As a business owner, there comes a time when everything you’ve ever dreamed of comes true. You have an amazing product that people are tripping over themselves to buy, your social media is ablaze with comments, and everyone’s favorite influencer gives your brand a shout out on their page.
When you first started your business, this may have seemed like a dream; but for a lot of small businesses, drastic increases in demand can be a nightmare.
With Great Reward Comes Great Responsibility
What many business owners don’t realize is that every sale they make is a promise. As soon as someone clicks ‘submit transaction’ on your eCommerce site or fulfills an invoice, you are promising to deliver the product to them and do so in a timely manner. Trying to fulfill too many promises at once can trigger chaos within your business if you’re not prepared. It can slow down delivery of your product to your customers, lead to burnout for you and your employees, and may even cause your business to bleed cash as you try to throw money at your problems because you don’t have the time to really fix them.
Organizational Design teaches business owners how to be intentional in the way they set up their businesses back-end processes so that they support the owner’s goals and the direction that the business is headed. It also helps business owners to deliver on the many promises they make every single day. There are many aspects to org design, but ultimately it focuses on strategies that streamline a business’s operations, makes the best use out of the systems the business owns, and curates a healthy and productive environment for the people that work for you.
Where the Profits Reside
As the business matures, many owners are focused on one thing: growing sales. Growing sales can have a tremendous effect on the top line of your income statement. In other words, you can make more money depending on how effective your marketing strategies are. Many people deem their strategies effective if they can use the least amount of money to reach more of their target audience. That’s one way to turn your lil’ business into a big business; but it’s not the only way.
A lot of small business owners don’t factor in the increase in their overhead that comes with selling more products. Things like compensation, benefits, user licenses for software platforms, hiring more people, buying more warehouse space, paying the light bill for your new warehouse space, and upgrading employee time tracking software are just a few things that can eat into your newfound earnings. So how do you stop these hidden costs from biting into the fruit of your new money tree? You use organizational design to cut costs!
No, I don’t mean reduce your staff’s paychecks or fire people all willy-nilly just to save a few dollars. Organizational design is bigger than that. It shapes your company’s culture so that you are purposeful in when and why you spend money. It also reduces risk so that you don’t spend money correcting costly mistakes *coughwrongfulterminationlawsuitcough*. It also helps you allocate your resources more efficiently so that you get bigger returns on your investment (think: more productive employees for the same hourly pay).
Who Can I Run To?
So, where do you start if you want to incorporate organizational design into your business. The easiest solution would be to hire a Chief Operations Officer; but this can be an expensive hire for a small business that has just started bringing in consistent sales. A good COO will bring a wide variety of skills to the table: finance/accounting, operations, supply chain management, procurement, human capital management, and technology. It is difficult to find someone with that level of expertise on a shoestring budget. Many business owners seek help from advisory board members which is a great way to leverage your free resources; but, oftentimes, board members aren’t involved in the day-to-day operations of your business because they have day jobs. So, what’s the solution?
Consultants! An operations consultant can help a business navigate the many growing pains that will occur as they mature. A lot of people believe hiring consultants can be more expensive than hiring a new employee. Truthfully, it depends. If your business requires ongoing support, then hiring an employee that is going to come along for the ride can seem more advantageous. A lot of times, business owners have a very specific problem that they need addressed in a specified amount of time. Then, they just say their good-byes. If the problem is specific or there is a definitive end point for the work, hiring a consultant may be your best bet. It all comes down to 3 things:
The complexity of the problem and how it stacks up against the expertise of you and your team members
The budget allocated for fixing the problem
The time you and your team have to contribute to solving the problem
Consultants come in many flavors. Some will do the work for you and you never have to lift a finger. Some prefer a more hands on approach and don’t mind you calling them fifty-leven a few times a day. Then there is a group of consultants that is designed for commitment phobes. They’ll schedule a check-in once a week, but you get the added benefit of talking to someone that knows the details of your business. The great part is that you don’t have to talk to them everyday...or exchange promise rings.
Bottom Line
There are a million and one things to think about when operating a business; but the one thing you should remember is that the dollars are in the details. Being intentional about all aspects of your business, both front and backend processes, will put you miles ahead of your competition...and will ensure that if you make a pinky promise then you can keep it.
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