Business lesson 108 – How to start your own business

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Hi kids!

It’s Wednesday or short weekend as we call it in South Africa. Time for our weekly lesson on how to start your own business.

I am sure that by now you all know the three “C’s” of a business of heart.

C – Concept
C – Clients or customer
C – Cash flow

For today’s lesson we are going to look at some sales tips. It will then also be our last lesson on “clients or customer”.

Next week we will start on the last C, that cash flow.

Just to recap on last week;

SALES is the transaction which takes place between a buyer and a seller and money is exchange. This transaction can be for goods or services.

SALES FUNNEL is the whole process which define sales

Awareness ➜ Interest ➜ Consideration ➜ Decision ➜Purchase

SALES STRATEGY is the way in which you convert these clients or customers into real clients or customers.

I am going to share another business story with you so if you want to get yourself a cup of coffee before your start reading now is the time.

As a restaurant owner the three “P’s” of sales are vital for survival. You need a good Product, you need People to sell the product to and you need a Process in which to do it.

At Saddles Steak Ranch, we ticked all three.

Of importance was how to put the three together in a package to generate income for us.

I put my efforts into two things;

1. The waiters
2. Specials

Let’s take a closer look at each one of these points.

For me a waiter is not someone who serves people food. No for me a waiter is a salesperson and I wanted the best salespeople in town. How?

I simply visited my competitors and monitored who was working for them and started to gather information.

Questions	Answers
How does their shifts work?	Three shift per day to choose from
How are they being paid?	5% commission on total sales
Do they get staff meals?	Free staff meals, normally burgers
Why are they working there?	To generate an extra income
Do they enjoy working there?	50% yes and 50% no

I got the answers I was looking for and it was time for me to make a move. I advertised for waiters.

• Two shifts per day, from open to 5 and from 5 to close
• Up to 25% commission on sales
• Staff meals @R10, +/- 3 STEEMS
• Your chance to make money
• If you look after me I will look after you

People told me that I was mad but there was some cleverness behind the madness. I hope you will agree with me.

Two shifts per day, from open to 5 and from 5 to close

By offering two shifts a day I made sure that the waiters will for sure be making money.

I made sure that I will always have someone in the shop and if someone doesn’t rock up for shift I will have ample time to get someone else to stand in before we get busy.

The rule was, first come get to choose which section of the restaurant he/she wants to serve. By doing this I always had people at work long before the start of their shifts which allowed me to plan. As for the waiters they got the chance to choose the busiest section of the restaurant.

Up to 25% commission on sales

I can hear you say, “Madness! How can you offer 25% commission?”
That is the whole thing, I didn’t offer them 25% I said, up to 25%.

What I did is I formulated a formula by which commission was paid. I looked at the items we sell and focused on those which had the lowest food cost (what cost the lease to make).

5% - base commission on the total sale
2% - if they sell a sauce excluding on steaks
2% - for every starter
2% - for every dessert
5% - for every full house (starter, main and dessert)

It worked like a bomb!

I had waiters selling sauces with ribs and chicken. I was happy as I could see items which hardly cost as money now generating a revenue.

Staff meals @R10, +/- 3 STEEMS

The waiters was tired of eating burgers all the time. I changed it, they could eat anything on the menu for R10 (South African Rand) except for SQ items. SQ on a menu means it is “Subject to Quotation” and is related to what we’ve paid for it.

None of the competitors was doing this and soon I saw the waiters buying their staff meals just to swop for movie tickets. I knew I got them hooked.

Your chance to make money

They were indeed making money and so was I. When you invest in people the worse thing they can do is to move on once you have trained them. I’ve seen it so often happening in restaurants. When you think you have found just the right waiter and you asked for him/her with you next visit you are told that the person is no longer working there.

In our case we had a long list of waiters who wanted to come and work for us and the waiters working for us was well aware of it.

We had waiters working for us for many years not only as students but as in full time job. All of a sudden they were wearing expensive brand clothing.

If you look after me I will look after you

Investing in your sale staff is so important. You have to teach them all the time, you have to treat them correctly and you have to reward them.

I taught them how to increase their sales. No longer was there a waiter who asked “Can I get you something else?”
No, they were all asking “What about an ice cream with chocolate sauce or a milkshake to end the meal?”

With this they didn’t plant the seed of “yes or no” BUT one of “which one will it be”.

I organised events for the waiters like treasure hunts, movie nights etc.

They were no longer just employees but they were all my children. I was the one they could run to when they were unhappy or not feeling well.

Your sale staff is worth more than gold in your business so don’t be shy to reward them.

“Waiter of the month” displayed in the front the shop didn’t cost me any money but it gave them the opportunity for an extra income as the clients asked to be served by them.

They say that the worst thing you can do in a business is to give something away. I went against the grain. It was now time to look after the clients and this I say with my tongue in my cheek.

We had a Monday night special “Buy a burger and get one free”.

More reason for our competitors to think we are crazy.

By doing this I made sure that;

• We had queues where other restaurants where empty on Monday nights
• We generate enough cash to pay for our weekly orders
• We had waiters who made sure they do not only sell two burgers but sell not only a sauce but also a starter and dessert with it

Do you still think I was crazy?

Best of all, if you now go to shops like Checkers and Shoprite they also advertise buy one and get one free.

➜ Have you noticed how strategically they have placed these items?

➜ Have you noticed that you add that chocolate on display at the till in our basket just before you pay?

These my pupils are all sales strategies and tips.

Homework:

For homework I want you to read the story I shared for a second time and then I want you to submit a post with ten sales tips you could gather from the post.

Good luck and most of all enjoy!

See you all next Wednesday!

Links to our previous lessons

What is the concept or the idea you have for your business? What is your business all about and what makes it unique.
Link to Lesson 101

We took a closer look at your customers or clients, in other words who is your target market, their demographics, budget group etc.
Link to Lesson 102

Link to Lesson 103

During this week we took a closer look at marketing and sales strategies.
Link to Lesson 104

This was the first lesson in which we took a closer look at marketing.

Link to Lesson 105

I share the marketing strategies we took when we launched our property portal.
Link to Lesson 106

This was our first lesson on sales. What is sales and the strategies.
Link to Lesson 107

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