Everyone loves a good business turnaround story. Today I wanted to tell you the story of the ‘little guy’ – the small business. I wanted to start small because I want to show you that no matter the industry type or size of the business, the principles remain the same. Without further ado here’s how I turned around a failing local cake business. (The names have been changed for privacy.)
From Hero to Zero
Baker’s Delights was a local family-run cake shop and had been there for about 15 years. The cake shop had served and delighted the local community with their range of delicious cakes, doughnuts and cupcakes. Online reviews were brilliant, the product was delicious and the business had become a local landmark. But the last 2 years had been hard. Since the 2008 Recession, like all businesses, Baker’s Delights had fallen on hard times. Footfall in the high street had declined, they had to get rid of long-serving members of staff (whom the locals loved) and the business was in trouble of going under. I decided to visit the cake shop to see what was going on.
A Not So Sweet First Impression
I arrived at Baker’s Delights around lunchtime on a Friday – peak traffic. As I approached the shop, I couldn’t help remembering all the Gordon Ramsay programmes I had binge-watched where he turns around local failing restaurants. “I wonder if I’ll encounter the same kinds of issues?” I thought to myself.
As I got closer, I could see that footfall was high, but no one was going inside the shop – and I couldn’t blame them. The Baker’s Delight sign above the shop window was old, dirty and tattered. The windows were grimy and there were no cakes on display. Instead, there were out of date posters for local DJ gigs, and a few business cards from local taxi firms and plumbers. Not appealing at all.
I peered inside the shop. Empty. When I say empty, there wasn’t even a member of staff behind the counter. I entered the shop. The inside was no better. The floor looked like it hadn’t been cleaned in a long time. The walls were filled with more posters and business cards.
I waited to be served. I waited and waited… I watched the people on the high street walk straight past as the shop not giving it a second thought. They didn’t even notice it was there.
All of a sudden, a young lady came out from the back. She was probably about 18 to 20 years old and was dressed in a baggy hoodie and was on her phone. She seemed disinterested and was scrolling away. She barely looked up from her phone and said, “Oh sorry, love. I didn’t realise there was anyone here.”
It didn’t take a rocket scientist to work out why this business was failing.
“I was in the mood for cupcakes but I was wondering if you could recommend anything?” I asked, keeping up the pretence of a mystery shopper.
The girl kept looking at her phone and motioned towards the cupcakes in the glass counter, “Labels are on the front, love.”
I was shocked.
I left without making a purchase and what’s more worrying, I don’t think the girl even noticed I left.
I stood outside the shop, got my phone out and called the owner, Valerie. She picked up. “Hi Valerie, it’s Haroon Rashid. You called me regarding some business consultancy.”
“Oh yes, hi Haroon! How are you doing?” she asked full of beans.
“Er, not great I’m afraid. I’m actually at your shop. Are you around?” I asked politely but with a hint of worry in my voice.
“Oh, you’re there now? I thought we were starting on Monday?” Valerie responded shocked. She sounded almost as if she’d been caught out.
“Yeah, but I was in the neighbourhood and thought I’d drop by,” I said.
“Erm, well yeah. Give me half an hour and I’ll be right there.” Valerie responded. I could hear a rustling in the background almost as if she was getting out of bed.
Valerie met me at a local coffee shop just around the corner from Bakers Delights. Valerie was a middle-aged woman and was the daughter of the original owner. Her father had, unfortunately, dies a few years previous which is when she took over the family business. I gave Valerie my assessment and told her about my bad experience at her shop.
“It’s not my fault!” Valerie said defensively. “My staff are useless. I keep telling them to clean the floor and pay more attention to the customers.”
“Valerie,” I said calmly, “Why can’t you clean the floor?”
Valerie looked stunned. She was obviously offended at my suggestion. “What do you mean, me cleaning the floors? I’m the boss! Why should I clean the floors?” she exclaimed.
“I know you’re the boss. But that’s why you should clean the floor.” I explained maintaining my calm tone. “Leaders lead. That means you go first, you set the example. But first, you need to be present. When your dad ran the shop, where was he usually?”
Valerie looked down, almost ashamed, “In the shop.”
“And what was he doing in the shop?” I asked.
“Everything…” she replied.
“Right. Your dad led by example. I’ve read the reviews, the old press articles. He was a hard worker, wasn’t he?” I said in a positive tone.
“He was amazing. He worked in that shop all hours of the day,” she said nostalgically.
“He was a present leader. He didn’t mind rolling his sleeves up and getting his hands dirty did he?” I asked.
“No…” Valerie responded sheepishly.
“So why should you be any different? I asked. “Your dad did you favour. He proved the business can work; in fact, he proved it can work really well. The first thing is that you need to be present as a leader, roll your sleeves up and get your hands dirty. Your staff need a model to emulate. Right now, no standards are being set and that’s why the shop is going downhill.”
Leading By Example
I set Valerie some very simple tasks to turn around the business.
- She was to be the first one in the shop and the last to leave
Leaders have to lead by example. By being the first one in and the last one out, you are non-verbally setting your standards to your team. They will respect you for it. People don’t do what you say, they do what you do. If you do this consistently, (most of) your staff will start to replicate your behaviour. They understand it as being the required standard.
- Clean the outside and inside of the shop
This was a no-brainer. I explained to Valerie that marketing is the battle of perceptions, not products. (Taken from the 21 Immutable Laws of Marketing by Al Ries and Jack Trout). You might have the best product in the world, but if it’s wrapped up in shit then no one will buy. Right now, the customer thinks your store is derelict. We wouldn’t go into a shop that looked like that. Give the whole place a makeover. Invest in a proper sign, proper decor and clean the damn floor and windows. It doesn’t need to cost a lot of money to spruce up the place. Valerie was also meant to be the one to clean the floor and windows herself so that she set the example.
- Fire the current staff
Valerie had hired the cheapest people she could. I explained that you get what you pay for. You can pay a little bit more and find some decent people. I taught Valerie that it’s better to have someone with a good attitude. That way you can train and mould them into a high performing member of your tea,
- Recruit only 2 decent people
It’s about quality, not quantity. If you hire better calibre, then you don’t need as many people. It’s better to have fewer high-calibre people than an army of layabouts.
- Adopt ‘Celebrity Service’
In his book, ‘Celebrity Service’, Geoff Ramm talks about a fascinating customer service principle – treat all your customers as if they were your favourite celebrity. If your favourite celebrity came to your shop, what would you do differently? I bet you’d clean the damn floor, maybe offer some complimentary coffee, free samples etc. So if we’d do that for a celebrity, then why not our customers? People will keep coming back for celebrity service. People will talk about celebrity service. People will post on social media about celebrity service. I asked Valerie to think of her favourite celebrity and pretend that every customer who came in the shop was that celebrity.
After giving the instructions, I said that I would come back in a couple of weeks to check the progress of the store.
As promised, I arrived back at Baker’s Delight 2 weeks later on a Friday lunchtime. When I arrived, I could hardly believe my eyes. There was a queue outside! As I approached, there was music playing from inside the store, people were queuing up and seemed excited to get in. The sign above the shop had been changed to a well-designed luminary one. The windows were clean and now there was an enticing window – the best cakes on display on a revolving display.
I squeezed past the line and entered the shop. The floor was clean. The walls had retro posters in nice frames. There was a theme now running through the store. Behind the counter was Valerie herself and 2 other girls. They were busy! But I noticed that all 3 of them were smiling and had very good banter with the customers. The service I saw was excellent. Valerie and her team were going above and beyond. They offered people free samples, they knew their customer’s names.
I went outside and asked a few people what they thought of the shop. A lot of them thought that it was a brand new shop and didn’t realise it was the old one re-branded. They unanimously loved the product but more than that – they loved the service. They loved how Valerie and her team made them feel when they came into the shop. Valerie and her team managed to make their customers feel good before they consumed the sugary treats.
It was a business turnaround. Baker’s Delight’s business turnaround story had come true.
The thing I like the most about the Baker’s Delight business turnaround is that it was simple. I didn’t have to set out a business turnaround strategy or set a complicated plan full of financial jargon. The business simply needed present leadership, a re-brand, good people and outstanding customer service. Once they got those simple things right, the money took care of itself. Quite often in a business turnaround, we complicate things. Business turnarounds don’t have to be complicated; in fact, it’s best to keep them simple. The simpler the plan, the better the execution. Baker’s Delight managed to turn their fortunes around by following a simple plan. I guess you could say their business turnaround was sweet.