Posts Tagged ‘business owner’

My First Job, or “Stock boys are cool”

Tuesday, February 14th, 2012

As a teenager, I thought I was working for gas money and spending money. Many years later, I learned that every job that I’ve had has contributed to my understanding of people, of business and how different people lead and manage others.

I’ve worked in a variety of organizations, from a small retail store to a national bank and an international accounting firm. The cultures were vastly different and so was their effectiveness at motivating and engaging their employees.

My first job, when I was 14 years old, was working in a small department store called The Met, short for Metropolitan. We sold all types of dry goods including clothing, diapers, kitchen goods, cheap hardware, batteries, and my favourite, chocolate bars. We had to keep those under lock and key in the candy room! For some reason, the manager didn’t trust anyone with the key to the candy room. A valuable lesson learned.

My first boss, Peggy, was a great manager and she taught me a lot about treating everyone with respect, to ask their opinions and to let them think.

Now, as the stock boy, I didn’t have to think too much. But Peggy never told me how to do anything unless I asked. She told me what to do, but never how to do it. She was confident that I could figure it out. And, her confidence in me increased my own confidence, although most teenage boys seem to exceed in confidence, for some reason.

I could sweep a 6,000 square foot store in nine minutes flat. The best parts were the handyman jobs like climbing up to the roof or up on a 16 foot ladder to change the eight foot light bulbs. Did you know that they explode into a million little pieces if you drop them?

I also learned that I didn’t want to work in retail. The worst part was working in a basement inventory room, on my summer vacation, during the hot July weather, pricing school supplies. Didn’t I just get out of school? Apparently, retail works one season ahead of reality.

The best part was bagging. It was easy, you got to meet people, and I wasn’t stuck in that darn basement. I learned that just because I could fit something in the bag, it didn’t mean the bag could withstand the weight. Customers got very unhappy if their bag ripped and they dropped their purchases. The manager got really mad if the product broke and we had to replace it. Cause and effect, consequences, logic: all these were burned into a teenagers brain.

We also had ‘management trainees’ sent from head office to learn from Peggy. This was an interesting experience because the stock boy, and everyone else working in the store, knew more about the store than the trainees. The trainees tried to manage by position of power (their perception of it, at least) instead of by respect. That didn’t work very well. Actually, it caused the occasional mutiny and intentional lack of cooperation. The mutinies were an important part of their training experience.

The trainees learned a few things:

  • leadership doesn’t come from a title
  • the most knowledgeable people are front line people, not the people from head office, or their hopeful delegates
  • never let the 16 year old stock boy drive your car.

As a parent, I’m looking forward to the work experience that my teenage daughters will gain. They’re not. Working in a clothing store just might cure their fashionitis, or, they might spend all their money on clothing purchased with employee discounts. Only time will tell.

Copyright 2012 Phil Symchych. All rights reserved.

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Working with Mom, Dad or the kids?

Wednesday, February 1st, 2012

If you run or work in a family business, then you are a very important part of the economy. You may even have great (family) employees who are committed to the business and are willing to go the extra mile on short notice, often without extra compensation or overtime. After all, what is family for, if they can’t help out?

Family businesses face many unique challenges that threaten their short term success and long term survival. Things like professional management, leadership development, performance and profits are critical to any business and even more important to a family business that may be reluctant to hire outsiders for key positions. Yet many family owned businesses grow to become successful global companies because their strong family values and long term perspectives prevent the financial weaknesses of focusing on quarterly earnings.

Ford, a family owned business, is the only major North American car manufacturer that did not declare bankruptcy. Cargill, another family owned business based in Minneapolis, is one of the largest companies that feeds the world. Both of these companies generate excellent results and have very strong brands in the market.

Regardless of the size of your family business, you can access help, advice and resources from other successful family businesses.

The best organization that I know of for helping family businesses is the Canadian Association of Family Enterprises, or CAFE for short. Their website is here.

CAFE has many local chapters across Canada. The fees for a family business to join are ridiculously low compared to the value received.

I’ve been a member for several years. CAFE provides value in several ways. My favourite is the Personal Advisory Group, or PAG, where a small group of people from different families/businesses gets together monthly for a couple of hours in a confidential and safe environment to discuss and share experiences. The process is structured and lead by the group’s moderator. My PAG has provided me with great perspectives and advice and helped me to be a better husband and father in addition to being a wiser consultant and business owner.

The local chapters run workshops and have guest speakers that educate the members and exchange ideas.

There is a bi-annual symposium coming up in Ottawa on May 23-25, 2012.

If you own or work in a family business, then I recommend that you consider joining. Running a business, even with family, can be a lonely adventure. Joining CAFE will strengthen your business and your family.

Copyright 2012 Phil Symchych. All rights reserved.

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DUDS: How to fix a cooktop in only 54 days

Thursday, January 26th, 2012

“The stove doesn’t work,” said my wife. “Uh-oh” I’m thinking, “kitchen stuff.” This wasn’t starting well and it wasn’t going to end well.

The largest, main burner on our cook-top stopped working. “We’re supposed to host Christmas dinner and I need all my burners,” exclaimed my wife. She called the warranty company – because the repair man told us to always buy an extended warranty on today’s electronically sensitive appliances – and this commenced a lengthy exchange. She provided the serial number and the warranty company needed to send out the local service representative to take a look. Two weeks later, the service rep showed up, made a diagnosis, and left. Then, nothing.

My wife called the warranty company back. They never received any information from the service rep. My wife called the service rep. He said that he faxed the information and will resend it. We waited, and waited. My wife called the warranty people, to whom she wished a “Merry Christmas” because the season was upon us and we, well, my wife, weren’t cooking anything on the main burner. The warranty company still hadn’t received any information.

We called the service company, again. Eventually, my wife helped everyone figure out that the service company had the wrong fax number and sent our information to fax purgatory. Finally, my wife connected the service company’s information with the warranty company.

This is why consulting is so easy, sometimes. Large companies lack management skills and processes and don’t test their own products and services. Small and medium business managers can run circles around any big company manager who has a single department specialty and is busy protecting his turf, but I digress.

Our local company sent the information for the third time. We appreciated their persistence. My wife was now on a first name basis with the warranty people and had elevated her concern to the supervisor. The repair was finally authorized, then scheduled and, finally, performed.

Total time: November 24 to January 17. Only 54 days to fix a burner.

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Know Your Numbers by Phil Symchych

Monday, January 16th, 2012

The best managers, running the most profitable businesses, know their numbers. Do you know yours?

Here are several key questions that, when answered, will give you a powerful insight into your company’s profits.

  1. What are your top three products or services, as a percentage of your total revenues?
  2. What are your gross margin percentages for these top products and your company average?
  3. How much of your total gross profits do these top products contribute? Remember, the 80/20 principle can apply here.
  4. What is your overhead rate by hour or person or unit of production?
  5. What is your break-even sales figure each day, week or month?
  6. Who are your most profitable customers?
  7. How much time and resources do you spend building relationships and selling to your most profitable customers compared to other customers or non-customers?
  8. What percentage of your revenues come from proactive selling vs. reactive order-taking?
  9. Which customers pay the fastest or the slowest?
  10. What is your days to cash? That is, how fast do you collect your cash. To calculate: Divide your accounts receivable into your annualized sales and then multiply by 365. The lower the number, the faster you’re getting paid.
  11. Are you actively promoting your most profitable products and services to your most profitable customers?

Knowing your numbers can reduce your risk from guessing and improve the probability of producing profits.

Copyright 2012. Phil Symchych. All rights reserved.

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Start-ups: are you a sprinter or a marathoner?

Monday, January 9th, 2012

There are two kinds of business start-ups: sprinters and marathoners.

Both have courage. Both want to control their destinies and both want to be successful. However, there are some key differences.

Sprinters

  • Have experience and expertise in their business and industry
  • Have learned the ropes on someone else’s dime
  • Have good relationships with customers or prospects
  • Generate sales and cash flow quickly
  • Develop their operating policies and procedures on the fly, but get them on paper
  • Focus on their core strengths and competencies, in other words, their ’sweet spot’
  • Are comfortable saying “No” to requests or opportunities that don’t fit their sweet spot
  • Have a culture of performance, accountability and success
  • Attract great people and customers because of their positive attitude
  • Are focused on a couple of key strategic goals; especially generating revenues and providing a great customer experience (quality, service, consistency, breadth, convenience)
  • Can generate positive cash flow from zero to 60 days

Marathoners

  • Have diverse experience but don’t have expertise in their new venture
  • Are learning the ropes on their savings, investor’s or banker’s dime
  • Think that their management skills are transferable to any industry or business
  • Have good relationships with referral sources or prospects
  • Generate sales slowly and steadily
  • Are too busy marketing and selling to develop operating policies and procedures
  • Try to keep everyone happy and will do just about anything for cash flow
  • Have a culture of sales and customer focus
  • Try to minimize their wage expense until they can afford to hire great talent
  • Are focused on growth for growth’s sake

I’ve played lots of sports including hockey, tennis, golf (well, some people think golf is a sport, especially golfers), and participated in endurance sports such as triathlons. As soon as I was in a triathlon race, I was figuring out how to conserve my energy so that I could finish the race. My strength in cycling didn’t make-up for my swimming and running.

It’s the same in a start-up. You can’t think about endurance, the long-term or trying to do everything yourself. You have to focus your team on creating short-term success, like a hockey shift or a tennis rally or a hundred yard (meter) dash, in order to grow your business.

The critical success factor in start-up success is speed: attracting customers, generating sales, converting sales to positive cash flow, reinvesting in your business, achieving profitable growth. These are a series of sprints. If it feels like a marathon, something is wrong.

Can you see the finish line or are you climbing yet another hill with no end in sight?

Copyright 2012. Phil Symchych. All rights reserved.

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Phil’s Profit Point 27 Podcast – Thought Leadership

Wednesday, October 26th, 2011

And now also on iTunes

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Phil’s Profit Point 26 Podcast – Innovation

Wednesday, October 19th, 2011

And now also on iTunes

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Growing Pains

Friday, October 14th, 2011

A good friend was explaining the daily challenges of growing his business.

“Why does it feel like my face is in a fire hose?” he asked.

“Well, there are people running multi-billion dollar companies, with the same 24 hours in a day we have,” I replied, not sure if he was asking for advice or venting.

“Yes, and they have people they can delegate to,” was his response, and then he heard the wisdom of his own words.

“So, there’s your answer,” I suggested, realizing it was simple but not easy.

The key factors in growing your business are resources: time, people and money.

Money, which comes from profit, allows you to hire great talent, to whom you can delegate. The critical path starts with having a profitable business model. If your business isn’t as profitable as it could be or should be, then you need to evaluate your business model from the customer’s perspective.

How much value are you providing to your customers?

Another entrepreneur asked “when should I hire extra help around the house while I’m juggling parenting, running the house and building a business?” As soon as possible!

It comes down to the opportunity cost of our time. If we can delegate or outsource tasks that we don’t like, that we don’t need to do and that aren’t important to our roles and relationships, then we should do so. This applies to both our professional and personal lives.

What can you delegate, outsource or stop doing in order to create more capacity for important things in your life?

Copyright Phil Symchych 2011. All rights reserved.

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Phil’s Profit Point 25 Podcast – A Good Accounting Department, Part Three – The Fortune Tellers

Wednesday, October 12th, 2011

And now also on iTunes

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The worst job in the world: owner/manager

Monday, October 10th, 2011

I recently spoke to a business owner who wanted to maximize short-term profits and increase long-term capacity in the business. It’s very difficult, if not impossible, to do both at the same time because they are in conflict. However, I hear the question often, and here’s why: The person isn’t thinking clearly, they are thinking like the owner/manager.

The worst job in the world, in fact, is ‘Owner/Manager’ because the two roles are always in conflict with each other.

Are you the owner, trying to achieve a return on investment from what should be a passive investment?

Or, are you the manager, trying to maximize revenues, profits and growth while consuming resources and spending money on training, advertising and other things that may not have an immediate payback-things that reduce short-term returns desired by owners?

Are you in conflict with yourself?

Just imagine what your role looks like to your employees? Are we maximizing profits today by cutting expenses because the owner is worried about a dividend or are we building for the long-term by increasing expenses and investments?

To help you sort out your roles, here are questions to think about.

Questions for owners:

  1. What is my return on investment?
  2. What is my return on equity?
  3. How can I build equity in the company?
  4. How can I protect my equity?
  5. How can I position my investment for eventual sale?

Questions for managers:

  1. How do we make our customers happier, improve our competitive position and grow revenues?
  2. How do we beat our budget and forecast (you have one, right?)?
  3. How do we allocate resources to increase our capacity and speed?
  4. How do I attract and retain key talent, regardless of what the economy is doing?
  5. How do I develop my people to replace me so that I can move up in the organization?

If you’re thinking about your wealth, you’re thinking like an owner. If you’re thinking about growing the company, you’re probably thinking like a manager.

Which hat are you wearing? Which hat should you be wearing?

If you’re not sure, here’s my recommendation: “You’re fired!”

Fire yourself as manager, build a management team, and give the team your performance targets that will meet your ownership returns of investment and equity. Then, get out of the managers’ way.

Copyright Phil Symchych 2011. All rights reserved.

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