I’ve been asked by a few people recently how to scale their small business, and I have delayed on purpose. It’s hard. It’s complicated. No doubt about it, and there are so many “moving parts”. But here I am at the coffee shop this afternoon, jotting down the outline because sometimes you just gotta do what you gotta do.
Many entrepreneurs today start their own business performing a service with their unique expertise. It could be computer networking, virtual assistance, building websites, repairing boats, cleaning office buildings, installing solar, doing manicures, and so on. Hey, we live in a “services economy”, right?
The majority of entrepreneurial startups today are services-based.
So you start your company because you know how to do “service x”. But you have to let people know you exist (marketing) and you have to book orders (sales) and you have to procure the tools and resources, and you need to perform the work (finance, operations) and then you get the customer to sign off (customer relations) and then you bill them (accounting) and you call them to get them to get paid (collections).
But what really earns you your money is the “operations” piece – simply performing the work – and you’ve taken on all these other responsibilities because that’s what business owners do. And you stay up late at night, and you worry about your revenue…..but I digress.
So it becomes clear to you, after a period of time, that your income will be maxed by your hourly, or job rate, times the number of hours you can bill. And when you’re doing all the other business stuff, you are going to have fewer billable hours. Or really long days!
Time and expertise are your products. Everything else is business stuff around the edges that makes your service sales possible and profitable. You know you need to hire people, and implement systems, but you’re not sure when, where, and how.
Do this first. Change your thinking.
The moment you decide to scale your business beyond just you is the moment you move from a technician’s mindset to one of being a leader, teacher, and manager.
Sure, you’ll still perform some services as an owner, but to a lesser and lesser degree as you grow your team. Eventually you won’t perform any at all yourself. You’ll be the boss.
What will you do? You’ll teach, oversee, schedule, run quality control, interface with customers, arrange the tools your people need, run sales & marketing, hire and fire, and essentially build this company to be a larger version of your work.
Your main goals: replicable, consistent, excellent results for your customers, and business done the way you want it done. The downside – your reaction times WILL slow down. There’s no way to document and communicate all of these operations without slowing things down, no matter how good your tools are. This is a necessary evil.
Your firm will need to (at the most basic level):
- Let people know you’re there (marketing)
- Quote the deal (site visit or detailed consultation important)
- Present it to your prospect (Scopes of Work necessary to define what they’re getting)
- Close the deal (Sales – maybe you!)
- Provide the tools, training and resources and perform the work (operations)
- Keep the customer up to date
- Handle change-orders (sales again)
- Gain customer sign-off/approval
- Invoice the customer (book-keeping)
- Collect your money
In the early days, you’ll combine or distribute these functions among several of you. As you grow, it’s likely you’ll have individuals, then teams performing them. You can do this with paper files and worksheets when you’re small. When you grow, you’ll get more sophisticated.
For nearly every industry, there are services software packages and apps available to help you document these processes. You can find software to have customers enter service requests online, track technicians’ hours (they’re uninterested), track trouble tickets, project status, service orders, customer infrastructure – the possibilities are nearly endless. Advice on this – pick carefully something that’s already out there and don’t modify it too much.
A good website will offer your customers self-service so they can check status on their order and what’s going on with it. Self-service has become the (sometimes annoying) way of the world in services. Get them the maximum information with the minimum expense. (I’m not going to rant on this point right now, but I could.)
As you hire more people, you will want to push jobs down to your minimum cost resource (person) as often as you can. Yes, your least-paid employees. THREE really strong benefits from this:
- Keeps your operational cost down per job.
- Gives these lower-paid, newer people a growth-path in your business and shows your confidence in them.
- Keeps your rock-stars from getting bored and losing motivation.
And now just a few random thoughts and tips:
- Allow a little extra time on your service estimates. Don’t over-promise and under-deliver, ruin your reputation, stress your people, and have unhappy customers.
- Remember that time and expertise are your products. You’re charging for them. Be careful how much you give away in the name of goodwill. Allocate your people wisely.
- Be careful on not-to-exceed quotes unless you’re 100% confident in the job.
- Give paperwork, scheduling, and administrative functions to the lowest-paid, highest efficiency people you can.
- Limit calls placed from your salespeople and your customers to your technicians, who are trying to do the work you pay them to do. It’s harder with the distractions.
- Let your techs know that you track their time because you VALUE it, not because you’re “big brother” or micromanaging.
Scaling a small business is a big project, and it’s not for the faint of heart. It takes systems, discipline, flexibility, and the ability to work with many diverse types of people. I’ve touched on a few of the basics here. But done well, it can be a great business on its own, or a money-making supplement to a product business.
Are you having trouble scaling your small business? How can I help? If you have this experience, what would you add?
Make it a great day!