Step back to get a clear sight line for strategy

All business owners know there comes a day when they have to make the transition from working in the business to working on it. When they start out, they will be wearing all the hats. They will answer calls and set up supplier relationships. They will take and fulfil orders. They will attend to technology meltdowns and glitches. Working in the business means always putting out fires. A customer might be taking forever to pay, another might be unhappy with the service. Then there are the inevitable issues with technology. While these are matters require your attention, they take all your attention and stop you looking at the broader strategic issues, at the marketing and building the client relationships.

How long does an owner continue doing this? The answer depends on their vision of the business. There are no hard and fast rules here. Much of it will depend on the kind of business it is, how big it is and on the personnel.

A study done by the University of Wisconsin in the 1970s found that companies fell into three categories. The first was the ‘craft’ firms – businesses started up by an entrepreneur particularly skilled in a certain area. The business depends completely on the entrepreneur being personally involved. As a result, the owner spends his time in the business not on it. Most small print houses fit into this category. Because the owner is not working on the broader strategy, these firms don’t grow much.

The second group comprises the ‘promotion’ firms. Their growth is built around a certain product or service. In many cases, the entrepreneurs behind these businesses tend to work in it rather than on it. These firms tend to have high growth. The final group is made up of ‘administrative’ companies. These have professional managers who spend their time planning and budgeting, rather than being directly involved in the day-to-day. These firms are likely to have formal procedures, processes, and job descriptions. The big focus here is on product and process improvement. Their growth is in the middle.

Printers who want to work on business rather than in it will need to make the shift to the administrative type. That means delegating. The same applies to ambitious entrepreneurs who might want to step back from their promotion business. This will mean bringing in a special manager to run it day to day.

If you feel you can’t afford someone to offer administrative services, but at the same time, you don’t want to keep playing nursemaid to your sales people, you will have to make some hard decisions. Making this sort of transition requires strong systems and solid profit growth to transform the business and at the same time, free up the owner to drive sales and profits, and create an empowered team committed to the company.

Another major step would be goal setting. Printers can set a target for the business, for six months and then a year. They need to make sure goals are definitive and measurable. It could include a resolution to double sales to $500,000 per month over one year. When you go down this direction, it is important to have an action plan.

Another good idea is to spend the time improving efficiencies. Printers can analyse how everything gets done on a daily, weekly and monthly basis. Can anything be streamlined or corrected? Should they include something new? Are there bottlenecks? Rewrite the daily, weekly and monthly tasks. They should monitor how the new tasks are being performed for a month. Then regularly test and measure them again. The transition will determine the level of growth.

Leon Gettler is a senior business journalist who writes for a range of leading newspapers and journals

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