Solomon Bruce Consulting Blog

Friday, September 23, 2011

Where is the Money Going?

    Are you watching all of your income (business revenue)?  Where are the expenses?  Why do you incur each expense?  Are there areas for reduction in each expense category?
    Many business owners are contacting us AFTER it is too late to be of any real benefit.  The business has failed-- the owner owes more in debt than he/she can ever hope to recover.  Now, we may not have been able to save them-- after all, we are management consultants, not miracle workers, however, we can perform some miracles if given enough lead time and some resources!
     We have mentioned this previously, however, let's hit it again.  It is always better to seek advice and assistance before you end up in trouble.  Now, this is often times difficult for folks to hear and accept.  However, there is nothing wrong with having a "check-up" to see how you are doing.  The medical doctor does the same thing-- you go in for an annual "check-up" to see that everything is functioning normally.  The same can be said about your business.  Our clients that schedule and execute either semi-annual or annual business check ups continue to be more successful than those clients who never get a check up until there is some major problem!
     If cash flow is a recurring and constant worry, schedule a business check-up with our firm.  We may be able to identify some actions that will help you retain more of your capital.  We work with many different businesses in various industry and business segments.  However, good money management is the same in each vertical!
     Know where you money is going at all times.  Don't be hesitant to seek professional consultation with one of our consultants.  The consulting fee is small compared to the benefits received!  You always need to know where your money is going!

Think About a Franchise Before You Invest!

   I have been in meetings the past several weeks where franchise businesses have been discussed.  Interestingly enough, many franchise owners do not seem to do the required amount of due diligence work BEFORE they commit to becoming a franchise owner.  In two cases that I have reviewed, the franchise owner did not seem to have the specific industry knowledge before they spent their money and became a franchise owner.
    Now, I am aware that one of the benefits of owning a franchise is that you do not need to have any industry knowledge-- the franchise will help you learn everything about what it is that you will do with your new business.  If I was going to become a franchise plumbing company, I think that I would want to know at least something about hand tools, plumbing techniques, etc.  Perhaps I need to know SOMETHING, maybe not a lot, but at least something.  In the instances that I am familiar with, that does not seem to the be case--- the owners received some franchise training, but after training, were kind of left on their own to figure out day to day management and operations.
     A franchise business is a wonderful way in which to become a business owner.  The right franchise provides outstanding training, national and international marketing support, a suite of tools with which to do the task and a procedures manual to handle any task that the franchise claims they can do.  However, there are many franchises that provide, little, if any training, "back office support" marketing material or support.  You pay a fee and "fly on your own."
     If you think that owning a franchise is something that you want to pursue, it may be very instructive to spend a hour or two with a business consultant and explore many of the factors that are associated with owning a business.  The small two hour fee of the consultant will address a variety of factors that you may not have carefully considered-- at least at this point.  Even if you pay the 2 hour consultant fee, you will be money ahead in due diligence research if you elect to pursue some franchise opportunity.
     We cannot overemphasize the value of strong due diligence before you do anything-- let alone become a franchise owner.  If you follow the franchise handbook and procedures manual, you should become a very successful business.  Knowing what support is available from the franchiser is very important.  Go slow, be careful and ask lots of questions before you spring into action in becoming a franchise owner.

Tuesday, September 13, 2011

A Professional Always Saves Time, Money and Frustration

     A business owner told me a story the other day.  He and his wife had used Expedia to on-line book an airline trip to a National Conference.  Interestingly, the online travel site had scheduled their departure from their second airport 45 minutes before they were to originally arrive from their departure point.  Well, you can guess what happened-- they arrived 45 minutes after their connecting flight had departed.
     What happened next was unconscionable.  Once they recognized the mistake, they called Expedia for assistance.  The assistance they received was that they were told that each traveller is responsible for insuring that the reservations and connections were correct before they begin the trip-- in other words, Expedia took no responsibility for any mistake.  The bottom line was that my friend and his wife had to pay another $1700 to continue on to the national conference.
     Now, when I was told of this story, I told hm that I always use a local travel agent, Travel Cafe for all of our personal and corporate travel arrangements.  Yes, I pay a  fee for their service, however, if we have any challenges, I have a professional travel advocate working for me, not me or one of our professional staff trying to resolve some snag with a grumpy airline employee. 
     Using a professional is priceless!  At the end of the day, does it really cost anymore?  In my mind, the answer is NO, using a professional actually costs less.  The Internet has proven to be the great equalizer in many varied matters, however, there are some things that are not worth the hassle and inconvenience.  In my mind, travel is one of those areas.  Our professional travel agency always knows what is going on, what the challenges are at the distant end and always has a solution or idea for our team to use.
     Did my friend get his money back?  No, not yet!  His wife was going to contact somebody on TV and try and get some consumer help.  However, if they had used a professional, they would not have had the problem in the first place!
     Remember, you always get what you pay for!  Can you get some good deals on the Internet?  Sure you can!  However, when you do have a snag, trying to resolve the snag is normally more painful and costly than the cost of the professional in the first place.  A professional always saves time, money and frustration.  In today's world, I need more time, more money and much less frustration.

Do I get a FREE Drink? NO-- NO FREE DRINK!

   A friend and I decided to have pizza for lunch the other day.  We walked over to the pizza place and the clerk said that there were 13 pizza's ahead of ours, however, we could order, wait and then take it out-- our original plan.  I asked if we got a free drink for waiting?  The answer was a loud and emphatic NO-- NO free drink!
   OK, no free drink-- we did order the pizza, waited for the other 13 pizza's to be made and cooked and finally, after 35 minutes, received our pizza.  We took it back to the place where we were staying and had lunch!
    Now, as we analyzed our pizza encounter, several key points came to the surface!  A soda fountain drink costs all of about 7 cents wholesale.  The key price is the cup, the syrup is about 2 cents a serving and the ice cubes, 1 cent!  For 7 cents, this pizza place could have had a great reputation for a 35 minute inconvenience!  What was interesting, at least to my friend and I was the fact that we really did not care what size the drink cup was--it could have been a kiddie cup, for all we cared.  The key point is that the pizza place recognized our inconvenience and tried to make a simple amend.
     What was even more interesting was the fact that we had to have something to drink with our pizza.  A little forethought on the part of the clerk would have revealed that we probably would have paid $2 each for drinks, $4 total (2 drinks @$2/ea).  What happened was that we did not buy any drinks at the pizza place, ended up going and buying ice tea at a coffee shop and saved $2 dollars.
     The key point here is that when a customer is inconvenienced, try and make a simple amend.  The amend is usually very inexpensive, however, the client value is normally priceless.  It makes no difference what the customer challenge is, everyone, including me, likes to "perceive" getting something for free!!!!!  After all, we are all human beings!
     Now, will I go back to the pizza place?  Yes, I will.  The pizza is great, outstanding, in fact.  However, this is a customer retention trait that staff fell flat on-- and the incremental cost of providing a drink would have been minimal in the overall scheme of the operation.  Think like the client, what would you want?  Just do that-- whatever action you choose will turn out to be right!