Do you feel you are paddling against the current for your business to generate profits? As hard as you work you can't get out of the red or, in the best months, you can only make a profit below your dreams? Calm down, this summary can help you.
Here you will learn how to make your business profitable and make your dreams come true from the business experience of Alberto Saraiva, owner of Habib's.
In the book, Saraiva shares his experiences and learnings so you can have a profitable business.
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The book was published in 2004 by the author Alberto Saraiva, owner of Habib's. It consists of 233 pages divided into four chapters which cover the main rules to follow to build a profitable business.
In this book, Saraiva tells how he had to take over the family's small bakery very early after his father's murder. But he has transformed his small establishment into the largest Arab fast-food chain in the world by applying the commandments of profitability.
Alberto Saraiva was born in Portugal but came to live in Brazil when he was still a baby. He received the title of doctor for the Santa Casa but was dedicated very early to the food business.
His father was a baker and was murdered when Alberto was seventeen. Alberto took over the bakery and made it grow. He opened restaurants, turned them into profitable businesses, and then sold them.
But thanks to his merchant's eye, when he opened the first Habib's he realized that it would be different, that he should not sell it. And was right, because it has become the largest Arab fast-food chain in the world with over 250 stores.
This book is recommended for all entrepreneurs, business owners, salespeople, managers and directors who want to make their business more profitable.
This book has cross-cutting teachings of universal utility in the business world, from companies whose mass audience is large to those who offer their services to the most accommodating and exclusive classes.
In this summary, we will cover the important points of how to have a profitable business. Let's go?
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In the preface, the author gives some general insights he has had in his life and then discusses the following parts of the book about the commandments of profitability itself.
Alberto Saraiva argues that everything is possible, because if he is a Portuguese doctor who has managed to become a cook and owner of the largest Arab fast-food chain in the world, anyone can.
He believes it is imperative to have a differential to succeed in business. Habib's is delivering quality food at the lowest price ever. His mantra is more for less. Even as a doctor, he planned to offer free attendance to patients.
If you want to have money you need a good relationship with it. You have to like money. There is nothing wrong if you make money honestly and with dignity.
In this part of the book "Os Mandamentos da Lucratividade" the author discusses the tenth commandment of profitability: serve good products as quickly as possible at the lowest possible prices and in a nice, clean place.
Alberto Saraiva believes that the success of a business is related to product quality. It is an obligation to serve good products. When this is forgotten, the business is in serious danger of breaking down.
One of the most important parameters of good service is speed. Customer displeasure when there are delays is large and increases fast. As much as the service and product are great if there is a delay, everything is forgotten.
The author explains that communication with the customer is essential to improve the speed of service and dealing with the parish. The quickest way to listen to the client is to read their body language, which Saraiva defines as a mime.
The mime shows what the customer is feeling and thinking at that moment, so you anticipate the complaint and solve the problem faster.
It is also useful for understanding your partners, employees, and competitors. This way you make right decisions fast.
The author shows the importance of giving personalized attention to clients. Greeting as soon as he comes in or apologizing when there is a delay are some of the ways to do so.
Saraiva says that his philosophy for less has always brought him great results. For example, due to selling so cheaply a customer wanted to open a Habib's franchise. What allowed the business to scale and reach more than 250 stores.
If you double the price, you don't double the profit, it doesn't work that way in commerce. This account may even close in the short run, but not in the long run. In commerce less always brings more.
For Saraiva, appearance is fundamental in commerce. It's the customer's first contact with the store and so it should be nice and clean. He believes that a careless environment can impair the perception of the product, even if it is of high quality.
Profit depends not only on revenues but also on expenses. This is why it is crucial to know how to spend well.
Saraiva believes that the prices of products are linked to expenses and that it should be the company itself that defines them without inflation giving any guesses. He once again reveals that Habib's success is because of its always low-price policy.
The book "Os Mandamentos da Lucratividade" suggests carrying a map of expenses, that is, a document that shows each expenditure, its value and where it goes. This way you can control expenses and manage them.
The worst expense of all is debt. If all debts were forgiven and from that moment on every transaction was in sight, the situation of everyone in the world would improve.
It is critical to keep a lean payroll under control so as not to have a bloated budget. This requires rigor, courage, and conviction. To support his premise, the author recounts the experience of American executive Jack Welch.
Jack Welch laid off thousands and thousands of GE employees and was hated by many, even so, he continued with rigor, courage and conviction, because he believed it was right. After a few years, GE became the company with the highest market value and managed to generate five to six times more jobs.
Alberto Saraiva is against outsourcing and says he prefers to have control of everything. From daily production to engineering projects. According to him, it is because of this policy that he always gets the lowest prices.
He accepts outsourcing in two possible scenarios. If there is no way to produce because technical or financial resources are lacking, then the company will not be the market leader; or if you make dependent outsourcing.
Saraiva argues that owning the production chain, from the production of inputs to the construction of stores, allows the price to be as low as possible. He adds that if the deal affects the final price it is better to own it. This strategy he defines as verticalization.
In order to evaluate sales performance, the book suggests qualifying sales into what sells, how much sells, who sells and who takes care of the sale.
The first requirement to qualify the sale is to choose what will be sold. One must choose carefully because this can determine the future of the company and the entrepreneur.
Therefore, one must measure how much is sold to see if there are issues to be improved.
Then it should be noted who sells. The author believes that to find out who is the best salesperson, one needs to measure sales, not relying solely on customer perception of good service.
Ihe last issue in qualifying sales is to see who takes care of them. Care of sales is related to monitoring the indicators and taking action to improve them, so having a suitable person for this function is essential.
Managing people requires motivating them through rewards. These rewards can be linked to pleasure, freedom, desires, and ideals, among other things.
The author explains that sales commissions also work well to motivate employees. Organizing annual events that reward the best with medals, diplomas, televisions and even cars bring great results.
In this commandment, Alberto Saraiva explains the importance of having a strong, efficient and profitable team for the venture to be successful.
He tells the story of a store that seemed to be a success. It had a great location, a large flow of people and no competition nearby. But the staff who worked there were not good and the store made no profits. Then all the management and key parts were changed and the store became profitable.
Saraiva says that as obvious as it is that for a business to go well, the people involved must be committed, which does not happen on several occasions. He explains this phenomenon by choosing "warm" people as master columns.
Warm people are those who do not act, so do not fail, and who can disguise their inaction, lack of opinion and lack of courage. The author believes that this kind of person in charge is the worst danger for business.
Saraiva advises turning the master columns into partners because this generates greater commitment and increases the profitability of the business.
In the book "Zero to One", author Peter Thiel gives the following tip: when there is competition, companies have no power over the market. As a result, they must sell their products at the market-regulated price or they will be massacred by competition. But when the monopoly is over, you are the one who dictates the rules.
In their research, the authors of the book "Built to Last", Jim Collins and Jerry Porras, found that most visionary companies did not start with a revolutionary idea that made them successful early on. In fact, they had a slow start and eventually overpowered their markets.
Simon Sinek in the book "Start with Why" believes that the most important part is discovering and understanding your own "why." This is a process of discovery, not an invention that occurs overnight.
So now that you've seen the concepts of profitability, how about recapping some practical tips?
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