Shut Up and Listen by Tilman Fertitta
Have you ever been so frustrated you wanted to scream? It's a feeling that author and successful business owner Tilman Fertitta can relate to: and it's the inspiration behind the title of his book Shut up and Listen. Fertitta is the 153rd richest person in America, with a variety of accomplishments under his belt. He is the sole owner and founder of Feritta Entertainment, which owns casinos, hotels, and popular restaurants. He owns the Houston Rockets, and has starred in his own reality show, Billion Dollar Buyer. So, why does he want to scream? He has a wealth of knowledge about how to become successful in business - and many stubborn entrepreneurs (usually to their detriment) refuse to listen to his advice. Here’s your chance to be wiser than they were. Read on to see the common blind spots many entrepreneurs have, with many tips along the way. Including: what to do when a customer orders breakfast at 9:00 pm, why a lot of orders can kill a business, and when 5% can be greater than 95%.
Vigilance is key
Failure to plan for future threats can bring your business to its knees. In order to plan for the future, be honest with yourself about where you are. Be realistic about your product, your competition, and what you’re capable of. Once you have a firm realistic grasp of your business, plan accordingly. When the author works on his show, Billion Dollar Buyer, he has excellent products presented to him all the time. However, in spite of the fact that the product and pitch are brilliant, there is often some area where are missing the target: and that key area can often spell failure for business owners. Make sure to be vigilant and honest with yourself about where you might be missing the mark in your own business.
What are the key areas he often sees missing? Read on to find out!
Think about how frustrating it is when you order something from a restaurant and they are out, or when you miss the brunch menu by ten minutes… but you still can’t eat. Now, think about your customers. Consider the times when your customers have a need that inconveniences you or your company. How do you respond?
Listen to your customer: When your customers talk to you, nothing but they should matter. And when they tell you about a problem… well, as the author says, “it's free to be nice”. Make the customer feel special. That's the most important thing. You can do that by following through on your commitments. Do what the customer says you should, not what you think it's right. You might love a product you created, but think about what your customers would want. Oh, and as far as products go: cater to the masses - not the classes. Listening to your customer means considering the broader the appeal of your product. The more universally useful your product is, the more people will want it, and the more it will sell.
Give explanations, not excuses: Don’t offer up excuses when you fail. Customer’s don’t care. Mistakes happen, but you should have a workaround. Create workarounds by building in a few “what ifs” to your production. This means preparing for the possibility of things going wrong. You can avoid many situations caused by errors by refusing to schedule things too far in advance. If you do make an error, resolve it. For instance, be willing to comp a meal if a customer is not satisfied, but don’t go overboard. The more you compensate, the most it seems as though you see yourself in the wrong. Oh, and if a client wants scrambled eggs at 10:00 pm, give them to them! However, make them pay extra. Cater to your clients, but let them compensate you for over and above work.
Know Your Numbers
When the author talks to many business owners, he’s appalled. Why? Because so many of them don’t know the numbers of their businesses. Numbers are the lifeblood of any business, and understanding them is absolutely essential. For starters, you should know the cost of your utilities, down to their decimal points. Having information about the numbers of your company can help you to confidently make good business decisions. For instance, let's say you didn’t know your numbers, made a purchasing error, and now you don’t have cash on hand. Without cash on hand, you may have to pass up on opportunities you may otherwise pursue. If you don’t know your numbers, you’ll go out of business.
Working capital is everything. You bring shoes you’ve crafted to a store to see if they want to sell them. They agree to buy them and ask for 32 pairs. Let's say you don’t have the cash to create them - what now? Consider that the store might not payback for the shoes for a while, and your business could be in trouble. You need working capital. Working capital is money you can put to use immediately. These are instances where a lot of orders is a bad thing because you don’t have enough money to make the products. You need a revolver - a revolving line of credit to fill the gap. You can also consider borrowing the money you need from a friend. But if you want to save money, there are other ways to prevent the scramble like:
Put your business ahead of your lifestyle: Though it's tempting to use your new-found income to buy things, one of the biggest reasons the author has been successful is he keeps all of his money in his business. And it works. He used his money to buy more companies or to benefit his current businesses: not to get things for himself. He talks about how he’s seen company owners make big money, spend tons of it on a more expensive lifestyle, then struggle to keep up the lifestyle if their company becomes less profitable.
Watch out for property leases: Property leases can be a problem, especially if your business isn’t successful. Consider a buy-out clause. The shorter the contract, the better, especially if you business is new.
Budget: Make budgets an everyday priority. At the author’s company, there are weekly and monthly budgets, as well as daily flash reports. Knowing how your business is performing on a financial basis is equally as important as selling a product. What is your lease payment? Your salaries? Your revenue? You should know the answers to these things at any given moment. The extent to which your revenue is greater than your expenses is how successful your business is. Inventory, overhead, staffing, and supplies are other things you need to know detailed information about. This information is important for many reasons. It shows you where costs can be cut, and it allows you to know if you have enough cash when you need it.
The 95:5 Rule
Most moderately successful businesses are good at 95% of what they do. However, the remaining 5% determines whether they are successful or not. This 5% is critical. The 5% in a restaurant business can be as simple as things like A perfect meal on the wrong plate or trash in the parking lot. These seemingly small things can affect the success of a business. Conversely, it's knowing certain customers, what certain customers like to order or escorting a customer to the restroom. These elements, that when executed well, can propel your business to the next level.
Know your 5%: A huge mistake is being unable to admit what you don’t know. The author can admit what he is skilled at, and he’s afraid of how many people he’s met who don’t know what skills they lack. Lean and build on the strengths you know you have, while hiring people who have strengths that oppose yours (more on that later). As far as strengths go, if you are great, speak up! If you are great with numbers, and you’re in a meeting and someone makes a point you disagree with, let them know! Oh, and if you feel like you need to sharpen your business knowledge, business school offers a lot.
Partner with complementary strengths: We’ve all heard the sayings about going into business with your friends - and how it is a good way to lose them. However, there is one thing that matters significantly more than your relationship with the person you go into business with, and it's how you guys work together. Partner with people who have complementary strengths. Think of two guys who get to know each other in the kitchen and decide to start a business together. They know a lot about how to run a kitchen: but they won’t have a clue how to run other parts of a business. Do not go into business with people who have the same strengths you do. Now, imagine one of you knew about the kitchen, while another knew about the financials, then one more who knew about the front of the house. You’ll all know how to address specific problems. Too often, people partner with friends without considering their strengths, crippling their business from the very beginning.
Some entrepreneurs capture the opportunity in circumstances that hinder everyone else. Make the most of chaos and confusion if need be: where some see a mess, you might see an opportunity. Go for it. And know that some businesses will take time to grow and prosper if they stand by their vision. These are the “not yet” entrepreneurs. Have patience, commitment, and know that success takes time and perspective.
Maintain perspective as you dream: Learn to be patient, even though it isn’t easy. Dreaming is essential for anyone who works to succeed, but keeping your perspective is everything. Building dreams has to be done systematically. Opportunity requires long term commitment and patience. When the author took his restaurant public in 1993, his restaurant raised over $400 million. With all the capital that was raised, they went from $30 million in revenues to over 1 billion in 2004. Those kinds of numbers can make people forget that it took a lot of $20 meals to make it there. Understand that slow progress doesn’t mean you’re not making any.
Don’t ever lose your hunger: How do people keep going after championships, when they already have so many under their belts? They don’t lose their hunger. Neither should you. Taking businesses to the next level can be exhausting: emotional strain, financial impact, psychological pain. It can be tempting to ease back and take a break. It's ok to do that every now and then but to keep building success you MUST get that hunger back. One way to do this is to let yourself feel poor. When the author couldn’t buy the Rockets when he wanted to, it made him hungrier. He wanted to be able to afford them. Then, he wanted to be on the Forbes 1 Billion list. Though his goals were massive, set goals for yourself too. Let yourself hunger for the thing you desire. Another way to keep the hunger is to remember that just because things are going well today, does not mean they will be going well tomorrow. Situations can change rapidly, and if you lose your hunger and rest on your laurels, your company might follow closely behind.
Live your leadership
People often worry that they don't have enough talent to be a skilled leader. Luckily, anyone willing to listen to solid advice can become a better leader.
Listen first: Nature didn't give you two ears and one month by mistake. Listen to others more than you speak, especially if you want to be a great leader. When the author had a meeting with hotel managers, they told him they wanted to offer 15% off stays, phrasing it in the ad as “15% off bar”. Bar meant the best available rate in hotel lingo, but customers would have thought they were talking about drinks at the bar! He listened and caught the mistake. So should you. If you want good advice, surround yourself with people smarter than you. Listening to others is key: but don’t forget to rely on your instincts. You’ll know what’s good advice, and what isn’t. Oh, and be wary of consultants - no one knows more about your business than you and your employees.
Be a great teacher: When the author saw a guest sitting in the lobby, he stopped to ask his employes why she had been waiting. After talking to an employee, he was told the room was being held up because of iron. He solved the issue. In this situation, someone should have called a senior manager, but no one was thinking. Though it was frustrating to see a customer having to endure over a 40-minute wait for an employee mistake, it was a teachable moment the author took advantage of, and everyone there got to learn how to solve that sort of problem. As you deal with issues, don’t be afraid to explain to the people around you how you solved it. You never know when that information will come in handy.
There’s no reason to fear it: it is truly an opportunity to improve. And since change is occurring anyway, you better put yourself in the position to deal with it. If you don’t change, you are setting yourself up for trouble. Think of companies like Blockbuster - they didn’t anticipate change, and now they’re out of business. You can avoid as much of the blowback from the change as possible by putting people in the right positions in your company to use change to their advantage. When a problem crops up, a certain kind of knowledge may be necessary for a solution. With the right balance of employees, there’s already someone ready to confront the situation.
Never give up. If you keep going, someday, you might be able to tell someone about how you made it big in spite of the struggle. Ignore the naysayers. The central message of the book is this: keep going, no matter what. As long as you stay alive - you’ve got a chance. And if you truly are ready to give up, ask yourself: are you deciding to give up because you have to, or because you choose to? The tides may turn, just hold on.
Have you ever been so frustrated you wanted to scream? It's a feeling that the author and successful business owner Tilman Fertitta can relate to. He has a wealth of knowledge about how to become successful in business - and many stubborn entrepreneurs refuse to listen to his advice. Here’s your chance to be wiser than they were. With tips on every topic of business ownership, from choosing a business partner to securing a reasonable lease agreement, he covers it all. Read on to learn what to do when a your restaurant customer orders breakfast at 9:00 pm (and why this matters, even if you’re not in hospitality), why a lot of orders can kill a business if you’re not careful, and when 5% can be greater than 95% (and how this can spell trouble for your company).