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Tuesday, March 25, 2014

RANDOM THOUGHTS #183

Steve Cole's thoughts on the case studies he sees in numerous business shows on TV.
     

1. If you own a business and you watch X-factor, American Idol, and The Voice but don't watch Restaurant Impossible, Hotel Impossible, Kitchen Nightmares, Bar Rescue, Tabitha Takes Over, or On the Rocks, you're doing it wrong and your business is not all it could be. Owning a business includes the obligation to continually improve your knowledge of business and make your own business better.
      

2. In one case study, a guy bought a bar then inconveniently died and left his wife (who knew nothing about the bar business) trying to run it because it was her late husband's dream to own a bar. She had worked at the bar (having quit a great job to help her husband's business). She should have realized that she didn't know how to keep the business going and put it up for sale. Instead, she ran it herself (without a clue what she was doing) and ran up huge debts. If she wanted to keep owning the bar she should have hired an experienced manager and gone to the effort to learn the bar business. The TV expert convinced her to promote an employee who was certainly capable, but in the end had no choice but to leave the clueless owner in charge because she was too deep in debt to sell the place. Also, and I'm just saying this, a successful bar may be the wrong legacy to leave two daughters.
      

3. A mature professional couple invested their savings to buy a restaurant for their son (who loved the restaurant business and had actually graduated from culinary school). The restaurant wasn't making money, so mom and dad started working there nights and weekends. They constantly bombarded their son with their ideas of what he was doing wrong, and would not let him change the d├ęcor (which no one but his mother liked) or the menu. To be sure, the son didn't have the experience to run a restaurant on his own, but the parents had no clue what he should be doing. The son lost interest and cooked lackluster food, so business got worse and worse and the parents kept pumping in money. The parents would have done better to hire an experienced manager to make the son run it right.
       

4. Some years ago, I was in a fast food burger place. Their system at the time (since changed) was to have racks of burgers ready on the shelf and just hand them to customers as they ordered. If the burgers got 45 minutes old without selling, they were thrown away. At various intervals, somebody in the back would make another tray of 24 burgers. I ordered mine and noticed three burgers of that type on the shelf, but I was not handed one. Asking, I was told that the lady in line ahead of me had ordered four, and when the new tray of 24 appeared they would give her the three on the shelf and one new one, then give me (and another customer who ordered after me) new ones. I pointed out that the lady who had ordered four would not wait one minute longer if we were handed the existing burgers, as the tray of 24 would more than cover her order. The manager told me to mind my own business and wait my turn, that the corporate rules were that I could not be served until the customer ahead of me was. I tried to point out the logic but was told to be quiet. There was quite some delay with the new tray of burgers, and the timer dinged that the three on the shelf had to be discarded. The manger then decided to hand them to the single-burger customers, but we refused, saying we could have eaten those burgers when they were fresh but would now wait for new ones. The manger got quite upset that we would not accept the now-stale burgers, and certainly did not want to hear that a lack of common sense was the problem, not our attitude.
   

5. Twenty years ago, there was a little store a short distance from my house, where I worked. I'd go down there to get BBQ and snacks. (It's still there but the new owners don't have BBQ any more. Pity.) There was a rack for snack pies, and the truck driver from the bakery showed up every Tuesday to place 36 pies (six each of six flavors) on that rack. I noticed that the six cherry pies sold that day, nothing sold on Wednesday, and over the rest of the week a few pies of non-cherry flavors (lemon, apricot, peach, chocolate, apple) would be grudgingly accepted by desperate customers. Most customers simply went to a different store (of another chain that bought from another bakery) two miles away, costing the little local store a lot of business. I had gotten to know the owner and together we tracked pie sales, then confronted the bakery truck driver, telling him to leave 26 cherry pies and two each of the other flavors. He refused, saying that the bakery gave him equal numbers of pies because they made equal numbers of pieces because their supplier brought them equal numbers of five-gallon buckets of fruit filling. The system was designed to produce an equal number, and that would be what we got, so we should buy the other flavors. The owner of the store did not renew his bakery contract, switching to the other bakery that (being smarter) had experimented to find out what people wanted to buy (66% cherry, 20% apple, and a few of the others) and had adjusted their entire logistical chain to produce that many. The store was quickly selling over 100 pies a week instead of less than 30, and had more business in general as local people now switched back to the local store.