How to tackle the next stage of Business Growth

[eric281]

God, Nathan, why bother posting if you can't offer any advice???

It is my heartfelt belief that leadership can't be hired into a small business. Maybe management skills can be, but building a business takes a committment that few (if any) employees could/would give. It's different in a large company where hiring CEO's is normal. But they're slightly outside my budget Although maybe Bill Gates would like something part-time now that he's at a loose end. I can certainly outsource some of the "everything else" role I spoke of earlier. Phone answering, accounts even marketing donkey work like cold calling/list compiling etc. However, EVERY successful small business I know has the owner fulfilling the business leadership/growth role and not the technical one, at least no more than occaisonally. And by small business I DON'T mean SOHO or Mom'n'Pop operations. That's what I'm aiming for, a couple of dozen techs, large corporate and national accounts, multiple locations... the whole shooting match. That cannot be built by a guy installing servers all day every day.

The rub here is that not everyone is that person. Just because someone is knowledgeable enough to put together a network doesn't mean that they are qualified or knowledgeable enough to really manage and incubate a business properly. I knew I wanted to work in computers at a very young age, but when I went to college I changed my major from CIS to business management after my first semester. This was necessary to get the knowledge base that would allow me to successfully execute the plan I had for my business.

Reading your posts so far, it seems like there are mixed messages. In a lot of ways it really seems like you would never give up your position, which says a lot about your entrepreneurial spirit. However, the fact that you have been ignoring the business side of your business should be a red flag. If you don't love it, and really want to do it, then it's going to be a struggle to make yourself work at the things you are currently ignoring.

 

[seedubya]

Maybe you're right, Eric. Maybe I'm not that person or don't have what it takes. I've already failed twice before. It's not like I don't know what I getting into. But guess what? I RECOVERED twice too. I learned a lot and I grew a lot. Now I'm ready to go again. And all that the talking here has done is make me surer that this is what I must do. All I'm trying to do from here out is determine what skills I can acquire and what must I hire in? Vision isn't a skill, though, at least not completely. My vision might be small compared to those of others but it's mine, no one else has it or knows it and if anyone else tried to build it for me it wouldn't be mine. It might look kinda like it but it wouldn't be the real thing. Know what I mean?

Anyway, Monday morning I'm going the County Enterprise Board and getting hooked up to the Business Mentoring Program. We'll see.....

 

[eric281]

Maybe you're right, Eric. Maybe I'm not that person or don't have what it takes. I've already failed twice before. It's not like I don't know what I getting into. But guess what? I RECOVERED twice too. I learned a lot and I grew a lot. Now I'm ready to go again. And all that the talking here has done is make me surer that this is what I must do. All I'm trying to do from here out is determine what skills I can acquire and what must I hire in? Vision isn't a skill, though, at least not completely. My vision might be small compared to those of others but it's mine, no one else has it or knows it and if anyone else tried to build it for me it wouldn't be mine. It might look kinda like it but it wouldn't be the real thing. Know what I mean?

Anyway, Monday morning I'm going the County Enterprise Board and getting hooked up to the Business Mentoring Program. We'll see.....

I am not telling you that you are or are not the person to do what you want to do. There is no way any of us can make that judgment. You have to do that for yourself, just make sure that you really think about what you want and why you want it. I think there are many self employed/smb owners out there doing it for the wrong reasons that are miserable because of it.

Also, the idea of getting into a mentoring program is great. I've been blessed to have family and close family friends around me my entire life that have helped me learn many things, but a mentoring program seems like it could be useful to anyone. I hope that goes well for you.

 

[NY_Bry]

catch 22

seedubya,

Also, whats tough about expanding is finding the business to accommodate your growth. If you already have a heavy workload, clients are waiting to be serviced, and you are winning opportunities with new prospects... then absolutely try to hire on employees to meet these needs.

On the other hand, hiring techs and administrators without having enough work for them to do could be costly. Back to what you and I originally started chatting about: Marketing (hey, that's my end of the IT biz - kinda have marketing on the brain) And there's the "catch 22". Can't hire if you don't have enough work for the staff, can't attract new business if you don't have the staff to work for the clients

Either way, you hire staff, you gotta give them work, even if it means that, at the start,they find themselves "wearing many hats" - doing different tasks- (unless there are union or labor laws that prevent this) But if your tech is sitting around waiting for the phone to ring, why not have them make some cold calls in attempt to attract new business? Print fliers, go through the Robin Robins material, etc.

We understand that the technical side of your business is your passion. You obviously, and with good reason, take a lot of pride in what you do. It's gonna be hard to let go of those responsibilities by letting someone else take them over, but that is the essence of being the boss -- I know that you know this already, but obviously there are many risks to factor and nothing will ever go exactly to plan. Hiring techs to free up your time would seem be the best place to start.. so that you can begin to focus more on marketing, seek new clients, do the books, and work less hours.

And, as you said previously, you may have failed before, but you certainly recovered. I think that's a proverb: "fall down 7 times, stand 8"

 

[Wheelie]

... I've already failed twice before. It's not like I don't know what I getting into. But guess what? I RECOVERED twice too. I learned a lot and I grew a lot. Now I'm ready to go again ...

"Many of life's failures are people who didn't realize how close they were to success when they gave up." -Thomas Edison

Keep at it seedubya

 

[seedubya]

Thanks for the encouragement, Wheelie.

And while I'm at it, many thanks to everyone who has replied to this thread. It means a lot to me that so many of you would take the time to even read it, never mind reply. Everyone managed to give me something to think about and that's no bad thing.

If any of you are interested I'm starting a night course in business managment with my local County Enterprise Board first week of September. Business mentoring will be part of that process. I've decided to go ahead and hire the tech on a 6 month contract, starting next month. I reckon if I can't get moving in the right direction within half a year I'm probably never going to do it. I have a couple of competitors locally that might be interested in a partnership if that happens. I'd be happy with a job and small shareholding, if that comes to pass. Another option would be to take in a partner who has good business growth experience, sell them a shareholding and I'll just stick with the tech. stuff.

Time to see what's behind door no. 1...............

 

[eric281]

There you go. Explore your options and you will always find a good one that fits. I think you will do well.

 

[Graystar]

There has to be more to this story!!

It has been months since the last post on this thread, and I am certain I am not the only one who wants to know how this is going.
Having started my service business three weeks ago I am enthralled by all the experiences I read about here. It is some of the best reading I have found on the subject that is now so near and dear to me.

So please if you can, come back and tell us the rest of the story.

Thank you
Graystar

 

[Pc Fixed Right]

Do you guys watch "The Big Idea"? I am not sure if you get this show on CNBC in other countries but here is the link to some episodes on www.HULU.com This show is the main reason I am able to keep my sanity. They have some great ideas on how to give up control of your business and do what you do best and let other people that do things better than you to let them do that as you expand. The episodes are about an hour each and well worth the watch.

 

[usacvlr]

How much money do you want to make? Growth is not necessary if you're happy at a given level. If you're making 250K but would be happy on 50k then just cut back your workload and live your life

 

[geeknz]

It is certainly worth considering what income to time ratio would make you the happiest... Everybody is different. I have no desire to be the biggest IT firm in the country. Just want to earn a good income and have plenty of time off to enjoy it!

 

[slees]

Partnerships as an alternative to employees

I know it's an old thread and it's a few years since it began. I would be interested in hearing where the OP is up to and what he has done in the intervening period.

I am in a similar position but really have no choice but to do what I am doing, so in some ways that makes it easier, and I don't allow myself to think negatively about the experience. Also I sort of have more of the overall type experience in how to run a business, lead and manage people, and am having to force myself to learn the more technical skills that I need.

I wanted to expand a little on a suggestion that has already been made in this thread.

One of my pet hates has always been how so many people don't enjoy their work. It is such a waste of their lives. Wishing away their working hours so they can do what they enjoy in their free time, looking forward to holidays, until ultimately they retire. I was pre-programmed into this type of attitude by a father who always hated his work and it took me a long time to realise it didn't have to be like that, and having experiencing semi retirement on 3 separate occassions has also given me an appreciation that retirement isn't all that it's cracked up to be. I could go on further about this but that should be enough background without me going off topic.

I don't think I will ever have an employee. It's not that I can't manage them. But I just don't like the whole environment of an employee based business (again I won't expand so I stay on topic). If and when I get round to expanding (which I probably don't want or need to do), or having a backup (which I will need to do if I don't fail), I intend to do it by forming partnerships. Either with an existing complimentary business, or by assisting someone to setup in a similar way to myself. We will each have our own business, that operates in a similar way, but we will be able to cover the others customers to allow for holidays or sickness. If one party has certain strengths they may provide that aspect for both businesses. If the relationship sours then it is possible for each business to operate independently again. Partnerships can disolve and new ones be formed.

Obviously it is essential to have a partner you can trust and that compliments your business. But isn't that the same for an employee - if it's going to work that is. Sure it could increase the risk of the other party trying to steal your business - but an employee could do that too - and you could always steal some back if it came to that. A business partner, well chosen, should be less likely to move on because having your own business gives you more opportunities to do what you want and less reasons to be frustrated. You have to be the right sort of person to work in partnership. And as mentioned you have to have the capacity to assess your future partner for compatability before you make the move.

I feel very comfortable with this as I believe I am a good judge of character and it doesn't have to take me a long time to do that. I have actually been "grooming" a potential partner for a couple of years already and it may well be a another few years before anything does come to pass. But I reckon I've got at least another 30 years to work so there's no rush.

 

[Wheelie]

Wow. I could've written that myself except for the part about not taking any vacation and about being burnt out. I took more than 8 weeks off last year and I will do at least that again this year. I have learned the importance of the need to balance work and play. As far as being burned out ... I still truly enjoy each day serving my customers and seeing the next BSOD. They need me and I need them. Hell I got burned out at every job I've ever had and this one is no different in that regard.

However, you are indeed correct about the need to do something to grow the business to the next phase. Because you cannot retire doing this (your income drops to zero).

The conundrum of adding help while maintaining profitability is indeed daunting. My examination of this is that the entire business would change. My role would be to manage employees that do what I am currently doing. From a quick and dirty look at it I think I'd need about 5 to 7 employees just to break even with my current take home pay. Is this what you've discovered? I guess that also means I'd need 5 to 7 times the customer base? so my work of marketing the business will go way up and thus advertising costs go way up. So to make significantly more money I'd need 8 to 12 employees, then I'd need someone to help me manage I am sure. Throw in an accountant, payroll, etc and now it all becomes a blur. That's probably where I'd get burned out.

I am so glad you started this thread. I sincerely hope it draws some good input. I intend to head this way some day as well and I need to know as much about this as I can.

Thanks for bringing this up!

You made me re-read my post from 3 years ago! 3 years have past and I still work at this alone. I really do not want the challenges of having employees and the increased revenue that would I would have to constantly chase to support the overhead.

If you lack the skills you need to process 4 or 5 PC's per day maybe you need a good technician in your shop? You would learn a lot by having him/her there and maybe you would not need them later down the road?

For almost 8 years now I have learned how to keep a steady stream of 4 to 5 PC's per day on the bench. Since I am in a major US metro area and on the "right side of town" it is easy to keep that number of repairs coming in. I have learned the value of working at home to increase revenue because doing 5 PC's at the same time generates a lot more revenue than being out in the field at my billable hourly rate. So I try to get customers to drop off and pick up here at my home/office. That has worked very well (although there are times you have to go out in the field).

I still LOVE MY JOB!! I work very hard and really enjoy serving my customers and I balance that by continuing to take lots of time off to prevent burn-out. Next Friday my best friend and I are flying out to Salt Lake City and renting two 2011 Harley Street Glides for 12 days! We plan to ride up to Jackson Hole, Yellowstone NP, Beartooth Highway, Flat Head Lake, "Going to the Sun Road", Glacier National Park, ending up in Banff NP where we'll turn around and ride the super slab back to SLC. It's going to be a phenomenal trip and MUCH NEEDED to stave off the burnout that can so easily come in this business (working 7 AM to 7 PM daily if not more).

I absolutely still love my job each and every day. It affords me a very good way of life and I appreciate each and every one of my customers and I treat them fairly. I have not had to advertise since year one because word of mouth has filled my shop benches.

When I go on vacation (several times a year) my voice-mail message simply says: "Thank you for calling *** Computers. We will be on vacation from June 11 through June 23. If it is urgent feel free to leave me a message and I will get back to you as soon as I can or just call me when I return on the 24th". Have a great day!"

NOTHING in this business is more important than time off .... TAKE IT!

 

[slees]

Glad to hear you are enjoying it because that is the most important thing.
I enjoy having my own business too. While I have no choice now, the challenge yet flexibility and freedom it brings suits me much more than being an employee. For me I find I can convince myself to enjoy something or not enjoy something. So I am making absolutely sure that any negative thoughts that do creep in are quickly identified and dispensed with.
Maybe unusually I am fortunate to have a technician as one of my customers and he is nearly always prepared to help me when I need it. And even better is that I find I need this assistance less and less.

 

[ittechsc]

Great post Hawks. Good advice

 

[Tony_Scarpelli]

Not withstanding the already great advice it seems to me that the OP and others in his situation should add one more option to their list of choices.

My first thought was not only do you have the option of hiring a great tech but you can also hire an administrator and or sales person for less money and it seems you already love the tech work. So let someone else balance the budgets work with advertisers and purchasing. I prefer to hire women and train them to the IT industry. They seem to be happier and stay longer than man. I offer little benefits accept I try to pay for child care when I get one that really works out. I will train her in any area that she needs if her personality fits my organization.

With your skills, you can make more money but nothing you do in life will create more time. So stop wasting your time working 80 hrs a week.

All my employees tease me as being retired for the last 8 years. That is because I am in the shops 1 or 2 hours a day or less. I consider myself a slack resource. That means I am a roving employee to fill in where I am needed. I staff to handle normal work loads and on really busy days I chip in and put in a full days work or two or three. Sometimes I have had to work a few weeks back to back and I know its time to hire the next employee. When work returns to normal I go back to my 9am espresso and morning news before doing the rounds. I take a 7-10 day trip every 6-8 weeks. These trips are my time to think about business and expand or fix problems. I could do the same with yoga at home but I prefer to go on long driving or flying trips which keeps my mind empty and allows creative juices to flow.

If the op is in no mood to increase risk, hire more employees, rent another shop, borrow more money.....I'd say ok. The best next choice could well be to raise your prices. anyone who is working at or above maximum sustainable performance can afford to loose some busy work. SO make sure that you increase your margins. You will see your net pay increase as you feel nervous about seeing your daily and weekly schedule decline slightly. Nothing drastic. If your on site rate is $125 per hour go to $135 or $145. If your bench rate is $59 per hour go to $69 or $72. If your markup on new computers is 30% increase it to 40 %.

Never take jobs that just swap dollars or break even. take all your accounting to an accountant and have him prepair a job profitability or customer profitability report and see what jobs or customers are not profitable and then avoid them. Or better yet fire the worst customers.

I did both of these things Increase prices followed by firing the worst customers who didn't already leave for the higher prices and the remaining customers became even better. Some called to find out what they needed to do to remain good customers as they were worried that next year I could cut them.

It really doesn't matter what your gross pay is. It only matters what you get to keep at the end of the period. If you cannot make at least a certain margin on hardware then don't sell it. You will find out that as bad as you think your profits on hardware are, they are actually worse when you consider the non billable time and the warranty work that goes with same.

I always wanted the whole thing. Hardware,software, network installation and service. Then one year one of my best clients bought directly from dell. I charged them every time I went out, for all the time on site, there was no more warranty as I wasn't the provider. My profits and income sored on that account. So I raised my hardware margins and no longer worry or even care much if I loose a bid on hardware so long as I can get the service work.

One more thing if you are going it alone. It is lonely out there year after year plugging away. So hire a part time key employee, train her to help with bookeeping, check writing, going the the parts house, girl friday stuff. And have someone to share your daily woes with. The go home early once in a while knowing that you made enough profits on the other clients today.

Learn to say no to clients. Or at least learn to say that will be a considerable fee additional.