What type of owner are you?
The future of the drycleaning industry is
in the hands of those who are willing to invest in new
equipment and new programs.
Of those willing to invest in the future,
only those who are willing to improve their operating
procedures and production standards will reap the full benefits
they deserve from their investment.
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Instead I am referring to management
styles and philosophies. What I have observed is that there are
three distinct traits that all entrepreneurs in this industry
are driven by.
• The need to succeed.
• The desire to be in control.
• The willingness to take risks.
In this article, we will explore the
traits that all entrepreneurs have and analyze how their
management affects their company’s bottom line over the
long term. By the way, if you recognize yourself in one of the
following viewpoints, don’t be surprised. Each is a
compilation of the cleaners I have consulted over the years.
Viewpoint #1
This group of owners wants to be
“liked” by their employees and this trait colors
their management viewpoint. They believe they are treating all
the employees fairly when they bend the rules to fit the wants
of just one employee.
Unfortunately, these owners do not
understand that every decision they make must be made in the
best interest of the company. As soon as you start to cave in
to the wants of one employee, you have lost control.
When working with this group, it is
difficult to install new production/incentive programs because
the owners feel compelled to modify the production programs to
fit the wants of certain of their employees. End result —
the production standards are lowered overall resulting in lower
productivity and higher labor costs.
Example: The drycleaning/pressers are
averaging 21 pieces per hour per presser. The standard for this
operation is 30 to 32 quality pieces per hour per presser.
The owner with this management viewpoint
(all my employees must like me) decides that an acceptable
production rate will be 27 pieces per hour.
Why set your standards lower than the
industry at large? You should not! At least, that is my advice
to all my clients because, from my viewpoint, why would any
business owner knowingly leave money on the table?
Of course, my clients don’t always
follow all my advice — I have clients who hold this
viewpoint and have profitable businesses — although they
could be more profitable.
Viewpoint #2
This group of owners wants to micromanage
their whole operation. They have a full understanding of
production flow and its relationship to sales which is what
drives their bottom line. Some of the most financially
successfully cleaners I work with are successful because they
are in the plant from the beginning of the day until the last
piece has been bagged (working harder not smarter).
When working with this group, the owners
feel the need to grow sales but their need to micromanage
results in an inability to expand beyond the tried and true
(retail locations). Many are stuck in a time warp — no
computers, no automated equipment, etc.
The result is that these owners must work
even harder. Their sales grow, their profits grow and…
their quality of life? The answer is obvious.
Viewpoint #3
This group of owners want results. They
aren’t concerned with being involved with every aspect of
their operations — they are hands-off managers who will
invest money in just about anything if they believe it will
improve the quality of the product and reduce their labor
costs.
They don’t hesitate to invest in
the latest of everything — equipment, computers,
locations, routes, etc. They are the true risk takers.
For me, working with these owners can be
stimulating while also challenging. Oftentimes they put too
much faith in this new equipment and systems without having
first established production standards, employee hours, etc.
As I said in the beginning, only those
who are willing to improve their operating procedures and
production standards will reap the full benefits they deserve.
Viewpoint #4
This group of owners has the most
forward-thinking management viewpoint. They can see their
company as a whole. They recognize the importance of their
financials, which provide them daily, weekly and monthly
information on sales, labor costs, and operating expenses.
They understand the importance of their
employees to their operation but are also well aware that in
business you must have leverage (unlike Viewpoint #1).
They have learned how to delegate the
proper levels of authority and responsibility to their key
employees, which gives them a great deal of employee leverage
(unlike Viewpoint #2).
Before making large investments of money,
this group spends a great deal of time doing their homework.
They do not rush out to be the first to own new technology
(unlike Viewpoint #3).
As noted, there are successful cleaners
practicing all four of these viewpoints. Look at all of them
and try to identify yourself. Pick areas from other viewpoints
and apply them to improve your operation.
News flash! I’ve been saying in
this column for the past ten years that you should improve your
quality and raise your prices and go after the high-end
business. I know you’ve been listening and taking my
advice.
In today’s Wall Street Journal
(Saturday, September 17), there’s a front page article
about Wal-Mart: “Looking Upscale, Wal-Mart Begins a
Makeover.”
The article is all about Wal-Mart’s
decision to rethink its formula of the “lowest possible
prices.” It refers to them responding to the
“big shifts it sees in the American economy and
wanting to reach out to more upscale shoppers.”
Wow! Even Bentonville, Arkansas, is
listening!
In the game of business, the more you know
the better you can play the game.
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