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Tuesday, January 14, 2014


Steve Cole comments on lessons he learned from case studies at business school and on several business makeover television shows he watches.

1. One business owner said: "I've been running this place two years and he's been here an hour and he wants to tell me how to run it?" Well, here's an answer for you: "You've been losing money every month for over a year, and he's an expert who has saved over a hundred businesses from bankruptcy, so yes, he can tell you how to run this place better." This is a fairly common attitude. People, that expert is a success (he's got a TV show) and you're a failure so maybe you want to listen to him?

2. One business owner said: "You're taking my good merchandise and selling it at 50% off. You're an idiot." Well, here's the answer: "Your own bookkeeping says that these items have not sold in two years. It's time to admit that stocking them was a mistake and get the money invested in them back into the bank where we can use it."

3. One business owner said: "But these employees need jobs." The answer is: "They're lazy, they steal, they don't show up on time, they are disrespectful to you, and if they're not making you money, you don't owe them a job." Far too many businesses keep ineffective employees around just to avoid the guilt of sending them to the unemployment line. By all means, keep the good employees, but do not keep bad employees just because they need the paycheck they don't earn. The tough part is sometimes the business only needs so many good employees and some good people have to leave because the business cannot afford them.

4. Time and again, I see restaurants with gigantic menus. All of those items require food to be bought ahead of time and stored, and since some stored food goes bad before you use it, a large menu just means waste. Cut the menu down to a 25 or 30 dinners at most. Be flexible on side dishes to let the customers pick what they want, and avoid fancy stuff not everyone wants, canned and frozen food (fresh is better), and if you're using the microwave you're losing customers. For that matter, every business needs to seriously look at it's "menu" of goods and services. Get rid of the worst-selling items (unless they are absolutely necessary to sell other items). Fire sale dead inventory and put the money back to work instead of being stored on a shelf in the form of unsold product.

5. I watched an episode of On The Rocks (a show about doing a business makeover for a failing bar) and one element of the problem was that the managers were not up to the task of managing an inventory of fresh food, so they relied on more expensive (and less tasty) frozen foods from Costco. The expert came in and showed them how to do it right and how to order fresh food three times a week so it did not go bad. Within a month of the show being filmed, the bar in question was back to frozen food (obviously because the managers could not handle the mental strain of a fresh food inventory). But then, they also went back to other pre-television things (the name of the bar and those horrid smoke things).