Heart of Business Mentor, and Maximising Value Expert Malcolm Allitt shares his thoughts with you.
There are essentially three routes to creating value in your business:
1. Do what you’re doing, but do it more efficiently
2. Do what you’re doing, but do it in different ways
3. Do new things which exploit emerging opportunities
It’s tough work running a small business and most owners are hard pressed to get beyond step 1. Working out how to do things differently takes time and effort and there’s often not a lot of creative energy left at the end of a long week. It also means changing things and moving both you and your staff out of your comfort zones.
But I would contend that if you want to maximise the potential value of your business your main tasks are to lead and to think.
Moving away from your roots
Perhaps you started your own business because you were an expert in IT, or in engineering or in accountancy. But the professional skills you brought to your new business will not automatically equip you for what’s needed to grow your company once it starts to become successful. You don’t necessarily have to completely give up contributing to the part of the business you love best, but you do have to allocate an increasing amount of time to leadership and to thinking.
You could do this by working harder and longer – and that’s what many business owners do. But this limits the potential of your company. Did you know that most businesses never grow beyond 20 people because this is the limit of the span of control for a hard-working manager? Maximising the value of your company is only going to be possible if you face up to the scary challenge of delegating.
Adding value to your company
It’s only after you’ve freed up some quality time that you can raise your sights above the coming hour, the coming day or the coming week and ask yourself how you can become a market leader over the next five years.
Let’s look at each of the three value-creation options outlined at the top of the article.
• Making your company more efficient means putting processes, targets and measures in place and allocating the tasks to the people best equipped to perform them. It also means stopping activities which don’t add value. Your job is to be clear that everything your company does contributes to the value you give your customers and that your staff are supported and accountable for their work.
• Doing things in different ways is a little subtler. The trick here is to work out what the essential essence of your customer offer is. Then work out which things you might outsource from your company without affecting your ‘value proposition’. This might involve, for example, payroll, HR, promotional materials or book-keeping. Or it might involve something more radical, such as delegating sales to expert channels and representatives in your field of work. You’ll have to pay a price for these services, but that price will be less than the gain you make from being able to concentrate your efforts on the core value-creation parts of your business.
• Doing new things is the biggest leap of all. It may well require market research, building new capabilities and finding new customers. It also involves investment and risk! This is a big topic – and I’ll say more about it in a future blog.
Here are my Five Top Tips for what you can do if you want to maximise the potential of your business:
1. Spend your Time Wisely
Think about which activities that you personally carry out are the most valuable in terms of nurturing your company’s growth. Now notice how you spend your time. Keep an hour-by-hour log for a week. What must you stop doing in order to give more time to the longer-term ambitions you have for your company?
2. Delegate More
Delegation does not mean abdication. Agree targets with the staff you give tasks to. If they have some experience ask them how they’d undertake the task and coach them through any gaps. Check how they’re getting on, and encourage them. Let people grow through giving them responsibility (delegation is another big topic and will be covered in a future blog).
3. Use Experts and Pay for Help
If you’re an engineer and you run an engineering company you wouldn’t dream of employing amateurs. But I come across many companies dissipating their efforts in trying to design their own logos, manage their own payroll and IT system, even though they have no core expertise. An outsourcing firm which specialises in, say, graphic design or HR policy has developed not only the technical expertise but also has the appropriate technology, systems and approach to do it efficiently. Pay for their help – it will be money well spent.
Now you’ve got more time and energy to concentrate on maximising the potential of your business…
4. Think Long Term
Imagine where you want your business to be in five years from now. Be expansive. Forget where you expect the business to be: imagine the best possible outcome. Ask yourself if you can get there in a straight line, based on the course you’re currently steering. Is it a continuous path, or might there be step changes you need to take in the way you think about and run your organisation? Set out your goals and work out what will need to be done if you are to achieve them.
5. Don’t try and do it all on your own!
If you’ve spent the last few years running yourself ragged then all of the above might sound like pie in the sky. Don’t blame yourself for that: it’s a very exceptional person who can reinvent themselves as a leader (rather than an ‘expert doer’), see what needs to be done and transform herself into an inspired MD. Employ a coach or a mentor to act as a sounding board, to challenge you and be your support and guide along the cliff-edge path to growth and success!
Get Help and a Grant to Support You
Did you know that if your business has fewer than 250 employees you can get financial support for personal coaching and mentoring through the government’s Growth Accelerator scheme?
Malcolm Allitt is a Growth Accelerator coach working with Heart of Business in London and the Thames Valley area. http://www.heart-of-business.co.uk/malcolm-allitt-mentor-profile.html
If you’d like a conversation over a cup of coffee about how you might maximise the value of your business – and have financial support in helping you do it – then telephone Malcolm on 07961 352268 or email on firstname.lastname@example.org