Showing posts with label planning. Show all posts
Showing posts with label planning. Show all posts
Monday, October 28, 2013
Tile Size and Slipperiness
For those who are observant, they would notice that the tile size used in the bathroom are normally much smaller than the other parts of the house. Besides the surface of the tile, the size of the tile also affects the slipperiness of the surface. Smaller the tiles, the more tiles are required to lay in an area. This increases the number of line gaps within the area. The more lines the more friction it can provide for the feet or shoes. As such, the surface become less slippery. Do note that you would still need rough surface tiles for wet areas.
Friday, September 13, 2013
Watch Your Suppliers
Recently, my business suffered from a string of complains with one of our cabinets. Through a series of investigation and conversation, we learned that the complains tend to focus on the same company that supplies the cabinet.
We selected this supplier was based upon its willingness to experiment and learn. Our investigation shows that they are only able to do small scale project. As the project scope increases, their resources are stretched to the point where they are not able to maintain consistency with the product qualities.
Being the contractor, we could have taken the easy way out by cutting off this supplier. Rather we have decided to continue working with this supplier with smaller scale project and probably other products. Before taking any drastic actions, we have to ask ourselves why we pick this supplier from the first place. If the supplier are able to hold on to the value where we first selected them, we believe in second chance. Moreover, we all make mistakes. If both of us can learn from it, it only strengthen our working relationship and improve we can offer to our customers.
To many, they may not agree to what we are doing now. Especially in a business environment where perceived to be no loyalties and honor. As for now, we are not willing to cut him lose, unless not yet.
We want to:
The quality of work/ services that you can provide to your customer has a direct correlation with the supplier's quality. Therefore, hang on to your suppliers and treat them with care.
We selected this supplier was based upon its willingness to experiment and learn. Our investigation shows that they are only able to do small scale project. As the project scope increases, their resources are stretched to the point where they are not able to maintain consistency with the product qualities.
Being the contractor, we could have taken the easy way out by cutting off this supplier. Rather we have decided to continue working with this supplier with smaller scale project and probably other products. Before taking any drastic actions, we have to ask ourselves why we pick this supplier from the first place. If the supplier are able to hold on to the value where we first selected them, we believe in second chance. Moreover, we all make mistakes. If both of us can learn from it, it only strengthen our working relationship and improve we can offer to our customers.
To many, they may not agree to what we are doing now. Especially in a business environment where perceived to be no loyalties and honor. As for now, we are not willing to cut him lose, unless not yet.
We want to:
- Grow together with the supplier. Come up with the best product that we can offer, at the most reasonable price.
- Leverage from the supplier's expertise and network.
- Built a portfolio of good suppliers where we are able to quickly gather resources and take action should any good opportunity arises.
The quality of work/ services that you can provide to your customer has a direct correlation with the supplier's quality. Therefore, hang on to your suppliers and treat them with care.
Monday, August 12, 2013
A Failed Cafe and Cost Management
Over the weekend, I received a sad news. A cousin of mine who opened a cafe in December 2012 has decided to close down the business. He said the business is running out of cash and it is not doing that well. Since Mark Suster talks about failure, I too would like to chip in my 2 cents worth of opinion about it.
I visited cousin's cafe two weeks after its grand opening. My first visit was on a Saturday night and I was surprised to see the place was barely 20% occupied. I followed up with a few more visits and the situation remains the same. The location of the cafe is all right. It has ample of parking but in a location where I will not call it as popular. At night, there are hardly any traffic around the area. There is a famous food joint opposite the cafe. The location is really not that dead. Nonetheless, I still feel the place has the potential.
The operation hours is from 7 am until 3 am daily. Cousin was very tight lip about the operation cost. The following calculation are based on my observation. Each shift, he has around seven staffs and approximately five kitchen staffs. Assuming that he has two shifts with the same number of staffs. Each staffs draw approximately 800 MYR (246 USD) a month, he would need a net profit of 19,200 MYR a month to pay his employees!
The above is only the cost of his employees. The size of the menu is also rather large, especially for a new cafe. The cafe offer close to a hundred types of drinks and dishes. I can imagine the amount of money has gone into food wastage. As I write this blog, I wonder how many dishes that are ordered less than 10 times.
In all honestly, the cafe has a lot of potential. I learned that its lunch business was doing fine. They could have reduce the operation hours and focus on lunch services. No doubt they could be forgoing business opportunities in the evening and night. The very least they can slash their employee and food cost by half. Probably they might be able to keep their head above water for another few more months.
Next is to rework the menu. The menu size can be cut down by half. Focus on the 20/80 rule. Chances are they will have 20% of their menu is taking up 80% of their orders. The business should then focus on that 20% and make it better.
Finally, it is to promote the business. I believe the business owners did some promotion. I shall refrain from commenting as I do not know what they have done. For myself, I would encourage my patrons to check into Foursquare or Facebook. Any form of check in, the customers will get 10% from the bills. In addition, I would partner with any car clubs to visit the cafe. There are ample of parking space around the business, car clubs members will not have any issues finding parking. For car club members, I too would throw in 10% off on drinks. As you can see, I try to refrain from going into expensive advertisement blitz. I am certain advertisement would work, rather I would choose to exhaust all my lost cost options before bringing out the big guns.
I do not know whether my strategy would work, but that's how I wold manage the cafe business. In any business, managing cost and cash flow is important. If the owner let any of it gets out of control, chances of failure increases exponentially. Still I hope cousin and his business partners can learn from this incident. A business can fail, but this does not mean they are a failure.
I visited cousin's cafe two weeks after its grand opening. My first visit was on a Saturday night and I was surprised to see the place was barely 20% occupied. I followed up with a few more visits and the situation remains the same. The location of the cafe is all right. It has ample of parking but in a location where I will not call it as popular. At night, there are hardly any traffic around the area. There is a famous food joint opposite the cafe. The location is really not that dead. Nonetheless, I still feel the place has the potential.
The operation hours is from 7 am until 3 am daily. Cousin was very tight lip about the operation cost. The following calculation are based on my observation. Each shift, he has around seven staffs and approximately five kitchen staffs. Assuming that he has two shifts with the same number of staffs. Each staffs draw approximately 800 MYR (246 USD) a month, he would need a net profit of 19,200 MYR a month to pay his employees!
The above is only the cost of his employees. The size of the menu is also rather large, especially for a new cafe. The cafe offer close to a hundred types of drinks and dishes. I can imagine the amount of money has gone into food wastage. As I write this blog, I wonder how many dishes that are ordered less than 10 times.
In all honestly, the cafe has a lot of potential. I learned that its lunch business was doing fine. They could have reduce the operation hours and focus on lunch services. No doubt they could be forgoing business opportunities in the evening and night. The very least they can slash their employee and food cost by half. Probably they might be able to keep their head above water for another few more months.
Next is to rework the menu. The menu size can be cut down by half. Focus on the 20/80 rule. Chances are they will have 20% of their menu is taking up 80% of their orders. The business should then focus on that 20% and make it better.
Finally, it is to promote the business. I believe the business owners did some promotion. I shall refrain from commenting as I do not know what they have done. For myself, I would encourage my patrons to check into Foursquare or Facebook. Any form of check in, the customers will get 10% from the bills. In addition, I would partner with any car clubs to visit the cafe. There are ample of parking space around the business, car clubs members will not have any issues finding parking. For car club members, I too would throw in 10% off on drinks. As you can see, I try to refrain from going into expensive advertisement blitz. I am certain advertisement would work, rather I would choose to exhaust all my lost cost options before bringing out the big guns.
I do not know whether my strategy would work, but that's how I wold manage the cafe business. In any business, managing cost and cash flow is important. If the owner let any of it gets out of control, chances of failure increases exponentially. Still I hope cousin and his business partners can learn from this incident. A business can fail, but this does not mean they are a failure.
Sunday, July 28, 2013
There Is Always Need To Learn
I have only started working since I graduated in the year 2000. My background is accounting and finance with a post grad in computer science. After nearly ten years in the IT industry, I got involve in the hospitality and residential building industry.
At the beginning, I came into the business as the bean counter and IT guy. As the business expands, I have to start dabble in the business side of things, especially in project management. Since I am already a project manager in my full time job, it is not a problem. The biggest challenge is understanding the hospitality and building industry.
When I first started, I could not differentiate between materials nor its usage. My business partners has been patient with me and work allocation never really demanded me to have any industrial knowledge. Nonetheless, I have never like to fall behind or needing people to tip toe around me.
Whenever I have the chance, I would grab a copy of the materials pamphlets given by our suppliers. I made sure I read whatever I can from it. The vendor's sales person are a perfect source of information. Being their customers, they are more than willing to share their knowledge and opinion. There is really no such thing as asking a stupid question. As far as these sales person are concerned, not all their customers are familiar with the industry. As such, they are used to strange and out-of-this-world type of questions. I even asked for samples and test out whatever vendor has claimed to be working. Through testing, I was able to provide feedback and understand the products better.
Spending time with the vendor actually helps two things. One is my understanding and also building up relationships. I was able to make my order more accurately and getting better deals from them. Of course, being a good paymaster helps a lot as well.
As a matter of fact, I actually find myself studying a lot harder than during my school days. In school I was not really sure how it will impact my life. In business, your knowledge determines the success of your deal and each decision's effectiveness.
Regardless which industry you are in, it is never too late to start learning. To be successful in your industry, all you need is to know 10% more than your competitor.
At the beginning, I came into the business as the bean counter and IT guy. As the business expands, I have to start dabble in the business side of things, especially in project management. Since I am already a project manager in my full time job, it is not a problem. The biggest challenge is understanding the hospitality and building industry.
When I first started, I could not differentiate between materials nor its usage. My business partners has been patient with me and work allocation never really demanded me to have any industrial knowledge. Nonetheless, I have never like to fall behind or needing people to tip toe around me.
Whenever I have the chance, I would grab a copy of the materials pamphlets given by our suppliers. I made sure I read whatever I can from it. The vendor's sales person are a perfect source of information. Being their customers, they are more than willing to share their knowledge and opinion. There is really no such thing as asking a stupid question. As far as these sales person are concerned, not all their customers are familiar with the industry. As such, they are used to strange and out-of-this-world type of questions. I even asked for samples and test out whatever vendor has claimed to be working. Through testing, I was able to provide feedback and understand the products better.
Spending time with the vendor actually helps two things. One is my understanding and also building up relationships. I was able to make my order more accurately and getting better deals from them. Of course, being a good paymaster helps a lot as well.
As a matter of fact, I actually find myself studying a lot harder than during my school days. In school I was not really sure how it will impact my life. In business, your knowledge determines the success of your deal and each decision's effectiveness.
Regardless which industry you are in, it is never too late to start learning. To be successful in your industry, all you need is to know 10% more than your competitor.
Monday, July 22, 2013
Cleaning Up The To-Read List
I love reading. The source of materials that I read comes from webpages, books, newspapers, and magazines. Normally I would read digital books and webpages from my Samsung Galaxy Note 2 phone. The screen size is just perfect to carry around and read while waiting. Whenever I come across webpages that I wanted to save for later reading, I would use the Evernote tool to save the webpage for later reading.
One of my biggest challenge is sorting out my reading materials. Around the house and my office desk, I have all kinds of half and to read materials. The same goes to my digital reading materials as well. As I accumulate more reading materials, it has become overwhelming. I see books and magazines everywhere and I would get distracted by some other reading materials as I am just reading through whatever that was in my palm.
I have spend the weekend trying to get myself back in order and free up some space in the house. The first thing that I did was to put all my reading materials into one location in the house. In this case, that would be my study room. I have to fight the temptation to procrastinate the clean up whenever I pick up something that catches my interest at that time. Without any thoughts I just want to pile all the notes, books, magazines and newspaper clipping into one area.
With all the reading materials laying in one central location. I look at my short term and long term goals. The goals will be the basis of how I should sort out the reading materials. For example, I have given up hope on learning how to code. Those programming books goes straight to the donation bin. I am still trying to aim to be certified as a PMP practitioner. Those materials will stay and pile together. For those really long term goals such as learning French, I would put those aside on the "maybe" pile. During the sorting process, I have to be ruthless. Whatever reading materials which I have not touch for more than a year, it is lightly that I will not need it again. Those goes into the donation bin. During clean up, I have found old prints that the ink has stuck the papers together already.
After shredding a bag full of papers and stashed two boxes of books and magazines. My reading list now is more manageable. My short term goal reading materials will be sitting next to my desk, while my long term goal reading materials are kept in the bookshelf. The "maybe" books will be in the storeroom.
The idea is to keep all the books in their respective locations. I will not simply put my books around the house. Whenever I need a break from the book, it has to go back to the same place where I took it. When I finish with the reading materials, I would either consider to be filed, shredded or given away. By doing so, this helps me to keep the house in order as well as making sure I get the necessary reading done and not get distracted.
If I have better ways to manage your reading materials, do share! Remember though, books can only give you knowledge and not wisdom.
One of my biggest challenge is sorting out my reading materials. Around the house and my office desk, I have all kinds of half and to read materials. The same goes to my digital reading materials as well. As I accumulate more reading materials, it has become overwhelming. I see books and magazines everywhere and I would get distracted by some other reading materials as I am just reading through whatever that was in my palm.
I have spend the weekend trying to get myself back in order and free up some space in the house. The first thing that I did was to put all my reading materials into one location in the house. In this case, that would be my study room. I have to fight the temptation to procrastinate the clean up whenever I pick up something that catches my interest at that time. Without any thoughts I just want to pile all the notes, books, magazines and newspaper clipping into one area.
With all the reading materials laying in one central location. I look at my short term and long term goals. The goals will be the basis of how I should sort out the reading materials. For example, I have given up hope on learning how to code. Those programming books goes straight to the donation bin. I am still trying to aim to be certified as a PMP practitioner. Those materials will stay and pile together. For those really long term goals such as learning French, I would put those aside on the "maybe" pile. During the sorting process, I have to be ruthless. Whatever reading materials which I have not touch for more than a year, it is lightly that I will not need it again. Those goes into the donation bin. During clean up, I have found old prints that the ink has stuck the papers together already.
After shredding a bag full of papers and stashed two boxes of books and magazines. My reading list now is more manageable. My short term goal reading materials will be sitting next to my desk, while my long term goal reading materials are kept in the bookshelf. The "maybe" books will be in the storeroom.
The idea is to keep all the books in their respective locations. I will not simply put my books around the house. Whenever I need a break from the book, it has to go back to the same place where I took it. When I finish with the reading materials, I would either consider to be filed, shredded or given away. By doing so, this helps me to keep the house in order as well as making sure I get the necessary reading done and not get distracted.
If I have better ways to manage your reading materials, do share! Remember though, books can only give you knowledge and not wisdom.
Monday, July 8, 2013
Decluterring
The last two weeks, my house is being renovated. The plan was to tear down the whole kitchen and put in another one. The rest of my apartment will then get a new coat of paint. The last time that my house did anything this major was 10 years ago. As the renovation progress, I would need to move furniture around and put stuffs away to make way for the workers to do their job.
It only begin to dawn to me that I actually have accumulated a lot of stuffs through the years. Camera bags alone, I have counted four! One brand new backpack and a brand new computer notebook bag. There were also files and notes that I have collected for "future reference" that has never arise. As such, I have taken the opportunity to declutter my life.
First I separate my stuffs based on its functions. For examples, books and notes will be piled together. Bags will be piled together etc. I do it one room at a time. In each pile I will go through one item at a time. I ask myself when is the last time I have used or needed that item. If is more than 12 months ago, chances are I will not be needing it anymore. It either goes into the donation pile or to sell pile. By just going through that activity, I have thrown away most of my old notes and gave some of my stuffs away.The exercise is not easy at all. I have to ask myself this question whether do I really need it. Or I just keeping it for nostalgic reasons or creating a false sense of security. If the item is hardly ever used, chances are it is not needed anymore.
For the stuffs that I need, I will separate it into three categories. The ones that I use regularly, use at least once every three months, every six months and finally every 12 months. The more frequent ones will be kept in a more handy area, while the ones that are lesser used will be kept in storage. I have to be honest, chances are the ones that are kept in storage will ended staying there for a long time until I decide to clean it out again...
Another tip which I think is great to have is the One In One Out policy. For every item that we buy or bring into the house, I should also dispose something from the house. If this does not reduce the clutter, at least it maintains the clutter does not get worst. We actually have more things that we actually need. Clean out your stuffs today! Believe me, the energy within the room is better and whole house breath better too.
Thursday, December 27, 2012
Small Mistakes Big Impact
I know someone who works in a shipyard. He is one of the most detailed project manager that I have ever met. In every meeting, he would say, there should be no leakages. He would pour through every single aspects of the project. This project manager delivers successful project but everyone was groaning behind his back due to his thoroughness. I never fully grasp his idea and beliefs in project management.
Nonetheless, I have learn his lesson through the hard way. Recently, I managed a tax project for a China business. I have gathered the necessary resources, gotten all the approvals signed well ahead of time, and everyone knows the vision of success.
Of all the preparation, there was a tiny component that one of my resources did not look into. Due to that careless, the project came to a halt and I have to seek approval for additional 50% funding to get it working again. The analysis shows that it was really not my fault but as the project manager everything stops at my level. I should be fully accountable to the failure of this project.
It is an important lesson for me. I cannot make any further assumptions and could have handled better by going through the project's critical path. A small leak would no doubt sink a big ship. Yes! There should be no leakages.
Nonetheless, I have learn his lesson through the hard way. Recently, I managed a tax project for a China business. I have gathered the necessary resources, gotten all the approvals signed well ahead of time, and everyone knows the vision of success.
Of all the preparation, there was a tiny component that one of my resources did not look into. Due to that careless, the project came to a halt and I have to seek approval for additional 50% funding to get it working again. The analysis shows that it was really not my fault but as the project manager everything stops at my level. I should be fully accountable to the failure of this project.
It is an important lesson for me. I cannot make any further assumptions and could have handled better by going through the project's critical path. A small leak would no doubt sink a big ship. Yes! There should be no leakages.
Monday, December 24, 2012
Planning, Adjusting and Mistakes
Last Saturday I visited a cousin's newly opened cafe. It was one week old. He told me that he is not getting the crowd or the desired revenue. Curious, so I decided to pay him a visit.
I asked for the shop's actual address. He said he is not sure and asked me to check out the Facebook page. Instead of registering as a local business, the cafe was registered as an individual. The address was not even there, good news was there is a location map. Maybe a map would be clearer? Wrong! The map contains two marks, one mark for his house, the other for his shop. I have to guess which was which. The page only has a picture of the cafe and did not show what was offered on the menu.
It is obvious that him and the partners did a poor job in planning. In any business, the first impression matters a lot. Even though the cafe is only one week old, I wonder how many customers had turned away.
At the cafe, I wanted to know the cafe's maximum capacity. He was not sure either. In any food retail outlet, the owner has to know how much each customer must spent and how many turnarounds per table in order to make a profit. On average, there should be at least three turnarounds in one business session.
As I spend more time with him, the more issues I noticed. Besides just poor planning, he has thrown himself into the deep end by dealing with customers and adjusting the operation issues. It would have been better to if he had a dry run with family and friends instead of enraging the wrath of the customers. In my opinion, he has 7 more weeks to get his act right. All the issues and mistakes are costing the business money. The business would have run out of money if the mistakes still remains.
I am a strong believer in making mistakes and taking risk. However, going into anything without proper planning is pure suicide. Thus far, he has adjusted his Facebook page. Hopefully he can sort out his operation kinks soon.
I asked for the shop's actual address. He said he is not sure and asked me to check out the Facebook page. Instead of registering as a local business, the cafe was registered as an individual. The address was not even there, good news was there is a location map. Maybe a map would be clearer? Wrong! The map contains two marks, one mark for his house, the other for his shop. I have to guess which was which. The page only has a picture of the cafe and did not show what was offered on the menu.
It is obvious that him and the partners did a poor job in planning. In any business, the first impression matters a lot. Even though the cafe is only one week old, I wonder how many customers had turned away.
At the cafe, I wanted to know the cafe's maximum capacity. He was not sure either. In any food retail outlet, the owner has to know how much each customer must spent and how many turnarounds per table in order to make a profit. On average, there should be at least three turnarounds in one business session.
As I spend more time with him, the more issues I noticed. Besides just poor planning, he has thrown himself into the deep end by dealing with customers and adjusting the operation issues. It would have been better to if he had a dry run with family and friends instead of enraging the wrath of the customers. In my opinion, he has 7 more weeks to get his act right. All the issues and mistakes are costing the business money. The business would have run out of money if the mistakes still remains.
I am a strong believer in making mistakes and taking risk. However, going into anything without proper planning is pure suicide. Thus far, he has adjusted his Facebook page. Hopefully he can sort out his operation kinks soon.
Sunday, December 16, 2012
An Hour with Jim Collins
I am a fan of Jim Collins. My first book was Good to Great. Now I am reading Great by Choice. If you want to spent the next hour learning something. Check out the four videos below.
Saturday, October 13, 2012
The 23 million USD Hotel Deal
Last week, someone told me a deal where someone is selling his three stars hotel for 72 million Malaysian Ringgit (Approximately 23 million US dollars). The hotel is located in downtown prime area. It has around 150 rooms. Getting at least 80% occupancy is definitely not a problem.
Unfortunately, the deal does not many any sense. Assuming that the hotel is paid in cash without loan and the occupancy rate is 100% throughout the year. An average room rates of 200 Malaysian Ringgit (65 US dollars) a night. The annual sales would be around 12 million Malaysian Ringgit (4 million US dollars).
If the cost of operation takes about 30% of the sales. That is a profit of 8.4 million Malaysian Ringgit (2.8 million US dollars). The buyer would still need 8.4 years to break even.
That is a very big if, as such deals normally involve certain amount of loans and hotels are normally required to be refurbished every three to four years. As such, the value of the property has far exceeded the value of the business.
My gut feeling tells me that the current owner was never keen in developing the hotel business. Rather they are using the property as a form of investment and sell the property when the price is right.
In my future blog entry, I will try to explain how to evaluate a project.
Unfortunately, the deal does not many any sense. Assuming that the hotel is paid in cash without loan and the occupancy rate is 100% throughout the year. An average room rates of 200 Malaysian Ringgit (65 US dollars) a night. The annual sales would be around 12 million Malaysian Ringgit (4 million US dollars).
If the cost of operation takes about 30% of the sales. That is a profit of 8.4 million Malaysian Ringgit (2.8 million US dollars). The buyer would still need 8.4 years to break even.
That is a very big if, as such deals normally involve certain amount of loans and hotels are normally required to be refurbished every three to four years. As such, the value of the property has far exceeded the value of the business.
My gut feeling tells me that the current owner was never keen in developing the hotel business. Rather they are using the property as a form of investment and sell the property when the price is right.
In my future blog entry, I will try to explain how to evaluate a project.
Saturday, October 6, 2012
Holding Your Ground and Looking for Customers
My business has been up since April 2014. Until today, we made multiple bids for hotel projects and have also received some import/ export queries. So far, our success rate is zero.
If I tell you that I am not nervous and desperate, I would be lying to you. Every month, the cash burning rate is around 1000 MYR/ 300 USD. The longer time I have no business, the bigger hole that myself and other business partners would be in.
For those who aspires owning a business and wanted to quit the current job. It is vital to plan ahead.
Good luck in getting the first customer.
If I tell you that I am not nervous and desperate, I would be lying to you. Every month, the cash burning rate is around 1000 MYR/ 300 USD. The longer time I have no business, the bigger hole that myself and other business partners would be in.
For those who aspires owning a business and wanted to quit the current job. It is vital to plan ahead.
- Keep your job until your side business starts to make money.
- Save up! Forget about the movies, or eating out. Before you spent the next dollar, think whether it can contribute to your business funds or savings.
- Calculate your personal monthly expenditure and the business's. From the calculation, you would know how much your business needs to make in order to sustain yourself and itself.
- Be careful of cost! I am lucky that my business partner own the property, thus we do not have pay the rental now. Due to our small operations, the services that we use are either the cheapest or free. For example, we are only using Google Drive's free 5GB storage for our work.
- Plan to call or bid for business on a regular basis. There are not many hotel projects out there in the market. The partners make sure to have weekly discussions on who and where to look for customers.
Good luck in getting the first customer.
Subscribe to:
Posts (Atom)