Can you believe it, only two more sections and we can write the Executive Summary! This week we will be discussing the Management Summary. The management summary covers the management team and personnel requirements.

Management Team

If you are a business seeking funding, this section is where you convince the potential investors of the quality and experience of those who will run the business. Remember, lending is all about risk assessment (how likely are we to get our money back and how long will it take) and investors first look at the executive level to determine the quality of those who set the vision.

As you begin to list the officers, be careful not to have it read like a resume. Give the job description of each position and how each person is uniquely qualified to execute those responsibilities. Stay with pertinent information regarding their qualifications for being part of the team, but do not describe prior work experiences in too much detail - you can include their resume in the Appendices.

The key positions to be listed are the President/CEO, VP Sales/ Marketing and Secretary/Treasurer. These are the vital functions within an company’s structure and represent the vision, implementation and administration of your business. If you are a Sole Proprieter or a two person Partnership, you will need to have resources that will function in the needed capacity whether compensated or non-compensated. Why? because investors know no business can be successful when the principles perform all facets of operations.

Remember, this is a three to five year plan, so it is a good idea to include the job descriptions of positions you have not filled. This will show your understanding of the type of infrastructure you will need to accomplish the financial goals you stated in the last section and if you can justify the principles functioning in many roles, it shows you have plans to alleviated that situation.

Personnel Requirements

Just as with the management team, list the job descriptions of your supporting staff. Whether you have completed hiring or not, it shows the framework on which your company will be built. Include the annual expense of the position and at which point in your plan those positions will be added. Use a spreadsheet to represent total personnel expenses as illustrated below:

The figures in your spreadsheet should reflect those in your pro-forma balance sheet. Take the time to research the average salaries and hourly rates for the positions to be added. A good source for this would be www.salary.com.  

Management, Business Development | No Comments »

On my ride home I used to pass a Chinese restaurant that was a free standing location on the corner of a very busy intersection. Over the past two years, I have never seen any cars in the parking lot nor patrons inside eating. I often wondered why that was and thought about going inside and asking how business was during the hours I am not passing by.

Several months ago, the Chinese restaurant closed, but it did not stay vacant long. It was soon replaced by  another company selling grilled foods. As the months have gone by since the Grand Opening, guess what? I have not seen any cars in the parking lot nor patrons inside eating.

In analyzing this situation from a purely speculative position, I have to ask, "Is it possible for a good location to be a bad choice?" 

If I were contracted by the most recent owner to perform site anaylsis, I would have examined two key factors:

• Who is the target market for this location?
• What are you doing to attract their business?

It is easy to understand why each of the owners may have thought there were plenty of potential customers given the fact there is a college directly across the street, a bus depot to the right of it and plenty of housing within walking distance, but which of those groups represented the most likely patron?

Let start with the college students - while the grilled restaurant’s menu fits well into the students’ price range, is their menu conducive of grabbing a quick bite in between classes or a meal they could eat on the way home? Are the menu selections favorable to the students palate? What type of food choices do the students have on campus?

Next we would take a look at the people who work at the bus depot. How many employes remain in the depot during the day? Do the drivers come back to the hub during lunch hour? What time do the drivers get to the depot in the morning and would it be worth adding a breakfast menu? What time do the various shifts end? Does the company ever have special occasion dinners or lunches?

Finally, we would address the residents in the surrounding area. What are the food choices within three blocks of the restaurant? Are there other places to get the same type of foods within one mile? What is the average tenure of restaurants in the area? Which fast food chains are near? What are the demographic breakdowns of the neighborhoods? Are there more apartments than houses? What percentage of customers walk up versus drive up?

Once this information has been obtained and analyzed, we can look at which targets make sense for the business and how we would maximize exposure without spending huge amounts of money.

For this example, we will conclude the greatest potential patronage would be the college and its students. Low cost, high impact marketing can include:

• Donating folders to the college with the restaurant’s menu and hours
• Purchasing advertising space in the school newspaper
• Sponsoring events for social organizations
• Host tastings of new products
• Sponsoring neighborhood sports teams
• Host home owner association meetings
• Host professors or other faculty functions 

As you can see, a good location without proper planning can be just as costly as a location that is less desirable. While traffic count and abundant potential may seem ideal on the outside, careful consideration and marketing has to be done to determine if the location is right for your business. Take the time to do a thorough market analysis and  target market analysis and you will save your company from being the next empty business I pass on the way home. 

Marketing, Management | No Comments »

It’s good to be back, I have been embroiled in the machinations of business and have not had the time nor brain power to post over the last thirty days. That being said, during my siesta I had the pleasure of reading an article by Robyn Waters that talked about the current paradox in the spending habits of today’s consumer.

Ms. Waters points out how consumers now have moved to buying patterns that are very contradictory in nature. In the same home where you find granite countertops, you find cabinets from Ikea. Once discount stores such as Target have been reborn by having designers like Isaac Mizrahi and Michael Graves bring in a higher end taste for a lower price point. This article re-inforced what I knew as a truism for the past twenty years - the need to watch market trends.

The Internet has introduced the small business to globalization and with that came all of the additional market research necessary to develop a strategy for marketing to new publics. However, we cannot over look the importance of trend watching as strategies are being developed. When investigating a new market or evaluating existing markets, you have to ask yourself what is selling now and why, what are the tastes of the particular consumer and what drives their purchases. 

Ms. Waters also points out many types of paradox, but for our purposes I want to address two - "mass customization" and "social capitalism". 

Mass customization is a growing trend towards the consumer being involved in the development of the products they buy. The success of this concept has been made evident by Toyota with the Scion, Jones Soda with custom labels and flavors, and even the US Postal service who allows you to create you own stamps. As a small business owner, you have to ask yourself if you can get the customer more involved in delivering what they want. Whether you use surveys or feedback forms, the benefit of knowing what the customer wants and allowing them the opportunity to help your company develop it is immeasurable.

Social capitalism is rooted in the concept of businesses taking a more responsible role to society as they offer their products. Just as with mass customizations, there are companies who have embraced this strategy by offering foods with 0 Trans Fats, Organic product offerings and being Earth friendly or "green" companies. This is especially important as competiton for your consumer’s dollars increase. Consumers are now asking what a company stands for, how they treat their employees and how they treat the environment. Consider these factors in your marketing and advertising and you can expect an increase in the efficacy of your strategies.

Finally, there are a few things I wanted to mention to help in your analysis:

1. Read, Read, Read. Know what is going on in your industry, who the movers and shakers are and what they are doing, any pending legislation that may affect how you do business and establish relationships with vendors and suppliers.

2. Make sure you understand everything has a cycle and trends are no different. Do not follow a trend that has hit its peak or you will be faced with slow moving merchandise that will end up being sold at a discount.

3. Know your customer!! Spend time talking to your customers, learn about their lifestyles, interests and where else they spend their money. The information you gain will be invaluable in forecasting trends among your consumers 

If you would like to read the article by Ms. Waters here is a link .

Thought of the Day, Management | No Comments »

When I am asked how to improve a company’s sales, I ask to speak to one of the company’s top sales people. During my conversation with the salesperson, I listen to how he/she represents themselves, respond to what I am asking and adjusts to tough questions. The object of this examination is to ascertain if the salesperson understands the finer points of sales and is applying best practices in closing.Next I ask to speak to a salesperson who is struggling to make goal and repeat the same process.

Finally, I ask to assemble the entire sales team and role play scenarios, have the group examine practices, and discuss the art of effective selling. Effective selling occurs when you give the customer enough information to arrive at a logical decision to purchase your product. This process includes identifying need, providing solutions for those needs and asking for the sale.

Identifying Need

Whether the customer came to you or you to them, once you are in their presence you must understand what their motivations are. This is achieved by asking questions related to the product; how it is to be used, what they are using now, and why they are replacing their current product? The most important thing to do during this portion of the sale is listen! This is a great opportunity to gather information that will aid you in closing the sale, such as urgency, budget, and comparable interests.

Providing Solutions

Once you have determined what the customer’s motivations are, you should begin providing solutions by restating the reasons for their potential purchase and how your product will provide the solution. If you have multiple products, start with the top and let the customer buy which best suits their needs. It is important that you do not try to prejudge what the customer will spend even though they gave you a budget they were trying to stay within.

Ask for the Sale

This is undoubtedly the single greatest stumbling block for salespeople. Many take the time and listen to the customer’s need, they present a fantastic solution and then wait for the customer to say they will buy the product. There are two methods of closing a sale; trial close and a summation approach.

Trial closing involves the salesperson asking the customer agreement question during the presentation. The idea is to have the customer answering "yes" during, so they will say "yes" at the end. Questions such as, "can you see how that will help", not only give you the positive response, but will reveal any objections (overcoming objections is another post), and set the stage for the close.

The summation approach is when you list the solutions and restate what the customer said their needs were. A good example would be: "Let’s see, you said you wanted to move from queen size to king size, we did that, you wanted a pillowtop mattress that was soft on top and firm underneath, we got that and you need it by Friday. Sounds like we are all ready, will that be check or credit card?" Any answer other than how they are going to pay let’s you know they need more information or you have not offered a solution they value.

I know this is only an appetizer and there are many more nuances to the anatomy of a sale, but these foundational steps will increase your effectiveness by 20% if implemented.

Management | No Comments »

My wife and I were watching a reality show and I commented on who I thought would win the competition. My wife asked me how did I come to that assumption when we had never seen this show before and I had no background on any of the people. I explained my assessment was based on years of being an employer and the consistency of attitude among my best employees. Although there were contestant I’m sure I would like more, this particular young lady exhibited an attitude of a winner and would definitely be one I’d hire.

My wife thought the person was arrogant, self-centered, and would be difficult to train, which could be the case if the manager is not prepared for coaching a Type A personality, but in my case, I welcome the drive, determination, and competitiveness of a winner.

As an employer, being a winner has far less to do with always coming out on top (although I don’t mind that) and more to do with dedication, tenacity and a passion for success. A winner’s attitude causes the individual to look at their situation, consider what is necessary to achieve success and formulate a plan. Additionally the winner assess their plan during implementation to determine if the plan will meet his/her goals and adjusts as necessary.

One of the chief factors in a winner’s attitude is the unwavering belief in success. I am reminded of a story of a little girl who had a swimming contest and she came running down stairs to breakfast and said to her father, she was going to win every race she was competing in. The dad gave her a high five and they left for the meet.

The person telling this story then said the father was wrong to allow his daughter to have the expectation of winning every race; instead he should have said, "do your best and if you win one that will be great and if not, we love you". I’m glad this story teller doesn’t work for me because she would have lost her job. Who is to say the little girl couldn’t win all of the races and if she did not win them all, it may have motivated her to practice harder, longer and with more passion. What would have been the wrong thing to do was dowse the little girl’s passion for swimming and the confidence that allowed her to believe in her ability to win all races.  

The bigger challenge in the preceeding scenario would have been managing the little girl’s attitude if she did win all of the races. A winner’s attitude can be managed best by channeling their drive and passion to the successes of accomplishment. Each stage conquered leads to another goal and each goal leads to higher feelings of success. Once again you don’t necessarily have to win all of the time, but giving your complete focus and attention to obtaining your goals will make you a winner everytime. 

Management | No Comments »

I have just returned from a trip to Arizona where I stayed in a four-star resort and was pleasantly surprised at the high level of customer service my family and I received. The entire staff was very accommodating and truly made us feel welcomed. When we first arrived and were escorted to our suite, there was a problem with the room. Not only did the management team quickly resolve the problem by giving us another suite, but the bellman brought us a new set of keys within five minutes of us getting settled in the larger and better located suite. With a start like that, we knew we found the right place.

In fact, after a big meal, my brother and I were walking around the resort, when one of the workers drove up in a golf cart and asked if we would like a ride to our room or were we just enjoying an evening walk? He wasn’t a driver or concierge, but a considerate housekeeping employee looking out for his guests.

As I flew back to Atlanta, I began to think about why this experience was so exceptional and I soon realized it was because we no longer receive good customer service in our daily lives. I thought about when that changed and what was killing customer service?

If we begin with the usual suspects, we could talk about the horrific attitude of the standard hourly employees, but that would be too easy. We could discuss the theories of wages being driven down by foreign outsourcing and the lack of better paying jobs due to immigration or downsizing, but  they are only symptoms of a larger problem.

Newsflash: Managers Sought for Questioning in the Demise of Customer Service!

Investigators announced today a growing suspicion in the management staff of frequented businesses. Managers became people of interest as detectives began to examine the root causes of poor customer service. Chief among the identified traits were:

• A lack of clear management standards and expectations
• No coaching for sales and customer service staff
• No employee incentives to increase customer satisfaction
• A lack of total quality management philosophies
• Hiring practices that do not screen for excellence
• No forum for customers to express concerns

Investigators discovered businesses that did not take measure to hire the proper staff, coach their development, reward their successes, listen to their customers, or have consistent goals and expectations were adding to the demise of customer service. Employees only portray traits and attitudes that are allowed by management and failure to correct these short comings woud most certainly lead to a lack of patronage and the cessation of business.

Finally, business physicians have determined poor customer service is not fatal! Managers willing to take longer in hiring, work harder to instill the importance of taking care of the customers in staff, suppliers and vendors are beginning to show improvement in their business health. Even in instances where price increases are necessary to cover the expense of finding motivated employees, customers are excited about the resuscitation of customer service and look forward to a sunny prognosis.

Management | No Comments »