Stuck Between Sizes
Making the leap from small company to mid-sized.
One of the most challenging stages in the life of a business is the transition from small to medium sized company. Owners often find themselves in a squeeze as they enter one of the most dangerous cycles in business. How do you take it to the next level while you manage the delicate balance of not overworking your staff and making sure you don’t blow your budget? A common scenario is this: Your business is growing, and you have a bright future ahead. You need to hire more people but you don’t quite have the money to do so yet. Because you are growing your current staff is now overloaded and overworked. They are looking at you wondering when you will hire some more staff so their lives can return to some kind of normal. As an owner you can feel like you’re in a bit of a race. Either you get more revenue in order to hire more staff, or some of your staff will begin leaving because the workload is just too much. If you can relate to what I am saying, here are a few suggestions you may find helpful or at very least might spark your own creative thinking.
1. Take care of your most valuable asset.
We are entering an unprecedented labor shortage that we are only beginning to see the scope of. If you think it’s bad now, it is only going to get worse. Check the statistics if you don’t believe me. Without good people, any business is doomed. This is amplified during those transition times when we are trying to make the leap to the next level with our company. Staff retention has to be one of your number one priorities right now. In addition to having a solid retention plan in place here are a few suggestions that are specific to your situation as you make the shift from small to mid-sized.
As a manager/owner:
- Pull your staff in on the planning and execution of this life cycle. Help them see how it works and what’s at stake. It’s a great time to solicit their input and ideas as how to best navigate these waters. You might be surprised at what you learn. Employees often have very creative ideas on ways to save money and be more efficient. Doing this also pulls them in and makes them feel part of the future of the company. Employees can even feel as if they are “founders.” By creating ownership, people begin to place a personal interest in the welfare of the company. Personal buy-in is huge because it inspires people to think of themselves as owners. Owners are the ones who think about the company after quitting time (as if I had to tell you this) and the more thinking, the more ideas, the more investment.
- Help your staff see this transition period as a challenge to be met with some specific goals outlined so they know when you have arrived. People love to be a part of a great quest in addition to their daily job. Outline in specifics what is going to be needed and work together as a team to get there. Come up with a name for your campaign. It can sound cheesy but if done correctly people love this stuff. Of course once you do reach your goal (a midsized company, defined by you) make sure you have a massive celebration. You may even want to offer some kind of bonus to be handed out to your team once all of these goals are met.
The strength of a small company is the bond you as a manager/owner can have with all of your employees. Make sure you capitalize on this and don’t assume that because your office is small, everyone feels pulled in and close to you.
2. Cash Flow is King
Imagine if somebody showed up tomorrow with a bag full of cash for you. I bet you could use that right about now. Finally you could hire the extra 3 staff you need as well as pay for the training your current employees have been asking for. Unfortunately the bag of money is probably not going to magically appear unless you have some kind of connection with the Soprano family. One of the misconceptions in business is that the only time to operate in the red is during the first three years of a start-up. We hear it all the time, that by the third year your company should be turning a profit. While this is true, it does not mean there is never a good time to go back into the red. A common myth is that if you grow your company correctly with controlled, smart growth, you will not need to go in to debt ever. That would be nice. Today’s workforce shortages however have changed the rules of the game. It’s true that you don’t want to rush back into running at a deficit if you don’t have to, but sometimes it just might save your company from being stuck in Smallville forever. Sometimes we are less willing to take risks once our business is established. Maybe it’s time to take some calculated leaps of faith again. Remember cash flow is king.
While this can be a stressful period, it’s also a time to be relished and enjoyed. Few occasions will test your leadership and management abilities like this. It can be a time of incredible personal growth. So this will either be an exciting journey or a living hell, it’s mostly a matter of perspective.
Good luck.
If you would like more suggestions on creating workplaces with high engagement and low turnover, contact James Robbins at info@ontothesummit.com or check out our website www.jamesrobbins.com
