By Domenic Rinaldi, Chicagoland Sunbelt
Anyone who works with home furnishings retailers knows that the first 100 days of owning a business are crucial to its success. What the owner does from the word “go” can change the entire future outlook.
However, it’s important not to lose sight of those all important initial steps. Whether you’re a long-time business owner or just starting out with your first business, getting back to the basics can help you boost productivity and efficiency in your operations.
Here are eight critical steps to gain an introspective look into your furniture store and help determine what to do as 2010 approaches.
1. Meet with your key employees. Indeed, meet with everyone on your payroll ,but prioritize those who are most important to the success of your business. Your employees are the front line of your organization. As such, they can sometimes be more closely tied to how the business is doing and where there is room for improvement than you may be.
For new business owners, this step is crucial for easing anxiety over an ownership transition. For owners that have been at this a long time, reconnecting with your employees will give you great insight into where your business is going, what your customers are saying and how frontline operations can be improved.
2. Meet with key customers. A business doesn't survive without customers. That's true for the family-owned store and the nationwide chain. Prioritize your most valuable customers. Who are the largest and most profitable clients? Who buys the most widgets? Ask what you can do better to retain their trust. Try to meet with customers your business may have lost recently and ask what you can do to earn their business again.
Don't forget the smaller customers. With proper care and nurturing, they can become your biggest spenders — and your biggest advocates. Consider appointing a go-getter employee with a new task: customer service rep for small and mid-sized accounts. Perhaps add an incentive for that employee if he or she brings in more business from those existing customers.
3. Meet with key suppliers. If suppliers ran into payment issues with the previous owner of the business, they’ll probably be relieved to find out it’s under new ownership. On the other hand, if things went smoothly in the past, they might suddenly become nervous about your ability to continue this positive relationship. The key is to assure them by meeting with them right away and clearly spelling out how you plan to work with them. They are your partners. Listen to them. Consult with them. They can help you succeed— or fail.
Of course, there could be big issues that need to be addressed. Perhaps one key supplier doesn't understand the concept of a deadline, or the products you have been receiving are of dubious quality. Manage these issues, and, if necessary, be prepared to make a change before you meet with problem suppliers.
4. Get on top of the accounting. Organize, organize, organize. Know who you are paying and why. Know how much you are spending and why. Who's paying you on time and who's not? These are all concerns you need to examine routinely. You need to identify problems, but more important, you need to make sure you understand the process of how your records are kept.
You may want to change how the books are done if you're not satisfied with the process. If you have a knack for numbers, consider bringing the basic accounting in-house. If you don't, use your network to find a trusted accountant. Typically, a new owner can save money through a simple financial review. Multiple small savings can really add up and drop immediate dollars to the bottom line.
5. Get hands-on experience with the business. If you're running a small business, this is probably the first thing you will do simply because cash flow dictates you do much of the work. But if the business is larger than a storefront, you want to get hands-on experience in all aspects of the business. This won't make you an expert in marketing or customer service, for example, but it will give you a better understanding of the processes involved. Also, if you detect a problem in marketing, for example, you will have better understanding of what you should be asking to fix that problem.
Also, having your employees seeing you on the job accomplishes two critical functions: First, it can be a morale booster to see the boss in the trenches. Second, it puts employees on alert that you're paying attention to what they are doing. That can reduce laziness and theft.
6. Create an issues list. This is an ongoing task. As you work your way around the business — talking to your employees, customers, suppliers and understanding how each department works — you'll start to encounter issues that need to be addressed. Rank these by importance. For example, if you know you have waste in the manufacturing process, you will want to put that high on your list. Does a key supplier deliver substandard products?
As you rank your issues, you can develop an action plan. That will help with the final step.
7. Refine your business plan. Now it's time to take everything you have learned and determine how to optimize your opportunities. What needs the most attention? Where can your unique skills be most useful to growth? What aspects of the business can you trust to certain employees?
It is typically not a good idea to refine your business plan until you carefully and critically look at the business you just bought. Don't rush into changes on Day 1; waiting 100 days will lead to wiser decisions.
Your patience will pay off in the long run.
8. Create an advisory board. It can be lonely at the top of a small to mid-sized business. All of the decisions ultimately land on your shoulders and you need to be well-versed in most functional disciplines to make the best decision possible. Business owners who are continually seeking out the ‘best’ business practices will be well-prepared for the ongoing challenges.
It would be smart to assemble a small group of trusted advisors who you can meet with on a regular basis. These meetings should be strategic and have a strong emphasis on reality-based issue resolution. If you cannot put the right group together there are advisory groups you can join that will serve as a ‘kitchen cabinet.’
One such service provider is The Inner Circle, which has operated peer-to-peer advisory groups across the country for over 30 years. The Inner Circle facilitates monthly meetings with eight to 12 business owners from non-competitive businesses helping each other think through their most pressing issues. When you get that many smart entrepreneurs together on a monthly basis, you are certain to gain a better perspective on how to run and maximize processes for your own business.
Running a business is hard work and having a plan is critical to ensuring your success. Most psychologists will tell you that one of the distinguishing traits of successful entrepreneurs is the willingness and ability to commit their plans to writing and executing those plans. Proactively manage your business and it will return you with many rewards both financially and personally.
About the Author
As President and Managing Partner of Chicagoland Sunbelt, Domenic Rinaldi is well-versed in teaching business buyers, sellers, and those who want to grow their business, the ins and outs of the process. Domenic is a seasoned executive who brings more than 24 years of proven experience in merger/acquisition, sales, service, marketing and operations to the business brokerage arena. He holds the professional designation of Certified Business Intermediary (CBI) from the International Business Brokers Association. Contact Domenic at drinaldi@sunbeltnetwork.com.