2 Things I’ve Learnt About Business Pitfalls, By Observing Other People’s Mistakes
The Disappearing ActIf it’s your business, you can’t let it run on autopilot and disappear, or not be around as the boss.
Look at 1Market with Chef Wan’s name on it. What happened? He wasn’t around, so chefs did as they pleased and the food quality went south.
Chef Wan, 59, was quoted by BERITA Mediacorp about his unhappiness with 1 Market’s management and the drop in food quality.
He said: “The food is not prepared (according to) how I have demonstrated and the chefs do as they please. When I heard what happened there, I got quite angry. – Source: The Straits Times
Look also at Jones the Grocer, which was at Mandarin Gallery. The business owners left it to their staff to take care of the business. What happened? Lots of politics, lots of money wastage, chefs doing what they want, when they want, how they want. That business became debt-ridden and was put up for sale.
When an external manager was brought in to save Jones the Grocer last November, it found that the company was spending money without basic rules in place.
Each chef could make food orders with suppliers independently, with no proper accounting procedures, while staff were instructed to order from a specific pool of suppliers, even though they charged higher prices.
At least two staff members were paid exorbitant salaries, and money was spent freely, including $1.5 million to $2 million for the renovation of Jones the Grocer International’s (JTGI) Becasse Bakery outlet in Dempsey Hill in 2013.The firm’s director, Mr John Manos, who was in charge of running day-to-day operations here, ran the business remotely from Australia. One of the company’s suppliers told The Straits Times he had not met or even spoken to Mr Manos. – Source: Business.AsiaOne
Lesson: Don’t leave your business completely alone. Visit it regularly and be involved.
Family and friends
I won’t blame you if you disagree with me on this one… But try not to bring family and friends into your business. Never hire someone you cannot fire.
It may be ok to bring in family or friends initially, especially if your business is new, and maybe you want to save costs, or have help you can trust.
But what about later on when business picks up? Trouble also comes if you don’t have things like boundaries, terms and conditions, leave days and remuneration packages laid out in black and white. It just opens yourself and your business up to unhappiness and resentment from your staff. Especially if they misunderstand and perceive things wrongly as a result.
The other one is having the spouse in your business. If say, your spouse and your sales staff are in disagreement over how things should be done, which one will you ultimately fire? Your spouse? Or the salesman who has been very good at his job; which is to make you money?
Lesson: Hire someone better than you, but maybe not someone you absolutely cannot fire. Though of course, I know this really depends on your own situation and the quality of help available to you.
Any other pitfalls that you have observed for yourself? Share it with your comments!