What I Would’ve Done Differently – Episode 3

Steve here; today I’m going to share with you What I Would’ve Done Differently. Though the list is endless, I’ll key in on one point.

In 1991, I signed up for my first franchise, and in 1992 I opened it, knowing next to nothing about what I was doing. I ended up in a spot that was extremely lucrative and we did very, very well in sales. My lease mimicked by franchise agreement, which was 10 years with two five-year options. Not realizing that leases do eventually come to an end, I ended up a business performing in the top five of the concept fleet; we were probably number three. The value of my business at its peak, and I went right through it. By the time I realized I should have sold, it’s now too late.

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WHEN TO SELL YOUR BUSINESS

by Steve Slowey

When is it time to sell your business? I can tell you the time NOT to sell your business is when you’re losing money. We’re going to make an assumption that your business is profitable, and that is definitely the best time to sell it.

I have a question for you. If you were to invest $1 million dollars and over a 4-year period, that million dollars was given back to you, and at the end of that 4-year period, you were given an additional $400,000, would you do it? If the answer’s yes, then I agree with you. I would do it too. Let’s talk about what I just said.

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Are You Outsourcing What You Should Have In-house?

By Steve Slowey

Recently, I spoke with a Franchisee made reference to the fact that they were not making any money and were considering closing their store. When asked why, and what the problem was, they said they ‘could not keep a GM’ and that they were ‘having to put money into the business’. They were trying to hire someone to bring functionality and organization into their disorganized dysfunctional operation.

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What Happens When You Don’t Pick A Tested Franchise

By Steve Slowey

Last week I was in Denver Colorado for a trade show; everything concept you could think of was represented there, from oil changing to cupcakes. As a potential franchisee,  seeing all these concepts, where do you even begin? Yes, some folks know what they want but there may have been several branded concepts representing the same niche, so again, where do you begin?

I had the opportunity to speak with a lot of people and as the show went on, I found myself asking people how much they knew about Franchising. Honestly, I found that they didn’t know exactly how it works or even what a franchise agreement was.

So how do you make a decision, or pick between so many concepts, when you’re making such an important choice? You don’t, you do your research,  remove all emotion, and realize this could be the best, or the worst decision, depending on how you approach it.

Franchises should represent a concept that has been tested and proven to increase the opportunity for a potential Franchisee to make money. This idea only holds true if the Franchisee follows the advice and direction of the Franchisor. Considering the length of time a franchise agreement represents (usually 10 years), a concept should not even consider Franchising until they are solid in every facet of their operation. While I don’t believe a concept needs to be operational for a certain amount of time before franchising, they better be able to prove they know what they are doing. Just because someone has an idea that seems unique today doesn’t mean it will be successful as a franchise.

Newer concepts rely heavily on the Franchisee to give them credibility and help them build relevance in the market. Every Franchise we see began somewhere, but believe me, they all went through some growing pains typically at the expense of some Franchisee.

Personally, I have been successful in some franchises and I have been financially hurt by others. With the ones I was hurt by, the Franchisor allowed me to open even when things weren’t exactly right. What risk did the Franchisor have, more than that, what did the Franchisor do to help me through the struggle and to ensure that I was successful?

If you buy a Franchise, you will be paying for the use of their branded name and what they consider proprietary information, that should help you to be successful. Remember, this is a big decision and you need to ask the right questions and get sound advice before you commit. Let us help you. We are not here to convince you to buy a Franchise, we are here to simply help you do it the right way.

 

Profit alone is no way to judge your business

By Steve Slowey

So I took over one of my restaurants from a manager who, in many circumstances, could not do the job. Today makes a full month since I took over. In that month, I have dealt with entitled employees, poorly executed systems, lack of training, and poor execution at every level. It is amazing how much damage is done when there is no leadership and no accountability.

Ultimately this is my fault as l should have never allowed it to get to this point but, I did. This scenario is not uncommon. It is likely we all have all allowed parts of our professional or business lives go, then found ourselves having to clean up the mess we created. Businesses are either in a progressive state or a regressive state; there is not a third direction.

This store has been in a regressive state for a while, and though it was and is still making money, business would be crushed if another concept were to open in the area. Profit alone is no way to judge your business. Ironically, at this location, the manager even said that he ‘didn’t see an issue’, that ‘the store was making money’.

The consumer has the ability to choose where they spend their money, and it is every employee’s job to ensure that the customer made the right choice when they walk in the restaurant. Open your eyes and try to see what your customer sees. Do a thorough evaluation of yourself and your business and make the changes needed to stay relevant.

Well-ran businesses do not worry about competition, they embrace it because their standards are high, and their execution is consistent. I have a lot of work still to do to get this store where I know it should be, but is there really any other choice? By being an absentee owner, I allowed this to happen so I have nobody to blame but myself. 

I hope you do some soul searching and take an honest look at your business. If you don’t like what you see, address it. I am doing just that. I am already seeing progress and getting good customer feedback but it has taken hard work to get here.

I am a believer in clear and concise systems that maintain standards and evaluate performance. Getting those systems in place has been difficult but they are the reason I am getting results. The systems are exposing the employees who are productive and the ones who are not.

If you find yourself wondering how to address some of the issues you are facing let us know.  I am confident we have the tools to help you get back on track.

What is on your mind?

By Steve Slowey

So I have written some blogs on various issues and I have talked about some of the challenges I have had in my career but I’d like your input on what you’d like to learn. 

I have made a lot of mistakes in my professional life and have learned from them. I have watched successful people and learned from them also. What do you want to learn? What are the challenges you are facing?

We (Paul, Tiffany and myself) have about 75 years of combined experience and it covers a broad spectrum; from being part of an existing franchise to starting a new concept. We have negotiated over 1000 leases and have owned more than 20 businesses. We could blog for years about running a profitable business, franchising, leases, and many other topics; but if there is a specific topic you’d like to hear more about, please let us know!

When I opened my first restaurant, I had no idea what I was doing. I would call the bank and get my balance and that’s how I knew I was making money. I did my profit and loss statement at the end of the year for tax purposes and learned the hard way about cash flow and taxable income. If I knew then what I know now, who knows?! But I do know now and I’m happy to help others that are currently in the position I was once in.

If you are considering leasing space and you have never done this before please let us know and learn from our experience. If you are considering a franchise let us know it is a huge decision that will contractually obligate you personally for the next 10 years. If you are struggling to make money in your business and don’t know what to do to turn it around then let us know.

I know there is tremendous value in my experience and would like to help you in your journey. I want this blog to be a service to you. Please comment below with any questions on franchising, leasing, construction, or running a profitable business. 

Success is a byproduct of commitment to goals

By Steve Slowey

So I have finished my first week at a restaurant that I have owned but recently took over all the GM duties and it was not easy.

I live a relatively relaxed life and enjoy my routine. Taking on this project has certainly changed all that. I started by making an honest assessment of what was needed and created realistic goals for myself and my management. I narrowed the focus of my managers so I would not overwhelm them and I took on the brunt of the load. This particular store had several systems in place and really it had too many. The systems were burdensome and created so much of a workload that the primary function of the employee was replaced by all the additional tasks they were made to do. An example would be the servers, their primary function is to take care of the guest and insure that the guest experience is of a standard that the guest would become a repeat customer. The systems that were in place had the servers doing so much additional work that they were unable to properly attend to the guests needs and it showed in declining revenues. First, I redistributed the workload and made the guest the priority and did away with excessive tasks. I also worked hard to win the respect of my employees so they would be more willing to accept me and my philosophies.

Success is a byproduct of hard work and commitment and it begins at the top of every business and trickles down to all involved. I have to be willing to put in the work and make the time investment to ensure that the goals I have set are accomplished. I also have to be the one who accomplishes my goals and cannot expect them to be met by handing them off to someone else. Every successful business has a strong leader and this particular store was in desperate need of that. What keeps me going is that if I do this correctly, the time I am investing will pay dividends in the future not only by increasing the value of this store, but also by allowing me the ability to enjoy my life.

So many times in my professional life I have come across businesses that are in decline because the owners are unwilling to give up their personal time to properly correct the issues. People do things for only two reasons, either they want to or have to and if you wait till you have to the risk of failure will be much greater.

These next couple of weeks I will work to have the systems in place that will allow me to fiscally manage my cost of goods and labor to insure profitability. The retraining of my staff will be ongoing during this process and will continue until I see it executed consistently and achieving the desired goals. Once this is complete and my foundation is solid I can rebuild my revenues and feel confident that they are stable.

Do you have what it takes?

By Steve Slowey  

Recently, I took over an existing restaurant operation and though I consider myself pretty smart, I was overwhelmed by the challenge and the magnitude of problems.

In 2012 the store was a powerhouse. It performed very well, but due to a number of issues, it has continued to regress to the point it is now; down 2% from 2015 which was down 2% from 2014 etc. Needless to say, the store is down and I have to fix it. I will share with you my assessment of issues and my plan to repair.

My first day at the restaurant, all the employees of course, were worried. They acknowledged things were bad but they were reluctant to change. They all wanted to let me know how long they have worked there as if that is some “get out jail free card”. (Personally, I would have stayed quiet, since the reviews on the store are really bad.) So I have a bunch of “entitled” employees (refer to previous blog posts) rather than productive employees. The other issues I saw are poor operational procedures and lots of discounted pricing. My guess is that the discounted pricing was used to increase traffic and/or to offset slumping sales {it did not work}. Labor costs were way too high and my cost of goods was 6% high due to discounting and poor procedures.

My biggest challenge is ME. I have to be willing to asses the situation, put a plan together, and execute. My plan takes me to my goal and to get there I have to be focused and committed without time and energy restraints.

If you’re faced with a similar situation, you had better be willing to do it the right way or you will add to the issues, and further devalue the business. This business is worth it. The first step I had to take; determine if the ROI was worth the time and energy and cost to repair what is broken.

This week I will put the focus back on the customer and not the employee. I will evaluate my staff to build the team I will need to accomplish my goals. My blogs going forward will be a journal, documenting my plans, struggles, and accomplishments. These are the realities of being in business and when you’re the leader of your business, you had better know what direction you are heading.

Who is the Prevailing Common Sense in your Business?

By Steve Slowey

Common sense is only common to the individual; there is no such thing as we are all different and, in business, there needs to be one perspective.

In the absence of leadership, everyone goes in their own direction and does so to protect what they think is theirs, even to the point of hurting their place of employment. Clear and concise systems, that read like a detailed map, that direct your employees to exactly the result you want, is what is needed. Invest time in putting your common sense in detail, doing away with any interpretation, in every position that your company has.

Every department should have it’s own KPI {key performance indicator} that is detailed to that departments’ expectations. If the detail is there, then training should align to the detail. If that is done, then you will be the ‘prevailing common sense’.

The two biggest cost factors in business are labor and cost of someone who does not fully grasp their impact or clearly understand what you believe to be common sense. Infinite detail is the answer again. Make the time investment and put your common sense in detailed form, leaving zero doubt what the outcome is to be. 

Is your business progressing or regressing?

By: Steve Slowey

Your business is moving in a very specific direction and it is either in a progressive productive direction or a regressive destructive direction. The way to tell is simple, what is your current focus? is it fixing employee issues and dealing with their problems or are you focusing on building revenues and stream lining your business. Every business has a foundation and within the foundation are all the systems and standards that need to be in place to protect the revenues coming in. How solid is your foundation? If your foundation is unstable then your revenues are likely unstable and you are not progressing and you certainly are not in a position to grow. To be in a progressive state you must be solid in your foundation you must have systems that assist you in managing your personnel and evaluates what value you are getting out of them. So many times we try to hire what we lack rather than develop it with good systems. I hear it all the time, I hired her or him because they came from an organization that was efficient and organized and we need that here. Well when you take someone who flourished in a solid systems oriented environment and put them in a dysfunctional system odds are you will ruin them.

 Evaluate your foundation and start fixing the systems that are needed to get you pointed in the correct direction. You may have to get your hands dirty and do a little work but that work if done correctly will be an investment that will pay dividends and allow you to grow. Businesses that are progressive are not building their foundation they are managing it and building revenues.

 You are the answer or you are the problem but if it is your business you are the leader and the direction your business is going is your responsibility. I have been in a regressive state and it’s not a good place to be but what got me progressive was working on my foundation and making it solid.