Growth in business is all about leverage. I’m not just talking about financial leverage (ie borrowing), I’m also talking about operating leverage and leveraging your time. It’s constantly reaching to get more out of what you put in.
A big part of what we love about what we do is we get to learn about businesses and come up with solutions to their growth capital challenges. In the process, we see many different business owners with businesses of various sizes and using a variety of strategies and management tactics. There’s micro managers, there’s big picture guys, there’s visionaries, there’s hardworkers, and some who seem to just get lucky! Not all of them make it all the way through our underwriting process, but for many, we help them achieve their goals.
The first type of leverage that a business owner needs to explore in order to grow is the ability to leverage his/her time. Too often we find someone that wants to grow but their focus is constantly turned towards random HR, operational or technical issues that are a constant distraction. It is a tough job and some of them even seem overworked. When you start a business, there is no avoiding these kind of duties, as they are critical and without resources in the early days they cannot be outsourced. However, there comes a time when the business owner has to step back and let someone else run these aspects or else growth will be constrained forever. Then the business owner should focus on strategy, acquisitions, growth capital investments, and ultimately negotiating deals that have a large impact on the business.
The trouble with this is even when a business has the resources to begin outsourcing some of the daily management duties (ie hiring a skilled operations person), a lot of business owners have difficulty stepping back. They say to themselves that “nobody cares about this business the way I do” and so they feel uncomfortable outsourcing these functions because they are critical to the success of the business. It looks like a big risk to them. While it’s probably true that nobody cares about the business as much as the founder, at some point you just need to take that risk. You’ve got to pay up for a talented person and put in a compensation structure that aligns incentives properly… and then you can focus on what you need to in order to take things to the next level!
Now that’s leverage!
Latest posts by David Gens (see all)
- Credit Score for Business Loan Applications - September 19, 2014
- Customer Loyalty and the Small Business - September 17, 2014
- Funding as an Element of Small Business Goal Setting - September 15, 2014
- Small Business Job Credit to EI Announced - September 12, 2014