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Not every business requires its owner to be at the helm all the time. But when a company is interested in maximizing profits, the owner had better be on board — not just on call.Over the years McDonald's has been able to sell hundreds of billions of hamburgers.
The business started with a single drive-in hamburger started by two brothers in Southern California. Now the company has grown to more than 36,000 locations in more than 100 countries.
Why? One of the reasons for the chain's success is that many McDonald's restaurants are franchise operations and the owners are on the premises. Therein lies a lesson for all business owners.
Take the case of the absentee owner of a chain of gift shops. Although sales had fallen off in response to a slumping economy, most of her stores were still operating in the black. One location, however, was faring worse than the others and the owner wanted to close it before it dragged her entire company under.
For several years, this retail business had been "managed" long distance by the owner. She considered closing the business, but before shutting it down, she decided to spend some time at the problem location.
Cause of the Problem
It didn't take long to identify the cause of the store's distress. The place was filthy, inventory wasn't being ordered on a timely basis and staff morale was poor. Even worse, the unit manager, who was being paid more than $100,000 a year to run the store, wasn't there most of the time. The owner also learned that the shop was routinely being closed an hour or two early every day.
The store manager was fired and the owner took charge of the operation personally. Within a short time, sales bounced back and the store was operating in the black again.
Even when times aren't so challenging, you can improve your company by becoming more of a motivational force. Start attending staff meetings that you ordinarily pass up. Write an article for your company's internal newsletter or start an employee publication if you don't have one. Go on customer calls with your sales reps. Spend some time on the assembly line, the loading dock or the sales floor.
Let your people know that you're willing to roll up your sleeves and pitch in. Your involvement will make a difference!
Find Hidden Cash
While your at it, take a thorough profit audit. It might uncover dollars in every department.
Here are five ideas to get you started:
1. If you're interested in borrowing money, it's important to show your banker a marketing plan. But have you considered showing a potential lender a profit plan as well?
Think of the extra capital you can borrow by showing your lender a realistic picture of your long-term profit potential.
2. Don't rely solely on traditional sales goals that are based on the previous year's performance. This encourages your sales force to coast when those benchmarks are achieved. Instead, compile some good market projections and set a higher goal.
3. Don't confine sales to the sales department. Train all your employees to spot leads around town. If the referrals result in extra sales, award those employees with a small piece of the sales commissions.
4. If you ask 10 employees what your company does best, you'll probably get a variety of answers. Conduct a few meetings and narrow it down. You'll end up strengthening the company's core operations and boosting the bottom line.
5. What products or services should you eliminate? That's a painful question for many businesses. Most likely, you and your top managers already know the answer. Get it out in the open so you can start focusing on more profitable activities.
Every business owner or top manager can find some way to become more involved — and possibly find some hidden cash — especially during tough times. That's when your leadership can make a real difference.
*Securities offered through 1st Global Capital Corp. Member FINRA, SIPC. Investment advisory services offered through 1st Global Advisors, Inc. We currently have individuals licensed to offer securities in the states of AL, AZ, CA, CO, CT, FL, GA, HI, ID, IL, IN, KY, MI, MS, MO, NV, NJ, NC, OH, RI, TN, TX, WA, WV and WI. This is not an offer to sell securities in any other state or jurisdiction.