It will come as no surprise that a lot of the conversations I have with business owners are about making more money. Most of them want the magic formula. It would be nice if there was one—like a magic porridge pot that just keeps producing.
There’s no such thing, unfortunately, but there are some key ways that you can increase your income and raise your profits.
One of those ways is through leverage. By leverage I mean getting a better result from slightly less input. If that sounds like a magic porridge pot, it’s because it isn’t far off. But it’s not magic. It’s just good sense and sound business practice.
The best way that a business can leverage is by employing people, and getting them to do the tasks that have been taking a chunk of your time and costing you lost opportunities. Another way to leverage is by employing someone to supplement the money-making tasks you’re already doing.
My conversations with business owners often go in two directions at this point. The first is that they tell me they can’t afford it. The second is that they’ve tried it already. The common lament is about person X who cost the business a small fortune because they were hopeless. But in my experience, those business owners have rarely sat back and analysed the situation enough to realise how much they contributed to it not working out. Was it because of their lack of prudent selection? Did they hold the person to account for what they were or were not doing? Did the person have adequate training? Were they appropriately authorised to do what they were asked to do? Or perhaps there’s a toxic culture in the workplace that caused them to go feral.
For most small businesses to be successful, they need to grow a team. It’s the only way a business can be sustainable into the future and generate the kind of profits your family needs. Yes, there are horror stories. But there are some keys to getting it right.
One of my favourite sayings is, hire for character and train for skills. In my book, character trumps skills every time. Why? Because if an employee has good character, they will recognise they don’t have the skills and do something about it. Or they’ll recognise the role is beyond them and they will opt out. The onus on you, the business owner, is to employ people of character and train them well. Be clear in what you want them to do. Ensure you’ve given them the appropriate level of authority to get the job done. And keep short accounts. If things aren’t working out, act quickly. No one wins by holding back because you feel sorry for someone.
Building a team with character takes time. It takes training and patience. It also takes prudence. Make sure you can cover wages for the first two months of a new team member’s employment. In that time, invest in their development. If you do, the opportunities to leverage will benefit your business and you will start to see the profits you’ve been hoping for. Even if you don’t see a magic porridge pot.