Podcast Summary
Managing a Multi-Location Family Business: Reaching the Critical Mass Point: To grow a multi-location family business in the fish and chip shop industry, focus on opening 4-6 stores per year, prioritize sales and marketing as a CEO, and aim for the critical mass point where effective management infrastructure and economy of scale can be implemented to boost net profit.
Growing a multi-location family business, such as a fish and chip shop chain, can be challenging due to the barriers presented by the limited number of people who operate larger businesses in the industry. James Lipscomb, CEO of the Chesterfield Group, shares his experience of managing a 40-store business and the importance of reaching the critical mass point where management infrastructure and economy of scale can be effectively implemented to drive net profit. This process involves opening around 4 to 6 stores per year and focusing on sales and marketing as a CEO to maximize growth. Entrepreneurs may feel frustrated when revenues grow but the bottom line does not, but there is a tipping point where the business suddenly starts to make significant progress.
Financial Management for Business Growth: Effective financial planning and management are crucial for business growth. Prioritize cash flow, consider bringing in an experienced FD, and make strategic financial decisions.
Growing a business requires careful financial planning and management, especially when it comes to deciding when to bring in additional resources and funding. The speaker shares his experience of wanting to put infrastructure in place early on to support growth but recognizing the importance of having a strong cash flow to pay for these additions. He also mentions the role of an experienced Finance Director (FD) in managing cash flow and making strategic financial decisions. The speaker's business, which is in the fish and chip industry and has been in operation for over 70 years, is currently generating around 28 million in revenue per year and has been in the family for several decades. The business has a rich history, with the founder having been funded by cricket fans who appreciated his cricket skills. Overall, the discussion highlights the importance of financial management and planning in driving business growth.
Empowering employees for business growth: Investing in and empowering employees leads to business growth and success, as shown in a family's journey from a fish and chip shop to a larger enterprise.
The success of a business often relies on the investment in and empowerment of its people. This was evident in the story shared about a family's journey from owning a fish and chip shop to growing it into a larger enterprise. The grandfather, having made a fortune from various ventures, lent his son the money to buy his first shop, and later on, his grandson followed in his footsteps. The business placed great importance on promoting from within, and the current Financial Director started as a financial controller and worked her way up. The company's success is attributed to its core values of saving, striving to better, doing the right thing, believing in each other, and empowering each other to be extraordinary. The people in the business are considered the most valuable asset, and the company spends a significant amount on fish annually. This story illustrates the power of investing in and empowering employees to reach their full potential, ultimately leading to the growth and success of the business.
Expanding a Chip Shop Chain: Prioritizing Freshness, Reducing Waste, and Enhancing Security: A successful chip shop owner, who prioritizes fresh ingredients and reducing waste, is expanding their business while balancing work and family life. They aim to diversify in the next five years, learn from past experiences, and make tough decisions for the company's future.
This business owner runs a successful chip shop chain, using fresh potatoes to make their chips daily, and they prioritize reducing food waste. They are considering implementing CCTV in their stores for security and support. The business owner, who identifies as entrepreneurial, has expanded the business significantly since taking the role of managing director and works around 60 hours a week. They strive to be present at home but acknowledge it can be a challenge. In five years, the business is expected to have diversified. The owner has learned from past experiences and aims to continue growing the business. They reflect on the importance of making tough decisions and considering the future direction of the company.
Mitigating business risks through diversification and multiple brands: Creating new brands can help cater to different market demographics and mitigate risks for existing businesses. Focusing on brand recognition and premiumization can lead to growth and expansion opportunities.
Diversification and having multiple brands under one group can help mitigate business risks and cater to different market demographics. The CEO of a fish and chip business discussed how they had a legacy brand that was difficult to market and create engagement with, leading them to create a new brand, Churchill's, which was immediately recognizable and premiumized fish and chips. They now have 14 Churchill stores and 22 fish and chip stores, with plans to rebrand some of the latter. The CEO also mentioned their interest in bringing over food franchises from the US and potentially rolling up businesses to expand their portfolio. However, they are currently focused on making their existing business as strong as possible and seeking alternative types of funding for growth.
Building stronger business relationships and upscaling operations: Confidence in abilities, owning properties, and implementing innovation can lead to stronger business relationships and upscaling operations
Having confidence in one's abilities and delegating responsibilities can lead to building stronger business relationships and upscaling operations. The speaker emphasized the importance of not making promises one cannot keep and the need to have full confidence in one's capabilities to deliver. He also discussed the potential benefits of owning freeholds, but acknowledged the challenges in negotiating with landlords. The speaker shared his experience of the time and energy spent on rent negotiations and the potential advantages of owning the properties outright. He also touched upon the increasing complexity of the tech side of his business and the implementation of digital ordering kiosks to improve efficiency and reduce wage bills. Overall, the key takeaway is the importance of confidence, ownership, and innovation in growing a business.
Digital kiosks transform retail and food industry landscape: Digital kiosks reduce labor costs, increase customer value, and improve customer experience in retail and food industry. McDonald's is an example of a company that saw benefits from implementing digital ordering systems.
Technology, specifically digital ordering kiosks, is changing the retail and food industry landscape by reducing labor costs while increasing average customer value. For instance, a business might have 33% leisure and 50% childcare duties, and digital kiosks could potentially allow for fewer front-end staff. However, there might be a need for more staff in the back to manage the increased operational information. McDonald's is an example of a company that has implemented digital ordering kiosks and likely saw labor cost savings, although the exact numbers are not disclosed. Additionally, digital ordering systems can lead to an increase in average customer spending, with £10.50 being the average transaction value in a store, but £20 being the average for click and collect orders. Furthermore, click and collect lanes and dedicated pick-up areas can provide a more efficient and frictionless customer experience, leading to increased customer satisfaction and loyalty. Overall, technology is transforming the retail and food industry, and businesses that embrace it are likely to see benefits in terms of labor savings, increased customer value, and improved customer experience.
Managing consumer experience and costs in fish and chip shops: Investing in own delivery, training staff, and community engagement helps fish and chip shops maintain quality, reduce reliance on third-party services, and create a successful business model.
A successful fish and chip shop business model involves managing the end-to-end consumer experience while keeping costs in check. The shop takes around 4% of the gross from click and collect orders and aims to reduce reliance on third-party delivery services. Instead, they manage their own delivery using leased cars to ensure safety and maintain brand image. A significant investment, around £65,000, is required for a fish frying range. Recruiting and training staff from within the company is essential to create a career pathway and foster talent. Managers' performance is evaluated based on net profit bonuses, and there's potential for rewarding loyal customers in the future. The business prioritizes community engagement and strives to create a positive customer experience.
Empowering Teams for Business Success: A strong team, effective communication, and adapting to trends are crucial for a successful fish and chip shop.
Empowering your team and fostering a culture of ownership, accountability, and transparency can lead to increased customer satisfaction and business success. This was evident in the fish and chip shop manager's approach to wastage, where he saw it as an opportunity to reward and motivate his team rather than a source of loss. Additionally, the shop's transition towards becoming cashless is a significant trend in the industry, and embracing technology to provide a frictionless customer experience is becoming increasingly important for staying competitive. The manager's weekly superhero briefings, which include transparent financial reporting and industry insights, are an effective way to keep the team informed and engaged. To break even in a fish and chip shop, about £800 a day is required, and weekends tend to be the busiest days. The shop's average weekly turnover is £12,000, and while there are quieter days during the week, the high sales on weekends help maintain profitability. Overall, the key takeaway is that a successful fish and chip shop relies on a strong team, effective communication, and the ability to adapt to changing customer preferences and industry trends.
Effectively marketing a product and building community connections: A combination of product excellence, community engagement, and effective marketing is essential for long-term business growth.
While having a great product is crucial, effectively marketing it and building a strong community connection are equally important for business success. The speaker acknowledges the need to improve their marketing efforts, specifically in showcasing their unique story behind sustainable sourcing and meeting local communities. They suggest using various marketing channels like leaflets, video content, and digital presence to connect with customers and build trust. However, they also emphasize the importance of understanding which marketing tactics work best for their specific business and budget. For instance, they found that leaflet drops did not significantly increase sales for them, but refurbishing shops led to a 10% uptick in turnover. Overall, the key takeaway is that a combination of product excellence, community engagement, and effective marketing is essential for long-term business growth.
Direct distribution from source to stores for cost savings: Direct distribution from source to stores can lead to cost savings and economies of scale, but requires additional resources and infrastructure.
Controlling the distribution of foodstuffs directly from the source to the stores can lead to significant cost savings and economies of scale for a business, despite the challenges that come with managing warehouses, delivery vehicles, and a larger head office team. The interviewee shares how they distribute their own fish and have a third party distribute their dry stock. This strategy allows them to buy in larger quantities and negotiate better prices, ultimately improving their margins. However, it also requires additional resources and infrastructure, such as a larger head office team and more vehicles for delivery. Despite these challenges, the interviewee believes that reaching this critical mass is necessary to grow the business and reach the next level. They also emphasize the importance of being objective and recognizing when a store is not performing well, and making necessary changes such as a management change to turn the situation around.
Staying Objective and Building Strong Financial Relationships: Stay emotionally detached in business decisions, know your business intimately, build strong relationships with supportive financial institutions, and be adaptable to seize growth opportunities.
Successful business growth requires objectivity, quick problem identification, and strong relationships with supportive financial institutions. The speaker shares his experience of managing a fish and chip shop chain, emphasizing the importance of staying emotionally detached in business decisions and leaving managerial issues to designated team members. He also highlights the significance of knowing your business intimately, as he can identify issues within minutes of entering a store. The speaker's business, with nearly 600 employees and 30 million in revenue, is bank and cash flow funded, and he works closely with HSBC, who have been instrumental in facilitating growth through funding and support. When faced with unexpected opportunities, the speaker is proactive in exploring creative solutions and is open to selling underperforming stores to invest in more profitable ventures. Overall, the key takeaway is the importance of staying objective, building strong financial relationships, and being adaptable to seize growth opportunities.
Fish and chip shops face new challenges: To stay competitive, fish and chip shops explore new business models and adapt to changing consumer behaviors while navigating regulatory challenges.
The food industry, particularly niche businesses like fish and chips shops, are facing new challenges due to changing consumer behaviors and market trends. With the rise of food delivery services like Amazon and Deliveroo, businesses are feeling the pressure to adapt and find ways to remain competitive. For fish and chip shops, this means exploring new business models like assisted service restaurants to reduce labor costs and keep prices competitive. However, these businesses also face regulatory challenges, such as unequal VAT treatment, which can impact their bottom line. To defend the future of fish and chips, it's essential to stay informed about industry trends and advocate for policies that level the playing field. Ultimately, the success of these businesses depends on their ability to adapt and innovate while staying true to their core values.
Virtual kitchens and dark kitchens: New revenue streams for food businesses: Virtual and dark kitchens offer food businesses new revenue streams, effective branding is crucial, and the industry is constantly evolving, requiring businesses to adapt and innovate.
The food industry is evolving, and businesses are finding innovative ways to adapt and thrive. Virtual kitchens, for instance, allow existing food businesses to offer new brands and generate additional revenue streams, while also providing an excellent property investment opportunity. Dark kitchens, which are essentially warehouses fitted out with kitchen units for delivery-only food businesses, are becoming increasingly popular. These kitchens can be rented out to individual operators, creating multiple revenue streams from a single property. Branding is crucial in this industry, and businesses must effectively communicate their expertise and unique selling points to customers. Churchill's, for example, is a stronger branded proposition for the fish and chip sector, but expanding beyond local demographics requires creating brands that transcend different customer groups and regions. Overall, the food industry is undergoing significant changes, and businesses that can adapt and innovate will be best positioned for success.
Innovation and scaling a QSR brand: Focus on R&D, digital order systems, and international franchising for growth. Maximize tax relief with a dedicated R&D accountant, outsource for cost savings, maintain objectivity, seek support, and take breaks for personal rejuvenation.
To grow a successful QSR brand, such as a fish and chip shop chain, it's important to focus on innovation and scaling the business. This could involve investing in R&D, implementing digital order systems, and even exploring international franchising opportunities. However, the process requires careful planning and the right resources. For instance, it's crucial to have a dedicated R&D accountant to maximize potential tax relief. Additionally, outsourcing certain aspects like packaging and uniforms can be more cost-effective. When faced with challenges or moments of frustration, it's essential to maintain objectivity, prioritize personal interests, and seek support from peers and networks like YPO. Remember, every entrepreneur faces similar hurdles, and sharing experiences can provide valuable insights and motivation. Lastly, don't hesitate to take a break when needed and regain your mojo through hobbies and personal connections.
The importance of work-life balance and family support for entrepreneurs: Entrepreneurs should prioritize date nights for work-life balance, understand their partner's perspective, and seek support from family for perseverance in business.
Maintaining a healthy work-life balance is crucial for entrepreneurs, especially those who run large businesses on their own. The speaker shared how having a regular date night with his wife helps him stay connected with her, understand her perspective on his business, and serve as a great stress reliever. He also mentioned that his drive and ambition may stem from his struggles in school due to dyslexia. The speaker's family, including his supportive parents and siblings, have also played a significant role in his success, with the proceeds from a management buyout enabling them to pursue their dreams. Overall, the importance of perseverance, support from loved ones, and finding joy in work were key themes in the conversation.
Dyslexia: A Source of Strength and Innovation: 35% of self-made millionaires in the UK have dyslexia, and their unique ways of thinking and problem-solving are assets rather than liabilities. Early identification and support are crucial for dyslexic individuals to thrive.
Dyslexia, a learning difference often associated with challenges in reading and writing, can actually be a source of strength and innovation. Many successful individuals, including 35% of self-made millionaires in the UK, have dyslexia. James, who is not dyslexic himself but has encountered numerous successful dyslexic individuals, shares that they often have unique ways of thinking and problem-solving. He believes that being dyslexic gives people permission to think differently and encourages them to find alternative methods to tackle challenges. James also emphasizes the importance of early identification and support for dyslexic individuals, which can help them overcome their unique hurdles and thrive. He encourages embracing diversity in thinking and problem-solving and views dyslexia as an asset rather than a liability.
Appreciating the joy of food and good company: Savor each bite and appreciate the joy of food and good company. Subscribe to this podcast for more insightful discussions.
Importance of enjoying food and the positive impact it can have on our lives. The speakers emphasized the significance of sharing meals and the joy that comes from trying new dishes. They also encouraged listeners to subscribe to their podcast, leave a review, and keep coming back for more. Ultimately, the conversation highlighted the importance of appreciating the simple pleasures in life, like good food and good company. So, next time you sit down for a meal, savor each bite and remember the joy it brings. And don't forget to subscribe to this podcast for more insightful discussions!
