Founder of O’Briens Sandwich Bars, BRODY SWEENEY, continues his series on how to cope with the stresses and strains of starting a new enterprise
Check the quality of the information you’re getting
It’s very normal to want to please the boss and tell him what you think he or she wants to hear. This is not any good for the boss, though, as you need to know the reality of your situation.
It’s very normal to want to please the boss and tell him what you think he or she wants to hear. This is not any good for the boss, though, as you need to know the reality of your situation.
A good example of this is when you go into a restaurant and have a meal. It seems to be a matter of course now that your waiter will come and ask you ‘Was everything okay with your meal?’ – in a tone which suggests that anything other than a positive answer will not be welcome. Yet how often have you not been terribly happy about some aspect of your meal and stayed quiet so as not to make a fuss?
If the restaurant was serious about getting feedback from customers, rather than paying lip service to it as part of their approach to customer service, they would ask the question in a way that encouraged you to answer it truthfully.
Probe behind the answers you are given by staff or customers to see what they are really saying. With your staff, assume that they’re giving you a truthful answer, but check, just in case – to put your mind at rest.
Continually reassess your business plan as you go along
We get our new business up and running, with the aid of our road map – the business plan. Unfortunately, with all the myriad day-to-day tasks involved in running the business, it’s difficult to get back to the business plan and to adjust it in light of the real situation in which your business is now operating, as opposed to the theoretical situation you were in before you started. You know that six weeks into the new venture, the business plan will be wrong. You’ll be doing either worse or better than you thought you would be – but not exactly how you thought you’d be doing.
However you’re actually doing, you’ll have to adjust your business. For example, your plan will usually have included projections relating to sales and margins. Your sales are easy enough to measure against a budget, but what about your margins?
To discover what your margins really are, you’re going to have to take at least two stock-takes – and, frankly, they probably don’t seem like a priority at this point. But that’s wrong: knowing your actual margins and sales are a key part of your re-assessment.
Knowing your sales allows you to figure out what you need to do to lift them. Being aware of your gross margin – which will be different from what you had predicted, and usually worse in the start-up phase – allows you to think about what you can do to change it. Have you a high level of wastage? Is your pricing correct? Is stock being stolen or not run through the till?
If you don’t reassess, you probably won’t look at your sales or margins until about three months after your first financial year-end, when your accountant forces you to.
At that stage, you will have been running your business for 15 months, most likely not hitting your margin target. In a small- to medium-size business turning over, say, 300,000 euro per annum, if your gross profit should have been 65 per cent but in reality was 55 per cent, this will have cost you 30,000 euro – which I presume you would prefer to have hung on to.
You’ve got to do whatever it takes
There are no excuses when it comes to starting or running a business. There is no one else to pass the buck to; nobody else is responsible for what happens. As nothing ever goes according to plan, are you prepared to do whatever it takes to make sure your venture succeeds?
Once you have an understanding about what is actually happening to you, you must take immediate action to remedy the situation. Letting people go is unpleasant, but it doesn’t generally get any easier by being delayed. Changing job roles around; finding the time to do stock-takes; to knock on doors even when you don’t want to; to go back, cap in hand, to your bank manager because you are running out of cash – all are examples of the type of action you might need to take for your business. None of it is particularly pleasant, but it’s part and parcel of the reason you decided to strike out on your own in the first place.
Next week: Franchising your business for long-term success
n Taken from Making Bread – The Real Way To Start Up and Stay Up in Business by Brody Sweeney, published by Liberties Press – buy at www.libertiespress.com and get a 10 per cent discount
