Stephen H Baum Leadership

GROWING THE BUSINESS

One of my small business owners owned a franchise in the consumer home services field. He built the company and its financials by hiring good people, adding functions not always present in small businesses (e.g., hiring a marketing director for direct marketing and research on prospects), spending on training, watching the cash flow like a hawk, developing a brand reputation for reliability and value.  

GROWING THE PIE

The business grew so well that the franchisor offered him an additional geography and then another and another. He both opened in unchartered territory and took over under-performing franchises. Now he did something very powerful: he retained or recruited general managers in the new territories and made them part owners of their businesses with a piece of the holding company to which they all belonged. This impact of this stake in profit-sharing in their unit and of all the units on their commitment and performance cannot be overstated. In periodic meetings, they share best practices and keep each other honest. As the business grew, he became more of a CEO, introducing processes for sales, implementation, financial and operations reporting and sharing of information. But he never stopped creating the climate in which each geographic leader feels he is the leader. But also a climate where these “owners” accept his leadership and the changes needed going forward. 

Then, as the revenues went from single digit millions to double digit millions and beyond, the CEO recognized the need for leverage of his time so he could focus on what only he can do and delegate much of the more day to day operation to a qualified partner; which he did about two years ago. It was a big leap in both emotion and money for the owner. Now, the two of them, together with the geographic partners have tackled some problems together and some problems as a tandem team. And there are always problems in such an operation. From time to time the CEO may wince at how much money his partner makes, but he knows that the pie has grown a lot and his take is a multiple of what it used to be. And he increasingly has time to look for new opportunities.

 What have you done to multiply yourself to grow the pie?

 This article is the basis for a conversation this morning with my friend Jim Blasingame, expert in small business, leader of the brain trust for small business and host for:

Small Business Advocate

That’s just my view. What’s yours? If you like this post tell your friends. If not, tell me.