Pandemic Spurs Innovation for Small- to Mid-Sized Businesses

Set up your business in the right entity and state. Mistakes in formation or taxation can have a lasting negative impact on business growth and viability. Before starting a new business, consider the best structure for asset protection and tax minimization. For example, a limited liability company (LLC) gives business owners time to operate at a loss for the first few months and write off the loss on their individual 1040 forms against other forms of income.

Pandemic spurs innovation for small- to mid-sized businesses

By Brandpoint

(BPT) – As COVID-19 continues to disrupt normal day-to-day operations of small- to mid-sized businesses and nearly half of the U.S. workforce hangs in the balance, employers are taking creative measures to reset their go-to-market strategies and offerings. By changing their operations to meet the demands of their customers, businesses can not only stay relevant but keep their staff employed and thrive in the new economy.

This pandemic offers business owners, investors and solopreneurs the opportunity to take a critical look at their overall business model, offerings and operations and reset the entire business structure, creating new opportunities to serve and prevail. This is the perfect time to explore new legal solutions to the most common business obstacles to help companies preserve and protect their brands and prosper for generations to come. There are great examples of resets happening within many industries.

With the pandemic closing summer camps throughout the country, ACA-accredited Adventure Links, a 23-year-old summer camp in Virginia, has found a way to replace its usual summer adventure camp programs with

The CampCloud(TM) , an experiential online alternative. The company is now offering its virtual camping programs to individuals and employers to assist employees working from home by keeping their kids engaged, learning and delighted all day from virtually anywhere. The program is being offered to other camps as a customizable, online option for their campers.

Ensuring the health and safety of employers when stay-at-home orders are lifted, and business resumes, is critical. Thanks to a team of entrepreneurs, Disinfect & Shield(TM), an FDA-registered, EPA-approved and eco-friendly disinfectant used in surgical suites for the last decade, is now available to businesses worldwide to kill SARS-CoV-2, the virus that causes COVID-19 and other dangerous organisms. It works by creating a permanent anti-microbial shield, preventing the virus from attaching to surfaces where it has been applied without risk to humans, animals or crops. With Disinfect & Shield(TM), employees, customers and visitors can feel safe knowing that their space has been properly disinfected and treated for optimum health and safety.

Clint Coons, founder of Anderson Business Advisors, offers 5 financing and entity creation tips to help entrepreneurs and small business owners:

  1. Know how to use loans: CARES Act loans have specific guidelines like having to use at least 60% of the loan within 24 weeks of receipt for payroll expenses. Concerned that money would dry up, many small business owners applied with no way of utilizing them because their business cannot reopen under the strict guidelines imposed on the industry.
  2. Alternate cash sources: Borrow from a 401(k) or IRA to keep businesses afloat, as it does not need to be paid back for at least 3-6 years. However, pulling money out of a retirement plan comes with some risk, such as if the business does not see profitability, then retirement funds were wasted on a failed business venture.
  3. Beware of increasing liabilities: Because insurance will not cover claims brought under COVID, reopening comes with risk and business owners are wondering how they will operate under strict COVID-19 related guidelines and still make a profit. Now is the time to pivot and reset.
  4. Consider restructuring: Set up your business in the right entity and state. Mistakes in formation or taxation can have a lasting negative impact on business growth and viability. Before starting a new business, consider the best structure for asset protection and tax minimization. For example, a limited liability company (LLC) gives business owners time to operate at a loss for the first few months and write off the loss on their individual 1040 forms against other forms of income. There are different entity funding options with protection ramifications.
  5. Utilize Privacy Shield Protection by creating anonymity with trusts.

COVID-19 has shown that many businesses aren’t prepared for worst-case scenarios and make common mistakes that can affect their ability to grow and borrow money. If approached strategically, small- to medium-sized businesses can take this time to implement changes and help their operations succeed and thrive.

An Interview With Tropical Smoothie Cafe’s CEO, Charles Watson

An Interview With Tropical Smoothie Cafe’s CEO, Charles Watson

By Gary Occhiogrosso
PHOTO COURTESY OF TROPICAL SMOOTHIE CAFE

CEO Shares His Story & Insights On Taking The Reins.
Amid all the pandemic news and stories of how the foodservice business is coping with the crisis, I thought I’d attempt to redirect our attention today, even if only for a short while. As a 35 year veteran of the restaurant and franchise industry, I have always been fascinated by the challenges, risks, rewards, and day to day “work” a CEO faces when first taking the helm of an ongoing franchise organization. Today’s post focus’ on that topic in an interview with Charles Watson, the CEO of Tropical Smoothie Café.

Mr. Watson was appointed the CEO position of Tropical Smoothie Cafe in December 2018. Since that time, he has led the company on its quest towards $1billion in sales by 2023. He’s no stranger to franchise development, nor is Charles Watson an outsider, having served four years as the company’s Chief Development Officer in addition to his prior role as VP of Franchise Development. He is directly responsible for selling more than 800 franchises.

As their franchise website states: “Tropical Smoothie Cafe’s menu boasts bold, flavorful smoothies with a healthy appeal, all made-to-order with quality ingredients. We find that real fruits, veggies, and juices just taste better.” The offerings have evolved over the years to include a menu of breakfast and lunch items beyond smoothies. From wraps to flatbreads to salads, Mr. Watson continues to solidly position Tropical Smoothie Cafe as a leader in the fast-casual, healthier lifestyle food category.

Gary Occhiogrosso: Tell us a little about your background before joining Tropical Smoothie?

Charles Watson: “Prior to joining Tropical Smoothie Cafe, I worked for several hotel and hospitality-centric companies, including Wyndham Hotels & Resorts, Intercontinental Hotels Group, US Franchise Systems, Inc. and Hospitality Real Estate Counselors. I joined Tropical Smoothie Cafe in 2010 as the Vice President of Franchise Development and, in 2016, became the Chief Development Officer, where I was responsible for all aspects of the development of the brand. In July 2018, I was named interim CEO, and then permanent in December 2018.”

Occhiogrosso: Please give our readers the “Elevator Pitch” for Tropical Smoothie Cafe?

Watson: “Tropical Smoothie Cafe is a national fast-casual cafe concept inspiring healthier lifestyles with more than 850 locations in 44 states. Beyond just smoothies, we serve better-for-you wraps, sandwiches, and flatbreads, and pride ourselves on living at the “intersection of taste, convenience, and hospitality.” In a highly competitive segment, we’re one of the fastest-growing quick-casual brands, opening 124 new locations in 2019 alone and singing 213 development agreements to open hundreds of businesses over the next few years.”

Occhiogrosso: What was the condition of the company before you were named CEO?

Watson: “We were in a good place! In 2018, when I was named CEO, we had more than 720 locations open nationwide. By year-end 2018 we opened 110 cafes and signed 191 new franchise agreements. Building off this momentum, in 2019, we celebrated the openings of our 750th and 800th locations, but taking over during such a monumental time for our brand certainly brought opportunities to improve. Each year, franchisees complete the Franchise Business Review to essentially grade us here at the Support Center on how we’re serving them. We gathered that feedback and used it to set goals and action plans for the company. Areas we wanted to attack immediately with our rapid growth were direct franchisee support as well as technology support and menu innovation. We set company-wide strategic imperatives around these issues immediately.”

Occhiogrosso: What were the one or two unique challenges that you faced upon taking over as CEO?

Watson: “As a first time CEO, learning to view the business from a thinking vs. a doing mentality was a challenge I faced. The success of our brand is about the talent and drive of our talented executives and Support Center team. It was not possible for me to get involved in every project – so I had to learn to let go and delegate. I would say that understanding the viewpoints and drivers of the different stakeholders I was serving was important. A presentation for a board is focused on very different things than a franchisee roadshow. Really trying to understand how to see the world through a different stakeholders’ eyes is something I still work on.”

Occhiogrosso: What was your plan for the first 90 days?

Watson: “I wanted to further instill a franchisee-first mentality. When our franchisees are successful, the brand is successful. When I became CEO, I launched a formal franchisee advisory council, known in our organization as the Tropical Franchisee Council (TFC). While we had always involved franchisees, I felt it needed to be formalized and more visible to our franchise system. In short, franchisees needed to know that there was a formal mechanism of their peers that was constantly feeding back to us at the Support Center. From there, we set up committees, reporting into our TFC, around the major parts of our business, and included more franchisees to provide feedback and work with us on further improving IT, Marketing, Design, and Construction, etc. It was important to me that we have franchisees themselves share their feedback and align on system initiatives and goals. In a franchise system, without broad franchisee buy-in, you cannot move as efficiently and effectively as is required in today’s business environment.”

Occhiogrosso: How is taking the reins of an existing company different than being part of a startup or a founder?

Watson: “I think when taking over any brand where you worked alongside your predecessor, there’s a certain level of pressure to continue carrying the torch, but also to make necessary changes to the brand to evolve with the changing economy and consumer trends. I was lucky enough to work with the founders of the business (and still do as they are board members) as well as work under our first CEO, who did an amazing job. Because 99% of Tropical Smoothie Cafe’s system is franchisee-owned and operated, it was my goal to maintain consistency for them and move the company forward in the right direction, with a lot of reverence and respect for the past. In my case, because I already had nearly a decade with Tropical Smoothie Cafe on the franchise development side, I had the unique advantage of personal relationships with our franchise community. We had a high level of mutual trust and respect for each other that existed before I assumed the role of CEO. I may have been, in fact, the person responsible for awarding them a franchise! My experience with the brand up to that point was beneficial because I was already very immersed in the operations and processes that had contributed to its success at that time. That created a kind of blueprint that served as the foundation for me to take the reins and lead the company the way I felt was best. Yes, I am putting my mark on the brand and culture, but I have been around long enough not to stray too far from the DNA of the brand.”

Occhiogrosso: What challenges, if any, did you face in getting “buy-in” from the existing franchise community once you became CEO? Were any of the franchisees reluctant to follow the system or embrace a new direction?

Watson: “Like I said, I was very fortunate to have had already developed relationships with our franchise community prior to becoming CEO. My predecessor did a great job, so most of the hesitancy candidly was, “will this guy be as good, will we have the same amount of success?” Luckily in my first two years as CEO, we continued to expand the footprint of the brand, and increase brand awareness, drive profitability for our franchisees and drive our comp sales…. So that was helpful! The impact of the more formalized committees we have set up, and the close connection I have with TFC has gotten the system more comfortable with my style and thinking, and I believe, since trust is earned, I still have a long way to go, but am off to a good start. Without our franchisees, committees, and council, I simply could not do this job. Those franchisees are serving our guests on the front lines – I can’t run this business without their candid feedback.”

Occhiogrosso: How do you feel about franchise advisory councils? And was one in place already?

Watson: “I’m a huge advocate for franchise advisory councils, specifically when nearly 60% of all franchise agreements at Tropical Smoothie Cafe come from existing franchisees. The Tropical Franchisee Council (TFC) was established in 2018 and has been invaluable for our growth. “Relationships Rule” is one of our core values, and because of that, people are at the heart of our company. Our relationships are founded on trust and respect for the unique talents of our teams, franchisees, and vendors alike. We strive to continue to harness these relationships in this way and feel that this approach will continue to fuel our success. The TFC works hand-in-hand with Tropical Smoothie on all facets of the business from operations, IT, marketing, construction, and beyond, and their genuine feedback continues to establish the open communication we strive for, helping us to enhance our business model on an ongoing basis. This process only helps our individual franchisees and their bottom line, respectively.”

Occhiogrosso: What is the mission and goal of the company over the next few years?

Watson: “At Tropical Smoothie Cafe, it’s our mission to inspire a healthier lifestyle by serving amazing food and smoothies, with a bit of tropical fun. We want to be an escape for our consumers in this hectic world we live, and an incredible business model for our franchise partners It’s an exciting time to be a fast-casual concept within this segment, specifically as the market size of the juice and smoothie bars industry is expected to increase by 2.3% in 2020, reaching nearly $3 billion in revenue across the globe. We consider ourselves to be an approachable, healthier option for the average American, and our customer loyalty system-wide continues to climb. Our company sells about 200 franchises, opens over 120 cafes a year, and has more than 500 locations in the pipeline. As a brand, we strive for excellence in service and creating a culture of hospitality for our business no matter which location you visit, and this year we’re prioritizing them even further by enhancing pillars of our hospitality-centric culture and the technology we use to create convenience for our guests in order to reinforce our position as the leader in our segment. Over the next five years, our goals are to reach 1,500 cafes open across the U.S., with over 18% profitability for our franchisees on average volumes in excess of $1M, all with very high operational satisfaction for our guests. Our annual tactics are focused around delivering those results.”


Although I did not want to focus on COVID-19 in this interview, it is difficult to ignore its impact on the restaurant community as well as franchisees in general. So I was compelled to ask Mr. Watson his thoughts on the pandemic and the company’s response.

Occhiogrosso: During the current COVID-19 crisis, what steps have you taken to ensure that Tropical Smoothie Cafe supports the local community?

Watson: “When COVID-19 struck the restaurant landscape in mid-March, we closed all dining rooms and shifted our focus to drive-thru, curbside pickup, and delivery where available. Then we determined two focus areas, giving back to the community and prioritizing support for our franchisees. Some of our franchisees had the idea to donate smoothies to first responders and hospital workers in Atlanta. We loved the idea so much we launched a nationwide campaign to donate 100,000 smoothies across the country and the response has been incredible. Within the first day, several local franchisees jumped on board and donated more than 600 smoothies each, and the donations just kept growing from there. On April 16 we met our goal of 100,000 smoothies, but our franchisees haven’t stopped there, and the new challenge is to donate a total of one million smoothies by the end of May. Knowing that those essential workers are not only in the healthcare fields, we’ve also extended our giving to grocery store, warehouse and post office employees. We’re proud to report that as of today, we’ve donated more than 200,000 smoothies to these hometown heroes, and we’re not done yet! In support of National Nurses Appreciation Month in May, we have also pledged to donate $100,000 to the American Nurses Foundation’s COVID-19 Response Fund upon reaching our goal of giving away 1,000,000 smoothies.”Our franchisees are the heart of our brand, so we wanted to make sure we were doing everything we could to help them stay afloat through the crisis. We decreased royalties and deployed hyper-local marketing strategies to drive business within a 1–to 2-mile radius of cafes. While our projected 2020 growth might take a step back due to the coronavirus, I believe our approach to navigating through this will help us emerge quickly once it passes.”

Occhiogrosso: What are some of the additional support initiatives you put in place for your franchise community during the pandemic?

Watson: “Our franchisees are the heart of our brand, so we wanted to make sure we were doing everything we could to help them stay afloat through the crisis. We’ve implemented various franchisee support initiatives, including decreased royalties by 50%, ongoing support with PPP loans and real estate deferrals and abatements, rolling out curbside delivery systemwide, deployed hyper-local marketing strategies to drive business within a 1–2-mile radius of cafes, among many others. While our projected 2020 growth might take a step back due to the coronavirus, I believe our approach to navigating through this will help us emerge quickly once it passes.

Occhiogrosso: How do you see the company moving forward?

Watson: “As you know, the restaurant industry has taken a huge hit. Although COVID-19 has directly impacted our business, some days being down more than 50 percent, we consider ourselves lucky to have a business model that allowed us to easily transition to grab-and-go, curbside, and delivery only. I think the biggest shift will take place for those restaurants that can’t be open right now. The guests who support local businesses in and around their communities are the ones we give the credit to because their loyalty to our cafes is what has ultimately maintained our ability to serve. Because of our amazing guests, our franchisees, and the communities they serve, including those on the front lines of this pandemic, we will get through this. As reopening guidelines are being determined, we plan to move forward with an abundance of caution.”

In conclusion, I believe the growth of Tropical Smoothie Cafe over the last two years demonstrates Mr. Watson’s steady leadership and a clear understanding of building on the momentum that has made the brand a leader in its category. In my experience, making franchisee success and profitability the priority is the key to the longevity of any franchised brand. The fact that nearly 60% of all new Tropical Smoothie Cafe units are opened by existing franchisees underscores the franchise owner’s satisfaction with the concept, the company, and it’s leadership. It’s almost all you need to know about the results of Mr. Watson’s work and commitment to the franchisees. Successfully taking the reins on an existing franchise company can be a daunting task, but in the case of Charles Watson, he continues, as their franchise website claims, to create waves for a brand that started on the beach.

About Charles Watson:

Charles Watson was named CEO in December 2018. In this role, he is responsible for the brand’s strategic vision and overall franchise performance. He was previously Tropical Smoothie Cafe’s Chief Development Officer since 2016, after serving as VP of Franchise Development since 2010. In these roles, Charles was responsible for all development of the Tropical Smoothie Cafe brand. A veteran hospitality professional, Charles has worked for several hospitality-related companies, including Wyndham Hotels & Resorts, Intercontinental Hotels Group, US Franchise Systems, Inc., and Hospitality Real Estate Counselors. Charles is a graduate of The Hotel School at Cornell University and also holds a Masters of Business Administration from The Terry School of Business at The University of Georgia.

* * MasterMind Minutes * *

Photo by AbsolutVision on Unsplash

MasterMind Minutes is the Webcast that shares expert business information in Minutes Not Hours. Each edition runs approximately 10 to 15 minutes and features an expert guest covering one question. The entire series is posted and updated several times a week on this page so you can binge watch back-to-back “episodes”. Three to five new editions are added each week so keep coming back to view the experts on an insightful topic that is sure to help you build, grow and run your business.

www.franchisegrowthsolutions.com

IN THE CURRENT ECONOMIC CLIMATE & LENDING ENVIRONMENT, WHAT ARE BANKS LOOKING AT WHEN CONSIDERING A BUSINESS LOAN.
Today’s guest is Reg Byrd.
Reg is the Managing Partner DCV Franchise Group
For over 25 years Mr. Byrd has been a business venture strategist assisting entrepreneurs with a focus on financing, business plan development, financial projections and blueprints for aggressive return on investments. The scope of his work ranges from sole proprietorship businesses to capital intensive Fortune 500 hotel development projects. To date, DCV Franchise Group has served more than 300 franchise systems placing debt for franchisees in the U.S., Puerto Rico, Panama and Canada.
Contact Reg at https://lnkd.in/eDhmeqs
Contact Gary at: [email protected]
Learn more at: https://www,https://lnkd.in/d89cb29

HOW TO EVALUATE A STARTUP OR EMERGING BRAND FRANCHISE WITH ONE OR NO FRANCHISEES?
Our Guest Today is: Ed Teixeira.
Ed has over 40 years of experience in the franchise industry and is the VP Franchise Development for FranchiseGrade.com a leading franchise market research firm. Ed is the author of Franchising from the Inside Out and The Franchise Buyers Manual and has spoken before the International Franchise Expo, Chinese Franchise Association in Shanghai, China and has lectured at the Stony Brook University Business School on Franchising.
Contact Ed at: https://www.franchisegrade.com/. 1-800-975-6101
Contact Gary at: [email protected]
Learn More About Franchising: https://www.franchisegrowthsolutions.com

WHAT SHOULD EMPLOYERS THINK ABOUT WITH RESPECT TO LIABILITY CONCERNING EMPLOYEES GETTING CORONAVIRUS AT THE WORKPLACE?
today’s guests are:
Joel Greenwald is the Founder and Managing Partner of Greenwald Doherty LLP, a national management-side employment law firm. Focusing on labor relations and employment law. AND Michael Einbinder is a founding Partner of Einbinder & Dunn. He is a participating member of the American Bar Association Forum on Franchising.
Contact Michael at: [email protected] – Contact Joel at:[email protected]

HOW A COMPANY CAN SUPPORT THE COMMUNITY, ITS EMPLOYEES AND ITS FRANCHISEES IN TIME OF CRISIS – Today’s guest is Hector Westerband. Hector is the Founder and CEO of ACAI EXPRESS. He has over 20 years in the hospitality industry. He was introduced to the amazing Acai Stone Fruit. It was there where he started his own Acai Food Truck Called Acai Express in 2013.development.
Acai Express: https://lnkd.in/eESYZ6U

WHAT ARE THE FRANCHISE BRANDS THAT ARE DOING WELL DURING AND WILL DO WELL AFTER THE PANDEMIC? – Today’s guest is Lance Graulich
Lance is the founder & CEO of ION Franchising, an industry leading franchise consulting and development group, that represents over 500 franchise brands & business opportunities within 90 categories. Lance helps prospective entrepreneurs find their perfect franchise for FREE.

ARE YOU OVERLOOKING POTENTIAL MONEY SAVING CHANGES IN THE FEDERAL TAX LAWS THAT WERE INCLUDED IN THE COVID STIMULUS BILLS? – Today’s guest is MICHAEL IANNUZZI
Michael Iannuzzi is a partner and co-leader in Citrin Copperman’s franchise practice providing a variety of services to a wide spectrum of clients within the franchise community.

GROWING YOUR FRANCHISE COMPANY POST COVID-19 – Today’s guest is Harold Kestenbaum.
Harold is a franchise attorney who has specialized in franchise law and other matters relating to franchising since 1977. https://youtu.be/OOCXqhGPA_U

WHY DO FRANCHISEES FAIL – Today’s guest is Tom Scarda, CFE, Founder & CEO of the Franchise Academy, Best selling author and Podcaster.

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MATTO FRANCHISE
A Revolution is Brewing
LEARN MORE HERE:
https://www.mattofranchise.com/

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HOW ARE BANKS RESPONDING TO LOANS FOR NEW BUSINESSES?
Today’s guest is Reginald Heard – Founder and CEO of Bankers One Capital.

HOW ARE YOU MARKETING AND GETTING THE WORD OUT THAT YOUR BUSINESS IS GETTING READY TO REOPEN? Laura Skulman, Director of Marketing and Events for B&D Burgers in Savannah Ga.

HOW FRANCHISORS ARE CREATING A DIGITAL STRATEGY AS THE ECONOMY OPENS UP – Today’s guest is Aubree Coderre, National Sales Manager at C-Squared Social

Stephen McCluskey Insurance Expert – Discussing what you can do if your Insurance Company is not paying business interruption insurance due to Covid 19 closure

Michael Einbinder – Founding Partner of Einbinder and Dunn, a Law firm focusing on the needs of franchisees and franchisors

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MATTO FRANCHISE
A Revolution is Brewing
LEARN MORE HERE:
https://www.mattofranchise.com/

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OPPORTUNITIES TO OPEN A RESTAURANT NOW! Today’s guest is David Simmonds – Commercial Rental Expert

MasterMind Minutes – One Question – One Expert Answer – Minutes Not Hours
Our guest today is Doug Smith… He is the Director of Sale for ROI Experts which is a digital marketing agency that works with restaurants around the world. ROI Experts generates trackable ROI using their unique ROI engine platform. Doug is 27 year veteran of the radio, sales and marketing. Visit their website at www.roiexperts.com‍

Beyond the Covid 19 Shutdown, Returning Workers will be Judging “Workplace Culture”

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MATTO FRANCHISE
A Revolution is Brewing
LEARN MORE HERE:
https://www.mattofranchise.com/

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Workplace talent drives success. It is not products, not marketing, not demand that ultimately make a company competitive. Don’t fall victim to fear and culture failures during these times. It will inhibit the future health and growth of your company.

Beyond The Covid19 Shutdown, Returning Workers will be Judging “Workplace Culture”

By Gary Occhiogrosso
Photo by Austin Distel on Unsplash

As companies continue to evaluate their business in these challenging times, one of the areas many small business operators, and CEO’s of large companies, are investigating is workplace culture. As we ramp back up, many companies will be seeking employees. Many workers will be very focused on how companies treated their employees, vendors, and customers during the pandemic shutdown. Returning employees will also want to know that they, their work, and their ideas, make a difference. Make no mistake; the job market will be so robust that workers have the opportunity to pick and choose for whom they will work. Companies should take this time to revisit, and if necessary, reinvent their workplace culture if they intend to compete for the most qualified employees. Workplace talent drives success. It is not products, not marketing, not demand that ultimately make a company competitive. Don’t fall victim to fear and culture failures during these times. It will inhibit the future health and growth of your company.

Please review this article in the Harvard Business Review. It clearly and expertly advances the concept of workplace culture and how to improve your approach and practices to best advance your company in the upcoming turnaround.

Excerpt:

    Today’s workforce wants to know that they’re making a difference within their companies. While work cultures are unique to every organization, the foundation of what enables a culture to thrive is the extent to which employees are empowered to be engaged, feel valued, and be heard. This is where leadership comes in.

Read the entire article here at Harvard Business Review: https://hbr.org/2020/04/build-a-culture-that-aligns-with-peoples-values?utm_campaign=hbr&utm_source=linkedin&utm_medium=social
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Franchise Money Maker
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How to Achieve A Competitive Advantage With The Help of Key Customers and Suppliers

Photo by Cytonn Photography on Unsplash

The greatest barrier to successful collaboration is the conventional mindset of a combative relationship with suppliers. Negotiations are perceived as a zero-sum margin tug-of-war, with the relative power balance determining the result.

Achieving Competitive Advantage through Collaboration with Key Customers and Suppliers
By: Don Johnston

An Evolving Operational Focus
In the past when companies pondered corporate strategy, operations had been peripheral to the discussion. Operations were considered a technical matter with one way of doing things and therefore not, strategic. Strategy is about products, markets, and competitive advantage with divergent possibilities.

Operations were seen as a series of puzzles with single best solutions. The realization that optimization of parts did not optimize the whole led to new focus – operational management went up a level from looking at individual tasks to looking at whole processes. During the 1960s, Japanese manufactures obtained competitive advantage by optimizing operational efficiency, which meant lower prices, flexible production capabilities and a reduction in lead times. Operational considerations became a key theme in strategic discussions.

During the 1990s, companies like Dell took this further. The computer market was changing faster than any other market had done in history. Dell began managing operations by synchronizing functional activity into a single corporate heartbeat. An order instantly drove procurement, which drove production and then distribution. The result was a further drop in lead times, inventory requirements, and operating costs along with flexibility. Operational efficiency was Dell’s sole source of competitive advantage and it reaped enormous market share gains.

Collaboration – The Next Step
The historical trend is clear. The impact that one activity has on the next means they cannot be optimized in isolation. The result is that operations have become the key corporate strategic consideration. Yet the nature of competitive advantage is to elapse as competitors replicate it, which places a continual onus on companies to find new differentials. This begs the question – what next?

The answer lies in another step up in the way we view corporate operation. We need to look beyond the borders of the firm in our search for operational efficiency. Optimized company operations can only be achieved through alignment and coordination with the agents up and down stream. Collaboration with suppliers and customers is the essential vehicle of the 21st century for achieving competitive advantage from operations.

The benefits of Collaboration

1. Sharing demand signals
The first step to collaboration comes through information sharing. Across nearly all industries, companies play a guessing game (called forecasting) to estimate the products and quantities that their customers will demand across different markets. Even if a company gets it just right it still needs large inventory buffers to cope with demand variability, thus dramatically reducing its capital efficiency. It is imperative to compress lead times to meet demand rapidly and lessen these negative effects – this can negate the production-cost benefits of today’s off-shoring vogue in China. The butterfly’s wing effect on forecasting and ordering means the end demand signal gets wildly distorted as it echoes up the supply chain being reinterpreted and exaggerated at each turn. Inaccuracies are amplified at each stage, leaving suppliers facing high-stake production gambles.

The answer is simple – relaying end user demand signals and likely future order quantities to suppliers up the chain. This is the single biggest benefit of collaboration and it comes at virtually no cost reducing much of the variability from the forecasting calculation. A supplier’s response will be a much closer fit to market demand if information about likely order quantities is shared. Typically, inventory levels can be reduced by two thirds, service levels sky-rocket while lost revenues evaporate, and supply costs are cut by a quarter when demand information sharing is implemented correctly.

2. Efficiency through alignment
The next step is operational coordination. Working capital naturally collects at the borders of the firm. Finished Goods nearly always account for much more inventory than Work in Process, mainly because of the typical inadequacy in coordination between supply chain entities. Accounts receivable tend to be swelled by disputes and billing problems, which would be ironed out instantly if they were internal issues. Most companies currently allow working capital to accumulate at the point where their processes meet those of their customers and suppliers, which provides a great opportunity for freed cash flow and increased capital efficiency.

Costs can also be reduced dramatically through simple operational coordination between suppliers and customers. Systems, processes, and organizations can be joined up much more effectively to eliminate unnecessary duplication and increase the through-put and flexibility of both supplier and customer organizations.

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The interfaces of goods delivery/goods-receipt, invoicing/invoice-processing and collection/payment all exhibit the same misalignment and duplication. The painstaking effort spent on internal efficiency is negated by a clumsy operational weld between suppliers and customers. Functions get managed to performance metrics, which encourage activity that runs, counter to the efficiency of the organization, let alone the total supply mechanism. Firms should optimise their impact on their key customers’ total cost of supply. Configuring and managing the organization to better align with key customers and suppliers facilitates a more fluid transfer of goods, cash and information up and down the supply chain. This provides a win/win of capital and cost reduction at the same time as enhanced revenue levers for all organizations involved.

3. Joint exploration of strategic options
The final step is a strategic coordination-unlocking new market development and product development possibilities based on co-exploring avenues to competitive advantage. This is only attainable once trust has been built through information share and some steps in operational integration. With the foundation of operational collaboration set, customers and suppliers can combine in entering new markets, coordinated off-shoring and shared selected R&D to explore exciting product development opportunities and condense launch times.

Overcoming the Zero Sum Mindset
The greatest barrier to successful collaboration is the conventional mindset of a combative relationship with suppliers. Negotiations are perceived as a zero-sum margin tug-of-war, with the relative power balance determining the result. This precludes a focus on win-win value driving activity. Suppliers and customers end up perpetually wasting and reworking because they see opening a constructive dialogue as weakness or even as surrender. Many executives fear a loss of flexibility through higher switching costs from greater collaboration. The truth is that most firms’ key supplier base has not changed dramatically over the last 2 years, so collaborative activity would have been massively beneficial as the payback period can be. Still, this does not irreversibly affix firms together – competitive pressures still work to drive down prices and provide the incentive to offer the best value.

Another fear is that companies would give away their competitive advantage to customers or suppliers if they collaborate. The reality is that core competencies do not vanish through sharing demand information, or through bridging operational rifts. The reason that there are few truly vertically integrated industries is testament to this – core competencies dilute and effective organization is impossible over too lengthy a chain. Such anxiety may be unfounded, but the fear is real and debilitating. This is why companies should commit progressively and in parallel, reaching a point acceptable to both parties; from information share, to operational alignment, through to symbiotic strategic planning. As a further development, (depending on the concentration of the end user markets for a product), a company can then extend its collaborative relationships further up and down the supply chain to suppliers’ suppliers, customers’ customers and beyond.

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As with preceding operational evolutions, collaboration will doubtless be pioneered by some companies and shunned by others. Far from the micro/technical operational thinking of the past, collaboration offers a strategic perspective, divergent options and colossal profit, and capital efficiency benefits. Until it becomes universally adopted, collaboration is the most promising source of competitive advantage from operations available today.

Author Bio
Don Johnston is a consultant with the REL Consultancy Group www.relconsult.com – REL’s financial consulting services are all about generating improvements in cashflow. As experts in working capital management REL has been associated with some of the world’s most successful companies for over 30 years, focusing on all of the three key areas of payables, receivables, and inventory.

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Organizational Tips To Keep A Small Business Pointed Towards Success

Photo by Norbert Levajsics on Unsplash

I firmly believe that the healthiest small business is the one that visits and reviews their organizational systems every six to twelve months. The small business that keeps doing the “same old, same old” is losing money. So where do you stand?

Being Organized Equals Small Business Success
By: Patty Kreamer

You started your own business because you have a burning passion for what you do. You are also – we hope — good what you do and have a desire to help others. Little do you know that running a business includes, well…running a business. This little bombshell can throw many a new business owner for a loop.

I receive numerous phone calls every week asking me how to start a business as a professional organizer. The first thing I say is that the organizing part is easy because it is a natural gift (sometimes a curse); it’s running the business that can trap you. This is not to scare a potential entrepreneur away, but to help them realize that it’s not all fun and games doing what you do best. You have to:

* Buy insurance
* Get legal advice on how to set up your business
* File for the company name with the state
* Find working capital if necessary
* File all the proper tax forms
* Open up a checking account
* Get office supplies
* Market the business
* Build a network
* And the list goes on and on…

In the initial start-up stage, entrepreneurs are often so excited about starting a new business that they pay little or no attention to what is happening with all the paperwork and electronic data you are generating. That is typical and expected. However, around the six to twelve month mark, entrepreneurs start calling people like me – a professional organizer – begging for help in setting up a system to help them be organized. I envision a hand protruding from mounds of papers reaching for help.

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The sad news is that many small businesses have never taken the time to set up systems once they’ve built up paper and electronic backlogs. They just keep generating documents without stopping to assess what is being created.

I firmly believe that the healthiest small business is the one that visits and reviews their organizational systems every six to twelve months. The small business that keeps doing the “same old, same old” is losing money. So where do you stand?

Something that has really hit home in the past year or so is that you don’t GET organized and have long lasting success. You have to BE organized. Getting organized is a quick fix of cleaning up and putting things away – usually a Band-aid (r) approach – that doesn’t last for more than a few days.

Being organized is recognizing that organization is an ongoing journey. Life doesn’t stop happening the minute you GET organized. You have to have systems in place that will help the daily flow; a lack of systems will cause clogs. These clogs come in many forms:

* Piles of papers
* Lost documents
* Misplaced items – glasses, phone, pens, keys
* Running late
* Stress and frustration…

You get the picture.

When it becomes clear to you that you are running through your day feeling like you’ve accomplished nothing, you may need to reassess your organizational skills and systems.

Your small business must overcome many hurdles to be successful. Fortunately, being organized is one hurdle that you can learn to overcome. Or you can work with a professional organizer to set up customized systems that make you functional, productive, and more pleasant to be around.

I challenge you take a deep look at the state of your small business’ organization. If you see your passion being overrun by disorganization, it’s time to take some action.

Here’s to simplifying your life!

Author Bio
Patty Kreamer, owner of Kreamer Connect, Inc., is a professional organizer, speaker, and author of the Making Life Simple… Again! e-course available at http://www.ByeByeClutter.com/MLSAHome.htm. If your business or organization is looking for a fun, dynamic, and effective speaker, you can email Patty at [email protected] or call her at 412-344-3252.

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Small business: How ethics can help your bottom line

Often, leaders at small businesses with few employees feel protected from or less susceptible to fraud or unethical conduct because of the close-knit nature of their teams. But research shows unethical behavior is more widespread than they realize, and not confined to one type of business.

Small business: How ethics can help your bottom line

(BPT) – The last thing any company wants is a misstep that hurts the trust it has built with customers. This is especially true for smaller businesses, which may not have the resources to recover from a reputation setback. To prevent mistakes, bad decisions and wrongdoing, smaller businesses can take a proactive approach to developing ethical business leaders and business cultures. Experts say when businesses do that they can achieve benefits for their bottom line, their employees and the common good.

It can happen anywhere

Often, leaders at small businesses with few employees feel protected from or less susceptible to fraud or unethical conduct because of the close-knit nature of their teams. But research shows unethical behavior is more widespread than they realize, and not confined to one type of business. According to a 2017 Ethics and Compliance Initiative survey, nearly 47% of U.S. employees at companies of all sizes said they personally observed workplace conduct that “either violated organizational standards or the law.”

A 2018 Better Business Bureau survey found that 84% of consumers trust small businesses the most. That’s important for business owners to recognize, because the more trust a consumer puts in your company, the greater the ramifications when that trust is broken. This means business leaders have every incentive to develop strong ethical standards and cultures.

Empowering businesses

One university is looking to empower smaller businesses through a new open-access website. The University of St. Thomas recently launched the Business Ethics Resource Center (BERC), with U.S. Bank as the founding sponsor. The BERC is part of the university’s Center for Ethics in Practice in the Opus College of Business and provides resources for small and midsized businesses, focusing on ways they can develop ethical leaders and cultures.

Resources include videos, articles, toolkits, example plans and other multimedia assets that can help companies promote ethical conduct as part of their core mission. The BERC is designed to help time-strapped business leaders develop and sustain a strong ethical culture within their organizations and realize the inherent benefits that come along with that.

The benefits of ethics

While it’s difficult to determine the true cost of developing an ethical culture within your organization, it’s clear there are several tangible benefits. For starters, practicing ethics can help you avoid costly legal issues while enhancing your company’s reputation. It will also help you build customer loyalty, with 80% of customers saying they are more loyal to a company with good ethics, according to a recent survey from Salesforce. The same qualities that attract customers will also increase your ability to attract and retain outstanding employees. When you’re able to establish ethical standards as the foundation of your company values, you foster a more positive, meaningful work culture for your employees.

Promoting ethical conduct and compliance doesn’t have to be expensive. By utilizing the resources available and cementing strong ethical standards as a critical part of company values, businesses can establish an ethical company culture that benefits everyone involved.

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The Growing Appetite That’s Fueling Acai Express’ Success

ACAI EXPRESS A HEALTHY AND DELICIOUS FRANCHISE…While food fads come and go, real trends that point to major shifts in attitudes and behaviors are invaluable cues for entrepreneurs looking for emerging and sustainable business opportunities. “Consumer Trends in Health and Wellness”, published in Forbes magazine reveals “the “new healthy” is a consumer journey of contradiction and discovery: Progressive health and wellness consumers are seeking alternatives to fear-based information, a phenomenon that has been driving wellness views for decades.

(They) are paving the way, sharing their enthusiasm and knowledge with mainstream consumers who are hungry for guidance and direction. As shoppers, progressives are no longer thinking about condition management (lowering cholesterol or blood pressure) or dieting (low fat, low carb) but are focused on real quality food, positive nutrition, fresh, less processed foods, and beverages and fun.” Translation: there is a growing wave of consumers — particularly among Gen Xers and Millennials — who are looking for a change in wholesome eating and are prime targets for the Acai Express experience and a healthy lifestyle brand. Entrepreneur, Hector Westerband, founder of Acai Express, has developed his low entry cost franchise concept to meet the cultural lifestyle change that is underway. With three flexible footprints: brick and mortar venues, trailers and food trucks — and a menu featuring new health-rich options — acai berry and pitaya bowls, smoothies and natural juices — he offers solutions to consumers and franchise owners alike.

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TOP 10 REASONS TO INVEST IN RIKO’S NOW!

RIKO’S THIN CRUST PIZZA…Franchise opportunities abound in every business category, but entrepreneurs interested in the fast-casual space, and pizza, in particular, should have Riko’s Pizza on their radar as a brand poised for growth and success with ground floor opportunities for franchisees.

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1. Pizza is a $50.7 billion dollar*1 American passion
The pizza industry was designated as the fastest-growing segment of fast-casual restaurants in 2017.*2 A Riko’s franchisee buys into a growth business with high consumer demand and a track record of solid growth year-after-year. The opportunity to bring America’s favorite comfort food to a franchisee’s local market ranks high among Riko’s attributes as a new franchisor in this extremely, profitable business category.

2. A proven business concept
The Riko’s business model has been refined over a 7-year period prior to expanding into franchise offerings. Riko’s founders have continually tried and revised products, systems, and operations as they evolved into a turnkey operation. Those hard-earned systems are passed to franchisees as easy-to-follow, foolproof guidelines for consistent results. The simplicity and ease of operations hold opportunity for owners with or without previous restaurant business experience.

3. Flexibility for Franchisees
Franchisees can choose from a flexible footprint that suits urban or suburban venues. The flexible business model is designed to work and succeed in any space. Riko’s fast-casual operation features take-out, dine in and delivery. Riko’s full-service casual restaurant features a family dining experience with a full bar and table service. Owners can purchase single units or multi-unit options that are commensurate with their experience and finances.

4. Multiple revenue streams
Diverse revenue streams including lunch, dinner, and late-night business with takeout, delivery, and fast casual dine in and full-service restaurant and bar options, gift cards and rewards programs offer multiple growth opportunities within a franchise.

5. Quality, quality, quality
Attention to details has made quality a hallmark of Riko’s brand. High-quality ingredients — nothing artificial — proven recipes, simplified menu, first-rate equipment, comfortable, contemporary venue design, staff training ensure business growth and a consistent brand image. Entrepreneurs are buying into a brand associated with quality at every level.

6. Streamlined, state-of-the-art business operating model
Riko’s has set standards and developed systems that are easy to follow and easy to replicate over and over. Pizza franchisees can produce consistent, great results. Both franchisees and their future customers are assured of the quality food and service that launched Riko ’s original success in three Connecticut locations. Pizza franchisees are armed with the tools and knowledge to produce consistent, great results. Riko’s is a turn-key business model that works across all processes. The goal: keep things simple and do them the best they can be done.

7. Traditional family values that resonate with consumers
Riko’s core philosophy: respecting family, serving great simple food with a family-friendly ambiance, offers an appealing alternative in an ultra-fast food world. The Riko’s guest experience is warm and casual, fast without being harried. It’s a comforting experience that engenders customer loyalty and on-going, multi-generational business.

8. Comprehensive training & support
A good franchise offering includes support and training . That’s why Riko’s consulted and hired industry experts to develop a first-class training program. A five to six-week long training program — with modules at the company modern training center and owner’s location — takes franchise owners through all phases of the business; covering all the components necessary to effectively and efficiently manage a Riko’s Franchise business. A full suite of manuals provides on-going reference and instruction for owners.

9. Owners with passion
As a franchisor with a passion for growth and quality, Riko’s future is guided by passionate, involved owners with a hands-on approach to day-to-day business as well as an eye on long-term growth strategies. The active 360º business outlook ensures Riko’s is prepared to adapt, adjust, and seize new opportunities as they arise. The formula is set, but it’s constantly fine-tuned for success.

10. Community-centric focus
The success of the Riko’s original locations is grounded in community involvement. Riko’s mission in all franchise venues is to be part of local family life. Franchisees are trained to be local in their location and engage in sponsoring local youth sports teams, supporting school events, donating pizza to community events and more as a means to building relationships and thanking customers for their loyalty.

For more information please visit: www.rikosfranchise.com

Creating Sensible Employee Policies When Building Your Company

WHEN BUILDING A COMPANY, YOUR CORPORATE POLICIES… will mold and shape the culture and mission of your brand. In addition, your team members performance and the aspect of becoming an “employer of choice” to attract the “best and the brightest” are directly connected to the polices you create for your organization. Warren Cook,President & CEO of SymbianceHR offers his thoughts on best practices when developing policies for your company.

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Development of Policies that Make Sense
– By Warren Cook, President & CEO

In my experience, small businesses owners care tremendously about their staff, so much so, that at times they develop practices that can later place them at risk and expose them to liability for discrimination. For example, paying an employee for a “few weeks” when they are out sick or taking care of a family member but then when a new employee wants time off since they are not friends, they are told use their paid time off or the absence is unpaid.

Maternity leave is another great example, as I have observed everything from 100% pay the entire absence without a policy written to working from home during the maternity leave, all while trying to provide FMLA coverage (job protection) when the company only had 8 employees. At the same time, when a male employee decided they wanted time off to be with their spouse and newborn, they were denied the request.

In another situation, an employee was in an auto accident, and the owner felt bad, so they continued their compensation at 100% for several months. Yet another employee, later in the year, requested time off because they heard about the other employee getting paid, and wham, problem for the employer because they didn’t want to pay this employee.

Inconsistency in practices is the road to discrimination, even if unintended. These employers and many other examples I could share, also neglected other means to provide the support to their employee they desired, without breaking the bank and destroying company cash flow. For example, implementing a Short Term Disability program, employer or employee paid, could allow for an offset of the cost in your current practice. Why? You pay an insurance premium instead of the full cost of the employee compensation. Let us not forget benefit premiums during an employee absence, that also can become a double hit on the employer with poor leave policies in place.

I encourage you to strategically plan for the various situations that can occur with your workforce, and then determine what is the most cost effective and beneficial method to provide the desired support to your workforce. It may be insurance, it may be time off, it may be alternative work schedules, it may be remote work, or it may be another solution all together. Remember, setting precedence using a discriminatory approach can expose your business to tremendous risk and liability even though your have great intentions. Seek the right advisor to help guide you through the development of legally compliant and non-discriminatory solutions to take care of your workforce with policies and programs that make sense. Visit: https://www.symbiancehr.net/

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About the Author: Warren Cook
Warren is a conscientious human capital management leader dedicated to providing coaching and guidance to business owners and leaders in support of their continued success. With over two decades of practical industry experience across the public and private sector, and various industries from pharmaceutical to financial to telecommunications, Warren enjoys applying his depth and breadth of industry and academic (BS/MBA/MS) experience to solving the workforce management challenges of today. With a proven track record of implementing successful solutions to business challenges by effectively orchestrating change initiatives, strategic planning & execution, system and process engineering, people development, and modeling leadership behaviors to motivate the workforce, Warren is uniquely competent and capable of driving continued business success for your organization.

Warren enjoys giving back to the community, and accomplishes this passion through his workshops and training to non-profit organizations and industry associations across the region and across the country. To further this ambition Warren served the Delaware HR & Business Community by presenting at the DE SHRM 2017 & 2018 Annual Conferences and was the lead presenter at the July 2018 DE SHRM Diversity & Inclusion conference.

Warren authored the book “Applicant Interview Preparation – Practical Coaching for Today” and provides training and coaching on this topic in the local community at schools and non-profit organizations to support the development of the next generation of professionals.

If you want to benefit from the experience and capabilities Warren has to offer, you can reach him by email at [email protected] or by phone at 302-276-3302. Visit: https://www.symbiancehr.net/