People, Functions and Efficient Use of Both

Over and over again you hear those infamous words, “if I don’t do it myself it doesn’t get done right!”  To that I say, if it is not getting done right then you did not train them correctly or you have the wrong person (employee) in the position.  People are a very important resource and a significant cost for most enterprises, especially smaller business.  Utilization of that resource falls on the owner (CEO/GM).  Affordable or budget conscious seems to “in phrase” which is right there with “I can’t afford it”.  What you can’t afford is to hire someone just because they are cheap and you have a simple function to fill.  What are you actual people needs?

Develop a people plan!  By that I mean more than just a personnel cost budget.  Take time, define the various functions that need to be handled (i.e. sales, phones, mail, order process and invoicing, shipping, customer service and accounting). When does it need to be handled? Daily, weekly or monthly.  Next we need to assign a rating to each that reflects how critical it is to the company’s mission.  What I mean is order processing or phones need to be handled as they occur whereas invoicing could be handled once a week.  So let’s design a system:

1.  to those that are absolute everyday type functions
2. could be for every other day but more often than weekly
3. would represent weekly
4.  for less often that weekly but more than monthly and
5. for monthly

 So now you have a scale for how critical the function is and now we need to consider how much time it consumes.  Start with the 1’s and how much time each day is spent on say answering the phones?  When calculating or “guesstimating” this time, be forgiving and think that people are not able to be 100% productive, so calculate what you think and multiply by 1.2.  This gives you a comfortable bandwidth for that function and will allow for all the “things” that happen each day that eat up time.

Now, it is time for you to review these functions, the time required, its frequency need and its critical rating.  Usually, certain fits and skill matches jump out at you.  Is the person (s) answering phones just forwarding to people or do they take orders?  If it is simple then there is function you can combine that might include a number 1 if you hire that right person.  In other words you can get more than a receptionist for maybe 20% more money.  You go right down the list until you have reviewed them all.  It should be obvious what order you need to address this within your organization.  You should also be gleaning a glimpse of the types of people you need to run your business in an efficient and cost effective manner.

How do the people you have in those positions now measure up?  Are there other factors involved such as one is your wife or child or investor’s relation or friend?  Now comes the time to decide on an order of importance.  Theoretically, this should be objective and to the point, but in reality there are too many factors that come into play to be that simple.  In any event, you should get enough of the picture to see what you need to do and how to proceed.  Next time, we will talk about logistics!

Introduction

Welcome!  As I mentioned I have long been driven to setup a forum or place to share ideas and concepts that small business owners or management face every day.  So let's begin by defining small business.  Not a start up and one that has been in business for more than 2 years.  They have more than 10 employees and their revenues would be in excess of $500,000 but less than $10,000,000.  Would it surprise you to know that there are over 1,300,000 firms employing more than 10 people and 1,980,000 firms that reportedly gross between $500,000 and $10,000,000.  That's a lot of businesses.

Many of these businesses are led by people who are visionaries who are driven to build their business.  In so doing many times, the support systems suffer.  It is true that many of the systems can slow people down as they labor to file reports or input data. The key is looking at what benefits management while improving efficiency.  Let's face it; there are limited resources and you want to get the most from what you do have.  In early stage companies unless they are well capitalized, infrastructure is something that is in the future, or just later.  Revenues are the focus! Sell Sell Sell is the name of the game.  An example might be to use QuickBooks to invoice and account for expense and with some planning you can setup your accounts in such a way that the data can be exported and/or integrated with Excel or Outlook or directly into sending mass marketing info to a group of prospects or customers.  What about you web site?  You have to have one?  What data does it give you?  Is it a sales tool or just information?  Can you modify it to do both?  Are all hosts the same?

These are just a couple of topics that we will tackle.  Some others would be how to manage your logistical costs and use it as a customer service tool.  How do you manage your human resources?  How often do you sit down and talk with them?  Discuss expectations, yours and theirs?  What about the prospect to customer pipeline?  What are some simple ways to keep tract?

Rules here are simple.  We will follow the KISS principle!