How to shift up a gear and grow your business from medium to large
What does it take to create a bigger and better business? Brett Davidson points to 4 key areas business owners need to tackle
If you want to take your business from medium to large sized (and I mean large in our industry context, which is £2-3M+), there’s a significant shift that needs to occur.
Simply doing 10% more each year won’t cut it. In all likelihood you’ll just find your ceiling and stay there. If you want to keep growing, here are four key areas that need to be top of your to do list.
1. Ditch the detail
To grow big, you need to think big. It’s easy to say, but much harder to do. For most small business owners, being at the centre of it all is part of the thrill. However staying at the centre of it all now becomes the hand-brake that’s holding back your business growth.
When you reach £700k – £800k of turnover, it’s time to bring a professional manager into your business. Why? So you can focus on the jobs that only you can do. Take a minute to think about what those jobs are and you’ll find it’s a bloody short list:
• Set strategic direction
• Meet with high value clients (new and existing)
• Make rain (i.e. find new on-target leads)
You might come up with one or two more which are specific to your firm, but that’s about it. Everything else can be delegated.
Are you involved in a whole bunch of stuff you shouldn’t be?
This is one of the key issues to address when hiring a second-in-command, general manager, ops manager, CEO or whatever title you want to give them. For the next stage of your development you’re going to have to become a master at delegation.
2. Transform your team
You’ll also need a first class team in place. As you re-think your vision for the future, you’ll automatically begin to see where the team is beginning to creak (if you haven’t figured this out already).
That doesn’t mean that everyone has to go, but you may well find that some of your team are just not up for the next phase of the journey. Don’t mourn this too hard; it’s a gift. Take the opportunity to replace some of those existing team members with some top-notch new recruits. Even making one great new hire can lift the standards within your firm. Two or three will be like a complete overhaul. Don’t waste the opportunity if it presents itself.
The major obstacles here are emotional. Most owners I know care about their staff as much (if not more) than they care about their clients (which is a lot). Having to hold the difficult conversation with a long-standing staff member is not something to look forward to, but it has to be done. You can’t avoid it. So just get on with it.
Failure to accept the responsibilities of your leadership role hurts the business, the rest of your team, and eventually your family. It’s your loved ones who pay the price when things don’t work as well as they could. When you think of it in that light, it’s easier to deal with what needs to be done.
3. Ban the busy(ness)
The saying ‘less is more’ applies to many things in this life, but when it comes to your time management, it should be your new mantra.
To get to where you are now has probably involved a huge amount of hours and a lot of getting your hands dirty at all level of the business. Going forward, you need to stop equating hours with productivity. That’s a major shift in thinking, so don’t underestimate how hard it is to pull off; most owners never really get to grips with it.
It’s time to stop being busy and start being productive. That means focusing on the big issues affecting your business, not just jumping in and fixing it yourself whenever a problem arises. If problems recur, look to address the real issue, which probably means ensuring you have the right people in place to do each and every role.
In a perfect world you want to be organising your day so that you’re not perpetually harried and hopeless. You should also be aiming for lots of time off and time out of the business where you can relax and think. All my best business ideas come to me under a palm tree on a beach when I’ve had some time away from work. I’m sure it’s the same for you too, but how often do you let yourself take the time for that to happen?
One way to create more time is by focusing your efforts on only your top 20-30 clients. Who can look after the rest of your current client list? Is there another adviser within your firm, or do you need to be hiring one?
Imagine a life with only 20 top clients, a full time practice manager and a brilliant team in place. Now you get to be your real creative self.
4. Pursue the productivity
To achieve turnover of £3M each year doesn’t require a huge team of advisers and staff. It is time to think quality and productivity; less clients with more money.
For example, the average adviser manages revenue of between £100k – £200k pa. Good ones achieve more like £300k – £400k and great ones achieve £500k – £600k. I know five advisers in different firms that manage £1M of annual revenue (albeit with a lot of support in place), and they don’t do it by working with 100 clients who pay them £2,000 pa.
So how can you move up the client curve?
A £3m firm might have 4-5 very productive advisers and a high quality support team in place to allow them to achieve those numbers. A £2m firm might only need you and 2 other advisers; it doesn’t have to become top heavy with advisers and a management nightmare.
The key is constant pursuit for more productivity; getting more with less, or much more with the same. Build up the back-office support team, as these are your cheapest resources to hire. However, you need to be continually asking yourself “Do I have the right people in each role?”. If you don’t, then fix it immediately. The right people are technologically savvy and highly efficient. They are always looking for a new piece of software or a smarter process to get more done in less time.
To supersize your business you’ll need to embrace a new set of skills that, to this point, were nice-to-haves, but are now essentials.
For many owners this is just a bridge too far and they never really make the jump. However, if you’re ready to shift up a gear, then apply these four steps and watch the growth begin!
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