Every business owner envisions a growing business, running smoothly without drama and having massive amounts of cash flow and profits. The problem is that with growth comes increasing complexity. Oftentimes, you need to add people and improve processes. Deciding not to add people and processes can create choke points in our business that cause it to become increasingly inefficient or ineffective. It breaks my heart to see businesses not living up to their potential. There’s a fix for those choke points, but sometimes we see them or sometimes we don’t. Or if we do see them, we may not know the right fix.
I have two clients that use fabricated steel as part of their product delivery to their clients. With the shutdown of steel production due to Covid and the rapid rise of construction post-Covid, many businesses like theirs have had huge steel price increases as supply was not keeping up with demand. The lack of supply by steel producers became a choke point in the U.S. supply chain as commercial construction increased. While my clients ultimately decided not to purchase steel overseas, they certainly investigated the possibility since U.S. supply was so limited.
Sometimes, choke points (like this one) are caused by external factors and are truly out of our control. But business owners still need to be aware of issues that could pop up and be prepared with a plan.
A more common and pervasive choke point resides in people and processes in your own business. Your staff forms a choke point any time just one person knows how to do something or has the qualifications or permission to make something happen. Whenever that person is ill, on vacation, or busy with other duties, your supply chain blocks up. If that person leaves the organization, everything grinds to a halt.
In a prior blog, we talked about the lack of delegation by the owner to other more qualified people in the organization. This can be a choke point in our organization too. The solution to this choke point is to look at your systems and staffing to identify single points of failure, including ourselves. For each, either adjust your operations or invest in training staff so there always is a second option whenever something goes wrong.
Do you really want to limit the potential of your business? Let’s identify those choke points and breakthrough those barriers to growth. Soon you’ll be on the path to increased cash flow and profitability and realizing the business of your dreams.