Ownership and responsibility
2007-05-24 15:42:53 -

Who’s really in charge of running your business?Founder of O’Briens Sandwich Bars, BRODY SWEENEY, continues his series on how to cope with the stresses and strains of starting a new enterprise 

Starting up the O’Briens business was by far the hardest thing I have ever done in my now fairly long life. I thought I knew it all. I had spent eight years running the Prontaprint business in Ireland, knew about the importance of site selection, had gained some experience in retail marketing and had developed a sound business concept. I knew the importance of a good business plan, and having enough money for the project (although in the business textbooks, I had never come across my particular method of fund-raising!). I had that youthful male arrogance which said that I knew everything, that nobody else could teach me anything, and that I was so good at what I did that I simply couldn’t fail. In short, external factors aside, there was no reason for the business not to succeed.

But it didn’t succeed. The early years of the business were disastrous: not just bad but chronically awful. And worse than that, there was nobody else to blame: I had started, stirred and created the mess I was in myself. Sure, I could have blamed the banks, or the fact that the market wasn’t ready for our products, or that my competitors tried to put me out of business, but in truth my problems were of my own making. The first positive step I took in terms of sorting things out was to admit to myself that I hadn’t been very good at it thus far.

Few people mention the ‘driver’ factor when starting a new business. The driver of the business is the person who dreams up the idea, executes it, and steers the business during its formative years. Comm-entators talk about the success of a new business venture being dependent on the state of the economy, or the market for widgets, or the need to secure the necessary finance, or the technical qualities of a particular product compared with what is already in the market. You hardly ever hear people talking about the ability of the company’s founder to run the damned thing. External factors always have some influence on the success of a venture, but the single most important factor in my experience is the quality of the driver, or owner, of the business.

Our second O’Briens store in the UK was opened in Cambridge by a young couple called Rob and Carol Shields. It was the couple’s first ever attempt to run their own business. Prior to joining O’Briens, Rob – a Geordie – had worked as a clerk of works involved in motorway construction. I think they were very brave. Here they were, moving to a strange town to set up a new business for the first time, with a fledgling Irish sandwich-bar chain that had yet to prove itself in Britain. I visited Cambridge with them and walked the streets of the city to try to find a suitable location for the store. After some months of searching, we found a good 
location not far from the city centre, just outside the gates of one of the university colleges.

We opened the store in 1996, and Rob and Carol worked extremely hard to try to make the business a success. But six months after opening, it wasn’t really happening. Sales were less than anticipated, and the money the couple had borrowed from the bank was running out. 

Rob and Carol were concerned; I was very concerned, as there was a real possibility that the problem was our new Irish brand. Often, when a new store isn’t working, it can be apparent that the new operators are having personal difficulties running the store. But in this case, I was convinced that Rob and Carol were doing an excellent job. This was why I was so worried.

A meeting was arranged in Cambridge with Rob and Carol’s financial advisers, and we debated what to do about the situation. I was stumped. These were good people, trying to operate the business according to the approach laid down in our operations manuals, and it wasn’t working. Because theirs was one of the first stores in Britain, I began to have doubts about the viability of the O’Briens concept in the UK. Maybe people didn’t like the Irish brand, or the sandwiches. The meeting was inconclusive, and I returned to Ireland seriously concerned about the whole future of the company in the UK.

Meanwhile, Rob realised that he was in trouble and that if he didn’t do something about it, he was going to go bust. To his credit, he never blamed O’Briens for his predicament, but as far as I was concerned, we were very responsible for the situation he and Carol found themselves in. We had persuaded them to trust us with their life savings, and we were letting them down.

Rob decided that the business was not going to survive on the store sales alone, so he put on his best bib and tucker and started knocking on doors in the area, offering a delivery service for meetings and the like. His positive attitude to getting out there and doing whatever it took to succeed made the crucial difference. Slowly, he began to turn the business around. Soon afterwards, the store started to break even overall, and they were on their way. Today, Rob and Carol are enjoying the fruits of their success after building up and selling four O’Brien’s units in Cambridge.

Rob and Carol should, by rights, have failed. They had every excuse to do so. But Rob took ownership of the problem and succeeded where many people would have given up. I have no doubt that a lesser person than Rob would not have survived to tell the tale. It proved to me forever more the importance of the ‘driver’.

Cash is king
Cash has rightly been described as the oil that makes the wheels of commerce turn. You can be so busy running around doing other things that keeping an eye on the cash slips way down the priority list, until it’s too late to do anything about it.

A surprising number of businesses run out of cash before they become established. There are many and varied reasons for this, from having little or no credit control so that some customers take advantage of you, to not making sure you’re achieving the margins you need in order to generate enough cash. Lack of cash control signifies lack of control of the business; this means that there’s no one in charge.

Next week: Ownership and responsibility continued

_ Taken from Making Bread – The Real Way To Start Up and Stay Up in Business by Brody Sweeney, published by Liberties Press – buy at www.libertiespress.com and get a 10 per cent discount
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