We have all heard this: “if you’re not moving forward, you’re falling behind.” According to all the published stats, this could not be more true in today’s small business world – the one all of us live in.
Duke University published a survey of 489 small business owners in June of this year. 61% of those surveyed plan to increase capital spending this year, 45% will increase R&D spending and 62% will increase their staff sizes.
These are very significant numbers and are a call to action for all of us. As my client, I do not want you to sit back on your heels while your competition moves forward. We already know how hard it is to find and retain top performing staff. It’s going to get harder. Spending money on capital expenditures means those companies are increasing their capacity. And they will be out taking customers from those of you that don’t spend the money.
We all need a solid growth plan.
What should you do? Here are the recommendations:
- Look at your employee compensation structure. Are your wages competitive in your industry? Why would a top performer come to you rather than go to your competition? You need to pay a fair wage and you need benefits. Top performers want a 401k, they want health insurance and they want an upside (incentive plan).
- What does your training program look like? I can tell you what most small business owners do: hire then turn the new hire loose. This is a recipe for disaster in this environment. You need a training program. One that will set the new hire up for success. If you can do this, you are better than 90% of all small businesses.
- Evaluate the tools your staff have to get the job done. Are your vehicles in good shape or are they suffering from poor maintenance. Are your computers 5 years old and out of date or are they new? Are you using industry specific software to help them be more productive or is everything done in excel? All this matters.
- Do you have a financial plan to get you through the next three years? Do you have aggressive sales goals? Assuming you achieve these sales goals, do you have the capacity to handle those sales? Do you have or will you have the cash to achieve these goals?
- Do you have written SOP’s (standard operating procedures)? If I start as your accountant today, can I find a document that says I need to contact a customer when his receivable balance hits 30 days? Do you have a written procedure saying that a customer is denied credit when his balance hits 60 days? You don’t want your company to operate in the Wild West with everyone making decisions. SOP’s take care of this.
This is not a time to wait. The economy is doing well and we want to take every advantage of the good times the next couple of years should bring us. Rash and hasty decisions are bad, smart well thought out good decisions will make you very successful.