Solomon Bruce Consulting Blog

Wednesday, February 9, 2011

The Food was Good, The Service Was Not!

   This was what a client told me this week when I went and visited with him!  He had a disgruntled customer call him and tell him that after the customer had ordered take out from his restaurant.  After waiting 40 minutes in the car with 2 hungry, crying, tired children, she was frustrated!! 
     Do you know what happened?  The staff had given the order to the wrong customer and forgot the lady waiting in the car!  Do you know what is even worse?  When the customer went back in the restaurant to find out what happened to her order, the staff got into a fight about who made the mistake-- and insulted the customer in the process!
     My client received a phone call from the customer!  As you can guess by this point, he did not know all of the facts, however, once he had them, he too was fit to be tied.  He called the disgruntled customer, offered her a gift certificate for another visit and apologized for the actions of the staff.  The customer came back, used the gift certificate and had a much better experience.
     My client was going to have a little "refresher" session with his staff, pointing out that the food dollar can be spent many places.  If you don't give good service or rude to the customer, they won't come back--period.
     I was in a coffee shop the other morning and the owner was frustrated about one of her new hires.  Interestingly, this employee has been constantly "challenged" since being hired, however, the owner of this coffee shop told me that she is afraid that there is nobody else any better "out there?"
     As a business owner, you cannot afford to have the staff ruin your business.  You have to constantly monitor, train and mentor every one of your staff.  Remember, everyone has something special to bring to the table.  In many cases, you have to find out what that special skill or trait is--- and then utilize it.  Now, this is not bad, however, it does require some additional work on your part as the owner!
     With today's employee, mentorship and leadership on your part is key to success of both the individual employee and your business.  Documented processes and procedures are vital to insure consistency throughout the work experience.  Most millenial generation employees will respond to direction and leadership, however, you must provide it.
     If you need help, give us a call, we can help you develop a program that will be beneficial to both you and your employees.

Friday, February 4, 2011

Cash Flow-- The Mother's Milk for Business!

   How is your cash flow?  Do you have cash flow?  This is the question of many business owners, both large and small.  Cash is KING!!! Those 3 words, repeated continually in undergraduate business courses, are significant for any business owner.  If you have a good cash flow, your business should be successful!
    Last week we worked with a client that continually had to inject more money into his business.  Our review of his financial data, along with his banker revealed several glaring challenges that the owner did not recognize or realize.  Let me address some of those points.
    Point one was that an employee was overpaid about 20% from the fee structure that he was hired under.  The owner did not recognize that until we identified it going through a financial statement analysis.  OK, no big deal you say.  Well, it is a BIG DEAL, because, not only was it not recognized, the matter continued to occur through out the fiscal year.  Now, was there an error in the process?  I don't know.  What I do know was that the data was "Dirty"-- I could not trust the integrity or veracity of the data.  One of the keys to good cash flow and business health is to insure that you have good input data.  In this case, I did not believe the data.  Was it wrong?  I don't know.  Was the data improperly placed in the wrong accounting categories?  I don't know.  Our recommendations in this area was to work with his accountant to insure that the data was not only accurate, but also correctly entered into the bookkeeping system.
     Profit margins is another area that will decrease cash flow.  In another client's case, his most profitable item should have had a profit margin of 55%, however, the financial statements indicated that the profit margin for this particular project was a paltry 11%.  You are not going to make money by failing to receive the requisite profit share you are supposed to!  In this case, the owner was giving money away to every customer that came and bought from him.
     Expenses were another area that can rob cash flow.  We worked with a client that had a significant increase in utility costs.  Investigating the matter, we found that the client held a class relative to their business which required students to use computers.  When all of the computers were turned on at once, a large power surge developed, causing the electrical rate to increase to sustain the requirements of the power surge.  This might seem like a small matter, however, this action doubled the amount of power charged for during a period.  Once the business owner learned that, when students used computers, they were turned on in a serial fashion, preventing a large power surge.
     Cash flow is an area where we can provide key solutions.  There may be some pain associated with the adjustments we suggest, however, the pain is in direct proportion to the amount of cash that you want saved.
     If this is an area where you are having difficulty, give us a call.  We can help!