This is a cautionary tale of what many businesses go through.
Every business operates on two fundamental aspects: as a provider of products or services and as a solution for those seeking these offerings. Most businesses originate from the simple idea of sustaining livelihoods and enhancing quality of life through their offerings
Now, you can go through history and find various reasons why some other people started their business, but one thing is very much a part of every one of them – profit.
Profitability
Maintaining profitability — or the fact that your business makes more money than it spends — may be easy at first. At the very start of your endeavour, you can elegantly disregard some key factors.
Running a business is not equal to being self-employed. If you are the sole employee, you might think all employees will do exactly the same as you — put in the same effort and have the same level of commitment and motivation. This couldn’t be farther from the truth.
Quality of work is equally important as quantity. You understand that work makes money, so more work means more money. But which kind of work?
We have seen too many wasteful businesses that don’t recognize they are making too much scrap and rejects. They found out the damaging consequences of their actions only after we helped them by implementing manufacturing and supply chain solutions which gave their heap of scraps true financial value. They were shocked with how much profit they threw away.
Businesses have high overhead that cannot be easily disregarded. This is even more true when the company is growing at a very steady pace or stagnating. And suddenly comes a moment when everything starts disintegrating in front of your very eyes. You might be cheaper than your larger competitor, but ask yourself this — what is your exact difference in margin and is it sustainable in the long run?
A small company has different problems than a medium one. Larger companies are even more distinct. Don’t make assumptions based upon what and where you are now, or even worse, based upon only yourself as a reference point. Think about what you want to become and then use your imagination to assess things before they can manifest themselves. Think how you can grow, combine services and how you will expand your informational backbone.
Continuity
Having a company is not an easy ride. It is a constant and ongoing process of the most efficient fine-tuning possible. Whatever you leave behind as unsolved, you will pay through the nose later.
If the company is approaching its breaking point, you will need to invest in either manufacturing equipment or software solutions that will propel you forward. Analysis and implementation services often take up a lot of your working capital and it may seem that you are investing not to grow, but just to stay in business.
A company needs great leaders and managers equally. What you don’t have – pay someone else to do it for you or hire them permanently. Don’t run around trying to put out all the fires because you don’t want to delegate part of your work to others.
Think about hiring long before such a need arises because it will be expensive and hard to find someone reliable on short notice.
If you want your company to do better and grow, you have to attract quality employees to get you where you want to be. Respect someone else’s knowledge and surround yourself with smart and competent people. We have frequently met insecure executives constrained by their ego, not wanting to be overshadowed by someone else.
“If you are the smartest person in the room, you are in the wrong room.
Have regular meetings with your employees. Ask them sometimes how they are, listen to their ideas and keep your doors open at any time. We have seen many companies with such appalling working conditions and severe lack of internal communications that it was evident they were doomed to fail.
And remember, to shake someone’s hand you must sometimes hold out yours first. Transparency, receptiveness and mutual respect are crucial if you want to build something sustainable.
Knowing your boundaries and respecting the boundaries of others are also a must. Disrespect drives people away from your company and no amount of employer branding tactics will be able to help you. There are many things that need to be considered before trying to present yourself as a desirable employer.
Employer branding is interconnected with many aspects of your organization, and you need expertise from all these areas of business to create a coherent and effective strategy. So, try to stay away from those who offer solely “employer branding” services, as they will probably not have such a comprehensive perspective and ability to offer you what you truly need — an all-encompassing and practical solution for your business.
Learn, learn, learn!
No matter how big your company is, you need to continually improve your vision, your methods and invest in the education of both you and your employees. Think about this — if you regard yourselves as e.g., just a simple HVAC installer, then you haven’t said or thought anything apart from what you do. There isn’t a sustainable business model in place, or an internal system to scale your business.
To elaborate on the same example, let us consider two companies: company A doing things the “old fashioned way”, and company B investing in continual improvement and care of its employees.
What do you think, which company will become more profitable? Company A will surely be more profitable in the short run, but company B will win it in the long run.
The reason behind is that CEO of company A is only looking at their current bottom line, trying to avoid any “unnecessary” investments. It reflects short-term thinking as well as a lack of vision and a bigger picture. The company will break apart at the very first sign of trouble because nothing is holding them together except money. Money runs out, employees leave, everything goes away.
The CEO of company B leads by looking at actual numbers and determining both short-term and long-term goals. They keep an eye on what their competition is doing, ask their customers what they want, and make continuous adjustments and incremental improvements. They take a humble approach to growth, they listen, appreciate and reward great ideas. If trouble comes to the horizon, they are going to know before everyone else and they will be able to hold tight together through the storm.
The market usually takes care of inefficiencies, so try to be as efficient as possible with what you are doing. And remember to respect everyone around you, you never know how they might one day help you.