10 Simple Rules For Managing Your Business

There are many techniques employed in managing both large and small businesses, dependent upon many factors. During my years in the consulting business we have found some companies try to avoid losing, while others play to win. The latter follow some simple rules inherent in all successful foodservice businesses. In our industry, margins are small, so any advantage gained could dramatically increase the bottom line.

These ten rules are not necessarily listed as to degree of importance, but the body of content as a whole is very important.

1. Develop an annual strategic plan for your specific business. Formulate a budget delineating forecasted sales, other revenue sources, all applicable costs and a projected bottom line. However, on a cautionary note, this is to serve as a living document, not to be done once and placed on the shelf, but to be reviewed and corrected systematically during the year as conditions change, always keeping the ultimate profit goal in focus.
2. Value your existing customer. (Remember how hard you had to initially work to gain their business). Construct a detailed business plan for each of your major clients. List all of the advantages this client has enjoyed since your company has served them (customers have short-term memories). Set up a business meeting with the client to review the past years results, layout your plans for the coming year, address areas of mutual concern (make this a shared problem), develop mutually satisfactory solutions, and always be prepared to offer several choices to reach the desired result. Follow up the meeting with a note thanking the client for his time and cooperation, as well as outlining the agreed-upon plan of action.
3. Identify and reward key employees who drive the business and help make it successful. Perform a written and personally conducted performance review with each key employee. Tie these reviews to raises or incentives and agreed-upon goals over which the person has direct control and can achieve.
4. Develop an annual strategic plan that is accurate, timely and clearly understood by all who use it, and ensure that critical data is highlighted and measurable. Obviously this must tie in to the company budgetary plan.
5. Become a master strategist. Every business owner, or chief operating officer, must transform themselves from simply being a technical expert to that of strategist for the company. Develop skill sets in all disciplines (sales, operations, legal, accounting, human resources, etc.) Since no one person normally possesses all of these skills, outside resources such as lawyers, accountants, technicians or specialized consultants may be judiciously utilized to fill the voids.
6. Protect the business from both external and internal loss. Surprisingly, almost all of a foodservice company’s unaccountable losses are from internal theft. Our studies have shown these unaccountable shortages to range from 1 percent to as much as 5 percent.
7. Budget percentages for new business. One way to control your costs when growing the business is by budgeting percentages rather than dollars. The tendency is to underestimate the financial needs of new business. Always remember to tie in the new sales to your amended annual budgetary plan.
8. Grow using geography. Control new sales growth by focusing the efforts on territory already served by your company. The temptation to acquire a new account that is not contiguous to your existing client base could result in a disproportionate expenditure of sales, service and managerial resources.
9. Develop and use quarterly profit and loss statements on all of your major accounts. Review the results versus your original (or corrected) annual budget expectations to ensure your plan is on track.
10. Do not procrastinate! Be decisive. Have a backup plan for all situations as necessary. (This should also include a succession plan for the business).

Managing a business is similar to competing in a professional sport. Play the game the way a championship athlete plays: develop a game plan, execute it and play to win instead of playing not to lose. Enjoy the experience.