A quick glance at the average size of our industry’s companies reveals a lopsided mix: very few large companies and many small companies, both offering numerous services. Yet a closer look at both types of companies reveals some red flags. For instance, it’s common for a young operator to start a business without a vision or plan to support the company as it grows. The operator gets started with some work, builds the book of business, and then adds help along the way to support the workload.
Soon, they’re running a successful enterprise - but with some missing pieces that often are critical to a company’s ability to grow and improve margins.
An evaluation of any successful company will reveal that the fundamental needs for almost all enterprises and industries are very similar. Small businesses require many of the same tools and positions on the organizational chart as large companies; however, these expensive additions to the business are much easier said than done.
Plus, most small business owners have trouble understanding how they can keep the business at a manageable size with the help of one or two key players, while adding the people and innovations they need to grow.
Additionally, don’t forget that direct costs to deliver the goods sold are relatively high compared to those of a large business, and it’s easy to understand why adding the support staff, tools and facility to make things run smoothly is no easy task for a smaller company.
Organizational chart overview
So what are some positions that make life easier and revenue and margins greater at a small business?
- A sales person along with a marketing plan are essential.
- Once the work is sold and the marketing plan is carried out, someone has to deliver the goods and services. A workforce along with field supervision by an operations manager is required to oversee the work and fulfill the customers’ purchases.
- After the job is done, you need to pay and get paid so you need accounting and administrative personnel to manage accounts payable/receivable, service documentation, etc.
Once you manage to get these people in place, consider the equipment and technology you can provide to improve your teams’ efficiency and ensure you’re staying competitive.
This requires that you know what your revenue will need to be to afford the competent players in the organizational chart described.
A balancing act to growth
Finding a balance when the entire business is operating simultaneously is challenging for a small business. Most owners and employees wear many hats to keep things running smoothly daily. Though it’s great when employees can be versatile, it can slow things down and whittle away margins.
For example, if a sales person is responsible for all aspects of the sales process including prospecting for customers, this will slow down the results he or she can generate in new orders. Or if a sales person gets involved with planning snow operations and their focus is directed on something other than sales, it can ultimately affect how well the business will do that season. And if the administrative duties are put on the back burner until long after the event is over, then it is unlikely the business is being managed well.
If you aren’t able to have all of these necessary areas of your business operating simultaneously with the right people and the right resources, then it means something is stopping for something else to start - and this can stall your ability to grow your bottom line.
Start planning for the future
To achieve a better bottom line it’s vital to understand the size, scale and players needed to position your company to run simultaneously and effectively.
Until you get that plan in place, don’t get caught between something you can handle yourself with one or two key people and taking the plunge to make it all the way to a multimillion-dollar operation. Plan your growth so you can get the proper organizational structure in place to grow and scale your company (and margins) successfully.
Mike Rorie has been a participant in the snow and ice industry for nearly four decades. He owns GroundSystems and is CEO of GIS Dynamics, parent company to Go iLawn and Go iPave. Contact him at Sales@gisdynamics.com.