I’ve learned a valuable lesson this week.
If you are an entrepreneur, theoretically, there is no sleep and there is no rest.
When we returned from a one-day vacation last June 2, husband and I were riding high from an awesome December month.
Sales were up 16.5% from last year’s high and our stores were humming and churning good numbers.
We’ve finally stabilized our team having hired five key people for the head office in less than six months. Everyone seemed to know what they were doing, and it’s good to finally breathe easy again knowing that your business is in good hands.
Most importantly, we are opening two new stores in the first quarter of 2015.
Life seemed great and perfect.
On January 3, it all came crashing down.
One of our area supervisors came to us wailing like a baby, claiming that a woman in the bus hypnotized him and took money from him. She rode with him as he went through store by store to get the cash sales from our sales staff. Since he was the supervisor, they gave the money to him.
The total damage? Php 54,000, 4.5x the Philippine minimum wage. A big amount of money for many people out there.
As we investigated the matter further, many holes appeared in his story.
For one, he changed company policy from the store directly depositing the money to the bank to him receiving the cash himself and bringing the cash to the office. This was done without management approval.
Two, taking advantage of the holidays, he also kept money in his boarding house for 5 days, saying he intended to deposit it to the head office when the money was given to the said lady. By policy, area supervisors are not allowed to keep goods and money at home.
“Ma’m, hindi ako magnanakaw!!!! Mamatay na ang nanay ko, pero po, biktima po ako dito!!!” he meladromatically cried and wailed. What he was saying was, “Ma’m, I am not a thief. May my own mother die but I myself am a victim of this occurence!”
Seriously, he could’ve won an Oscar.
If you manage a business, you know that many staff lie to your face. How many times have I heard a person swear to God that he didn’t steal (but did), or come up with a stupid excuse on why he didn’t come to work when in fact he was going out for an interview or something.
Filipinos can be really good at lying.
They will say things that would tug your heart and make it seem as if they are kawawa (to be pitied), but in fact, they are as guilty as hell. If all reasoning don’t work, then work on your boss’ mercy and emotions.
This is such a case.
As the investigation came about, I realized that things are not as rosy as they seem.
He was able to take money from the company because of a lack of control in the head office. Items and money were not recorded properly and several rules were not strictly implemented. Supervisors took it upon themselves to handle money even if they were told not to, and nobody said anything about this.
I was dumbfounded and angry.
First, angry at my staff for not doing what they should be doing. That’s why I hired someone to be our accounting clerk – for her to record and receive the right things. That’s why I assigned a second-in-command, for her to keep track of people in the company.
Alas, if something bad happens in your own business, the most guilty party of all is yourself. If I caught him earlier, this wouldn’t have happened. Money would not have been lost. If I double-checked their work, my staff would have been more on top of their game.
I enjoyed the high tide a bit too much, turning complacent when things were going well our way. I didn’t stay as late as I should nor did I push my staff to take their work more seriously because it was the Christmas season.
When you are in business, there is no rest.
I’ve looked at our business and found six (6) critical aspects of managing one’s business. They are as follows:
- Products: Product includes sourcing products that can sell or at least dispose of at a certain amount of time. If you have no items to sell, there is no business. And if you cannot sell your item at a price people want to pay, then you will also have no business.Distribution is also part of product. Customers must be able to access your product when they need it. If your product is always unavailable in the market, then customers will get frustrated and buy from your competitor.
This was not a problem since our stores were all well-stocked with salable items. Even when sales were brisk, we did not run out of stock. Our products were great gift items, and hence, were salable during the Christmas season.
- Hiring and Recruitment: Hiring the right people is important to business. Hiring the wrong people is tantamount to a lot of headaches and pain. My area supervisor not only lost me money, but also my precious time, which could have been spent elsewhere. If you cannot also staff people on time, your stores have to close even if business is high.This was not a problem since our stores were well-staffed during the Christmas season. Even if there were a lot of people who left or were terminated, our stores were still open every day at prolonged mall hours and holidays, and sales were not impacted at all.
- Sales and Marketing: You have to source products people would actually want to buy. You have to hire and train people who can sales talk. You have to somewhat promote your business so people know your brand is to be trusted. Retail is about making your products desirable and pushing your customers to buy. If you have a store and sales are low, then you’re dead.Last December, sales were great. Our staff was pushing and chasing the quota. We gave out an annual planner for a minimum purchase. People were hitting record numbers. No problem in this avenue.
- Paying your expenses and liabilities: Managing a business requires you to balance your cash. If you are a good businessman, you have to have a good handle on how much cash your business is bleeding on a daily basis. Spend too much, you will run out of cash. Run out of capital and you have no choice but to close down your business. Bounce a check and you have to pay a fee, and worse, ruin your reputation and lose your supplier’s trust.Last month, I was on time in paying all of my financial obligations — from the payroll to the rental, and up to the miscellaneous expenses. Great!
- Receiving the correct amount of money back to the office: If your sales are high but no money is received by the head office, then your business is fucked. People will steal from you. Your bank may make a mistake (e.g., did not record the deposit even if you gave them the money). Your customers will delay paying for as long as you can. And people can conveniently “lose” the money like what happened in my case.Our money problems started because we were not tight enough with control. My girl in the office was receiving the money, but did not really relate that to actual sales that were happening. Our staff was delayed in depositing money. Our supervisors were handling the money even if they shouldn’t touch it opening up the temptation to steal.
As a boss, it’s crucial that you have a tight hold in money coming in. If you cannot reconciliate your numbers and are still confused where your money comes from, then maybe you’re in the wrong job.
- Back office controls: Now this was where we had a problem. Money was being deposited, but was the amount correct? People seemed to be doing their jobs, but were they? My staff were leaving the office on time but were their work done? Our supervisors were turning over their documents, but were they correct? Back office controls means that not only that people are doing what you hired them to do, but they are also doing the right things at the right time.Take for example this image: Sure, you’re climbing the wall fast and efficiently. But are you climbing up the right wall?
Our company’s mistakes happened because I was so strict with the four, but lacked the time and discipline to check the deposits and check to see if people in the head office were doing their jobs.
Honest to goodness, I was too busy expanding my store, enjoying the fruits of our people’s labor and worrying about the other three aspects of the business. December was our peak month so I was more focused on getting our products out and ensuring that everyone can push our product.
This effort was successful, which was why we beat our quota.
But because I removed my eye from the other two, the whole thing bombed in my face. This is the reason why I was left with a wailing scheming son-of-a-bitch who managed to take advantage of the lack of controls in the head office to steal Php 50,000+ from us.
In summary, there is no rest for the weary entrepreneur.
Unlike a corporate dude who can still leave work in the office and focus on a few specific mandates, an entrepreneur cannot take his/her eyes from the six critical aspects of business.
Take your eye out from product, and you’ll find yourself with angry customers who are tired of coming back again and again.
Take your eye out from hiring, and you might force yourself to close stores because you are understaffed. You may end up with poorly trained staff with low morale. Worse, you get staff who will file a case against you for wrongful termination even if they needed to be fired.
Take your eye out from sales and marketing and you may find yourself with a lot of inventory you cannot dispose of. Whoops!
Take your eye out from paying your bills and your creditors will take you to court. You may be in jail and your reputation in tatters.
Take your eye out from deposits and people may be stealing under your nose.
And lastly, take your eye out from controls and you’ll find your people taking you for a ride. Nothing gets done, and even if it is, it’s the wrong thing.
My mother-in-law always said, “If I had a choice, I would rather be a bean counter in a large company. I don’t think its always good to be a businesswoman. Sure, there is fulfillment in managing your own business, but there is no rest for the weary.”
She is 100% right.
The only time an entrepreneur can rest is if he closes the business down willingly or unwillingly. Otherwise, one must trudge on. 🙂
Entrepreneurship is my fate.
My dad is an entrepreneur. My mom is an entrepreneur. My husband’s family is an entrepreneur, and my husband is also an entrepreneur.
Though I can easily jump to a cushy corporate job, entrepreneurship is my present and my future.
But it’s no peace of cake.
Hopefully, my sharing with you what I think are the six critical aspects of business would help you manage your business better. Till then!