The trouble with growth, be it moving to a second store, a new market, or across state lines, is the loss of the business culture that made the first store successful. Think about the shifting major players in our industry. If you check out a list of the “big boys” 15 years ago compared with today, you will see more line-up changes than George Steinbrenner’s New York Yankees in the 1980s and 1990s! Our own furniture and bedding players who lost out, didn’t fail for lack of sales or lack of capital. It was most often the lack of a sustained culture that created consistent quality experiences over time.
Smaller businesses usually achieve this culture balance by placing a family member or owner in each new location. For the most part only owners can have that vested interest in seeing that each selling opportunity is maximized, every invested dollar is stretched to the fullest, and every business crisis is resolved by making the customer “right”, even when the customer isn’t right! It’s a FACT that customers love to spend money when they are dealing directly with the owner!
Managers vs. Leaders
If you weren’t lucky enough to be born into a family with eight or more siblings (or even cousins) you won’t be able to depend on having family members in each store. It is, therefore, up to you to develop the new owners of your satellite locations. My Everlovin’ Bride once told me that there is a difference between managers and leaders. Sure, you can train store managers and they will MANAGE your business. But owners become leaders who can LEAD your business to success. Making the decision to offer employees an ownership stake in your business can be difficult; nobody likes to give up control of their business or assets. However, when planned right, creating a path to partial ownership can give you benefits that will grow your business and give it life far beyond your working years. Imagine having 10 people (or 100 people) on your team that would make decisions predicated on the long term satisfaction of your customers and your bottom line. Stated simply, owners understand that free stuff isn’t free. Every shopper is a paid-in-advance asset, good news travels fast, and bad news travels faster. Owners know how to wisely manage the exceptions to create profit.
Leaders who become owners know when to bend or even break the rules. I got a note a few weeks back about an associate in an Upstate New York mattress shop that decided to close the store on a Saturday afternoon. Here’s the story... he received a call from a shopper who suffered an injury that prevented him from climbing upstairs to his bedroom. He needed a bed, pronto! That store associate took ownership of the situation, packed the sleep set into his personal pick-up truck, closed the store for an hour, and personally delivered the bed. In so doing, he also delivered a customer for life to his company. To paraphrase the customer’s comments, “I wonder what the (Big Box) store would have... done”!
Think about the great retail and service experiences that you have enjoyed! Whether it is the store clerk who knows just where to find the perfect item for you, the hotel manager who upgrades your room just “because”, or the restaurant where they know you by name, they all have something in common. They were most likely due to people who took ownership of their portion of the business and practiced customer service as the art it should be.
Turning over The Keys
When you turn your key leaders into owners, they will take action to build and preserve your business. They will develop the best in each associate, or move damaging personalities out. They will treat your shoppers like gold, and your customers like diamonds. Your leaders will understand that the competitor down the street is your business rival (aka enemy), and that proprietary information needs to be kept secret. They will seek to improve your business by improving themselves; learning more so they can accomplish more. Further, they will seek to reduce costs and operating expenses. Whether times are lean or robust, reducing costs and improving quality are sure-fire ways to build profits.
Are there valued people on your team whose departure for another career would seriously affect your business’ continuity? These are the individuals you can trust to take care of the store, the warehouse keys, and to keep your trade secrets to themselves. Chances are they would be less likely to leave if they had a true ownership role. Whether you carve out a one-percent stake per person or a 10-15 percent share for all of your employees, you can REWARD and RETAIN them with that minority ownership.
A Wise Investment?
Yes, there is a monetary and emotional cost to sharing ownership in a business, especially if you have spent years, tears and toil keeping it viable. Depending on the size of your empire the investment can be thousands or even millions of dollars, but maintaining your operation always requires wise investments. Smart operators know when the time is right to spend money on new computer systems, trucks, store remodels and locations, as well as bearing the cost of bringing in a new supplier. Just as those investments are made to build your business, investments in owners and leaders need to be made as well. Chances are your people will be around longer than the latest IT Operating System or that new Flippable Extra Firm Pillow Top Super King mattress line.
Built-In Exit Plan
Creating owners also gives you a personal exit plan from your business. Many retailers face closing their stores when no other family members have an interest. This can result in a loss of jobs for people you care about and another empty storefront on Main Street. Developing tomorrow’s owners TODAY can keep your business viable far into the future while providing local jobs and opportunities.
Make the decision to post the UNDER NEW OWNERSHIP sign in your business. Consult your financial adviser to create a plan that works well for you. Be the Leader of Leaders and watch your business prosper.