By Daniel Beaulé, Service 2000 Électroménager
Based on the growth guru Verne Harnish, CEO at Gazelles International and Fortune Magazine columnist, there are three obstacles that an entrepreneur will face that will prevent him from growing his business. Let’s start by explaining the business growth process, with an example in our industry.
You are the founder and owner of XYZ Appliance, a reliable appliance repair service that delivers quality service. As you’ve been in the trade for several years, word of mouth works well and you have more customers knocking on your door than you can accommodate. This is when you think about growing your business, so you hire your first technician and load his day. As this takes lots of your time to manage, you hire a CSR and data entry clerk to support you with administrative work and call taking. As long as new calls will come, you will probably continue growing your business this way until you face the three following obstacles:
1. Lack of confidence in your team: As you try to transfer more and more duties to your staff, you see that they are not as committed to customer satisfaction as you are. Tasks are dropped or not completed diligently and you receive some negative customer feedback. As you have the impression that no one does the job better than you do or feel like it will take you less time to accomplish the task than to train your staff, you keep it to yourself, which increases your personal workload (anybody heard of the evening shift ?).
The solution: Identify the role you need to fill, build a scorecard to clearly evaluate candidates based on measurable criteria and survey their values to make sure they fit with your business, measure their performance according to the scorecard, celebrate their success, and praise their leadership. If they are not accountable, they’re not the good people. If you can’t find accountable people at all, it’s either who you are talking to or that you as a person can’t attract leaders (sorry for the candid opinion, but that’s the truth).
2. Lack of system: As you increase the number of service calls, you need to provide more reports and service updates to your corporate partners (TPA, retailers). They make it mandatory that you file your claims through their own platform so you spend more and more time producing this extra administrative work, which does not help you work less. You hear about these automated solutions such as dispatching, accounting and others but you can’t work your head around spending a big chunk of money as you won’t see a return on your investment anytime soon.
The solution: Do it. It works! Invest in automation to reduce time to manually file paper, manage information exchange, provide updates, and more. Your time as an owner is worth hundreds of dollars per hour if not more, so spend it wisely to generate the most value. Train your CSRs to convert more leads to customers, train your techs to generate more revenue per day and fewer call backs, become the compliment king to exacerbate your people’s productivity, and take lunch with key people that can unlock more profitable business relationship.
3. Lack of foresight in your industry: Take for example your business where revenue developed in such ways that one of your key customers drives 40%+ of your sales. If for any reason they decide to pull their business and transfer it elsewhere, you might get stuck with no alternative plan.
The solution: Understand your industry, each stakeholder and trends. Everyone talks about low end appliances being thrown to the garbage instead of being repaired. Make sure to diversify! Also, make sure that no customer drives more that 15% of your revenue or make sure that you can scale down fast if you have larger customers. Develop relationships with complementary businesses such as dryer vent cleaners, kitchen designers, and real estate managers in order to have more revenue channels.
In conclusion, these three barriers to growth are easy to overcome as long as you keep your head out of the water, learn the industry’s best practices, and spend time working on your business, not in your business.
Daniel is a Gazelles International Certified Business Coach who teaches business owners and teams of executives how to accelerate their business without damaging their people, cash and culture. He is also president of Service 2000 Appliance located in the Montreal area, Canada.