I had a business meeting in a local restaurant last night and it was a rare scenario I thought worth mentioning. The restaurant was a small establishment off the beaten path, but had a lot of character and personality. It had a seating capacity of nearly 70 people and a staff of about ten.

When our group arrived, we were greeted by the Marketing Director, who was young, but very professional and enthusiastic. As everyone gathered their drinks and proceeded to their chosen tables, the Marketing Director (Danielle) explained the history of the establishment and introduced us to the Maitre’ D and the Chef. Looking at the menu it became clear their intention was to offer patrons a reward for finding their restaurant, with dishes including ostrich, buffalo, and moon fish, but more importantly was the level of service we received. Each member of the staff took the time to make sure everyone had everything they needed without being pestilent and I even saw Danielle serving appetizers and entrees. Before you think I have suddenly incorporated food critic to my list of consultations, I will tell you why I thought this story worthy of sharing.

At the end of the evening I cornered Danielle and ask her why she thought the resturant was doing so well and she said it was because of the team they have assembled. The core management group consisted of her, the chef, the manager and the owner, all of which are under the age of thirty! Each person has a special talent they bring to the team and the others rely on them for their expertise. She went on to describe how they are a family and love each other like a family and fight like a family, but at the end of the day, they all work together for the same purpose, which is supporting the business they all are very passionate about.

In my past history in retail sales, the one thing I take pride in was my ability to assemble winning teams. There isn’t a company I worked for that we do not hold the record for sales or profitability. What made my teams successful is the same thing I saw in the restaurant last night. A team in my definition is a group of individuals working towards a common goal. It begins with a manager/owner with a clear vision and a plan to obtain the dream. From there it is a matter of putting the people in place to execute that dream. The manager has to be willing to choose individuals who will take ownership of their assignments, offer suggestions on processes, give input on areas needing improvement and are not afraid to disagree. In turn the manager has to be able to listen to their input, analyze their suggestions and implement them if they prove effective. Additionally each member added to the team must be evaluated for their fit into the existing environment and even have members of the existing team perform mini interviews. This type of environment creates a true ownership mentality and each member will always have the business’ best interest in mind, which invariably creates a desirable atmosphere for the company, as well as it’s clients. 

Management | No Comments »

As the cost of filling up continues to reach the point of true pain, we have to wonder what collateral damage will be done to businesses. Many of the nation’s large retailers such as WalMart, Marshalls, and Target rely on lower prices and high volume to drive their business. Increased fuel costs forces consumers to  make choices on how their discretionary income will be spent. Expenditures that were seen as simple pleasures such as movies, dining out and shopping, will be post poned if not eliminated.  When you consider WalMart operates on a 3% margin of profit, you can only imagine the strain any reduction in spending will have.

What will the small businesses do to survive?

Small businesses that have worked hard to gain accounts with the large retailers will undoubtedly come under pressure to reduce prices or offer incentives in order to keep their accounts. If that was not problem enough, larger competitors will begin to approach their accounts offering reduced pricing. This impending and seemingly unavoidable scenario will present a challenge to the savviest business owner. How do you maintain competitiveness while not passing on the rise in cost of materials and transportation due to the increase in gas prices? The simple solution….technology.  Technology is one sure way of increasing productivity, profitability and marketability in a short period of time and without great expense to the consumers. The implementation of the proper technologies will be the result of process analysis and business strategies. The small business owner can gain profitability not by lowering expenses, but increasing the efficiency of the entire business process.

Market Trends | No Comments »

In a recent consultation, I  referenced a common mistake businesses make when preparing to bring their product to market.  Many companies produce a product before they have any idea who will purchase the product …which is totally backwards.

Throughout history we can name products that were developed by accident and went on to great success (e.g. Wite Out, Super Soaker). However when we look at the process of how these products reached the pinnacle of their success we find it was a long and arduous journey. A product that does not have an intended market must be aggressively marketed to:

• Find investors to provide capital for intial offerings.
• Establish agreements with vendors and manufacturers.
• Determine target markets
• Develop Marketing Strategies
• Let the buying publics know your products exists.

This process can easily take three to five years and in some cases (Super Soaker) seven years to get to market. If you are independently wealthy, this is not a concern, but for the average small business person it can lead to the end of your business.

Long term success is the result of superior marketing, a sound three to five year business plan and constant evaluation of you strategies. In the beginning stages you should identify the need your product will fulfill. If you want to open a restaurant, identify who will eat your food, what they are eating now and what needs to be done to ensure they visit your restaurant. I have long since been perplexed by the number of Soul Food restaurants in predominantly African American areas. Why bring a product into a market where those foods are eaten on a regular basis. That isn’t to say it can’t be done, but when you are in this scenario you open yourself to comparisons of cost, portions and quality, thus putting undue stress on the business. A better strategy may have been to seek an office building looking for a restaurant or cafeteria. Do sampling among the tenants to establish menu items and possibly work with management to cater an event. This type of market research would be invaluable in preparing to open a restaurant and would give the owner a clear idea of the marketability of their food within the target market.

Marketing | 2 Comments »

As gas prices have crossed into post-Katrina levels, charges of price gouging have been murmured by everyone from Congress to the average man on the street, but is that really the case?

Not withstanding the true reason for the price increases (not enough refineries), we can examine the rise in the price of gasoline from the Capitalist point of view. In a free market economy merchandise is sold for whatever price the consumer is willing to pay. Does that change if it is a consumable item? Should businesses not be able to make as much profit as possible if their merchandise is something vital to everyday existence?

I am reminded of the gasoline situation in the southeast after Hurricane Katrina; there were two gas stations across from each other in my neighborhood. One had regular unleaded at $4.99/gallon and the other was selling it for $3.99. The station at $3.99 had a line around the block and the $4.99 station was empty. This went on for a couple of days and suddenly both stations were at $3.99 and each had ample patrons. Was this a case of the first gas station owner seeing the error of his ways or did he realize no one was willing to pay $4.99 per gallon?

As we remove emotions and the inconvenience of $120 to fill our SUVS, from the conversation, not only do we find there is no such thing as price gouging, but we have come to value and cherish those things we find in short supply. When a loved one is sick, we want the best doctor money can buy. Does it matter his fees are three times those of other doctors? Should Congress hold hearings to determine if that doctor is gouging patients because his level of expertise is in short supply? Should he be forced by law to give away his services at a lower price because more lives could be saved? Of course not.

When you are faced with short supply, you raise the price to stem the flow of demand. Lowering prices or giving product away only exacerbates the problems and creates and even greater sense of deprivation from those who did not receive the same. If the short supply of refined gasoline was coupled with lower prices, the result would be periods of NO gas, followed by extremely slow replenishment as refiners run at full capacity trying to keep up with all of the screaming resellers.

If Americans truly wanted to see prices decline, they would demand the capacity to increase supply be augmented, modify their traveling habits and make every attempt to decrease the level of consumption we have today.

Thought of the Day | 4 Comments »

Of all of the consulting I do, I especially enjoy working with small businesses. Recently I had a client that wanted to take her cosmetics business to the next level and asked if I thought it was worth it to invest in a retail location. My first question to her was, "What type of marketing have you done that would make this venture profitable?" Her answer was typical of a person with a great idea or service, but no marketing or business experience - she believes "If you build it, they will come". After giving her a brief lesson on Marketing 101, I shared with her the concept of Strategic Partnerships.

Strategic Partnerships combine your marketing efforts with other businesses that share the same target market. For example, as many as 70% of the customers at Bass Pro Shop are Nascar fans. A partnership between these two could produce a special edition Nascar boat or other merchandise and Bass Pro Shops can offer discounts to customers with a Nascar event ticket stub.

In the instance of the young lady, I suggested she visit hair salons, more specifically salons that offer braiding because the average cost for braiding is $150 and offer to do makeup consulting for their clientel. Additionally, she can offer free seminars and set up a kiosk where her product can be purchased with a commission going to the shop owner. In return, she would promote the hair salon to her clients and give them sponsorship space on her flyers and website. What makes Strategic Partnerships so desirable is the fact if structured properly the benefits far outweigh any costs associated with implementation and he cost of marketing to the subsequent customer is 50% less than it would be individually.

Marketing | No Comments »

Quality Improvement is one of the cornerstones of a successful business. It creates a organizational culture of innovation and empowerment, but most importantly strengthens the relationship between producers and their customers. Achieving a high quality philosophy through total quality management takes more than just striving to be the best. Every facet of a company’s existence must be dedicated to providing an ever-changing, ever-growing system of processes that incorporates upper managements vision with employee execution and customer expectation. This philosophy is best executed by a strategic plan that clearly dictates the company goals and expectations and provides every employee with a clear understanding of how total quality will be achieved.

Management, Process Analysis | 2 Comments »