Dynamic Business

Once your business model is watertight, you have created flawless systems and hired the perfect workforce, the next step on the SME productivity journey is usually when the business hits the payroll tax ceiling of $100,000. Issues generally start to arise when staff numbers reach about 25-to-27. These organisational fissures tend to show up as a reduction in customer numbers and staff discontent. 96 percent of people don’t tell you when you’ve done the wrong thing so this is the perfect time to get the experts in to give your business a full service. Your staff may not talk to you but they won’t have a problem telling an independent third party.

The challenge in this situation is that many SME owners don’t treat their business like an investment; they treat it like a baby. The natural tendency is to protect a baby but the sole objective of investment is growth. If a consultant comes in and tells a business owner hard truths about what they must do to continue growing past the stage they’re at, the smart operator will act on the advice. The ‘parent’ will refuse to listen in order to maintain the status quo and retain complete control.

The key to productivity is to always look at the business objectively from as many perspectives as possible. To do this, you need to wear a lot of different hats but the most important one is that of analyst, always seeking out opportunities for improvement. The second most important is that of a multimillion-dollar business owner, because then every tiny improvement makes a significant contribution to the streamlining of the business. Remember that no productivity gain is too small over the life of the business.

THE PRODUCTIVITY BASICS

Business Model

Get this right from the beginning by thinking about the worst case scenario for absolutely every component of the business. From the quality of the sticky tape you use to the amount of bathrooms that there are in the building, everything should be factored in. It will save you a lot of revision and hassle further down the track.

Systems

Build the systems first. Many businesses make the mistake of hiring staff to build the systems when, ideally, the systems should be in place before a single staff member is hired. Furthermore, things need to be done the same way every time. It’s like drinking a coffee; you add milk and sugar, you tilt the cup, you take a sip, you swallow. If everything is done the same way every time, you can reduce training times because you won’t have to account for a large number of contingencies.

Staffing

Following on from the previous point, hire the staff that are best qualified to operate systems that you have created. There is no point having perfect systems if your staff don’t have the skills necessary to operate them.

Training and expert advice

The greatest danger for owners and managers of SMEs is that they stop learning and seeking advice. No one tells the CEO what to do, right? Wrong. The best CEOs out there understand that there is always someone smarter, better and more creative than them. They know that if they want to improve, they have pay someone what they’re worth to find out what they know.

–Nathan Aherne is the founder and managing director of Reddog Technology (www.reddog.com.au), a full service IT company.

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