Edition 69 – Sudden Impact

Our youngest son, Fraser, has a part time job in a coffee shop in a major shopping mall in our local area. He is trained as a Barista so, at the ripe old age of 17, whatever your order may be, it’s always “order up”.

Recently, the management team gathered the troops together and told them that things are tough for the business right now. Sales are down almost 40% over 12 months ago. In anyone’s language, that is startling. The message to the team was that the sales decline needed to be turned around and one of the ways they could all help that was to “upsell”. The old “would you like a donut with your coffee?”

Fraser is sitting at our kitchen bench the evening of the team meeting, relaying the story and what they have to do moving forward. I listened intently as I’m keen to find out what is going on in this family business.

Once he finished, I asked him what he thought. Of course, he was concerned that they should all do what they can do to lift sales. Fair enough.

Then I asked him why he thought sales might be down 40% in 12 months? He stopped and pondered but couldn’t really provide an answer. So I helped him along.

I asked Fraser to relay to me what was it that had happened in the past six months that had gone wrong or had frustrated him in his work. Well, that was easy. He rattled off:

1. The EFTPOS terminal is out of action more often that it should be, meaning those without cash (which is most of us in Australia in 2017) can’t use our cards to pay for a coffee.
2. He works alongside staff who are not trained in all facets of the role. So, the customer is forced to wait longer for their coffee than they should otherwise.
3. The machines are not serviced regularly, meaning the customers that love their coffee know in an instant when the coffee is not right.
4. The refrigerators don’t work correctly and, at times, milk and food has had to be thrown out.
5. The owner is never there. He treats the business as a passive investment.

Too many family business owners look at effect, but not cause. They look at the result of what has happened but don’t ask why it happened.

I have worked with a lot of family businesses over the past three decades. One of the most striking things that I have observed is that a lot of what goes right and a lot of what goes on in business is actually very simple. When you focus on the simple, you realise that it can have a very sudden impact on the business, for better and for worse.

What the owners and managers of Fraser’s coffee shop need to do is get back to basics. They need to:

1. Focus on the customer experience.
2. Remember that with food and beverage, you simply never skimp.
3. Ensure that everyone that needs to know how things are done, are taught it and are proficient in it.
4. Put in an appearance on a regular basis to show the team that they are genuinely interested in the business and its customers and therefore, so should they be.

Simple, really. It’s not that complicated.

This Week’s Tip

If your business is facing a challenging situation, don’t merely throw more resources at shoring it up. First ask why it is happening? Unless you know why things are heading south, you will never understand the solution that you need.