The magic triangle of small business

Take a look at any reality show business turnaround and the story is always the same: Quality, customer service, management.

It’s the magic triangle of small business, much less the formulaic basis of most business turnaround reality shows.

What’s a bit stunning is that people actually wait around for the reality show hero and their crew to show up before they take action to clean up the mess they’ve made – and even then, it’s orchestrated by the show. Sure, there’s some money and some not-so-good publicity involved, but most of the time, they’d be ahead financially and publicity-wise if they simply took care of business without waiting for the show people to arrive.

Think about what these people would do if they showed up at your business tomorrow.

They’d taste your food or try your product or service. They’d see how clean the place is. They’d monitor your service. They’d look at your books. They’d ride around with your delivery rigs.

Yes, these are the same things you should be doing in one way or another.

Management

Sometimes other things find their way into the success equation of a good small business, but they’re almost always rooted in the magic triangle. Some of these things are a part of management.

For example:

  • Cleanliness… is management.
  • Hiring…. is management.
  • Knowing your numbers…is management.
  • Knowing who your clientele is, and isn’t…is both management and marketing.
  • Focusing your marketing and client care on exactly the right people…is management.
  • Being focused on the quality of what you produce and sell is management, as is how you deliver it.

Quality

Think about the things you’ve seen in other businesses that made you angry, disappointed or made you wonder “Who’s running this place?” Consider the service you’ve complained about.

Is any of that happening at your business? How do you know? Have you called the last several customers you lost? Are you even aware who they are?

What about the last few new customers? Do you know who they are?

If you don’t know the last few you lost or the last few you got, it’s tough to check in with them and ask how things went. If you can’t do that, you’re probably guessing or assuming how things are going.

Is there a TV truck out front yet?

The phone

Think about the last time you were served well over the phone. Or about the last time you had a terrible phone experience with a business. Remember how you felt? Remember the “I’ll never use this business again” thought process – or something like it.

Now, with that thought cemented in your mind – are you sure that your business isn’t having those same kinds of issues with customer calls? Are you positive?

Have you called your business lately as a customer? Have you talked to anyone who has? If the answer to both questions is no, how do you know that your clients are being properly cared for by phone?

Try calling your accounting department and asking a question about an old invoice. Once the conversation is done, ask them to send you a copy of the invoice.  Do they refuse? Does the copy ever show up? These are the kinds of things that set customers off on a daily basis.

Call your sales and service departments as well. How does that go? Try being a “good customer” as well as a “bad” one. How does the experience change? Are they following your training? Speaking of, are they being trained?

Onboarding

What’s your new customer “onboarding” process like? Is it consistent? Does it set expectations for how things will go after that? Do you train them how to do business with you?

What’s your process like? Think about the process that other businesses have put you through, or used to welcome you into their “family”.

Which do you prefer? Yours, or theirs? If you prefer the ones you’ve experienced elsewhere, is there a reason why you haven’t adopted parts of their process and made them your own?

Pay attention to the magic triangle and everything that it touches. Don’t wait for the TV truck to pull up – it may not arrive soon enough.

Does your business reality match theirs?

If you happen to pay attention to any of the business turnaround reality shows on TV (I see them on rare occasions), you’ll know that the pattern is the same for most of them – regardless of the type of business.

Typically, there are some quality and cleanliness problems, a management issue or two (or five),  a lack of performance that’s often attributable to training and consistent systems and processes, and last but not least, a lack of attention to the numbers.

In some rare cases, the businesses seem to be more of a hobby or an escape than an actual business – a situation that never escapes the consulting expert, and always infuriates them.

On the rare occasion when I see these shows, three things always come to mind:

  • How could they have let the situation get this bad?
  • How could they not see these obvious problems, much less fail to address them?
  • How do business owners who read my stuff feel when seeing these shows?

If you haven’t seen one of these shows, here are the things you should be looking for in your business’ reality.

Filth

One of the universal failures of the businesses in these shows is that they’re consistently filthy. Some are worse than others, with some downright unbelievable.

The reason this can get out of control in your business is the gradual creep of muck. You get used to a certain level of clean and it never again seems to be the kind of clean you’d want to see in a place you’d visit.

My wife and I visited a Cajun restaurant in the south earlier this year and found the dining room’s tile floor filthy. It was hard not to wonder if they simply got used to the dirt.

How are you doing on the filth factor?

Management Vacuum

Another consistency of the businesses profiled in these shows is a partial to total lack of management.

Sometimes, the problem is the owner(s) acting as if the business is a hobby (and often creating a massive distraction – much less money suck), while in others, it’s a failure to delegate and then use the time savings to actually manage the business. Managers in these businesses often have owner-instigated conflicts that prevent them from exerting any authority on day to day operations – making them ineffective at best.

Do any of these situations sound familiar? Ask your manager(s) about it. If you sense hesitation…

Systems and Processes

One of the most common problems in these businesses is a lack of order and consistency.  Many of them have no point of sale system or have nothing more than a cash register to balance at the end of the day.

In the episodes where food and drink are part of the business, food and drink costs are always out of control and highly variable from serving to serving and drink to drink.

They not only have inconsistent production (and thus inconsistent quality), but they also tend to have no measurement / tracking / purchasing controls in place. They have no idea how much they’re spending on food and drink or if they are even turning a profit.

Key to the resolution of these problems is creating systems to manage and track materials, sales and purchasing. Yes, I know… this seems like Doctor Obvious speaking, but you would be surprised at the times this has been missing from businesses in these shows (and in my personal observation).

Do you know how much that $8.95 meal costs your business? Don’t serve food or drink? You still have production costs of some kind.

Training

A tightly integrated issue with systems and processes is staff training. Inconsistency in these businesses starts with a lack of systems and processes and ends with inconsistent (or non-existent) training of the staff.

A universal component of the reality-show-fix is a combination of new systems, processes and staff training on those systems and processes.

Systems and processes combined with training breed consistency, which breeds quality.

Watching the numbers

Beyond cost of production numbers, a common issue for these reality show businesses is a disconnect between what the business is doing sales and cost-wise and what the owner(s) / manager(s) think the business is doing.

Do you know what your real numbers are?

What’s the reality at your business?