I’ve talked with enough business owners to know most have things they would change. I am not talking about small stuff like plastic silverware versus metal silverware. Most owners I talk with say they have established some “norms” with customers or employees that are hard to change.
In today’s environment, customers and employees are expecting change. Customers are open more than ever to fundamental changes that may occur in their interactions with businesses.
On top of providing CFO and strategy services for franchisors and businesses, I am a small business owner. To say my indoor kids play business has been affected by COVID-19 is an understatement. As my employees, franchisees, and I work on strategies to reopen, we will begin to implement temperature checks for kids before they are allowed to play. We even surveyed our customers and found that over 90% approve of this idea.
Before COVID-19, we may have gotten significant push back from customers about implementing this process. Now, temperature checks are acceptable and welcomed. We’ll continue after COVID-19 doing temperature checks, which will help us combat some of the germ stigma that surrounds businesses like ours.
Temperature checks for our business is not a monumental change. It is a change that we have been talking about for 2 years but haven’t found a good way to implement it. We are taking a more in-depth look at our revenue streams and seeing if day camps or other opportunities exist for us. This would represent a monumental change to our business model.
What to Change
There are typically 3 reasons business owners want to make a change to their business; part of the business doesn’t work, create a better customer experience, or introduce new/better revenue opportunities.
Most businesses have a part that just doesn’t work as it should. However, many times this part or process has been too ingrained to change. All business owners and franchisors developed processes when their business first opened that somehow when awry. Now, these parts of their business are too hard to change.
A second change is to provide a better customer experience. I am a big advocate of making sure that you understand your customer’s journey. For most, this journey has been thrown for a drastic change due to COVID-19. The more you know your customers, what their needs and desires are, and their relationship with your business, the better you’ll be able to identify areas that may need to change.
Finally, now is a time to introduce new services or products to increase or recover revenue. Market demands and needs have changed. The highest and best use for your business may have been one thing before COVID-19, which could have changed now.
All three of these scenarios may seem daunting, but also provide an exciting time for you to make your business or franchise better.
How to Make Changes
The first step in making changes is to identify the problem. Most entrepreneurs skip this step and go straight to brainstorming. However, correctly identifying the problem is the most crucial step to growth. Albert Einstein once said, “If I had 20 days to solve a problem, I would take 19 days to define it”. Don’t be in a rush to fix a problem before you define it.
Once you have identified the problem, there are three different techniques I like to use with my clients to brainstorm solutions. I have found that different brainstorming styles work better for different problems.
If you believe that the problem you identified is not a change to your business model (i.e., smaller problem), then I like to use an iterative approach. In an iterative approach, you start to examine what would it look like if you took your current solution to your problem to the next level? This process is somewhat like the iPhone development. When the iPhone 10 was released, it was an iteration of the previous model. Sure, the camera, operating system, and other features were improved, but overall, much of the product was the same.
In my example about temperature checks, that is an iterative step in our business. It is making our current customer journey and service better, but not dramatically changing it. It was born out of the problem, “How do we help our customers feel safe?”.
If you are looking to change your business model, I would suggest taking more of a Blue Ocean Strategy approach. In this approach, you look to take your business where others aren’t. How can you create a marketplace where one may not exist? Don’t let the grandness of this approach scare you away. Instead, ask yourself these 4 questions:
- What factors of your business can you eliminate that your industry has long competed on?
- Which factors of your business could be raised well above the industry standard?
- Which factors of your business could be reduced well below industry standards without it having a dramatic effect on customers or employees?
- Which factors should be created that the industry has never offered?
Lastly, there is a third brainstorming approach I use, no matter the size of the problem. The Phoenix Checklist is a set of context-free questions developed by the CIA to encourage agents to look at challenges from multiple angles. Some of the questions are great for business leaders to contemplate when solving problems. Here are a few of my favorite ones:
- Why do you need to solve this problem?
- What isn’t the problem?
- Have you seen this problem elsewhere before? How was it solved?
- What is the best, worst, and most likely outcome of the problem?
- Can you solve all or part of the problem?
- What do you need to do at this time?
- How will you know when you are successful?
How Does Strategy Play Into Making Changes
All businesses have a vision, whether stated or not, which is the guiding light to operate with. Vision includes core values, 10 and 3-year targets, marketing strategy, and a 1-year plan. Successful companies can craft this into their operating system.
When solving problems, no matter the size, solutions must fit the vision. If a solution doesn’t match up with the company’s vision, then there is a risk of creating issues later that will need to be addressed.
What if your business or franchise doesn’t have a clearly stated vision? Then start down that path first before solving any problems and making changes.
COVID-19 has not presented many business owners with opportunities. However, it has given owners the chance to hit the reset button in certain areas of their business to make needed changes. Will you use this time to your advantage?
My name is Matt Krieger, and I am the founder of Krieger Analytics, a CFO advisory partner for small businesses and franchisors. I am also the owner and franchisor of a concept called Monkey Bizness, in Denver, Colorado.
As a small business owner with a background in finance and strategy, I realized the benefits that a CFO could bring to smaller organizations. Most franchisors and small business owners don’t have a need (or budget) for a full-time CFO. To better fit my clients, Krieger Analytics is a part-time resource. While most think of CFO’s being involved in finance and accounting (we are), I am also involved in much more. I partner with my clients by coaching them on strategy, gaining clarity on their business, building efficient and effective processes, and making confident business decisions. Conversations are free, so don’t hesitate to reach out to me at email@example.com.