Growing Your Business
Requisite HR July Newsletter 2017
Where do you want to take your business? People start businesses for a variety of reasons. Sometimes it’s because they believe that they can do it better than everyone else, sometimes it’s for lifestyle reasons, other people because they don’t want to work for someone else. Whatever the reason, at a certain point in time you are going to need an exit strategy and to consider the impact that it will have on your business and its team members. If your retirement plan is contingent on selling your business, then it needs to be built into a sustainable business that will survive the transition of being sold. No one wants to buy a business that had no future profits post acquisition and this can occur when the revenue and profits are tied to the owner, because they are seen as the same entity. What are buyers looking for? According to Divestopedia there are 10 Value Drivers that make a business attractive to a potential buyer. With the Value Drivers in mind the next question you need to ask yourself “What do I need to do to ensure that I am not required for day-to-day business operations, whilst ensuring that my business continues to grow in my absence? If you don’t have the answers or the time for the solution, then your next step is to gain specialist assistance.
Frontline to Management Making the Transition The transition of the business owner from the frontline to management can be very destructive to team morale, the culture of the business and the business itself. Although Business Owners wanting to grow their business need to focus on achieving Value Drivers, they also need to make sure that don’t let the company they love and the team that supports them, get lost on the journey. Jack starts his business as a landscape designer. He loves what he does and his clients love his work. Suddenly he has more work than he knows what to do with, so he takes that bold step to employ Jill. The two of them work well together and they make a great team. However, Jack realises that they are spending more time on paperwork and not on what brings income into the business, so he employees Janet to take on the admin and accounts side of the business. Before he knows it he also has Jim, Julie and Jay as landscape labourers. Jack and his small team work together and play together, celebrating birthdays and other milestones alone the way. However, Jack now has all these people depending on him to keeping bring work into the business, and so he has to step up to spend more time doing business development and keeping clients happy to ensure that he has a sustainable business. So, he passes the design baton to Jill and employs a semi experienced Designer to support her. He then makes Jim the team leader of the labourers and employs two juniors to help them out.
Suddenly Jack is traveling from one client meeting to another, he moves into an office away from everyone so he can have private business calls, the team never see him out on site, he never picks up a shovel any more and more often than not he can’t make Friday drinks. Previously the team knew what Jack’s vision, values, standards, and expectations were because they spent every day with Jack on the frontline talking about these concepts. But without Jack there, things have become muddy. New issues come up that they haven’t deal with before and Jack isn’t there to ask. Annoyances that previously that they would have talked to Jack about over a beer at the pub and he would have fixed, hang around turning from ‘lit match’ status into a ‘raging bushfire’ status. His prioritises have changes from getting the work done to making sure they have work to do, and his team are no longer feeling the love. This is not the Company they signed up for, and they start to disengage from the business and their work leading to a downturn in their performance and client results. A few things that Jack could of or should do: 1. Work with Jill and Jim to develop policies and procedures for their respective teams, so that Jack’s vision, values, standards and expectations can be communicated when he is not around, and provided to new starters so that they are aligned with the business right from day one. 2. Empowered and train Jill and Jim to act in his stead in regards to providing that personal touch that the team is used to. 3. Regularly set aside time to get down to the ‘coal face’ or sometimes siting in the same area as everyone else to do work, so he can participate in friendly batter and take the time to connect on a personal level and not just a business level. 4. Set up regular informal communication opportunities to give people an occasion to have their voice heard. 5. Jack needs to upskill himself in modern management practices and skills, and find appropriate mentors as he moves from Landscaping to People and Business Management. 6. Jack should be open and transparent about what he is doing and why he is doing it so that everyone knows that although they miss the old Jack, what the new Jack is doing it is important for them, their team and the Company. 7. When the workload is a struggle Jack should roll up his sleeves and help out so that the team isn’t resentful that someone who has the skills to help out, isn’t. 8. Jack should create opportunities in and outside of work to maintain a personal relationship with his team and encourage them to offer new ideas or feedback and give credit where credit is due. 9. Never miss a chance to celebrate your team. So, remember that when you are growing your business, there needs to be a balance between focusing on the bring in work and ensuring that there are happy engaged people to get the work done, to the same standard that made your business great in the first place.
Fail to Prepare, Prepare to Fail “Fail to prepare, prepare to fail” is an important adage to remember in the business world, and often in day-to-day life. Originally attributed to Benjamin Franklin, you may have heard these wise words long ago, but not necessarily recognised how relevant they are when you’re thinking about growing your existing business. You have already done the hardest part in getting your business off the ground and turning your idea into a reality, but to take the next step and grow your business, that’s where a business plan is essential. A strong business plan is an indispensable backbone of your business, and can be the difference between success and failure. Help your business grow, by starting off on the right foot with a brilliant plan that outlines what your business will look like in the future. Start with these important questions: What is your “value proposition”? This is basically an elevator pitch, summarising the value your business proposes to add to its target markets (clients and employees alike). What service do you provide, and how do you provide it better than your competitors? What problem do you hope to address? What gap are you filling? Initially, attempting to define your value proposition will lead you to more questions than answers, but these questions are exactly the ones you need to be asking. Why? This is an existential question - why did you start and sustain this business? Why do you want to grow your business? What is your mission, and how are you different from everyone else who is already out there in this market? By articulating your mission statement, and your unique selling proposition, you’re taking valuable steps towards defining what your business has to offer. To who? Who are your current and future customers? What does an average Joe or Joanne customer of your business look like? By defining your ideal customer you can work out how to show them you have the solution to their problems. After all, even the best business model isn’t useful if nobody knows about the business.
What? What does success look like for your business, and how will you know if you’re making progress? What are your goals, and how do you measure their achievement? A tool that is often used in the business world is the SMART criteria; the goals you set should be specific, measurable, agreed upon, realistic and time-based. Goal-setting is so important to ensuring that you are heading in the right direction, understanding how far you’ve come, and celebrating your successes. Who else? It’s important to understand the ecosystem that you operate within. It’s very valuable to understand who your major competitors are, and how they reach their target markets (after all, you can learn from their failures and successes). How? What is the business’ current financial position, not only in dollar-terms but in assets and liabilities? What will your cashflow look like? What does your organisational structure look like? Once you’ve got the ball rolling, what do you expect your finances and organisational structure to look like in a few months, in a year, in a few years? How can you sustain the growth? What about? As we’ve discussed, any potential obstacles you can proactively identify are invaluable to your planning process. Think about some of the problems that you might encounter, and how you might deal with them. Forewarned is forearmed. Why us? What does your team have to offer? Why are they the right . business? Of course, you should only hire people for your people who you believe add value to your business, but you should also be able to explain why you believe they add value when you're writing your business plan. Funders choose people, not pieces of paper. Your business plan is an essential part of your pitch, but it doesn’t exist in a vacuum: you’re also demonstrating that you and your team are the right people to lead your business idea to success. If you would like to receive a complimentary copy of our business plan template, please click here to request a copy.
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