I recently had a discussion with a small business owner who wanted to take his business to the next level. His problem was a “Catch 22”. There is not enough business to support another employee but all current employees are busy servicing customers, so no time is being spent developing new business. That seems to be common in today’s economy and almost every successful business faces such a dilemma at some point. After some thought we came up with this plan.
1.Build a Growth Plan: Take the time to study your historical growth areas and the overall market. What part of your market is growing faster and has the size to support rapid growth for your business? Does it fit with your competitive advantages and your value proposition? Consider niche areas that competitors may be neglecting. Do not assume that the market is just waiting for you, or that your competitors will not respond to actions you take. Develop a specific set of actions with a specific set of target customers. Do a realistic estimate of sales and calculate the margins as well. The plan must adequately cover the cost of any additional employee(s) along with other costs of expansion while delivering at least comparable (if not higher) margins percentages as the current business. Write down the plan and revenue and margin projections. (Only if it is written will it take on the urgency needed to get through such a challenge successfully.)
2. Decide the right time to act: Pick a time to act based upon business cycles and a healthy balance sheet. Some markets experience seasonal periods of better growth. You want to act at the beginning of one of these seasonal growth cycles and with a healthy balance sheet to carry you during the early part of your plan. Remember that new employees must be trained and that selling cycles are longer in some businesses. Picking the right time is about giving your plan the time it needs to work successfully.
3. Establish the Metrics: The ultimate success criteria will be a level of sales growth which delivers the same or higher margins percent as the current business. However, there are likely several metrics which will give indicators of progress during the height of battle in execution of the plan. Establish these metrics before beginning and set some milestones. Give the plan a chance to succeed but if you are not hitting these milestones you may need to adjust your plan or cut your losses.
4. Do strategic hiring: Many owners or managers have tunnel vision when hiring. They are looking for a person like themselves or like someone they have previously hired. They hire one or more of the same as they now employ. Avoid this mistake and hire the person right for the role. You have developed a new strategy in part 1 above. Therefore it is proper to start by redesigning the roles and adjusting the organizational structure. In my discussion with the small business owner above, we debated whether he was hiring someone to develop new business or a person to service current customers. In a small business this can often be the same person but maybe now is the time to separate a role into two very different roles, requiring very different hiring criteria. Define the new roles and set clear hiring criteria. Consider the individual capability profile discussed in Post 4 Hiring and Evaluating Employees in the criteria.
Normally I am not a fan of hiring part-time or temporary employees, but in this situation, if an owner or manager is concerned about the risk, it may be appropriate. There are highly skilled people seeking employment in today’s economy and would gladly take a temporary or part-time role. If your business strategy is successful the role can be made permanent. For small companies I would also advocate for fining highly experienced employees (retired) looking for extra income. Highly experienced employees will bring valuable insights and pick up on your requirements much faster. Just be open about the expectations and the chance of more permanent status with whomever you hire.
Moving a business to the next level can be tricky, but with a good plan and making the right organizational adjustment, it can be very rewarding for the business and its employees.
Comments are closed