Business Up Front - June 2002

Business Up Front

Letting George Do It

Many managers may think it is easier to do the work themselves rather than to ask others for help, but delegating tasks is one of the ways a manager can draw on the strengths of the entire staff, manage the workload and reduce overall stress. It is also a way to empower employees, says Leemor Amado, practice consultant for the American Management Association (AMA). The AMA suggests a series of steps to make the process easier and more effective.

• Meet with employees and describe the desired results of the task. Be clear about what success will look like, and explain why the task needs to be accomplished.

• Make sure employees understand the task by asking an effective open-ended question: "Can you explain to me how you would go about handling this task?"

• Get input from employees stating whether they are up to the task. If employees don’t feel capable, consider coaching them.

• Make expectations crystal clear and ensure employees know what they are accountable for.

• Support the employee by providing resources—make it clear to the employee what authority he/she has. Ask what resources will be needed and provide them.

• Empower employees — let them do the work, but agree upon checkpoints along the way so you can gauge the progress of the work and provide feedback.

• Energize employees — when the task is complete, acknowledge their efforts.

  

Good Morning, India

The late 1990s marked the start of a migration of teleservices from the United States - where a decade of economic boom made labor scarce - to international locations with a deeper labor pool and lower labor costs, according to a recent article in Teleservices News, published by the Direct Marketing Association. Since September, major players such as Convergys and ATEC Group have opened call centers in India, and American Express moved 110 jobs from a center in Utah to a facility in the Philippines.

"Asia remains compelling despite heightened security concerns mainly because of the savings teleservices firms can realize," noted the article. Outsource2India.com, a Website that encourages U.S. businesses to outsource back-end services to Indian companies, said the average annual per-agent labor cost in India is $5,000, one-tenth the cost in the United States. English is widely spoken in India, Pakistan and the Philippines, and recent advances in telecommunications technology have made it cost-effective to route calls from U.S. consumers to locations in Asia and back. Still, crime and political violence are major issues. Security guards, surveillance cameras and keycard entrances are the norm.

Ten MacQuestions About Franchising

Franchised businesses offer many advantages such as a proven system, a recognizable brand name, training and support, but like any venture, they require a certain amount of due diligence before signing on the dotted line. The International Franchise Association notes that, "It’s vital to investigate before investing" and suggests that before buying a franchise, 10 important questions need to be carefully and thoughtfully answered:

1. Are you willing and able to take on the responsibilities of managing your own business? While some franchises may lend themselves to absentee ownership, most are best run by hands-on management. Forty-hour weeks are a myth, particularly in the start-up phase of the business. You must also be willing to mop floors, empty trash, fire as well as hire employees and deal with upset customers.

2. Will you enjoy the franchise? You should buy a franchise that centers in an area that you will enjoy for at least 10 years, which is the typical length of a franchise contract. Determine your interests and types of businesses you might really enjoy.

3. Are you willing to completely follow the franchise system? When you display the sign and brand of a franchise, you are indicating to customers that you follow that particular system. People who are extremely entrepreneurial in the sense that they do not like to conform to a predetermined formula should be very careful about buying a franchise.

4. Do you have a history of success in dealing and interacting with people? Many franchised businesses are based on human relations. Your ability to interact well with your franchisor, other franchisees, your employees and your customers cannot be emphasized enough.

5. Can you afford the franchise? You will need enough money to not only open your franchise, but to run it until such a time as it is profitable. For some franchises, that may take a year. Remember, it is better to start out with more money than you think you will need, rather than less.

6. Have you carefully studied the legal documents? Franchisors are required to prepare a disclosure document called the Franchise Offering Circular. It should be studied very carefully and discussed with an attorney who has expertise in franchising.

7. Does the franchise you are considering have a track record of success? You should obtain information about the principal directors of the company — their business backgrounds and how profitable their franchise has been.

8. Are the franchisees generally happy and successful? The offering circular will contain a listing of all of the franchise owners. It would be worth your time to contact a number of them to discuss their experiences with the franchise.

9. Do you like the franchise’s staff — those people with whom you will be working? One of the most important elements of a franchise is the ongoing support and contact you will have with the corporate office.

10. Do you have your family’s support? Your family should understand that you will have tremendous demands on your time. They should be supportive of your decision to buy a franchise.

Getting Gas at Convenience Stores

Nearly 80 percent of all motor fuels sold in the U.S. are purchased at convenience stores, and more than 78 percent of all convenience stores now sell motor fuels, according to a recent report by the National Association of Convenience Stores (NACS). The report on the state of the industry in 2001 showed a 4 percent annual increase in the number of stores, which totaled 124,516 at year-end. The industry posted $269 billion in sales for 2000, with $165 billion resulting from motor fuel sales. Texas leads the nation in convenience stores, with 12,775, while Alaska has the fewest, with only 133. The industry continues to be dominated by small, independent operators – stores that are part of a company with three or fewer locations. "The continued growth of independent retailers shows that 75 years after its founding, the convenience store industry is still a place for entrepreneurs and a gateway to small business ownership," said Teri Richman, senior vice president of NACS.