Update on My Small Business: February 2017

Update On My Small Business

Hello everyone! Welcome back to The Green Swan. It’s been a little while since my last update on my small business (which for the sake of anonymity I’ve named The Green Condor) so I figured it was time to touch base again. And for the new readers, The Green Condor is the pseudonym for the small business my sibling and I bought together back in August. The business is what I would call an industrial service provider, but it is hard to put in a clean categorical box, as is the case with many small businesses.

In the last update I went into a number of growth hurdles that we faced with The Green Condor. Those hurdles revolved around Staffing, our Marketing & Incentive Program, and Equipment & Tools. While things have improved in some regards, we still have some wood to chop, and the hurdles have evolved and become a little more dynamic.

Let me explain:

Staffing

We’ve had a couple improvements in our staffing situation, but simultaneously we’ve had a couple additional setbacks.

Improvements:

  • The bickering among staff has stopped. This issue stemmed from some staff not fully appreciating what other staff did day-to-day. Part of the solution here was to simply have them sit with each other for part of the day to demonstrate what all everyone does daily. A simple solution with great results!
  • We’ve completed lots of training for our technicians. As a result, the performance from this group of staff has improved.

Setbacks:

  • Our staffing levels have continued to suffer. While it may be getting better as we speak today, it will continue to be something we keep a close eye on. We’ve turned over tons of relatively lower skill / lower wage positions and it has been tough to attract good folks here. This has given me much more appreciation for drug problems in America… We have a drug testing program and let’s just say it has been very effective…and most recently we even caught a guy drinking on the job. We’ve also experienced voluntary turnover. I think we’ve come to accept that this staffing position will always be a revolving door to some extent and to just continue ongoing hiring efforts to stay ahead of it.
  • The worst point in this saga was having to turn down some business just before the holidays. This was a low point because we turned down business not because we were out-growing our budget and expectations, but because of staffing levels! We even relied heavily on temp staffing agencies for a period of time. A bad deal indeed, but a lesson learned and one we hope to never have to address again.

Marketing & Incentive Program

As I mentioned last time, we have two employees responsible for marketing, but we were unsure how great either of them really were. Also, I previously mentioned how the one had been in a car accident shortly after we acquired the Green Condor and she was sidelined from work temporarily. Her being out of her job gave us some insight into how effective (or ineffective…) she actually was on the job. Needless to say it turned out she wasn’t that great and we didn’t miss her. She ended up quitting before ever returning for work anyway. This was a good outcome and allowed us to turn our attention toward hiring a good marketer sooner.

After a good search and interviewing many candidates, we think we found a good one! He started in mid-January and we’ll find out soon how effective he really is. Fortunately he comes in with good related experience and contacts that can help us in establishing new relationships and growth opportunities. He’ll be heavily incentivized to drive revenue with the incentive program we were able to put in place. We are also considering another potential marketing hire. I don’t want us to bite off more than we can chew here, but we are excited about this candidate as well.

The legacy marketer we still employ has a very finite time period remaining to prove himself. We aren’t optimistic necessarily, but we are giving him a chance.

Equipment & Tools

With some of the equipment purchases I mentioned in the last update we are pretty good on this front. Equipment has not been a bottleneck to accepting new business and we are focused to ensure it won’t be. We’ve found equipment can pay for itself very quickly if the business is there (i.e. within a year) so there isn’t too much risk to having excess equipment. Purchases going forward will be more opportunistic in nature (finding good deals, etc.) and not out of necessity.

However, a related issue has come up and that is our truck / van fleet. We have 4 work autos in our “fleet”. These are all hold over from when we bought the business. And it turns out they’ve needed quite a few repairs…untimely and unlucky repairs. The worst of which was when a break pad literally fell off a truck as it was exiting our parking lot!! Can you believe that! We were fortunate it was just in our lot and no major accident occurred.

The auto fleet was a major thorn in our side the last few months. The time and expense it took for the successive issue after issue after issue took its toll. I think we are through the worst of it now though and hopefully good to go!

Ahh, the joys of being a business owner… :).

Focus on Revenue!

James, my brother running the day-to-day, has been deeply involved in the business operations to clear the above growth hurdles.

  • While staffing levels are better, we’ve come to appreciate that staffing will always require some level of focus on an ongoing basis.
  • We are optimistic about the new marketing hire and hope these efforts will be helpful in driving new business. If the marketer is successful, we’ll be successful.
  • We now have a good handle on equipment.

All of these hurdles have required lots of time from James. Now that they are mostly addressed, he is able to free his time to focus more on revenue and marketing related efforts. Revenue has improved recently and over the trailing three months we’ve been tracking to budget! Revenue can be lumpy and unpredictable. We need to focus more on revenue initiatives to ensure we keep hitting budget.

Hopefully this will continue, hopefully marketing efforts will drive more business, and hopefully we continue to nail the staffing and equipment utilization levels!

Don’t Shy From Challenges

Many folks avoid pursuing small business ownership as part of their journey toward Financial Independence (FI) because the significant administrative burdens. Unfortunately the growth hurdles that I’ve outlined above and that we continue to face probably don’t do much to alleviate that concern :). Running a business is tough…but there is upside.

I’m a natural optimist and while we continue to face challenges, I can’t help but see the light at the end of the tunnel. These are all issues that we can get through. The underlying company provides a good service that will continue to see demand for going forward. So I stay focused on the long-term view and the bigger picture.

While there definitely are administrative burdens in owning your own business, I’m reminded of the following quote:

“Nothing in life worth having comes easy.”

The financial rewards of owning a business can potentially far outweigh the cost and burden which inherently can lead to a faster track toward FI.

Fortunately for our case with The Green Condor, we have four of us to share this burden. While it is primarily my two siblings involved in the day to day, me and my older brother are here for support and advice. This entails weekly phone calls among all of us and numerous other one-on-one side calls. Many small businesses operate similarly, albeit with maybe a small or larger support structure including spouses, siblings, parents, business partners and/or friends.

Also, these administrative burdens of small business ownership don’t affect all businesses equally either. And to that point, I expect some of these burdens to ease for us over time as we continue to familiarize ourselves with the business and gain more operating experience.

Lastly, did I not just write about Stepping Out of My Comfort Zone! New challenges like owning a small business builds character and grit which are important to build and develop throughout life.

Concluding Thoughts

So there you have it, another update on The Green Condor. Hopefully this was helpful if you are also a small business owner or thinking of entering into a venture. And if you are a small business owner, I’d love to hear if you’ve had similar trials and tribulations!

Thanks for taking a look!

The Green Swan

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33 Comments

  1. Excellent update! I love how you outline the good and bad things about running your own small business. I’ve thought sometimes about starting one, so it’s good to see more about what really goes on behind the scenes.

    1. Not surprisingly, there is always more behind the scenes! Not a look you get often from owners which is part of why I want to show the good, bad and ugly for everyone.

      Thanks for stopping by, Liz!

  2. Thanks for the update. I have heard similar staffing issues with friends that run small business. My son and daughter who work P/T are always being asked by their manager if they can recommend anyone.

    1. Oh that is interesting you’ve heard similar issues with staffing, glad to know we aren’t the only ones. I’m sure we will get better at finding good folks, but that has been one thing we’ve tried also. One employee in particular has referred a number of other good workers who are on staff now too.

      Thanks for the comment, Brian!

  3. Glad to hear the business is progressing well for you. As someone fully on the corporate side of the house it’s interesting to hear about the other side of the house. It’s especially interesting to hear about it in the context of a multi employee environment. So many entrepreneurs talk only about their one or two person partnership business which is a different set of problems. I’ve seen similar staffing issues with companies staffing the warehouses of my employer. All I can suggest is if you do get a good one do your best to keep them.

    1. Yeah definitely different picture with multiple employees, we have over a dozen. We do try to pay the good ones what they are worth, hopefully we don’t lose any of them soon!

      Thanks, FTF!

  4. Thanks for the update. Staffing issues seems to be a common problem among small business (well any business really).

    I can see why companies prefer to outsource some, if not all, of their hiring requirements to a staffing agency and focus on the operational/business development side of the house.

  5. Dang, drinking on the job? Duuuuude.
    Just know that marketers are always under pressure to justify our existence. I’ve had a few bosses who thought marketing was lazy or a bad use of money altogether–it’s a good way to lose marketers. Maybe The Green Condor marketers were lacking direction or an overall strategy for marketing? It’s tough to know from the outside looking in, but it would be unusual to have two slackers in a single marketing department. In this case it might be better to hire more experienced marketers who can create a strategic plan instead of newbies looking for more direction. Just a thought!
    Anyhoo, I hope business continues well for The Green Condor!

    1. Yes, shocking isn’t it!

      That’s a good point about being unlikely to have two slackers for marketers. And you may be right. I don’t think they were even given good direction or held accountable under the previous owner. Part of our plan was to put them on a more commission based pay structure. I think that’s why the one left. The other that is still around though has been doing better with the new play and pay structure so hopefully that continues.

      Thanks for the great comment, Mrs Picky Pincher, and thanks for the well wishes too! We need it 🙂

    1. Yes absolutely. I definitely want to use this platform to share and for transparency. Of course, if there are ever any questions or things you think I could address better just let me know. Thanks ATL!

  6. Thanks for the update. I think economywide there is still a problem with a mismatch of skills offered and skills demanded. And that mismatch includes also “staying away from drugs” as you point out. It’s a big issue at every job site and every employer to find qualified and reliable people, despite the ostensibly large number of unemployed. Even where I work it takes a while to fill a position with someone who’s a good fit.
    Best of luck, and I hope you reward your brother handsomely for dealing with those issues day to day! 🙂

    1. Yes, the mismatch has definitely become apparent! Definitely an eye-opener for me and my brothers. Ha and yes, he deserves it given how full his hands have been!

      Thanks for the comment, ERN!

  7. Great update! I love seeing the behind-the-scenes issues small businesses face.

    It’s really crazy to me how many businesses are always looking to hire but the news media and general public seem to think there’s not enough jobs.. I see ‘now hiring’ signs EVERYWHERE I go, and these $12+/hr starting wages are almost double what I made working part-time in High School & College.

    1. Absolutely, I’m glad you enjoyed the read! There are definitely jobs out there for people, and we are paying more than that for our low-level tech position. Good decent pay for good honest labor.

      Thanks for the great comment, Ryan!

  8. Very interesting topic not often covered on PF blogs. I think buying a business is a great source of income. I’m just discovering your blog and will need to do some catching up. But I’m looking forward to reading more about the topic.

  9. I’m aware of and interact with all these departments (hiring, marketing etc.) at my mega corp. It is a whole different world though to think about it from the perspective of one person (or a small group of people) being responsible for the whole shebang. Thanks for sharing the inside workings of your venture, and you are lucky to be able to share an adventure like this with siblings whom you trust and can depend on.

    1. Yeah agreed, it would be hard for be to get into a venture like this without the trust and confidence that siblings provide.

      And it is definitely a whole new world. We’ve only had limited experience if anything at all with many of these corporate functions before at our mega corps so there’s a learning curve here!

      Thanks for the comment, Mrs BITA!

  10. I had been wondering how this venture was going. If anyone doesn’t believe that running a small business is incredibly hard work, I think I would point them to your recap. It sounds like just about everything that could go wrong has at some point, and you’ve still been successful in the face of adversity. I hope you can find moments to take it all in and be proud of that!

  11. I do own a rental property with a friend of mine. The first year of operation was quite smooth as we had decent tenants, but our second year of operation is a bit rough. We had quite a few challenges as there are more issues than we had expected. The issues did set us back a bit in terms of finances and time. Lucky for us, we are very compatible partners and we work very well as a team and I am glad that I partnered up with my friend. Otherwise, handling those issues alone will take it’s toll on me.

  12. Awesome round up!!! That stinks to hear about staffing issues. You hear all the time how hard it is to find good people, but until you can’t find the right people you can’t appreciate the saying 🙂

    It sounds like you all are smoothing out the kinks and will be running on all cylinders in no time.

  13. Great job so far. It sounds like the business is keeping you very busy. I don’t think I can run that kind of small business. Too many drama with the staff. I’d be stressed out beyond belief. Good luck! 🙂

  14. Hey Green Swan — new to your blog and I appreciated this post. I haven’t seen a lot of info on side businesses by personal finance bloggers other than their blogs. My brothers and I started an LLC a few years ago … we started with an investment in farm land (a family legacy) and now own shares of commercial properties and a small business. We hope to build a diversified portfolio of investments that grow, with the occasional cash flow event.

    Has it been difficult to divide up the business duties with family? It hasn’t been too bad for us — we have complementary skills (one rich guy, one banker, one comic relief). Would you consider adding more businesses to the portfolio or is this a one off?

    Great blog –R

    1. Oh that’s great, Rich! No you don’t see small business ownership much among bloggers. That sounds like a great strategy that you and your brothers have, similar to us really. We’ll continue to focus on our two business “platforms” (the financial service company and the industrial service company) and hope to grow them out both organically and through acquisitions.

      It hasn’t been difficult for us to divide responsibilities. Two of my brothers run the two platforms on a day to day basis. My other brother and I are just owners and get involved wit through regular updates and strategic discussions. It’s worked well so far for us.

      Thanks for stopping by and sharing. I’ll have to stop by your site! I’m interested to hear more about your business as well.

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