By Gordon Hecht, Serta Simmons Bedding
A key to achieving business success is growth.
Whether choosing to grow within a market or extending reach statewide, nationally or internationally, businesses must expand continually. The opposite choice — to remain motionless — is to be resigned to stagnation and demise.
The trouble with growth, be it opening a second store, entering a new market or crossing state lines, is the loss of the business culture that made the first store successful. Smaller businesses achieve this culture balance by placing a family member or owner in each new location. For the most part, only owners can have that vested interest in seeing that each selling opportunity is maximized, every invested dollar is stretched to the fullest, and every business crisis is resolved by making the customer right, even when they’re wrong.
Plus, it’s a fact that shoppers love to spend money when they are dealing directly with the owner.
If you weren’t lucky enough to be born into a family with eight or more siblings (or even cousins), you won’t be able to depend on having family members in each store. Therefore, it is up to you to develop the new owners of your satellite locations. Sure, you can train store managers, and they will manage your business. But owners become leaders, and they will lead your business to success.
Making the decision to create vested partners from your team is difficult; nobody likes to give up control of their business or assets. However, when planned right, creating a path to partial ownership gives you benefits that will grow your business and give it life far beyond your working years. Imagine having 10 people (or 100 people) on your team who could make decisions predicated on the long-term satisfaction of your customers and the wellbeing of your bank account.
Stated simply, owners understand that free stuff isn’t free; that every shopper is a paid-in-advance asset; that good news travels fast; and that bad news travels faster. Owners know how to wisely manage the exceptions to create profit.
Many of the people on your team act like owners already. On a recent store visit, a salesperson took a call from a shopper who had suffered an injury that prevented him from climbing the stairs to his second-floor bedroom. He needed a bed for downstairs, pronto!
This salesperson took the initiative (and risk) of packing the sleep set into his personal pick-up truck, closing the store for an hour on a Wednesday afternoon, and personally delivering the bed to the shopper … and a customer for life to his company. To paraphrase the customer’s reaction: “I wonder what the [big box] store would have done.”
Are there people on your team whose departure for another career would seriously affect the continuity of your business? These are the individuals that you trust with the store and the warehouse keys and to keep your trade secrets to themselves. Chances are they would be less likely to leave if they had a true ownership role. Whether you carve out a one-percent stake per person or a 10 percent to 15 percent share for all employees, you can reward and retain them with that minority position.
Creating owners also gives you a personal exit plan from your business. Many retailers face shutting their stores when no other family members have an interest in working the business. This can result in a loss of jobs for the team that kept the operation going, and another empty storefront on Main Street that you could have prevented. Developing tomorrow’s owners today can keep your business viable far into the future.
Make the decision to post the Under New Ownership sign in your business. Consult your financial adviser to create a scheme that works well for you. Be the leader of leaders and watch your business prosper.
Gordon Hecht is Senior Regional Manager/Strategic Retail Group at Serta Simmons Bedding and a regular contributor to YSN. You can reach him at email@example.com.