Issue 256 - "It's not the economy, stupid, it’s you."

Glancing through the NY Times I came across the following... "It's not the economy, stupid, it’s you. So says George Cloutier, author of 'Profits Aren’t Everything, They’re the Only Thing'." The Author then went on to drop a number of other thought bombs from George like "the best family business has only one member — in other words, fire your relatives." I'm not quite as radical about family businesses. Because I sell to 95% family businesses I get to see the good sides, but I do believe his article deserved some comments for its relevancy to my readership. Besides for us husbands with kids working for us, "How do we explain this to Mom?"

The article titled 'Fire Your Relatives. Scare Your Employees. And Stop Whining' provided some shocking (and almost insulting) tips for small business owners, but sometimes it takes an insult to point out that the emperor has no clothes on. I sucked up my pride and read through as he slammed several traits I see in my own business. Are you brave enough to do the same for the top 3 slams that the food industry needs to hear that I picked out of his conversation?

Q) You say the best family business has only one member — in other words, fire your relatives. What’s wrong with family businesses? What about a relative who’s highly competent and well respected?
A) A member of the family, if they’re not carefully policed or indoctrinated by the principle of the business, tends to feel entitled. That entitlement is terrible for morale and is terrible for the business. They should work better than your conventional nonfamily members. If they don’t, parole them. Give them some money to go away.

Paul H-C thoughts: Family members can be an integral part to growing the business, and eases handing a business down to the next generation. Just make sure in business family are treated as employees first and relatives 2nd. A very tough job, but one that has to be done. Most family businesses I know expect more work out of their relatives not less. That is really the point here. They have more skin in the game and should demonstrate that they do.

Q) What are you trying to drive into people’s heads when you say, “It’s not the economy, stupid, it’s you.”
A) Look, what happened yesterday is now done. Tomorrow is a new day. I have to cut my costs viciously. I have to spend a great deal more time on my sales and marketing, and I have to stop whining and get to work.

Paul H-C thoughts: I believe, I believe !!! This whining has got to stop. We should pause and listen to ourselves sometime. I did and do and have decided they only thing I really control is what's inside my head. We touched on something similar when we reported in Issue 201 "Everyone is facing the same problem. If companies are getting killed int he market, someone is making a killing." What are your thoughts?

Q) Lots of people blame the recession for putting them out of business. You don’t buy it? What do most of these troubled companies have in common?
A) I’m a little bit of a hawk on that one. The recession has been an excuse for poor performance. Why does your work dry up? Normally because you haven’t built a strong enough sales organization.They have not implemented strong financial reporting. Small businesses fail to focus on the basics — doing your P.& L.’s [profit and loss statements] and paying attention to cash flow.

Paul H-C thoughts: I agree with his focus on the basics, but there is a #1 he doesn't mention and that is #1 Protect your customers, they're your number one asset,then P&L and then cash flow. At the end of the day there ain't no 2 and 3 without #1.

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