HOW&WHEN TO YOUR INFRASTRUCTURE By Jeff Bennett and Rick Smith
A s a business owner, infrastructure may be one of those things you think about only when confronted with a change in staff or considering your business plan. While some may review their business plan more often than others, I want to encourage you that infrastructure should not be a once or twice a year consideration. The infrastructure of your business will determine the success of your business. As a past business owner, I (Jeff) fell into the same trap of feeling that I could not afford to hire the proper staff at times. As I continued to grow, it became apparent that hiring the staff needed to run the business efficiently was an absolute necessity. I would look at my numbers and decide I needed to grow by a certain percentage before I could hire that next employee. Where I was failing is that I would not take into consideration what I was losing without that person on staff. I also failed to see that when you hire correctly, and you allow that person to be creative, new ideas for increased revenue and reduced costs can be realized. We all have ideas and dreams when we start our business. Once we get started, the grind of the business everyday can dull those ideas and dreams. To remedy this, take a short vacation or a long weekend with those close to your ideas and dreams. Review what it will take to get you where you want to be. If you don’t seem to be able to get off the truck, you are working too many hours. Or, if you are feeling the financial pinch, look to the system for correction. Let the numbers be your guide. Review the suggested benchmarks with your Franchise Consultant (FC), but also consider your goals in light of the bigger picture. I (Rick) am reminded of the importance of having clear job descriptions. Michael Gerber, author of The E Myth, suggests that even when wearing multiple hats in your business, it is important to have clear job descriptions for each “hat.” That way, when you do add a new staff member, you can take one of those job descriptions and assign it to the new employee. I have experienced running a business with and without clear job descriptions. I have a feeling that I don’t have to tell you which way is much less stressful. So, let’s dig into a few possibilities where growing your infrastructure may be very apparent. For starters, if you are still on the truck every day, who is selling that next job and keeping your pipeline full of jobs? If you are on KAP accounts or tied to a TPA that is sending you work, that’s great – but what happens if those go away? Your business could be in great jeopardy of failing. Rainbow International® recommends that you have a Business Development Associate (BDA) to help build the 5/20’s of your business organically. The BDA position can at times be a tough position to fill. By using the RAREtoolbox, including Predictive Profiles, this will help reduce much of
the time involved in finding the right person and reduce the chances of finding the “wrong” person for the position. Hiring an additional technician or office professional might be the best step for you. If you are not on the truck every day, you will have time to job cost, check your benchmarks and break even. Tracking these numbers could lead to finding leakage that could allow you to make these additional hires grow your business and increase profit margins. In other words, they could more than pay for themselves in a short period of time.
LET THE NUMBERS
BE YOURGUIDE.
How do you know when it is the right time to hire? One indication is when you start to see that overtime is increasing. You will need to determine if the increase is just a temporary spike in the business or true growth. The use of temporary or part-time help could be employed to get you through a temporary spike. If it is true growth, knowing your financial numbers will help you determine when it is time to bring on that additional employee. Temporary labor, although necessary at times, is much more expensive in the long term. Bringing in the right person can help meet your increased labor needs while reducing your current labor costs if he/she reduces the need for the temp laborers. As you consider your long-term plan for your business – whether that is retiring, selling, or passing it on to a family member – a rock solid infrastructure must be in place. If your plan is to retire and leave the business running, how can that happen if you are the business? If you plan to sell your business one day, a clear organizational chart with the appropriate infrastructure will make your business much more attractive to a potential buyer. If you plan to pass it on to a family member, the transition can be accomplished much more seamlessly if your infrastructure is in place and ready for transition. If you have questions about building or tweaking your infrastructure, please reach out to your FC and start building a plan together. Remember, this is your dream and you have invested a lot to be where you are right now. Don’t fall short of your dreams due to fears of building the proper infrastructure around you.
STORMSURGE TM | E1:2017 15
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