadership, People!, Personal Development, Planning, The Board Room | No Comments

In flipping about the net I came across this link. http://www.bcg.com/

Simply put the publications section has some great resources for businesses of all sorts, check it out, there’s plenty for everyone…

Very professionally put together, usually when I come across resources like this you end up having to pay or need to be a client with a special password to get in. So it was refreshing to come across this one from a large consulting group.

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