Category Archives: Consulting

Grinding Your Own

It’s Foodie Friday and the topic is ground beef. I try, whenever possible, to grind my own beef and the thinking behind that is also thinking that can be used in business decision-making.

You can walk into any supermarket and purchase ground beef. In fact, you can be very specific about chuck vs. sirloin, the percentage of fat in the mix and often grass-fed vs. non. That’s great in my mind when you are making chili or meatballs or some other dish requiring that the beef cooks for quite a while. For burgers, however, I’m grinding my own. I’ll generally grind a mix of chuck, brisket, and short rib and I’ll usually grind some parboiled bacon into the meat both for fat and for flavor. The biggest reason I take the time to do this, however, isn’t the flavor. It’s food safety. I like to eat my burgers on the rare side and ground beef from a store is generally not safe to eat unless it’s cooked more than I like it to be. I know what’s in my mix and that it’s safe to eat when cooked to less than 165 degrees.

Is it a pain to clean the grinder? Yes. Does it take more time than just opening a package from the store? Of course. But the results are much better and exactly what I want even if it costs a bit more and take more time. That’s exactly the process any business goes through when making a “build vs. buy” decision. Let me run you through the steps.

First, you need to validate that you actually need the technology you’re considering. In burger terms, I’m hungry so I need food. I have a legitimate need. In considering tech, you need to figure out if you’re finding a solution without a problem existing. Next, you need to pull together core business requirements. My burger must be safe to eat when rare, it must hold together on a grill, etc. You need to involve anyone whose business is affected by the proposed tech to be sure all constituents weigh in on requirements.

The technical architecture requirements come next. If you’re looking outside, can the product fit in with your existing infrastructure? Does it meet whatever standards your business has already? It’s only after the above steps have been taken that you can start to evaluate build vs. buy. In my case, I have a need, my requirements are clear, I’ve asked my dinner guests if they like burgers, how they want them cooked, and what they put on them. I figured out I’m building the beef but buying the rolls, mayo, pickles, onions, and tomatoes even though I could also build them.

The final steps in the evaluation concern costs and support but you get the point. Some managers start evaluation solutions before they pull together requirements and the overview of the environment in which the solution will live. While it was an easy decision for me to grind my own beef, few business decisions are as easy and require planning and forethought. Make sense?

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Filed under Consulting, food

Taking The Beaten Path

One of the questions that has come up often in my newish role as a franchise consultant has been why one should look to invest in a franchise to begin with rather than starting a business from scratch. After all, there are generally fairly substantial franchise fees associated with a franchise along with the other expenses one might expect when starting a business plus you usually have on-going royalties. You’ll still have to pay to incorporate, you still often need insurance, licenses, equipment, space, and people. Why incur the extra fees on top of the ordinary expenses? It’s a good question and I have what I think are some good answers. If you’re thinking of starting a business or maybe changing the nature of the business you’re running, here are my thoughts.

First, the biggest advantage of buying into a franchise is that it’s a business in a box. It’s a proven business model, one that comes with built-in support. Almost every franchise I work with has some form of training and on-going mentoring. I think about that in terms of the businesses that have hired me to consult in the past. Much of what I did would have been covered by that sort of support, negating the need for an outside consultant. The franchise will have research and the business results of all the other franchisees. That’s invaluable and beats the heck out of going it alone.

Another consequence of that is you’ll probably experience much faster growth. You won’t be spending time formulating a business plan. Instead, you’ll be getting trained and executing one that has been time-tested. Something as simple as logo design, which can take time and several iterations, is not really a concern. You’ll generally be presented with operations manuals and marketing materials. Your time to market is greatly decreased.

One thing that is much easier is financing your business. Franchises are less risky in lenders’ minds since they’re known brands and proven businesses. While banks aren’t the best source for franchise ending, there are many lenders who specialize in that (I work with 6 of them) and SBA loans are easier to come by as well. Finally, your potential customers will already know who you are. Most franchises have good brand recognition, and even those that don’t have a current local presence can often benefit from being seen as part of a bigger entity.

The Bureau of Labor Statistics says that roughly 1 in 5 of all businesses in the U.S. close after the first two years of operation and a little over a third shut their doors after four years. You can beat those odds by taking the beaten path and investing the franchise fee to gain the above benefits. In my mind, and why I added this to my consulting portfolio, that investment yields as good or better returns than blazing your own new trail. What do you think?

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Stew

It’s nearly 80 degrees here on this Foodie Friday and one might think that winter is gone. Not so fast – it will be in the mid-40’s tomorrow so we’re not yet past stew weather. Stews are a winter staple and since there are endless variations of them, one can’t really get bored with making them.

Some folks think of stews as a thick soup but I think that vastly underrates the dish. I wouldn’t serve soup over noodles or mashed potatoes, would you? As it turns out, they teach us a bit about managing too.

One thing that’s great about stews is that the longer they sit, the better they get as long as you don’t raise the temperature too far. You need to choose your protein – generally meat – wisely. You want the inexpensive cuts that really aren’t good for much else since they contain a lot of connective tissue. They require lengthy cooking (pressure cooking excepted) so that tissue can break down and the meat can transform into tender loveliness.

The meat needs to be seared properly. That means you can’t overload your pan or the meat with steam and not brown. You don’t want to put too much flour on the meat or into the stew to help thicken it or you end up with a gloppy mess. Let the collagen from the meat do its job. If you need more thickening, use gelatin (look it up!) which does the job without changing the flavor or adding lumps.

So why is this appropriate for our business blog? Your team is your stew. You need to find the right ingredients, which are often the overlooked cuts. The best stew meat comes from the muscles that do a lot of work but need help in transforming into dinner greatness. Dig deeper for people, especially the ones who’ve been working hard but maybe not getting the recognition they deserve. You need a sturdy pot that can hold the heat. That, dear readers, is often you, the leader of the team. Great stews have lots of individual components, each of which needs to be added at the right time or it will get mushy. This speaks to the need to pay attention to the individuals on your team to bring out the best in each of them. Pull things together, apply some gentle heat, and give it time. Your team is a magnificent stew!

Here is a list of stews. It is quite varied, but the dishes have a lot in common while still being quite distinctive. Your stew – your team – will be too. Go out and pull it together.

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Filed under Consulting, Thinking Aloud

Five Feet From Where?

If you’ve been reading the screed on a regular basis of late, you know that my recent experience of purchasing and moving into a new home has provided wonderful fodder for my rants. Today will continue the trend.

One thing that I asked the builder to do as part of the deal was to put up a five-foot fence in the back yard. He agreed and yet another adventure in communication began. It dawned on me as this adventure progressed that there is a great business point contained within.

I live in a community that has an HOA – a homeowner’s association. I’d never lived with one before and so wasn’t really used to the fact that most of the people living in “neighborhoods” down here live with the fact that a board can tell them everything from what color they can paint their home to the type of trees they can plant to the type and height of the fences they can erect and where. To build my fence, I needed HOA approval, and that’s when the fun started. I couldn’t get that approval until I actually owned the home. Until then, the developer’s regulations applied, meaning the fence could only extend five feet from the side of the house and be no more than four feet high. I wanted to live with the HOA rule of the fence being five feet from the property line, not from the house, which in my case meant it would extend an extra eight feet from the house. I also wanted the HOA to approve a five-foot-high fence. You with me so far?

The builder was happy to put up the fence but he would have to do so within the builder regulations unless I wanted to wait almost 2 months, the time it would take to close on the house and go through the HOA approval process. I won’t bore you with the details, but I managed to get the approval much faster (it helps to have golf buddies with good connections). The fence was going up as of last Friday and should be done by Monday, move-in day.

I drove by the new house on Friday and sure enough, the five foot high posts were in the ground, exactly five feet from the house and NOT from the property line. Despite many emails and calls back and forth, somehow the point of the delay – to get a variance to get five feet from the property line and not from the house – was lost even though the message about extra height got through. The fence company was told five feet from the house and they were not happy when they got the call to reset all the posts. Of course, there were also emails asking for proof that the variance had been granted (they’d received the copies several weeks before). As of right now, I’m looking at posts five feet high sitting five feet from the property line (and 13 feet from the house) awaiting the rails and pickets to be attached, hopefully, today or tomorrow.

What’s the business point? No matter what you think you’re communicating to someone, it’s always a good idea to review it again, especially when it involves something that’s not easily undone. Have the person repeat the instructions back to you. Make sure that nothing was lost in the communication. In my case, “five feet” wasn’t the issue. Five feet from where certainly was and that’s what got lost somehow. Good teams are all built around great communication. So are good partnerships and great customer service.

Frost wrote Something there is that doesn’t love a wall. Apparently, that something is unclear instruction and faulty communication, right?

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Slow Down

“Fail fast” has become one of the mantras of our age. The notion is that iterating fast failures will get us to the desired result faster than taking our time and seeking a more perfect answer. I agree that the perfect can be the enemy of the good and that at some point the cost of reducing variance and getting to the perfect far exceeds the benefits derived from actually getting there. But I’m not so sure that slowing down and taking a bit more time is a bad thing. Let me explain why.

People are deluged these days. Marketing messages overwhelm them. We don’t have 100 channels of entertainment nor even 1,000. There is an unlimited and expanding number of sources, both physical and digital, of entertainment. Walk into any supermarket and the product offerings in almost any category boggle the mind. Why is this a big deal? Because I don’t think you get a second chance. If you’re not solving a problem and creating value for the customer right out of the box, you’re dead. That means that you have to get it right the first time.

How many apps have you installed and removed from your phone because they didn’t meet your expectations the first time you opened the app? Was version 2.0 better? Who knows – they had their chance. How many new restaurants have you tried that were disappointing either in food or service and not returned? Did the menu evolve and new a manager show up to fix service? Who knows or cares – there are plenty of other options.

I’ve noticed it in a bad habit I have. My brain is often working too fast as I’m listening to people and I will often respond before I’ve listened to all the information they are trying to convey to me. I need to slow it down a bit so my first answer to them is the right answer and not something that I need to revise.

If you make things, do market research. If you write things, proofread them and put them aside to read them again in 5 minutes instead of hitting “send”. We all feel the time crunch and the need to get stuff done, but slow down a bit. Your results will be better and you’ll actually save time since you won’t need to do it all over again as more information changes your thinking. Make sense?

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Filed under Consulting, Helpful Hints, Reality checks, Thinking Aloud

Something To Talk About

I’m going to return to an old theme this Foodie Friday. I’ve written about how happy customers breed more happy customers but I came across a piece of food-related research that reinforced that message. Since I think it’s one of the most critical tenets in any business – food-related or not – I’m sharing it here today.

A recent survey by reservation platform SevenRooms found that more than half of American diners (54 percent) turn to friends and family for restaurant recommendations. About 30 percent consult review sites like Yelp, and 25 percent were influenced by something they saw on TV, according to the survey. About 35 percent of diners said they have eaten at a restaurant because they saw it on social media. Among those platforms, Facebook had the most influence (23 percent), with Instagram (10 percent), YouTube (9 percent) and Twitter (7 percent) far behind.

So word of mouth isn’t dead, and the way that one generates the best word of mouth is to create a memorably wonderful experience for the customer. I don’t believe that the restaurant industry is any different from any other in this regard. Let’s think for a moment about what that great experience really means. I think it means that the business provides an experience that distracts the customer from whatever else is on their minds. It provides a break and enjoyment. It gives the customer something to talk about afterward – something positive. It makes the customer feel that whatever they paid for the service or product they received they received better than fair value. Their expectations were exceeded. It’s the totality of the customer experience. It’s a combination of items offered but also the service quality in which those items are offered.

That’s the sort of stuff that people talk and write about. Have you ever left a business with the feeling that you couldn’t wait to tell someone about it? I have and those become the businesses with which I gladly spend a good deal of time and money. One small example from going out for breakfast this morning. The server greeted me and said, “coffee and a small container of milk for it, right?” She remembered that I can’t stand the little containers of non-diary creamer or half and half that many places – including hers – put out for coffee. A small thing but among the many reasons I keep going back and tell others to do the same.

What business has given you something positive to talk about? I spent a lot of this week telling you about some businesses that managed to do the opposite. It’s much more fun to write and talk about when businesses get it right don’t you think?

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When Free Is $99

If you’ve not moved or bought a house recently, you are probably unfamiliar with the deluge of mail you receive for everything from supplemental mortgage insurance to yard services to security systems. The last time I bought a new place was in 1985 when it must have been a lot more difficult to pull together all the names and addresses of those people filing deeds or getting new mortgages. Apparently, it isn’t today.

One of the offers that showed up in the mailbox on Monday came from…well…I actually am not really sure from whom it came since there wasn’t a return address. It says it wants to welcome me to the neighborhood with a FREE OFFER! Of course, nothing in this world is free and this offer isn’t any different. The “free” security system will be installed with a $99 customer installation charge and the payment of $28 a month for monitoring. The free offer will only cost $435 the first year, and you have to sign a three-year agreement. Nice, right?  The fine print, which takes up a third of the second page, also mentions that labor charges might apply and that there are additional fees for various monitoring services beyond the basic. There are also limits on how many sensors you can get if your home isn’t prewired. Of course, it also comes with a $100 Visa gift card, so I got that working for me, which is nice.

This is yet another example of shady marketing. Sure, it’s a free offer in that the offer is free. The alarm and monitoring will run you thousands of dollars. The company behind it is called Protect Your Home and out of the 63 reviews for one location on Yelp, 59 are one-star reviews. There are complaints about being lied to by technicians, missed appointments, non-existent customer service, and even forged signatures. The BBB shows 1,630 complaints in the last three years. One can’t help but wonder why ADT, for whom they are an authorized reseller, doesn’t monitor how their brand is being marketed and serviced.

Trust is everything in marketing these days. A lot of fine print, unless it’s the sort of regulatory stuff the government makes you write as in a drug ad, is generally not a good indicator of trustworthiness. “Free” should really be free or the word should not be used. It sets an expectation which this company clearly doesn’t come close to meeting when the offer is broken down in detail. Honest marketing is one of the first steps to happy, satisfied, long-term customers. Beginning any relationship with a lie or half-truth really isn’t, is it?

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Filed under Consulting, Huh?