Back in 2011, Shane Cann, an associate at Bush & Co Chartered Accountants, decided to start a business with his wife, Marie. It wasn’t a difficult decision as he thought that he had a good background in the relevant skills. The only problem was that the business was in an industry neither of them had any direct experience of.
This is the third post of a three part series on the subject of starting a business. This has been written by Shane following his experiences of owning and running a restaurant in Dawlish Warren, Devon. Although Shane is an accountant and tax advisor, the experiences he gained prove invaluable when advising on starting up a business or speaking to a potential entrepreneur.
Having run my business for two complete years, we are now into our third year. To the outside world there are few changes to our business however internally, I don’t even recognise it anymore.
The first year was all about survival. Nothing else. It wasn’t pretty, it was a glamourous life as a business owner. It was all about just staggering through each day trying to just maintain the service levels without offending any customers.
The second year was about starting again, not improving on what we were doing from the first year. It really was a complete re-write of what we doing. We took staff on who could work as a team as opposed to highly qualified members who were more than able to do the job but sometimes chose not to.
The third year, we’re now looking at improving and sharpening the processes from the second year.
Luckily our business is seasonal. Not only do you get an enforced break in the winter but you get to start again each year. Bit of a problem when it comes to staff but that’s another issue.
When we started thinking about the second year, which was about a day after the end of the first year, we were brutally honest about what had gone well and what hadn’t. Through this process, we decided to soften our approach to some things and to harden our stance in relation to others.
For example, we choose in the second year to conduct a full tendering process for our suppliers before the season started. We negotiated some good deals and looked at getting a better service than we had received in the first year.
We made decisions this year to cut some services back in some areas and others, we choose to have additional services.
One of these changes was to look at the admin side of things, an area of comfort normally for myself, being an accountant. Realising that my time spent doing admin tasks rather than reviewing the business performance and other strategic decisions was a bit of a “no-brainer”.
Initially it felt difficult to reduce the tasks through a weird sort of guilt. This feeling was probably because as an employee, you’re conditioned into thinking that working hard is good. Reducing your actual workload is bad. As much as staff should be effective and efficient, I’m not convinced that if a staff member was able to do all of their work by lunch time, I doubt whether they would be rewarded by being able to relax in the afternoon or even go home? As a business owner this is a complete misnomer.
Contrary to the employee work model, as a business owner it is in your interest to reduce all of your tasks as much as possible. This obviously needs to be balanced by the potential costs of the services required if you’re not doing them. Through changing my accounting software to Xero and having my payroll outsourced, I saved about 5-10 hours a week in time. All of the tasks were completed just the same albeit much more efficiently.
The benefit of this not only means that I have more time each week to read magazines and write blogs but more importantly, I have time to deal with anything that comes up with the business. It also means that I can proactively go about improving areas that I want. An added benefit is that when the inevitable happens, and I’m needed to go into the business at short-notice, I can go in having completed my tasks relatively easily and be as fresh and stress-free as possible.
We still spend a lot of time thinking about what the customer wants and like Jeff Bezos, we start with what the client wants and work backwards.
An example of this being the large families we cater for in our restaurant, eating out whilst on holiday can be a costly experience if there are 5 mouths to feed so we introduced a number of multi-buy deals, this allows a family to choose different meals and pay less per meal. Not a particularly ground breaking strategy, in fact very common however not many restaurants seem to think about it in this way.
As you would expect from an accountant, every menu item is meticulously costed out. Dull as this may seem, it means that we know which item is most profitable and possibly more importantly, we know the items where we make less profit. During the third year, we decided to tweak our menu slightly to remove some of the less profitable items from the deals and make an incremental increase on one or two of our best selling items. This has led to some really dramatic gains, our margins are wider and we seem to be making more profit even when in the less busy times.
This is a fruit of having more time to concentrate on the business and not been constantly drawn into a large amount of admin.
Without too much foresight, our business has evolved into a less onerous, more profitable venture however without making some big decisions (which could easily have backfired) we would never have got here.
We are by no means plain-sailing from here on however the business is now a manageable and we are doing a lot less fire-fighting. The business is still a way off from where we want it to be which may sound ungrateful to the incredible job that our team are doing however we know that if help them along the way and improve the way we manage the business, we will get to where we want to be.
I believe the main difference between our position now and 2 years ago is that the changes we need to make now are small and some would see them as trivial although we certainly wouldn’t. The principles of the business are now in place so even when personnel change, the business has an identity which we can stay consistent with.
5 Tips for Evolving Your Business
- Constantly evaluate what your customers are saying & decide if there are modifications to be done.
- Don’t be embarrassed about reducing your routine workload, if it means you can concentrate on other areas of the business then that may have a much bigger impact.
- Research and take time to decide on a course of action/or a change to the current business.
- Once you make a decision, really commit to it. You may change it if it doesn’t work but if you don’t give it your best shot then how do you know?
- Don’t make changes for changes sake. Make changes because they will improve what you do.
To contact Shane, please ring 01392 432525 or by email email@example.com
Image courtesy of https://www.flickr.com/photos/spidermandragon5/
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