I am talking to many businesspeople and entrepreneurs. For many, expanding, growing a business is a rocky road.
One can get comfortable where one is at and stagnate.
But, anyone running a business or being in charge of one knows that there is only ONE way to go and that is UP!
We all want stability, growth and a smooth running, profitable business. Understanding some basic fundamentals of the factors of expansion will shed some light on how to make it smoother.
Frankly, it is easy to slap a bunch of people together and make an organization. But then you have to work with what you have put together! It is when it was not done right that things get rocky.
The following points are key factors to your expansion. I would like to share these with you.
Your business foundation rests on 4 pillars.
These 4 pillars are 4 areas that will make or break your business. Bluntly, you cannot have a high functioning, profitable business if any of those 4 pillars are weak or unstable.
You can trace back the reason for financial stress, lack of growth, high staff turnovers, supply problems, etc., etc. to a weakness in one of these 4 pillars, or a combination of them.
If your business is plateauing and can’t get past a certain level, understanding which one of those pillars is causing it would light the path to your growth.
Again, these are a very important subjects!
These are:
1. Personnel
2. Organizational Structure
3. Leadership/Management
4. Financial Control
These are interdependent.
For example:
You can have the greatest, most competent, and qualified staff posted according to the sequence of how production flows through your company. Yet, if the executive in charge is not guiding and coordinating the actions of the team, you may have inefficiencies and problems.
Another example:
You might have the best organizational structure, good marketing and sales, good executives who are working off a solid strategic plan but if you are missing key staff or have staff that are not trained or are unqualified for their position, running your business will be problematic and you may fall short of your goals.
Let’s look at each of the 4 pillars.
Personnel:
That is your workforce, your staff! They buy you more time to get more done. There is just 24 hours in a day. For example, having 2 more staff add another 16 hours to it. But staff have a mind of their own. They have values, goals, and purposes. Despite their differences, they must work together. They must cooperate.
For example: You have a school and need a teacher assistant. What will happen if you hire someone who is uncomfortable with children to fill that position? You got it. That person will end not being with the children much. They might end up outside the classroom, chatting with other staff, doing some other work. What happened with the 8 hours this person was supposed to add to your day? This person will not only waste the money you spend on paying them but also distract others from doing their job!
Personnel is finding and selecting the right persons; onboarding them; training them; team building and staff motivations. It is getting them work together and unfortunately weeding out those who do not contribute or fit well in your team. Personnel is building the best team that will forward the vision, goals and purpose of your company.
Organizational Structure:
Put 7 individuals around a table and tell them to push. There is going to be a lot of efforts and grunting. But the table wont move much. A staff, no matter how competent, working without a clearly defined structure will breed chaos, inefficiencies, waste time, money, and effort.
By organizational structure, we mean clearly defined policies, flow lines, processes, job descriptions and expected results from each positions and functions held in your company. It’s your playbook!
When do not have these clearly laid out, you end up assuming the staff are operating a certain way when individual policies, set at lower level are being used. Example: Your process for sales is deliver something to the potential buyer, help them in some way, to build trust and value in your services. A new sales manager comes in and was educated in his previous job that the way to sell is to give as little as possible and get the person to buy in order to get the solution. Thinking that the staff are operating on your successful actions, you wonder why the sales are down.
Your organizational structure lays out how your organization should operate. It is how the game is played. Your team need to be clear on this. Otherwise, who knows what game is being played?
Leadership and Management:
We have selected a good staff and have a clearly laid out playbook for your company. In the best of world, you would be well on your way to a productive and expanding company. I wish it were that simple!
Leadership and management are essential to make it all work together. Example: In a construction company, you could have the best salespeople, the best carpenters, etc. and very little happening. This would be like a professional sports team without a coach. It would be disjointed.
Leadership and management bring about coordination of actions resulting in alignment.
Here we are not talking about just the owner or CEO but the executive structure at all levels. Management skills has its own know-how. It is a subject on its own. There are 19 specific management tools at an executive’s disposal to bring into existence any ideas or plans.
Once you have more that 6 employees, you should start building your executive structure. The most overworked and burned out executives are those who have the most direct juniors reporting to them.
Management and Leadership is all about strategic planning, program execution, use of statistics to manage your company, coordination of your team through the use of management and executive tools.
Financial Control:
Money is the energy that fuels your organization. It is the oxygen your body needs to live. It is the gas in your car. Without money, you are not going anywhere. No wonder why this is such an emotional subject!
One could have the best service or product in the world and yet never get off the launching pad. I hear sometimes that someone doesn’t like to promote and is not good at selling. Right then I know that this person will be in trouble.
Part of financial control is how to get people to see the value of what you have to offer so they will want to pay you money in exchange for it. That, my friends, is called marketing and sales. This is how you put gas in the car. The hard, cold fact is: you can’t control your finances if you do not have any money.
Financial control is about creating a demand for what you are offering, costing and pricing it correctly, selling it and then, through proper financial planning, allocating the money where it will bring you the best return.
Financial control is also about looking for new opportunities and developing them.
Summary
Each of these areas contain in themselves a set of know-how and tools. Understanding where your business is at on each of these pillars will instantly tell you why you are successful and where your stress is coming from. This also tells you where you should put your attention to create a more stable growth for your business.
You could say that running a business has a lot to do with handling these areas and your success will reflect on how well you do!
Let's talk!
I would love to discuss your thoughts on this article. Let's book a free, no strings attached, call/video conference to work out how to best implement these concepts in your business: https://rpmc.youcanbook.me
Which one(s) of these need more attention in your business?
0%Personnel
0%Structure
0%Leadership/Management
0%Financial Control
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