Every business owner wants to grow their business. However, many business owners don’t where to start or what to do. Growth for “growth’s sake” is not a good strategy. But, achieving scale is. Achieving scale is where you can consistently achieve revenue growth on a relatively stable cost or asset base. In other words, the incremental revenue falls right to the bottom line.
I’ve had the privilege of working with a company that has two owners, both of which are working in the business (not on it) and are learning to delegate. But, it doesn’t come naturally to them. Many business owners feel, “If I don’t do it, it won’t be done right.” For these particular business owners, we recently calculated their hourly rate (salary plus profit). I challenged them to think about any task that is less than their hourly rate, find a person that excels at that task, and delegate it. Then they use that time saved to work on the business and increase revenue generating activities.
On the other hand, I have another client that recently hired the next level of management in the company. A VP of Sales and a VP of Operations. She has delegated all sales and operations responsibilities to those two. Both will be playing to their strengths and are a good cultural fit. They have functions they’re accountable for, a critical number to hit each month, and documented process that will increase efficiency. Early indications are that revenue and client satisfaction are climbing.
Scaling your business is all about people and processes. To quote Jim Collins in “Good to Great”, you must “have the right people in the business (culture fit) and make sure they’re in the right seat (playing to their strengths)”. If you either have the wrong people or they’re in the wrong seats, it will be a drag on your ability to achieve scale. Further, documented processes that are repeatable will increase efficiency and effectiveness.
Don’t just throw people at a problem hoping it will increase sales. If you feel like you’re in a rut and you’re not growing, it might be time to shake things up. As owner, are you delegating non-revenue generating activities, do you have the right people in the seats, and have you clearly documented processes? If the answer is no, then you might be your own impediment to achieving scale.
