How many small business growth thresholds have you already encountered in your start-up business? Are they “testing your mettle?” Perhaps you’re wondering whether you have the best approaches?
What thresholds have you encountered so far?
So you’ve started your own business and have perhaps been going for a year or two? And you’re still around and haven’t become a statistic – congratulations. So your initial idea appears to have been good and it suggests you’ve also been able to drive it through the inevitable challenges, but also experienced the sweet taste of some success, right?
By now, you may well have already experienced a few, and may now be at yet another of those typical growth thresholds, correct? They were probably fuelled by growth and /or change. Both are welcome in my opinion and both necessitate a response in order to manage them for the ongoing benefit of the business survival and success.
Apart from having started and run my own business for almost 10 years now, I have also coached and mentored many a small business through a range of different thresholds that are part of every business and its growth (and decline) chapters. And working with a small business in exactly that situation recently prompted me to write this blog.
Are you mainly working “in” or “on” the business
In this business (apart from limited availability of some capacity from her husband) everything was up to the owner – everything: design, manufacture, execution and delivery, marketing, sales, financial, administration – everything. She spent every available hour working “in” the business, so that she had absolutely no time to work “on” the business.
By that I mean there was no time for planning, reflecting, measuring, thinking, improving, and growing, even relaxing. Why? Because it was always go-go-go, work – work – work, always on the treadmill. She was heading for burnout and she knew it. Something had to change.
And so we started working together. I have been able to help challenge and guide and through engagement of a few tools and techniques, suggest a range of different approaches and changes.
Do you have the support of a network of professionals?
I work in a network of business professionals from (almost) every possible business field you could imagine. You see, nobody can possibly “know it all” and I have invested heavily in such professional networks because most of these associates have become trusted associates and thus have become an extension of my value proposition to you, my prospect and client. So whenever there is a curved ball or a challenge I am unable to assist with, I am pretty confident I can find just the right skill to help address it. My primary such network is The Network of Consulting Professionals (www.thencp.com.au)
And if they aren’t able to help, they would usually have someone in their network that they could “safely” recommend (along the lines of what I wrote in The Trust Triangle).
In this case I referred this client to a marketing specialist in this network so that one very important aspect of her business could be addressed: defining and finding the right source of her ideal clients, differentiated into the right service level and price categories. That’s not my specialty, so it could easily be “outsourced” to the right level of skill. Everybody wins.
Are you selecting the right capacity to help?
And so we needed to look at ways of freeing the owner up to be able to “get her head up and her rear end down” to look at her business, what she wanted it to achieve for her, by when, and how we might go about achieving that, leveraging a range of different tools and techniques to support that process.
An immediate area of need was to find some capacity to help. We saw that she could:
• Engage someone on a part time or casual basis.
• Contract someone
• Employ someone
• Collaborate with someone.
They are often found through family, friends (even neighbours) or through your network. That can be a useful win – win arrangement that suits both parties’ expectations and budgets, and can usually be pretty flexibly arranged. They usually cover off the more repetitive and often administrative tasks that don’t require as much skill as they do availability, energy and time. They usually work on an hourly basis. Most importantly, as the business owner, you are in control of the extent of engagement and hence only pay for what you need, when you need it.
This option is also quite an appealing one, in that it can be specifically tailored again to suit both parties’ requirements. Contractors are often engaged to address a demand peak or a project or to address a certain issue and usually work on a daily basis. Payment can be via daily rate or for a fixed outcome etc. Often when the specific job is done, they “move on”. I guess you’d probably relate to the age old “sheep shearer” example, who comes when required and is paid by the day or by the output and then moves on.
Then we might have our business reach a stage where we are able to and need to make an employment commitment to engage someone full time. Of course this necessitates carrying all the payroll and other liabilities and risks, so we would want to be pretty confident that our business is sustainable enough to be able to cover those overheads and risks on an ongoing basis. In most small business cases the employee input not only covers activities to be performed, but either directly adds to the revenue earning potential, or frees the owner up to be able to do so.
If you are in or approaching these sorts of thresholds, then I’d highly recommend Michael Gerber’s classic book “The E-Myth Revisited” in which he describes the emergence and dealing with these thresholds beautifully.
And as we continue to grow the business we will probably over time add further employees to add capacity and skill levels to the various tasks that emerge through that growth.
Collaboration – making small business growth thresholds easy to cross
There is one further category of “help” that I have availed myself of that has become significantly more prevalent these days, and that is collaboration. I made a conscious choice to remain a “one person band” business. That is I took the decision not to employ people, knowing that while building value in my brand, I would never have a sellable asset. (The different types and structures of business models will be the subject of another blog).
Some are able to use their wife as their business manager, to be able to engage to take care of all the administrative management of their business. When cashflow times are good, the business pays her a salary and Super, and when it couldn’t, it didn’t. That can also be an important tax question.
However, having made that decision, there will be times when there is an opportunity they couldn’t fulfill that well themselves, but knew just the person that could. Apart from referring them into certain client engagements, which is what occurs that much better through a trusted network, and where we have an agreed internal financial arrangement that doesn’t affect or bother the client (our client), it is sometimes easy to choose to work in collaboration with such “partners”.
In some cases we have started joint ventures or consortiums, sometimes within a business entity created for that purpose, sometimes with a partnership agreement and sometimes in a loose “handshake” arrangement.
That way we complement and supplement each others respective strengths and weaknesses so as to provide our client with a substantially better service or experience or outcome. Training courses, jointly developed and run are typical examples of such initiatives. Of course this approach may well also serve the client I used as an example above.
And so we have chosen exactly the right combination of the above options for my client for now and looked at the right planning for the next thresholds on the horizon. So far everybody involved has won.
So what next?
Well, this article has highlighted a few options available to us when our reasonably recently started business has reached certain thresholds where the owner is no longer able to cope on their own.
If you haven’t experienced that yet, I am very sure that you will. And when you do, I hope that you too will avail yourself of the services of a business mentor that will enable you to explore a bunch of options to select and implement exactly the ones that will work best for your business – at that point in time and also already having an eye on what future thresholds you might already want to start preparing for.
What if such a mentor (with the support of their network) were able to help you “see the wood for the trees” and either save you from a heap of pitfalls or risks or guide you to new opportunities you might not have seen yet or were unsure how to implement, or both?
What if you could?