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Sweet marketing music

Tanner Montague came to town from Seattle having never owned his own music venue before. He’s a musician himself, so he has a pretty good sense of good music, but he also wandered into a crowded music scene filled with concert venues large and small.But the owner of Green Room thinks he found a void in the market. It’s lacking, he says, in places serving between 200 and 500 people, a sweet spot he thinks could be a draw for both some national acts not quite big enough yet for arena gigs and local acts looking for a launching pad.“I felt that size would do well in the city to offer more options,” he says. “My goal was to A, bring another option for national acts but then, B, have a great spot for local bands to start.”Right or wrong, something seems to be working, he says. He’s got a full calendar of concerts booked out several months. How did he, as a newcomer to the market in an industry filled with competition, get the attention of the local concertgoer?

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by Ron Leander
October-November 2015

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MANAGEMENT: Solve the biggest profit-killer in a growing business

In a new business, the owner wears all three hats. I’ve never met an owner who excelled at all three at the same time.

 

Entrepreneurs are often creative people who can produce and deliver a great product or service (operations).

 

Sometimes they are really good at selling because they believe in the value provided to customers (financial). They are usually not great at details: balancing the checkbook, collecting on invoices, sending out proposals, keeping track of receipts or answering email. Who can blame them?

Predictably, many business owners start looking for someone to handle the office details they can’t or don’t want to keep doing. The trouble — and the biggest profit killer — is holding on to small-dollar tasks too long. Just because you can do them doesn’t mean you should.

Consider the following areas of your business. Have you delegated and elevated these functions to other people to free up your time to innovate and plan ahead for your business?

If you haven’t and something happens to you, your business is sunk.  Don’t wait too long to build the right team or you’ll risk missing out on opportunity and growth.

 

Tackling paperwork

 

The normal paperwork of running a business can become overwhelming and not that much fun for most business owners. They need cash flow and organization, but collecting checks, answering phones and filing isn’t the best use of their time once the business is up and running.

Start-ups often engage a bookkeeper or office assistant to handle administrative and basic financial tasks for the business. The business owner also should engage a CPA to conduct assurance reviews and handle annual tax filing and planning.

As the business grows, an outsourced controller or chief financial officer could oversee financial statements, taxes and forecasting. This transition supports record-keeping and access to capital with the bank. It also provides segregation of duties to make sure someone besides the office assistant is keeping an eye on the money.

When should you switch to an internal chief financial officer? Look at the numbers. Review the cost-benefit of outsourcing vs. hiring.

 

Feet on the ground

 

Sometimes I’ll advise an entrepreneur to stay involved in sales and marketing just to stay sharp and present a trusted “face of the firm.” But at some point, growing businesses need more feet on the ground to meet larger sales goals.

This bucket can be tricky. Do you hire salespeople on commission or base salary plus commission? Can the person have just any sales experience or does the experience have to be within the industry?

It’s also important to consider marketing. If your materials, website or business cards look thrown together or outdated, potential customers will question your credibility.

Sales and marketing are valuable and necessary, but are also the biggest areas where owners waste money on the wrong people or the wrong tactics. The people hired must align with your vision and core values.

They must support a role the business needs for the next three to five years, but show the capacity to grow into a larger management role in which they supervise a team or provide a new level of value.

Most growing business owners choose to outsource marketing needs to an agency until they grow large enough to support an internal marketing coordinator or assistant. If the owner is great at sales and marketing, then the best investment may be to hire an operations manager or chief operating officer.

 

Getting to the core

 

Operations are core to the business. This is where the goods and services are produced, distributed, delivered, improved and expanded. Operations deserve an experienced leader who takes pride in quality and can work well with a variety of people.

Larger companies will hire a chief operations officer or director of operations. Smaller companies may keep the owner in this role for a while as a mentor for talent and to perfect the customer service model.

Even here, someone else will need to take over management of day-to-day duties so the owner can focus on the future vision of the company and where to best invest people and dollars. If owners are too busy working in their businesses, they aren’t working on their businesses.

Think about it this way. If talented people don’t see a future at your company, they will leave.  Owners have to rise to the visionary role to provide new, elevated operational positions for experienced staff.

Where do you start with delegation and elevating your role? A simple way to begin exploring the duties you can or should stop doing is the 80/20 rule. Eighty percent of your time should be spent on the 20 percent of activities that add the highest value to the business bottom line.

Choose those high value activities and delegate or get rid of the rest.

Business owners may be surprised to discover that some tasks they love, like selling, coaching talent or overseeing a building expansion, must be delegated. They need to focus on high-value activities such as networking, innovation or exploring a new market.

Delegation is not a perfect science. It’s a matter of timing, proper hiring and gut instinct. If your company vision and values are clear, but you begin to see slowing revenue or rising turnover with no time to explore why it’s happening, then you are in too deep. Delegate or face lost profits.