Dreaming big when it comes to your business is exciting and contagious, but having your visions come to fruition is a different animal altogether and mis-managed growth is often the down-fall of many fledgling companies. Despite your best intentions and eager wishes, creating a business that can grow requires careful attention and a specific approach from the get-go, which is something Jess Eddy and Crista Freeman of famed ice cream company Phin & Phebes know all too well. Phin & Phebes didn’t become a national brand and change the way people think about ice cream overnight — their success took a lot of careful planning and attention. Today, Jess and Crista are generously sharing seven mega-important things to consider in order to successfully scale your business, from discovering your BHAG (AKA your big hairy audacious goal), to testing and discovery, to implementation and managing your day-to-day. –Sabrina
Have you ever heard an entrepreneur say they want their start-up to be, or remain, a small business? Maybe. But more often than not most entrepreneurs have set their sights on achieving something big. They want to see their company, their brand achieve success not just locally or regionally, but nationally or globally. But if this seems to be what so many entrepreneurs aim to achieve with their businesses, then why don’t all of them do it? And how do the ones that do get there make it happen?
Enter the scalable business. The term “scalable business” is one that’s thrown around a lot in the start-up world. But what is a scalable business? How do you build one? And why should you want to? If you’re an entrepreneur, or you’re someone who’s considering starting your own business, and your goal is to make it successful on a large scale, then understanding what a scalable business is and how to build one can help you get there.
At Phin & Phebes, we make outrageously delicious ice cream using real, quality ingredients, but our goal is bigger than making the best ice cream possible. From the very beginning of our business, our long-term vision or “Big Hairy Audacious Goal (BHAG)” has been to change the way people everywhere think about ice cream. From day one this goal has been the driving force that has influenced how we built our brand from the ground up and continue to scale and grow our business today. In order to achieve our BHAG, we knew that we would have to become a national ice cream brand with products sold in stores nationwide. Because in order to change the way people everywhere think about ice cream we knew we would need to get our ice cream in as many peoples’ hands as possible. We looked to the future of where we wanted to see our business and worked backwards. Because of this approach, we built the foundation for a scalable business and brand from the very beginning, and set the stage for us to grow our business and achieve our long-term vision. Below are key steps we focused on in order to build a scalable business and tips for how you can do the same in yours.
Test your product idea
It’s very easy to get excited about starting a business and in the excitement, skip some important steps in understanding if your product idea is a good one. In our very early days, before we were considering launching a full-fledged ice cream company, but curious about turning our passion into a business somehow, we took several small steps to test our ice cream and learn. Starting small not only allows you to get valuable feedback and understand consumers and the market, it allows you to start to see where there may be flaws or kinks in your idea; you want to uncover these on a small scale so when it comes time to start and grow your business, you’re not making mistakes that have a bigger financial impact. There are many things you can learn from testing your idea such as: what price are consumers comfortable with, how do people react to your brand or packaging, do people generally like my product, would they repeat purchase, how does it compare to other products on the market and so on. The trick is to create realistic enough situations to get the feedback you need, without taking the full leap of launching your business. One of the first experiments we did was go to a food fair to get feedback from people we didn’t know, i.e. strangers. Family and friends are not the best test beds because they may concerned with hurting your feelings. Strangers? Not so much. At this fair we handed out free ice cream in exchange for a 10 question market and demographic survey. Not only did we get almost 100 surveys, but the buzz of free ice cream created such a demand that we literally had a line going around the corner and out the door of the building. It was amazing.
Setting your business up to scale
It may not seem sexy, but it’s very important to think about what kind of company you want to be when you grown up. Do you want to be a smaller company with a regional or local focus or do you want to see your product in all 50 states, or in different regions of the country? These scenarios have different implications, which lead you to making a different set of decisions – even when you are a very young company. One classic example of this in the food industry is the decision to make your own product, or hire a manufacturing facility, a.k.a. a “co-packer” to do it for you. When we were thinking of starting our business, we had our sights set high. We want to change the way people think about ice cream and redefine it to a certain extent. To us, this meant that we wanted to see our ice cream on shelves across the country, we had a strong desire to share it with as many people as possible. If you have a business partner, this is a very important conversation to have. You may think you’re on the same page about how you see the company growing but unless you’ve talked about it, you don’t really know. Given our vision of the company, we knew that co-packing would allow us to grow the company without any pains or large restructuring down the road. Our first big break came when Whole Foods Northeast came to us and said they wanted our ice cream in almost 30 stores basically overnight. If we were making the ice cream ourselves, in a small facility, this demand would have been very hard to keep up with. Then you have to consider, if you’re making your product all day – who is running the business? It is possible to make your own product and convert to co-packing at some point but there are risks associated with doing so, like testing out co-packing for the first time when you’re about to or are already in, many stores. If you hire someone else to make your product for you, you still need to account for the time it takes for you to have oversight over the process. At the end of the day, no one is going to care about the quality of your product as much as you.
Get your financial and legal ducks in a row
Starting and growing a business comes with risks. When many people think about starting a business, they think about turning their passion or hobby into something bigger. If you’re a baker, perhaps you see yourself baking all day, but the reality is, you need to keep a tight watch on your finances on day-to-day basis to ensure the business remains intact. Much of the time, this means doing less of your hobby and spending more time in spreadsheets and or doing projections. When you’re small, it’s rarely an option to hire someone full time to do this for you, but a little help can go a long way. Hiring the right accountant and or bookkeeper in the beginning to help you get setup will save you a lot of time down the road and you can go about your business with the confidence that you have the financial foundation to give you the insights you need to make smart decisions. If your books are in check you are less likely to get audited or show up to work one morning and realize a delivery didn’t come because payment was never rendered. The other half of mitigating risk is making sure you have a good lawyer. You don’t want to wait until you’re in a legal dispute or are raising money to hunt around for a good lawyer. Legal issues can arise out of the blue and catch you by surprise and sometimes you need to act quickly. Having a lawyer that you can talk to on an as-needed basis will help you ensure a safer and brighter future for your business.
Customer feedback, the good, the bad and the ugly
When you have a product in the market, customer feedback is inevitable. Your brand and reputation is everything and customer feedback gives you insight into how people perceive and talk about your brand. There is a saying by Jeff Bezos that goes;“Your brand is what other people say about you when you’re not in the room.” This is true, but your brand is also what brutally honest people say to you in an email. As a founder of the business, it can be very difficult not to take customer feedback personally – after all, you’ve probably made a lot of sacrifices to get to where you are in your business. Many customers don’t have this perspective, they’re either happy or unhappy with your product and want to share their thoughts, sometimes with very little tact or a lot of aggression. At Phin & Phebes, we get mostly positive feedback but sometimes there is someone that just doesn’t like a flavor, or expects a pint of ice cream to have more cookies in it. Other times a customer may purchase a pint of ice cream that has been compromised somehow whether it be from a freezer not being cold enough or a pint melting and refreezing somewhere in the store, ruining the texture. Whatever the case may be, our goal with customer service is really to make everyone has happy as possible and fix problems as soon as we find out about them. In order to do this, we have some systems in place that allows us to reimburse customers at different levels. Good customer feedback should be praised too! We have gotten many emails from customers that are almost love letters. These emails are obviously the best ones to get and really make you feel like what you’re doing is all worth it. We like to reward these types of customers as well. Anytime you can have a positive, reciprocal interaction with a customer, you should. Lastly, customer emails can help alert you to problems that may have occurred with a specific product, batch or store. Paying attention to the details and looking for patterns in customer feedback can help you hone in and isolate where a problem is or may have started.
Be accountable
Being a founder of a business can be very isolating and it can be easy to lose focus because more than often you are pulled in a million as different directions. Many entrepreneurs love the product development side of the business and will easily become bored with role of leading the company. As a business owner, would you think twice about holding your team accountable for their goals? Probably not. But who is holding you accountable when you are on the top of totem pole? Not only that, but who is guiding you in making business decisions based upon their expertise? I personally love accountability, setting and achieving goals, but I think it is very important to have someone that holds you accountable and also challenges you push your goals even further. For this reason, I recommend hiring a coach or bringing on a board of directors. I have both and not only have these people helped to ease doubt or answer questions I’ve had, they’ve also had an immeasurably positive impact on our business’ growth.
Do a lot with a little
Being an entrepreneur means being familiar with sacrifice. You can’t do everything that pops into your head, if you try to do everything then everything become less effective. We believe in the 80/20 rule and try to focus on the “One Thing” that will have the most impact and drive the most results. Following this principle may mean sometimes a project or goal you really want to work on has to be sacrificed, since the near-term results won’t drive you closer to your timeline to accomplish your long-terms goals. An example of this for us is opening a scoop shop. We want to open a scoop shop so badly and we know that it will help propel the success of our brand, but while having a scoop shop may mean increased local or regional success, the most effective way for us to achieve our long-term BHAG is to become a nationally distributed ice cream brand. In addition, a scoop shop would be another business for us to run and we are big believers in doing one thing really well. So in order to say laser focused on our long-term goal, to make the most of our minimal resources, we have always chosen to focus on the grocery side of the business and master that.
Slow to hire, quick to fire
I am a big believer in the principle of “slow to hire, quick to fire.” Finding the right team members, people who align with your core values and who are also effective, can be hard, especially when you may not have the resources to offer competitive salaries. When contemplating making a new hire, the first things to consider are your long terms goals and what your team needs to look like in order to achieve those goals. Creating an organizational chart outlining the positions necessary to achieve your BHAG can be helpful. Then I like to take this hire road map and identify my 1-3 and 5-10 year goals / vision and identify the hires that are necessary in each phase of our business. I like to create scorecards for each of these hires that are near term versus position descriptions. These outline their key performance indicators and hold them accountable for what they need to achieve in their position. Next is actually interviewing the potential hires — I use the scorecard I have created to help shape the questions I ask when interviewing. These questions always relate back to our core values to make sure that person is the right fit for our company. Once the hire is made our team has daily ten minute huddles where we catch everyone up on the progress of our individual and the companies quarterly goals and then we have a weekly huddle that is longer where we review our goals, the company scorecard and then get into strategy. By creating this meeting pulse we can easily identify which team members are falling short and if that person is not a fit for our company.
via Design*Sponge http://ift.tt/1MbPJHq From Sabrina Smelko
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