This is your friendly reminder that growth is a good thing
“Am I going to have to go through this again!?” said the frustrated longtime business owner.
I could feel his disappointment. Imagine being in business for two or three decades and suddenly finding yourself dealing with startup growing pains.
Wait, sorry…of course you do. We are all feeling it.
It seems unfair to once again face problems you thought were solved long ago, but to be fair, you are not the same company you were a year ago, much less twenty years ago.
More importantly, the answers to your questions have change dramatically.
Before the pandemic, the solution for growing pains included process updates, redistribution of responsibilities, and new metrics for success. Simply adding more employees didn’t increase the capacity if processes were still constrained by one person.
How we grow our companies today must take into account market conditions that did not exist prior to the pandemic. Specifically, there is now a labor shortage (temporary) and an overabundance of equipment.
Even though demand is rising, supply isn’t. That’s frustrating.
We turn to metrics for the answers. Event-based businesses need to measure performance differently than before.
Notice that even with your current small staff that one or two events at a time seem to incur minimal additional costs. Cool, right? However, with everyone busy on this week’s shows, preparing for the next week is difficult, and selling next month comes last.
This makes you want to hire more staff, but next month isn’t busy enough to support a bigger team. Being busy stifles growth, but hiring hurts profits.
The solution is going to seem counter-intuitive.
Your staff – your overhead fixed salary team – should be 100% focused on acquiring new business and planning the execution of jobs. The only time your team should be “teching” a job is when business is slow. If they are good at acquiring new business, then you will never be slow.
Read that again.
This means that most if not all of your event and warehouse crew should be part-time on demand or freelance. Managers need to plan and schedule workers as needed. This includes preventative maintenance and catch-up projects.
With a limited team, you also need to be more selective about which projects you take on. This means you will want to turn down jobs. That will take some getting used to.
To be fair, we should have been doing this all along, but with so much demand it was easy to forgo optimization.
The ideal business model for our industry is evolving. Your first step is to be honest about how much demand is really out there and what your capacity actually is.
It’s okay to seek help navigating these changes. Wouldn’t that be better than prolonging your growing pains?