What is the job of the business owner? In this installment three of four, we add to the tasks of the job described previously – especially in the areas of sales and finance.
In the last two installments we said that ownership is a passive verb. An owner has a right to a return on investment in both time and money. We found owning a business was much like owning a car – that it is limited in usefulness until someone drives the car. And we found that ownership is broader than the founder – that it extends to the entire business family who are stakeholders in these businesses regardless of whether they are stockholders. Most people confuse the title of owner with the function of the one person who runs the business – the function of General Manager. And, the job of the General Manager is to make and meet all budgets, report to stakeholders on the progress of the business and to maintain organization discipline and oversight. We also find that this function is only a part-time function in most of our shops. But, this isn’t the complete story. There are other roles held by the General Manager like recruiting and retaining workers; selling; negotiating price; and finance. Let’s review them to help round out our picture of the function of the General Manager.
Role in Recruiting and Retention of Workers
At the highest level of the business is the requirement to recruit and retain workers. I put this at the top simply because it is usually the owner who chases off good workers and creating the need to recruit in the first place.
An owner in the Midwest obtained sales training for his CSR’s and then asked one of them to do part-time outside sales which she was eager to do. To cover the CSR’s absence, the owner had the bookkeeper, who was untrained in CSR things, to fill in.
The bookkeeper did some light stuff like answering the telephone, but stacked up all the heavy lifting (estimates, orders, etc.) until the CSR returned. The CSR found herself not only doing outside sales, but doing her original job as well but in less time.
It didn’t take long for the CSR to find reasons not to go out which didn’t make the general manager happy, so he puts pressure on her to get out the door. The CSR felt like the old saying, “no good deed goes unpunished,” interviewed for another job where they “really wanted me,” and quit.
There are a lot of ways that owners run workers off. Most aren’t because the owner cusses, yells and screams although I see that. Mostly it’s subtle but sometimes not.
Sometimes owners allow one person to repeat bad behavior to the detriment of others. I know of one who put up with a worker smoking pot in the delivery van. He didn’t do anything about it but expected everyone else to follow the rules. They didn’t. Imagine that.
Sometimes we don’t talk to a worker for six weeks because they actually took off some well-earned vacation days. Sometimes we hire a new worker and then expecting them to learn through osmosis – and then coping an attitude when they make a mistake.
There are so many examples but it is best summed up with this one: employee left a $15 an hour job for one paying $10 an hour. Owner questioned him and he said, “It’s just that $15 isn’t enough to put up with you.”
So, retention of workers is right up there with the recruitment of workers. As for recruiting workers, I’ll be publishing more on that soon. Just understand that recruiting workers is a campaign and you have to spend real time on it. You just don’t put out an online ad and expect the perfect person to walk in the door.
The General Manager’s Role in Sales
The general manager plans and oversees the company’s sales and marketing. This also is at the highest level of the organization since, as we have mentioned before, the businesses’ business is to find and keep customers (Al Rises in “Focus”). But let’s get specific.
Specifically we add to the general manager’s duties the requirement to maintain a personal relationship with the company’s top 25 accounts. These are the accounts of the general manager and, as you have heard me say many times, the top 25 accounts provide usually 50% to 75% of the total sales.
Do I mean the general manager has to write up the orders, etc.? No. What I mean is all accounts, especially the top 25, are the accounts of the general manager. The general manager may assign others to assist them such as a salesperson to regularly call on the account and write up orders. But make no mistake. Regardless of who writes the jobs up, regardless of whether you have outside salespeople, and regardless of how you don’t like to deal with customers – maintaining these relationships is what keeps your shop’s customers yours and not the salesperson’s. Failure to do this is the reason printing companies usually face a life and death sales crisis. Someone took the accounts and that someone was the salesperson working for you.
Further, it is the responsibility of the general manager to assure that the business is actively seeking customers. Al Ries in his book, “Focus,” says the business of the business is to acquire and keep customers.
The fact remains thought that most companies, even with outside sales people, have no regular process that targets and seeks business from new accounts. Stephen Covey in his classic “7 Habits for Highly Effective People” uses the historic example of farming. We must plant in the spring to reap in the fall. The business that fails to prospect continually can expect no better results than the farmer who waits until fall to plant the corn.
And this is not just sending out a direct mail piece to the same tired list as we have done for years or setting up a web site. Remarkably, many don’t even do that.
Somewhere we must identify all the prospects that we have in our target market. From that we select those most likely to need our services. Then we follow up with an organized approach to penetrating the account. That includes finding out specifically who buys what it is we sell, which includes getting to see them. That includes us knowing what to do and say when we get in the door. There’s more, but imagine, some general managers think all they have to do is to hire a salesperson and the salesperson will somehow figure it out.
The General Manager’s Role in Price
The general manager is chief negotiator of the business. Unfortunately, many owners are poor negotiators and end up selling on price. That forces us to keep wages and benefits low putting us in a very difficult position. We can’t afford to pay our workers more and we can’t afford to recruit new ones when the ones we have leave because they can earn more elsewhere.
General Managers, who know how to negotiate, get better prices, pay better wages, have less stress and make more money than those who don’t. Those who don’t know how to negotiate; they focus on price and complain to each other about the “guy down the street.” Nevertheless, the role of the general manager in price is to be the chief negotiator. And not knowing negotiation is what helps keep poor printers poor.
The General Manager’s Role in Finance
Every company must have a finance officer. This person’s job is cash management. Generally, they get in the checks, post them to the receivables, organize the bills and write checks. Too many times, general managers see this as their only role. You can no better run a business from the position of finance officer than a supply sergeant can successfully run a battalion. “Take that hill, men – but be sure to bring me back your ammunition usage forms in triplicate. And if you don’t, I’ll shoot you!”
This kind of organization is known in most circles as something akin to chicken manure. “I go out and fight the enemy (CSR helping customers on the front counter) and yet my leader is in the rear echelon (plush office) creating another form for me to fill out. I’d just wish for once he (or she) would just come out here and see what I’m doing and help me with tools that will give us an advantage in the battle.”
Too many times we see the general manager performing the function of a bookkeeper. Bookkeepers are vital to our business, but it’s not a line function. There is a reason that the chief of staff at the hospital is a doctor – not an administrator. There is a reason that the commander of a flying unit is a flyer – not a supply officer. There is a reason that the person running the business needs to be involved with the real business of the business. The reason is leadership. The reason is morale. The reason is you can’t drive a car by sitting in the passenger seat studying a map.
The general manager, however, has an important role in finance. After all, if the return on investment in money isn’t there – then we kill the general manager. So, the general manager in most small shops directs the work of the finance officer. The general manager reviews the aging report of receivables and directs the collection effort. However, it is the general manager who personally steps in on the tough cases and makes the final collection calls themselves.
The general manager directs the bills to be paid, but doesn’t write the check. The general manager generally signs the check in order to maintain security as well as to know what is really going on. Frequently one spouse will be the part-time finance officer and the other the general manager. Even in these cases we want the general manager to sign the checks, not because of security as much as maintaining contact with what is happening to the cash in the business. Surprising how we don’t spend as much when we actually sign the checks. This step alone has brought many general managers back into touch with reality. So, the general manager’s role in finance is to supervise cash management and make sure we meet all budgets. It’s not to do the work.
In this installment, we have examined the general manager role in recruiting and retaining workers; sales; price; and finance. Next, in our fourth and final installment, I will wrap it up in a big package. By the way, I told you it was a long and difficult answer to a short question.