Employing more people isn’t the only way to make a small business grow. In fact, employing too many people too quickly can have the opposite effect, causing your company to struggle to cope with all of the changes.
More sustainable growth can be attained if you first ask a simple, but challenging question: are you getting the most out of your resources?
Understanding your resources
The first step towards answering that question is to understand what your business’s resources are. One very important resource for most small businesses – especially startups – is money. Are you using your money in a sustainable way that is building a strong foundation for the future of the company, or are you throwing it at projects that are doomed to have little or no impact on your bottom line?
Linked to money is your company’s other material resources, including any equipment and property you own. These assets will dictate much of what you are able to do, and could either limit your company’s growth or facilitate it.
The other important resource is time. You will have a certain amount of employees, and those employees will be able to give a certain amount of time to the company. How are they using that time, and is it being used efficiently? Rather than looking to hire new people whenever you can and adding to the confusion in the office, first consider how you can help your current employees to be more effective.
Once you have understood the resources available, the next step is to ask yourself how your company can most benefit from them. It is so easy to think that growing the company means moving on to the next new thing as soon as possible, when in reality, many small businesses already have the tools to take the company to the next level, they just need to make better use of them.
Structure is key
In small businesses and startups there is the temptation to have a flat business structure that allows people to just get on with their work, but this dream doesn’t work out for every business, and it becomes harder to maintain the more employees you have.
At first, implementing more of a structure might seem to conflict with your entrepreneurial, growth-oriented mindset, but the reason that it is so important is because it means that everybody knows who and what they are responsible for, and everyone knows who is responsible for them.
A company without a clear structure can struggle with accountability, and if something goes wrong it can be difficult to determine why this was the case. Bringing more structure into the business isn’t about being able to pin the blame on people, but it’s about knowing where the problems are coming from and being able to solve them quicker. This will save you time and reduce stress, and it will also likely increase customer satisfaction, which will encourage people to keep coming back to you.
Always think about your employees
As you look to grow, and think about making changes and perhaps implementing a clearer structure, it’s really important that your employees are on board. If they know what’s going on in the workplace they will be happier and more willing to work.
I’m not just talking about making sure everyone fits with the culture – though this is something that more and more businesses are trying to do and it is important to make sure everyone fits. I’m talking more about making sure that everyone shares the vision of the company and understands why you’re doing things in a certain way. Show your employees that you value and trust them as human beings, and they will come onto your side, rather than resisting any changes that you try to make.
As you hire more people, and although I’m not focusing on that, it will happen as a part of sustainable growth, look for people who can take responsibility for their own time and work. This will reduce strain on other people in the workplace, and contribute towards a healthy, efficient office environment.
Spend money on what your customers want
Aside from your employees, the other group of people you need to keep happy are your customers. When it comes to managing your money, you need to be asking yourself if the things that you’re spending it on are going to lead to more money coming into the business from your customers. To put it another way, if you’re spending money on things that aren’t adding value to your customers, stop doing it.
This doesn’t mean that everything has to produce an immediate financial return. A tech company investing in research that’s going to help make an incredible product two years down the line is not wasting that money, even though they won’t see a return on it for a while. However, if that money is spent on developing a product that customers don’t really want, then you’re doing something wrong.
Of all your resources, money should be one of the easiest to keep track of. This is another reason to have a good structure in the company: you will be able to find out quickly who is spending money and what they’re spending it on. You need to be cultivating a business in which people are looking to spend money in the right areas, not wasting it on stabs in the dark and dead ends.
Have a reason for everything
My final point underpins all that I have said so far. Whatever you do, you should be able to give a reason for it. That doesn’t mean you can’t make mistakes, but if you don’t know why you’re doing something, that should raise a red flag.
Successfully and sustainably growing your business and managing your resources is all about increasing efficiency and cutting down wasted time and money. If you always stop yourself to ask why something is happening (preferably before it starts) you’ll be able to catch a lot of problems before they develop, and ensure that the company’s resources are being managed carefully.
Why are you developing that new software? Is it because your customers need it, or because your developer wants a challenge?
Why are you hiring that new employee? Is it because they will share the vision of your company and push you forward, or because they had the flashiest CV and looked the best in the interview?
If you can legitimately justify what your business is doing, then you will be in a great position to build sustainably for the future. Think critically about structural changes, how your new ideas are impacting the bottom line, and who you’re bringing in to work for you. If you think through things like this, your business will be much stronger than if you just push on, hiring new employees because you think that’s a sign of a good company.
by Charles Reilly, director, Fridgesmart