While small business owners often dream about one day scaling up their operations, many struggle to let go of their early stage business responsibilities so they can allocate the time to delivering high value tasks and growing the business.
[Editor’s note: This is the sixth in a 12-part series, by accountant and serial entrepreneur Tanya Titman, on the secrets to building and scaling a successful SME]
The right kind of delegation is critical to scaling a business profitably and the key to success lies in recruiting in the right order.
As the CEO or business owner, you are typically the business’s most expensive resource. To grow and scale your business, you need “mental space” to think strategically and time to implement. How do you find the time? Identify the “low-level” admin or recurring tasks that are process driven and delegate.
For the business to flourish, you need to balance all skillsets and recruit the right people to support you. As a business founder and advisor, I recommend recruiting in the following order:
- Lowest level admin
Just like a business budget should be built from the bottom up, so should building a team. Don’t be tempted to recruit a senior executive “who can do what you do”, start with admin support.
One of the biggest mistakes you can make is recruiting a high salary person first and then end up doing the admin yourself – that’s what’s likely to send you broke. You need to start with delegating the low-level tasks and scale up from there.
You can borrow from the franchise business format when you think about scaling. Statistically speaking, franchises have a higher success rate than independently-owned businesses. This has a lot to do with the discipline they put around systems and processes.
This franchise business model also enables you to set up the structure and processes that would allow you to sell your business further down the track, or work on other projects whilst a manager runs the day-to-day operations. If the business is essentially all about you, then you don’t have a saleable asset – it will provide nice revenue stream but you can’t sell “you” to another person.
Once you have tackled the everyday admin tasks, recruiting the right team member often comes back to the three unique skillsets you need in the business, as explained by Michael Gerber in his timeless business guide, The E-Myth Revisited. The entrepreneur is the visionary who is planning for the future, the technician is the person who can do the technical work involved in delivering your product or service, while the manager is the detail-oriented person. In the earliest stages of a business, the business owner often fulfils all three roles. However, a growth mindset requires allowing others to come in and support us in those roles.
So, if you’re a technician or specialist (which is often the case when starting a business) you need to recognise what skills you are missing and either invest in your own professional development or start recruiting the right people to support you.
How big do you want to be?
That brings us to your next major decision – how big do you want your business to be? There’s no right or wrong answer – you have to be comfortable. Some people want to keep it small and be a specialist. However, if you want to grow a scalable business, you must accept that the business is going to become less and less about you.
This is where some “crystal ball gazing” comes into play because unless you’re clear about the end destination for your entrepreneurial journey and are willing to commit to the challenge, the financial rewards are simply unlikely to be there.
Once you get down to recruiting, it’s essential to understand what your strengths are and fill in the gaps. Look at where the value is that you bring to the business and the ideal place for business to be, and then get a complementary team.
Instead of beating yourself up about not being good enough in certain areas, embrace the tasks you do really well and recruit people with the right skill set to do the rest. If you have great people around you, it becomes so much easier to delegate.
The aim should be to make yourself redundant – that frees you up to focus on growing and scaling your business to the stage of growth you choose, such as going beyond the “imaginary financial ceiling” of a million dollars.
There’s no ideal time to expand the business, it’s more about when you have enough momentum. Start by analysing what you’re doing in a day, week, month. Start using a timesheet to record what you spend time on every day. If you are spending 50 per cent of your time on low-level admin tasks, then it is really time to consider: “If I could spend those hours on growing the business, it’s going to enable me to employ a staff member”.
A staff member doesn’t have to be a physical person sitting next to you. It could be a virtual offshore assistant. This recruit is not going to have a huge impact on your cashflow. Choosing an offshore or onshore admin person is a personal decision, but with those options available it’s very easy to start delegating down. Increasingly, there are other virtual team members available to small business owners – whether that be HR or Legal support or even an outsourced CFO.
Moving from solopreneur to entrepreneur may sound daunting but it boils down to getting out of your comfort zone and focus on how can you free your time to scale up. That’s when you can go from survival mode to making a profit. You just need the tools and confidence to do this.
About the author
Tanya Titman is the founder of SME focused accountancy practice Consolid8 and Female SME growth program Acceler8. She was interviewed by Dynamic Business for the feature article Financial literacy, not gut feelings, key to female founders scaling past the $1m mark. She also regularly contributes to the “Let’s Talk…” series of thought leader pieces.