HELPING ENTREPRENEURS RUN THEIR BUSINESS INSTEAD OF HAVING THEIR BUSINESS RUN THEIR LIVES

The Vendor's Daughter

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Rightsizing Your Business and Your Life

WITH JENNIFER CALDERON

AKA THE VENDOR'S DAUGHTER

Episodes 56 of The Vendor's Daughter

This year at J&J our primary focus has been on reducing waste. As part of the initiative to reduce waste we looked at waste in all its forms:

  • Spoiled product – both product that went bad on location and product that went bad before it ever had a chance to leave the warehouse (the saddest of all waste)

  • Wasted time – where are areas we could be more efficient, what are polices/procedures we could implement that would reduce wasted time and efforts or streamline certain tasks

  • Wasted resources – were there cheaper ways to handle internal processes that could reduce our spend without having a negative impact on the customer experience

  • Unprofitable accounts – did we have equipment at locations that couldn’t support the equipment

We’ve been doing all of this under the umbrella of waste-management but I recently found out about a term I liked more; rightsizing.

You might say, Jenny, that’s just another term for downsizing, and in a sense, you’d be correct, in fact from what I can tell executives somewhere decided to rebrand the term downsizing (something that has a negative connotation) with the term rightsizing (something that has a more positive connotation) to prevent spreading fear of layoffs within organizations.

However, although rightsizing can include layoffs as people get shifted to roles that better fit their skills and as technology makes tasks more streamlined; it doesn’t have to.

In fact, J&J has been focused on rightsizing for almost an entire year now and we haven’t made one layoff, but we were able to grow the business with making limited new hires.

I’d like to pause here because I think it’s important to mention that I don’t believe rightsizing means overworking existing team members, you haven’t properly sized your company if employees are overworked, spending too much time away from their personal lives or feeling burnout. If rightsizing for you means laying off team members, or growing your customer base without growing your employee headcount make sure you:

  1. Reward the people who have been a part of your growth and

  2. Have regular check ins to make sure team members aren’t being stretched too thin

J&J needed to reevaluate the way we were doing things because although we were making more money than ever before, we weren’t keeping any of it. Everything we made was going right back out, often faster than it came in.

I’m using past tense terminology but the truth is we’re still right in the middle of it all.

It’s stressful to have bills you can’t pay, to worry about making payroll, to want to invest in professional help (like high quality training videos) but not being able to because the basics aren’t taken care of.

I don’t want you to have that stress, in your professional or your personal life. So if you’re in a place where your company isn’t thriving the way you would like it to, or if your calendar seems like it has more than 24 hours worth of activities on it in one single day (every day), if more money is going out than is coming in, then you are going to want to start your rightsizing journey immediately. And if you’re company is thriving, if your credit cards are paid off, if money is flowing, I would still encourage you to take this same rightsizing audit on a regular basis. If you proactively stay on top of these things you won’t need to dig yourself out of a hole later.

Professional Rightsizing

Take a look at the waste within your company. Not sure where to begin? Here are a few notable areas:

  • Employee time – are employees milking the clock, are breaks becoming longer and longer, do certain team members spend more time being social butterflies than being productive?

  • Employee workload – some team members don’t have enough to do and some have way too much to do. Can you distribute the burden? For the team members with too much on their plate, can you help them prioritize the most important things first? I don’t know about you, but when I have too much on my plate I tailspin, end up feeling exhausted and have nothing to show for it

  • Expenses – what are areas you can reduce spend?

    • Rent

    • Office supplies

    • Services (cleaning services, uniform rentals)

    • Gas – we run a route based service, so the more efficient we are at routing the trucks the more money we save in gas

  • Employee benefits – hold up! I’m not saying get rid of employee benefits, I’m saying reevaluate which benefits are truly benefiting team members. For example, we had a supplemental health care plan in addition to the 100% medical plan. It turns out in a year, not one employee took advantage of the plan so we cut it. It’s like a having a membership site subscription and never going to the website. They take their payment every month whether you go to the site or not.

  • Customers – this one can be tricky because no one wants to say goodbye to business, or end what could be long standing relationships. At this point, I want to remind you that you are running a BUSINESS, and the entire purpose of a business is to make money. Now take some time here and do a customer audit. If any customers aren’t making you money, look into ways they can. For example

    • We have some customers who have micro markets. We need micro markets to make $1000 in weekly sales to justify the amount of time and resources that go into them. When we audited our micro market customers this year we opened discussions with customers who weren’t making this minimum and came up with a few options:

      • Pull the market and replace with vending machines

      • Bill the customer the difference in sales from their weekly minimum

      • Bill the customer the $45 operating fee J&J gets billed each week for each market

Customers are like children, in that you can’t raise every child the same way. Each customer has a unique experience, a unique budget, a unique ceiling and floor. Because of this we implemented different strategies at each location but in each situation the account became more profitable after implementation.

  • Inventory – take a deep look at your inventory and note:

    • What are you wasting/not selling

    • What could you be selling at a higher price point increasing your margins

    • What should you not be selling

    • Of all the items/services you sell what has the highest profit – focus your attention this next year here

The details of rightsizing your business are going to be unique to your specific company; however, the basic principles apply universally. Take time to evaluate what it and what isn’t working, whenever possible base decisions on data rather than opinion/feeling, don’t make rash decisions but when the decision is made act quickly, you can’t stop the bleeding too quickly.

Personal Rightsizing

Making sure things are going smoothly at home is just as important as making sure things are going well at work. Here are some quick tips on how to start rightsizing your personal life:

  • Time – time is your most precious commodity, unlike money, you can’t get wasted time back. Are you overwhelmed, stretched too thin, overcommitted? It’s time to audit your calendar.

  • Finances – are your credit cards maxed, are you spending more than you’re making? Then you to find ways to reduce your spend. Maybe it’s time to make coffee at home for awhile, or some of your streaming options are going to need reduced. Only you know your finances and only you know what luxuries you can afford. If you have already cut out all of the luxuries you may need to look at a second job or some type of passive income.

  • Things – does it feel like you are always cleaning your house, does your closet give you anxiety, do you feel like your space is cluttered? Then it’s time to purge things. Go through cabinets and get rid of the items you no longer use, the clothes you no longer wear, donate them or if they’re in good condition try to sell them on Facebook Marketplace and make some extra money (hello side hustle).

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© 2020 by The Vendor's Daughter. For more information on J&J Vending visit jandjvendinginc.com