A business that is dependent upon its owner, both in terms of operational ability and funding, is often referred to as a lifestyle business.
Lifestyle businesses are those that have been created to provide flexibility and financial freedom to their owner. Having a lifestyle business does not suggest a lack of ambition or motivation; it just means that the long-term goal is not to scale or to maximize revenue.
But there are entrepreneurs whose goal is to scale and maximize revenue but end up with the lifestyle business. And the conflict between the dream and reality can result in a poor lifestyle of very long hours and high stress levels. The result is the entrepreneur themselves can become the very reason why their business is unable to scale.
So, what can you do to upgrade and push beyond the lifestyle business phase? In this blog I will run through how to scale your business using your team.
Start by reviewing your current team
The first step towards building a scalable business is to focus on building the right team to deliver your services and sell your products.
If you already have employees, then you may wish to review your current job descriptions and invest in the training required to bring your team up to the standard you require.
As hard as it may feel, you will need to learn to delegate tasks to your team. Too often entrepreneurs have the mindset that it’s easier and quicker to undertake certain tasks themselves. While this may be true for one-off jobs, taking the extra time initially to train an employee will save you far more time in the long run.
If your current team is young or your business is still in the start-up phase, you may want to use contractors to fill the gaps while you review your internal systems and recruit the right employees. Paying a little extra for experts could give you additional insights to what your business really needs if you want to maximize its potential.
You may want to review my blog, Do I need an independent contractor or an employee? if this is an area you would like to research in more depth.
Invest in your Human Resources (HR) department
Often the HR department is associated with dealing with employee disputes and other negative staff related issues. The reality is, if used correctly, a good HR department can provide the strong backbone to your recruitment and onboarding processes.
Once you decide that you need to employ more workers to strengthen or diversity your team, you need to consider what type of employees you wish to hire. It is worth considering both skills and personalities at this stage.
Knowing the type of people you wish to attract will help you to design an appropriate technical interview questionnaire. It was also help you to design your job posting ad as well as knowing the best places to advertise the vacancies.
Your HR department can help you to develop your employee onboarding system. This will include any initial hiring paper checks, right through to a new hires training program. You need to consider how to transfer your business knowledge over to your employees and ensure they are kept up to date.
A great example we’ve seen is a private YouTube channel where training videos are uploaded and made easily available to all employees. However, handbooks remain popular and are a simple way of communicating your values, mission statement, culture and rules of your business.
Read my blog, Recruiting tips for small businesses for further information on how to design a great interview process.
Monitor time and team management
If you are unsure as to how your employees are spending their time, we recommend introducing timesheets into your business.
Timesheets are often associated with companies that bill by the hour and while this is often their primary use, you may want to consider using them to track employee performance. Knowing how your employees are spending their time can help to identify inefficiencies such as too much time being spent on non-chargeable work.
Timesheets can also be good for workforce management and can help you to see areas where it may make more sense to outsource.
For smaller businesses you may be tempted to use Excel, but we recommend looking at TSheets, a cloud-based timesheet software, which we’ve found to be an easy, flexible and complete solution.
You want to remove yourself as the key employee
If you remain the go to person for every aspect of your business, you will make making yourself irreplaceable. While this may be great for your self-worth, if your business is dependent upon you, your businesses value will be impacted as a result.
If you are removed from the equation, your business will grind to a halt.
Potential purchasers will be unlikely to want to buy a business that cannot function without its key worker. So, the stress and additional hours that you are currently working to keep the day-to-day functions of your business moving is actually hindering your ambitions, potential earnings and your retirement fund.
If you feel you may be too attached to your business to step away from the day-to-day operations and enable it to scale, we recommend contacting Orange Kiwi. They are a consulting firm that specializes in helping business owners to scale and prepare to exit the business on their terms.
In the next blog in this series, I will run through the systems you will need in place to compliment your team, and to ensure you have the ability to scale your business.
If you would like to discuss how an outsourced HR department can benefit your business as you begin to scale, please get in touch to arrange a meeting.