How NOT To Run a Business - Part I

kaylarStarred Page By kaylar, 7th Sep 2010 | Follow this author | RSS Feed | Short URL http://nut.bz/1yxmexeq/
Posted in Wikinut>Business>Analysis

Various tips on how Not to run a business, from a supermarket to a hotel concentrating on management and customer service

The Very Basics

The reason you run a business is to make money. At least enough money to continue to run the business. The most important person in your business is the customer. Your major product is 'service'. Unless you are the only company providing the product customers will select to buy elsewhere if they confront surly staff, difficult processes, or are dissatisfied.

Price and location are factors, of course, so that where two places are fairly equal, people will go where they pay less or where is more convenient.

Where one place has a friendly staff and recognises their customers, even if their prices are higher and they are a bit out of the way they will get the custom over the other which has the usual sour staff. Thinking a few pennies less or a few steps closer makes up for it, forget it.

Everyone will walk into a business once.
Getting them to come back is success.

Anyone But....

There was one telephone company in Jamaica until 2001. Originally a statutory body, service was haphazard, limited, but cheap. One knew exactly what their phone bill would be because it was a flat rate per month. Make 1000 calls or 1, talk for five hours or five minutes, it was the same price.

In 1988 a few tricks were used to sell this company to Cable & Wireless. By 1995 there was no company hated more.

In 2001 another company, providing only cell phone service arrived. The price of their service was nearly one hundred per cent higher.

Within one month that company, Digicel had as many customers as Cable & Wireless, by the end of the year, more than twice as many.

Despite being the most expensive company, being a dry weather network, and not offering anything special, Digicel now has nearly 100 times the customer base of its now two rivals.

The day Digicel opened for business, the line formed, because the public, to display its hatred for 'Careless & Worthless' , would buy NCW; (not Cable & Wireless).

This 'take it or leave it' attitude which C & W displayed from the moment it began to operate, created the hatred it now experiences.

There is no way 'back' for C & W. Changing its name to 'Lime' has resulted in people referring to it as 'sLime'.

This is the first lesson;

if a business takes advantage of its monopoly status, customers will go into revenge mode. The competition can be more expensive, less reliable, but as long as it is Not the ex-monoply it will be swamped by customers.

Management Matters

There is a difference between an office manager who is to stay inside the office and make sure all computers are turned off before leaving, and a manager of a business.

Managers who hide in offices should be sent home. They are not managing the business. In fact, by 'hiding' they allow the business to go to hell in a handbasket.

Visualise a Hotel. The back faces the sea. There's the kitchen and restaurant, the rooms, the lobby, and off the lobby; the Manager's Office.

The Day Manager arrives at her appointed time and goes into her office to look over the previous day's receipts. The Night Manager's driver is in the kitchen stealing chicken. The Day Manager never goes beyond her office, save to the Bar to check the liquor.

What is the use of this manager?

She is not managing the business. She has no idea that food is being stolen. In fact, she has no idea what is going on outside of that office.

Visualise a Supermarket where Managers stay cloistered or at the front. They have no idea what is going on at the back. They must rely on the honesty of their workers, many who may feel underpaid. Goods will be walking out, masked as garbage. Items might not be cashed but bagged for conspiring customers.

Any business where the manager is not virtually underfoot creates opportunities for workers to unwork, steal, get into fights, abuse customers, and destroy goods.

Less is More

There were eight waiters where only four were needed. They sat and did nothing, then talked, then argued, then got into a fight. Customers ran out, (some taking the food, others leaving it, but no cheque was paid). The Chef came to part the fight, got stabbed.

This incident began the downward spiral which put this once popular spot out of business.

The mistake here is the mistake everywhere; having too many workers and not enough work. One should always have one less employee than is required. This forces the manager to become a worker during the busiest periods. And it prevents workers from having any time to get into trouble.

Having too many workers isn't a sign of success it is invitation to failure. Having a manager on the floor waiting on a customer or cashing goods, proves that this place is popular and the senior staff helpful.

Unqualified means unqualified

To save money many owners do not hire professionals or those with experience because they have to pay more. Often slapping a title on a worker to make them 'staff' is to avoid paying overtime.

A person with a million dollars worth of personality doesn't need anything else. Nor does a computer genius who dropped out of high school. But cutting corners by not having a senior person present, even on a part time basis, insures failure.

Cut corners by recycling paper, buying cheaper coffee, turning off the air conditioner, but don't hire the applicant you can pay the least.

It is better to pay a professional or experienced employee for a four day week, then pay half that for newbie who'll work six. There has got to be someone who knows what s/he is doing, can take responsibility and has authority.

Undermining Managers

Once you hire a manager you decide either; this is just a name so I don't have to pay overtime, and I'll continue to run the business, or you allow him/her to manage.

The moment a decision is undercut, changed, or overruled, is the last time that person manages.

When a manager fires someone, either fire the manager to get the worker back, or accept it.

Walk the manager through the first day or so, listen, explain, and then leave him or her to it.

If things start to fall apart, fire.

If things proceed normally, compliment.

If things pick up, get a contract for a year, because one of the rules of headhunting is to go after that new person whose effect is just beginning to be felt.

The Next Part

These tips should give you a good overview of your options and focus your attention on Customer Service, on proper Management and on your workforce.

Tags

Business, Employees, Firing, Management, Staff, Unqualified, Unworking

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author avatar kaylar
I am passionate about history, culture, current events, science and law

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