I do not know if you have purchased an item from Amazon, however, I find my
experience with the company always exceptional.
For that reason, I am quoting the founder of Amazon, Jeff Bezos, who said the
watch our competitors, learn from them, see what they are doing for customers
and copy those
things as much as we can.”
Are you the largest drycleaner in
your market? If you are not, have
you ever secret-shopped the largest
drycleaner in your market?
You might learn about how they
handle new customers. You could
learn what they do differently to
make their company the success
that it is.
There is nothing wrong with a
secret-shop of competition. I know
you hate to give them dollars, but you can chalk up the expense to your
Speaking of marketing, what is your marketing budget? Do you have a budget for
any of your
line items? Do you have line items? Are you so busy worrying about how much your
that you do not take the time to measure what your costs are?
Last month a company contacted me to inquire about hiring a manager so the owner
follow my advice about working on his business, not in the business.
I inquired about having a budget for managers.
The owner said, “I do not have a budget. How do I create a budget?”
I asked if he receives a P & L from his accountant.
He said, “Yes, but I do not really read it. All I care about is how much I have to pay to
on April 15.”
Is that how you operate your company? Do you have any idea how much your
are? To make things easy for him to transition into keeping records, I suggested
Quicken. It is a very basic bookkeeping program.
Next, I told him to contact his CPA to learn how the company’s operating expenses are
currently coded. I said to him if he did not want to learn at work, install
Quicken at home and
start measuring his personal expenses.
Fortunately, this person did not receive unreported income, so the task was very
Two weeks later the business owner called and expressed his profuse thanks for
about measuring costs at home. He learned how much his wife was spending on
clothing and he
stopped that expense. His wife’s expenditures taught him that the same thing could happen in
Now he has Quicken installed on his PC in his company office. Every check
written is entered;
every credit card receipt is posted. He told me he is now considering check
printing by Quicken.
With the influx of information, the business owner can now create a budget. I
liked to use my
previous year’s expenses as the following year’s budget. It was not a perfect system; however,
it was a starting point.
After reviewing his unread P & L statement, he created a budget.
Due to his wife’s extravagance, he might never have realized the value of keeping records.
Let us now return to the inquiry about hiring a manager. A good rule of thumb is
salary should not exceed five percent of gross sales.
I received a phone call from a drycleaner with one large route. When he told me
route did over $500,000 in annual sales, I was astounded. Yes, that is a great
however, I suggested he make a couple of changes in his business model.
Currently, the driver of this route gets a salary, and a small, one or two
percent bonus based
on sales. The driver does not do any selling to build the route. His job is all
about pick-up and
The labor cost for this route is extraordinarily low and that is nice for the
bottom line. What is
bad is there is not a lot of time left to handle more sales or the solicitation
of new customers.
The business model that is followed is the driver works five days with Monday to
and Tuesday to Friday service. The commission that is paid is small, too small
to incentivize the
route person considering the amount of work being handled.
Who has the most routes in your community? What is their business model?
Here is another opportunity to secret shop your major competitor. Remember what
said about watching competitors. This does not mean only over-the-counter
means route customers, also.
I recommended that this plant owner split the route geographically. I further
he hire another route salesperson. I use the word “sales” because I want a route driver to be
more than a drop-off and pick-up person.
This suggestion did not sit well because the cost of labor for operating the
He would have to change his business model and most people are reluctant to make
I then threw another pitch at him. I suggested he run his routes six days
instead of four.
Too much change at one time is hard to digest for many people so we compromised.
The one big route will be divided geographically, and another driver salesperson
will be hired.
The new and old route will continue to operate in the current fashion, meaning
mentioned schedule. By doing this he can grow his sales and expand the
geographic area of his
We are working on changing the compensation plan that is currently in place. In
are writing a job description for the newly hired person and one that the
existing driver will have
They say, “You cannot teach an old dog new tricks,” but over this past month, two business
owners who were locked into old methods of operation are making changes.
business is like a living organism. If you do not feed it, and care for it, it
will stagnate and die.
If you need a questionanswered, do not hesitate to send me an email. I will
respond to most
questions, no matter the subject matter.