Update on My Small Business: February 2017
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:
We’ve had a couple improvements in our staffing situation, but simultaneously we’ve had a couple additional setbacks.
- 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.
- 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.
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