Tag Archives: profitability

The “Little Steps” Entrepreneur

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A friend of mine has a company he started several years ago and he’s on an unbelievable roll. If he’s not there already it won’t be long before his top line revenues exceed nine figures. When I first met him, his business was grossing nearly $10 million. Not only has he seen a gigantic increase in his sales, but his profitability is off the charts. I fully expect to read about him in Forbes one of these days. How has he done it?

My friend is not a particularly flashy guy. He didn’t design fancy strategies or engage in crazy risks. Instead, he concentrated on taking little steps. You or I might see them individually as pretty mundane. But when viewed collectively these small steps have become giant leaps, propelling his organization to dizzying heights. What have I learned over the years about how my friend has built such a successful company?

In the early days my friend was the classic bootstrapper. He literally did everything. He and one key associate were the “executive” level management. They paid attention to the little details and obsessed over their customers. I remember urging my friend to spend more time working “on” his business than “in” it. Over time he took this to heart and began to be more strategic. But initially he was the chief cook and bottle washer as well as the CEO.

Also in the beginning, this man was allergic to debt. He re-invested his profits and made sacrifices to get through the leaner times. I suggested that he procure a line of credit to which he responded, “Why? I don’t need it.” I explained that at some point in the future he would need a lending relationship with a bank and that he should establish it sooner rather than later. He could borrow against it and then pay it right back if that would make him feel better. Ultimately, he did obtain a line of credit and it was eventually quite helpful in accelerating his growth.

My friend was very particular about the business he would take. There were opportunities abound, but he showed great discipline in staying in his lane. He did not set out to be the biggest company in his industry, nor did he care if he developed a national footprint. By only taking assignments that he knew he could handle, he avoided the pitfalls that many entrepreneurs have made (including yours truly) by gobbling up every piece of business they could. At first, I thought he might have an affliction of limited thinking. But I was wrong. Though it wasn’t articulated, it was obvious that he had a winning formula that was taking shape because of his intuition.

Over time, my friend learned how to scale his company. He gradually created the infrastructure necessary to meet the needs of more and more customers. Today he hires more than 50,000 people a year to staff the industrial operations of his customers. He attributes his continued growth to his ability to identify and value talent. The “value” part is especially intriguing. He genuinely cares about the team he has assembled. It would be easy to view 50,000 workers as a commodity. But he doesn’t. My friend goes to great lengths to make certain that everyone is treated fairly and with respect.

Above all, he’s played it straight as long as I’ve known him. He makes certain that he only hires team members who are legal, and I’ve never seen him cut corners. Over many breakfast meetings and other encounters, I’ve observed this man to be grounded in principle and integrity. We’ve all heard about high-flying businesses that came crashing down when it was revealed that they had been involved in some form of cheating. My friend is Mr. Straight Arrow and has marched to that tune from Day One.

Overall, I think I can ascribe his level of success to his ability to execute. Some leaders are born to perform – my friend seems to do so effortlessly. I’m sure he’s stubbed his toe along the way. But I’m not aware that he’s made any major mistakes that would have jeopardized his future. I can’t say that he was studious about creating strategic plans and organizational charts or subscribed to the Harvard Business Review. Maybe he did. My guess is that he simply exercised a great deal of common sense and had an amazingly deep understanding of his industry.

My friend is a living example of how taking little steps can lead to sweet success. What he has done can be instructive for the rest of us as we grow and flourish as entrepreneurs.

This blog is being written in tandem with my book, “An Entrepreneur’s Words to Live By,” available on Amazon.com in paperback and Kindle (My Book), as well as being available in all of the other major eBook formats.

Sliced Tomatoes

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While vacationing, my wife and I had the occasion to dine at several restaurants that we have enjoyed over the years. Something happened at two of them that was somewhat of a surprise. Here’s what occurred. At the first restaurant we had been told by a nearby merchant that a particular dish was extremely good. Naturally we wanted to partake, only to be told by the waiter that this item was only available on the bar menu. I told him that we were willing to pay an upcharge if necessary in order to enjoy this seemingly delectable delight. No dice was his reply. He went on to spin a tale about how the kitchen was too small to serve both the bar and the dining room. The explanation was not remotely plausible.

We had enjoyed a scrumptious dinner at the second restaurant and were attended to by a very outgoing server. The entrée I selected had a side dish that I didn’t prefer and I asked if some sliced tomatoes could be substituted. This was done without issue and the service was impeccable. Roll the tape forward a week with a different server but the same entrée. Again, I asked for sliced tomatoes and was very abruptly informed that the chef was not going to accommodate my request. This server (a bit on the snippy side to begin with) said that there had been quite a conversation with the chef about such a substitution and he wasn’t going to slice any tomatoes.

In both situations, the desires of the customer were secondary to the desires of the restaurants. In both cases, I wrote social media reviews pointing out that the operational efficiencies of the eateries were apparently more important than offering a memorable customer experience. And as I thought about it more I realized how often this approach is taken by many businesses. But why?

We’re in the day and age of creating customer experiences. No longer is it just about selling a product or service. I’ve advocated for years that we should avoid “selling to” customers (product-centric) and help customers “buy from” (customer-centric). Helping people buy something provides us with an opportunity to create a more tailored and pleasant experience – something they might mention in a positive manner when speaking with friends and family . . . or posting on social media. Both restaurants failed the test. The food was so-so at the first establishment but truly amazing at the second. Yet, the wonderful cuisine was overshadowed by the negative experience of a chef who apparently was throwing a hissy fit for unknown reasons. I would have certainly understood if the tomatoes were of poor quality and that had been explained to me. And while the chef may have had a limited supply of tomatoes to be reserved for other dishes that included tomatoes, there is a fabulous modern day invention called a “grocery store.”

I eat breakfast regularly at a restaurant where the proprietor often makes a run to the nearby grocery store when she runs low on a particular food item. The last thing she wants to tell a customer is that she is out of something and can’t accommodate a request. The upshot of all of this is to pause for a moment and look at our own operations. Are there things we can do to make sure we are creating a positive customer experience? Do we have systems and processes that are designed to make our operations more efficient and profitable, but could potentially stand in the way of putting a smile on the customer’s face? Are we a slave to rigidity and adherence to a very precise “recipe?” Perhaps we should consider applying the “reasonableness test.” In other words, is the request of a customer reasonable or not? If it is, we should accommodate it to create the desired experience. If I had asked for Baked Alaska, that probably wouldn’t have passed the “reasonableness test.” But sliced tomatoes?

Entrepreneurs can differentiate themselves by working to create a memorable customer experience. This can be accomplished by developing a reasonableness test when it comes to customer requests.

You can also listen to a weekly audio podcast of my blog. What you hear will be different than what you read in this blog. Subscribe on iTunes or wherever you get your podcasts. You can also click on this link – Click here to listen to Audio Episode 61 – The Zone of Doom.

This blog is being written in tandem with my book, “An Entrepreneur’s Words to Live By,” available on Amazon.com in paperback and Kindle (My Book), as well as being available in all of the other major eBook formats.