How Do I Manage Business Growth?
Most firms begin with a simple idea such as service the customer. Firms that fulfill that mission will be successful.
At first it seems so easy. A client that you located calls and asks a question. You then research the client’s situation and possible solutions and then call back the client with a plan that makes sense. As in the beginning of everything, simplicity should rule.
But most start-ups evolve into larger and more mature operations. As the business changes, the depth of its personnel also needs to grow. At first the business owner can run his business by his checkbook. Then as the firm hits the $200,000 sales mark, an outside CPA is used on a periodic basis. At the $1 million mark, a full time bookkeeper /controller is needed to help manage, the administrative and finance function. At $5 million, a finance person capable of entrepreneurial vision is needed.
Management Determines the Company’s Direction
The image of the client’s first vocal contact, the receptionist, immediately sends an aura of the company’s degree of professionalism to the caller. It is management’s duty to ensure that the right message is received. Direction should be from the top of an organization and then exude downward to all levels. Management should always train and hire so as to augment their present skills and expertise, broadening the depth of the organization.
All too often new hires are clones of the hiring authority. They feel compelled to hire people who have characteristics that match their own as opposed to diversifying the firm’s talent. This often results in too many chiefs and not enough Indians or perhaps too many sales people without adequate administration and support.
Develop a Complete Management Team
Many operations succeed or fail when they reach their critical mass. That is a time at which the next personnel move could make or break their firm. Many entrepreneurs fully develop their sales and marketing functions while almost totally ignoring their support and finance functions. These functions are not as critical in the early stage, but as a firm grows, the lack of proper emphasis could be devastating. Firms need to assess when they should seek out professional managers capable of running with the entrepreneurial crowd.
Take for example a company that obtained that $3 million sales mark and then set out to reach the next tier of growth. Its president sought out and hired a Fortune 500 chief financial officer at compensation that exceeded his own by more than 50 percent. Although most leaders would have never paid more than their own compensation, this one saw the value added that a financial officer of this stature could bring to the firm. The firm went on to grow to the $35 million mark and is still growing.
Stay Focused on the Company’s Business
Often we fail to remember to dance with the one that brought us and seek out other unrelated and frivolous ventures. For example, another company was enjoying unprecedented growth in its specialized field. Its staff had grown with the organization and had matured in its shill and market ability. Unfortunately, the owner opted to go into an unrelated venture that had not been properly researched and an area in which none of the staff had any real business experience.
Fortunately the losses were stopped before it was too late. The company was saved: however, the year was lost. The company’s prior tremendous growth had been stopped, and its personnel had lost faith in the company.
Frivolous ventures drain our energies and stretch our people resources. Entrepreneurs who focus on their people and their interactions with clients have a better chance to win the marketing game.
Each and every impression your business makes is critical to your current years profitability and long-term success. By retaining our services you will be better served in anticipating manpower needs and a quality focus in your business’s development.
Contact His CPA PC (A Christian CPA Firm) today.