3 minutes read

by Sue Hirst, CFO On-Call

Whether you’re new to business or a seasoned operator, it can sometimes be difficult to know what to focus on.  Business owners/managers are expected to be in control of:

  • Product/service development
  • Marketing and Sales
  • Operations and Finance
  • Customer Service
  • Human Resources

I’ve put them in the above order because firstly you have to have a viable product/service to offer to the market.

Then you need to convey a compelling marketing message to customers and be able to convert their interest into sales.

You then need an effective method of delivering your product/service to customers as well as finance to fund the business.

You need to focus attention on customer service to ensure they come back and give good testimonials.

Probably the number one for established businesses is Human Resources.  It can be summed up into one sentence:

Happy staff – deliver great service – to happy customers – who are happy to pay you!”

It may be surprising to some that HR can have such a big impact on your bottom line.

When your business is small you can afford the time to focus attention on customers and ensure they are being well looked after and happy.

When your business grows, you can become distanced from customers due to all the other things you have to focus on.  One thing I’ve learned about employing people is that they aren’t there just to make your life easier!

They have their own motivations and desires and you need to understand this and nurture them if you hope to successfully employ people and grow your business.

The best way to nurture staff is to take this area of your business seriously.  It’s surprising how many big businesses don’t take this area seriously, let alone small businesses.

It’s not rocket science though.  We’ve been employing people in our business for about 20 plus years and it hasn’t all been ‘plain sailing’, but due to our proactive approach we’ve had a lot less hassle than other employers I know.

It pays to have regular reviews with staff and work with them to develop their skills.  Try to create a consultative culture in your business and really listen to staff and what they have to offer, in terms of feedback and suggestions for what might work best for the organisation.

They are generally the ones interfacing with customers and hear what they say, so often have the best handle on reality.  If you listen to them and incorporate their suggestions, it can be very worthwhile to your bottom line.

If you work with staff to develop their skills and help them to be more productive, you will also win as a business owner.  On top of all this you get great loyalty from staff if they feel valued and listened to.

It can save you much money and headaches if you keep working with great people who are committed to your business and its success.

The very best place to start with HR Management is with an ‘Organisational Chart’.  This sets out everything that gets done in the business and who does it.  It’s a great way to ensure that all aspects of business operations are covered and there aren’t any gaps or overlaps.

Once you have the ‘Organisation Chart’ you can then come up with accurate Job Descriptions for everyone.  It’s vital for everyone to understand what they’re responsible for.

Having people running around without clear understanding of what they should be focusing on is very detrimental to business productivity and profitability.

Once you have these tools in place it’s much easier to regularly review the situation and creates an easier environment for HR realignment.  This means constantly reviewing who is doing what and if some people are overloaded where you can shift tasks to others who aren’t fully utilised.

If you’re in a service based business your most valuable income earning asset is your service staff.  You want to ensure they are spending the maximum time on billable activity.

If for example they’re spending 5 hours a week on non-billable admin and being charged out at say $100 per hour … if you can move that work onto part of the job … you could create an extra $20,000 of revenue per person.

That’s if you take into account a 40 week working year allowing for annual leave, sick leave, public holidays etc.  And that’s just one person – imagine if you could do that with 5 or 6 people!

It would more than cover the wage of someone else to do the admin or better utilise someone already employed.  One very important question to ask in a service based business is:

“Am I selling all the hours I’m paying for?”

The best way to be more productive with service staff is to have great systems for managing people’s time and travel and scheduling.  There are some fantastic systems available nowadays to make this process easy and cost effective.

Cloud commerce has made systems more affordable and accessible to small businesses.  Check them out to see how much you could save – not just in money, but headaches too.