One of my new favorite television shows is "The Profit" on CNBC. For those who haven't seen it, I highly recommend that you give it a viewing. The premise involves a successful entrepreneur, Marcus Lemonis, who is considering investing in struggling small-business operations where he thinks there exists an opportunity to turn them around.
Like most "reality TV," this program leaves you feeling better about yourself. The issues and ineptitude of some of the prospective business operators is astounding; and, if nothing else, you are certain to get a few good ideas -- or, at least, reinforcement for things you are attempting to do in your own business.
In reviewing the operations of a popcorn concessionaire, a cash business not unlike vending, Marcus asks, "where's accounting?" The owner replies, "That's her over there, she's counting." The frustrated, if not disgusted, reaction by Marcus is hilarious.
Marcus states there are three critical areas he looks at when considering whether to partner up with a small business: People, Process and Product. This is the crux of his strategy for reviving a struggling business -- review each of these categories and see where there might be a problem he can solve, or at least improve.
Many small-business folks, caught in a similar struggle (and most readers who ever have run their own businesses likely have been) should remember these three critical elements, and consider all the aspects of each one when challenged with righting the ship.
There are obviously a lot of categories to be considered, but they can usually be placed under one of those "3P" headings.
The people portion of the equation is, to my mind, the most difficult problem area. People are not static; personalities and issues change, so you must continuously evaluate everyone and how they fit within your organization, or whether they fit at all.
Route-based businesses start with the drivers. Having to replace and train new drivers is always a struggle; but if there is one area that should have your best performers, it is this one. I recall days where we would have a driver on vacation, and another call in sick. I would find myself out on a route when one person was off; with two out we would double up stops, and reorganize the routing, to get the job done as best we could.
As much as I disliked chewing up a day riding around town, it was always enlightening to jump in a truck and go service sites. In very short order, I knew whether I had a good, bad or questionable employee running that route. Outdated product, unclean equipment and disgruntled clients are a great performance review.
If you consider the expense of acquiring an account, getting rid of a bad driver is paramount to improving business performance, painful though the transition might be. Sadly, it always seems that the only drivers who ever quit are the ones most worth keeping.
An excellent driver should be recognized as such, and figuring out what motivates them and what rewards besides pay raises keeps them content is important. They should be promoted wherever there is room, or led to understand that you intend to do so in the future when the opportunity arises.
Today's technologies (processes) have greatly improved site management, so spotting a bad routeperson may well have more to do with other factors; but the premise remains the same. Your drivers are the face of your business, and an extension of it in the field. As such, replacing a bad one should be a top priority.
If you aren't the only account acquirer for your business, your salespeople are a group in which it is easy to quantify performance. But it can be very tough to pull the plug on the underachievers, since they are often the nicest, friendliest and most outgoing staff members and you can easily become quite attached to them.
They can be coached and trained in hopes of improving, and this should be ongoing with all sales staff; but if a salesperson isn't hitting his or her numbers, you have to take a hard look at why. Quite often, you'll come to the realization that they are not right for the position, and therefore a huge drain on the operation.
Using a personality profiler like Omnia Profile from the Omnia Group (Tampa, FL), which I recommended in a past article, can help you discover who is and is not suited to sales. Omnia can filter prospective salespeople, and it is an asset in assessing current ones to learn whether they are actually in the correct position within your ranks. A great personality who is not a "closer" might just be the next great route driver you've been looking for!
Personally, firing people is my least favorite activity, so I can empathize with those who would rather stay the course and try to get current staff to improve. But there is one activity worse than having to let someone go, and that is having to sell or close a business out of duress. I never looked back on someone we replaced and thought to myself, I sure wish we hadn't done that. It always seems a move for the better.
Applying the correct process to People will strengthen the business. Next month, we will look at Process and Product.
May your cup be full, and the brew exquisite!
KEVIN DAW is president of Heritage Coffee Co. (London, ON, Canada), a private-label roaster serving the breaktime management industries. A 30-year veteran of OCS, water delivery and vending operations, he has concentrated on coffee roasting for the past two decades.