Growing a Small Business—Only 3 Ways to Create Capacity
Inspire Results Business Coaching
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Growing a small business requires increasing capacity. But there are a lot of ways to increase capacity in your small business. The trick is identifying the ones that will work in your business.?
In this article we’ll share a practical and simple way to find the best path to growing a small business and increasing capacity customized to YOUR small business. (And check out one client’s success story below)!?
What makes the search simple is that there are only 3 places in your business to look if you want to increase capacity—?
Does your business need more capacity? You do if you:?
When you think about the definition of capacity, who doesn’t need it?!? It’s what growing a small business is all about. As business coaches, business owners seek us out for a lot of complex reasons, the majority of which can fall into the need to create more capacity.?
Stated differently, increase your capacity and you’ll have—?
Fortunately, you can take a simple approach to increasing capacity, because there are 3 ways to do it—through your people, your processes, or your technology. Let’s dive into each one.?
3 Ways to Increase Capacity?
People?
When you find yourself unable to meet deadlines without overtime, the easy button is “let’s hire somebody.” Except it’s not easy. It’s hard to find people for starters. And another thing… the more people you hire, the more complex the business gets. Verne Harnish, in his book Scaling Up, said that when your business grows from three to four people, you increase your staff by 33% but, the complexity of your company’s operations increases by 400%!?
The key is hiring the right people at the right salary level. Our business coaches find that the #1 position that most small businesses don’t have but really, really need is a reliable $20-25 administrative person who can think for themselves, forecast needs, and take action without permission. Someone who’s organized and can run things behind the scenes.?
We often see business owners hire before they have a really clear understanding of the job description. Then we see the new hire leave soon after often because the job didn’t turn out to be as described.??
Growing a small business the right way requires you to be planful about your hiring. We use a tool called the Future-Focused Organizational Chart to help our clients forecast their people needs 5 years out and more. That way, you know what position you’re going to need next year and the year after that and so on. You can be watching for that right person long before you need them. Making a future-focused org chart also keeps you from making snap hiring decisions.??
Processes?
The 2nd area to review when growing a small business is in the basic processes required to get work out the door. If you have existing processes, how up-to-date are they? Evaluate your current processes to identify areas where there are gaps, backlogs, and delays. At the very least, you want defined processes for the most common, frequently executed tasks.??
Once you identify which tasks need processes defined or updated, how do you attack creating them? Usually, the quickest, easiest, and most accurate way to define and document any process is to ask the person who’s performing the process to capture each step. They’re the expert. Then the two of you can review and polish the documented process for the record books.??
Implementing efficient, up-to-date processes is essential for creating capacity.??
Technology?
Our business coaches observe that most small businesses use about 30% of the bandwidth of the software they currently have. So start there. Make it a goal for someone to deeply learn the capabilities of all your software and technology—go to a user conference, go to YouTube, or Google it and start learning! Fully utilizing existing software and systems before seeking new solutions can save money and time.??
Once you’re fully utilizing the software and technology you currently have, ask yourself and your team, could any emerging technologies help us achieve our top priority goals? Next, do the research, form a hypothesis, and test it. Then you can make an informed decision before running out and buying a system only to find out it doesn’t do all you wanted it to.?
Growing a small business takes time. Here’s a story of one client’s success with all 3 ways of increasing capacity, in his own words…??
As an owner and the lead salesperson in the metal fabrication side of our business, I was overwhelmed by the amount of time I spent quoting and preparing jobs for the production floor. I spent about 18 months getting a workflow and system put together that alleviated some of the load and increased our ability to sell more jobs. ?
The first thing we tried was some quoting software that was written for companies like ours. The first one we tried “helped” but still fell short of enveloping all our metal processing offerings (we do lots of things). What it had done though, was help us get a little more done than we were before. That drove some extra revenue. ?About 6 months later I revisited a more robust software package, unaffordable to us before but with the new revenue brought about by the first software package, became a bit more palatable.? We signed up for that and are still with it today.??
That seemed like a great solution for probably about 2 weeks and then I once again found myself overwhelmed. I was now quoting faster and more accurately, but the drafting/engineering/file management problems started to overwhelm me! We soon hired a project coordinator. That helped get the files organized and with some simple quoting tasks, it also drove more revenue, but I was still working 70-hour weeks! ??
About 6 months after that we hired our first draftsman. He has taken a great deal of load from me and in the last 3 months we’ve quoted 2x more than we sold this year and we’re winning a reasonable percentage of jobs. Hiring those two positions and being able to afford that software was unthinkable 18 months ago but I’m down to about 50 hours per week and revenue is up by double digit percentages.? I’d call it a success and a great learning experience. I’m actually EXCITED about hiring more people now!??
Growing a small business requires increased capacity—be it in people, processes, or technology. Look at each of these areas to scale, innovate, and adapt to the market changes that enable you to meet customer demands, drive innovation, and sustain long-term growth.?
Contact us today and let us help you grow your small business!??