Saturday 1 October 2016

Problem Solver: Should passion be a priority for a business owner?

Published 14/01/2016 | 02:30

Feargal Quinn
Feargal Quinn

Q: You always seem very passionate when you speak. How important is that for a business owner?

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A: It is easy to be passionate about something you enjoy, and therein lies the answer. I have been fortunate in that throughout my retail career I really enjoyed learning about the industry and working on ways to make my own business succeed. I genuinely looked forward to what each day would bring in Superquinn and how, as a team, we would achieve our vision.

As a business owner, if you have passion, you will find it is infectious. Others will see that passion and take inspiration from it, become more motivated and focused on the challenges. It's also important that when building the management team, you ensure that you have people that are passionate about different aspects of the business.

While my retailing passion was for the consumer and innovation, I made sure I surrounded myself with people who were passionate about the financial aspects of the business, the legal aspects and some of the other more technical aspects of the business which I simply didn't have passion for.

While passion in a business owner is always a good thing, there is a danger that if others in the business were also passionate about what they were doing, you could get an imbalance of what is focused on. Passion is also closely linked to self-belief and sometimes during difficult trading periods it is important that someone in the business is able to keep a positive perspective on the business succeeding, and that passion is used to keep others motivated.

Q: I run a café and I am looking for some advice on how to improve my gross margin. I seem to be missing at least 8pc and I am not sure where to start looking.

A: What you need to do now is to systematically go through all of the controls in the business to make sure they are correct and be able to eliminate each one to be sure it is not creating the problem.

Some key areas for you to look at are your controls at the back door, your cash controls, training and procedures revolving around portion control, waste levels, etc.

It would even be worth your while to go out and do a price survey of what you are charging for the various different items as you could find that your pricing model is not correct. You will find that you become a little bit like a forensic detective going through all of the different parts of the business trying to identify the elements that are not working or are contributing to the poor margin. I also think that you would find it very helpful to go and talk with another café owner and be able to benchmark your model against theirs. It won't be that difficult to find a similar café owner in another town or region and try to engage with them on the topic. You will find that most other business owners are only too delighted to engage with one of their peers. I have not mentioned that you also need to ensure that you are good at purchasing. You may be overpaying for the goods you are buying because you have not shopped around and I would suggest you tender your annual volume among the key distributors and see who will give you the best price.

What I usually find when margin is missing, is that the solution is spread over many different areas and it is usually never one aspect. Therefore to identify those areas that need to be fixed or improved, you need to review every single process and control within the business to identify where the opportunities lie.

Send your small business questions to himself@feargalquinn.ie

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