- Rewards for the leader (salary, benefits and profit)
- Stress levels (cash flow and risk) and
- Workloads
- Reality check that growth is possible
- Configure for sustainable growth
- Consider what staff positions to hire and how to manage that process
- Monitor the business to ensure it stays sustainable.
Find What You Need!
There are lot sof resources in 12Faces so it can be a bit daunting finding what you need. Here’s a few suggested approaches;
- Grouped on this page are resources most likely to help grow staff count
- for specific topics (e.g. pricing) use the Search tool in the top menu of every page
- to see more of a similar type of information, many pages have clickable “breadcrumbs” in the page heading and also have a “category” and “tag”. Clicking on any of those will take you to more in a similar vein. Categories are larger, or wider ranging, groups than tags. An article can be in both
- Our Diagnostic System drill down with a Q&A approach to find useful information. This is particularly useful when you don’t know specifically what you want but do have a general idea.
The Business of Micro (1-4 staff) Businesses
About Micro (1-4 staff) Business Management
The step up from Solopreneur to Micro Business Owner introduces a number of “firsts” for the owner. If you are contemplating an upgrade, read more here on what to expect.
If you are already a micro-business owner, a quick scan might focus your mind on the most important issues for this stage of a business lifecycle.
Work Smarter not Harder Planning
Business planning sounds like a pretty complex exercise that takes a lot of time and thought; and has uncertain payoffs. Consequently, many smaller business owners don’t spend a lot of time on it. We take these realities into consideration and have fashioned a very simple, very adaptable, planning routine based on the best practices of leading writers and companies. We encourage you to use this systematic approach.
Micro Business Resources: Is Growth Possible?
For several reasons, not all businesses can grow! Here we show resources to help you determine if you can take the next step from Solopreneur up to 4 staff.
If you have made that step, this might be more of a refresher. But well worth doing if you want to keep growing from Micro to Small Business.
Estimate Revenue Boost for Next Hire
Much of the extra expense early in the Solo to Micro business process will be the extra labour required. You can take a guess and say “I have to double revenue” (usually not a enough by the way) or you can take just a few minutes and estimate the additional revenue required much more accurately.
About Cash Flow
Many people think Profit is the goal of a business. And that is true in the long-run. But much more important to a Micro Business is a healthy cash flow. This is so that you can pay the bills when they fall due. Learn more about the roles of Profit and Cash Flow on this link.
Diagnostics: Cash Flow
We have categorised our micro business resources on the topic of cash flow in our easy-to-use, drill down Diagnostics System. Go straight to that topic on the link above.
Mentor Support
It can be lonely being a business leader. Sometimes you will feel you can benefit from another person’s advice or guidance but can’t ask staff. We offer a volunteer Business Mentor Service on an as-requested basis for just these times. Use the link above to learn more
Planning to Work Smarter not Harder
Business planning sounds like a pretty complex exercise that takes a lot of time and thought; and has uncertain payoffs. Consequently, many smaller business owners don’t spend a lot of time on it. We take these realities into consideration and have fashioned a very simple, very adaptable, planning routine based on the best practices of leading writers and companies.
Course: Growth365
The Growth365 (G365) Course explores the topic of “What might stop your growth” in the first of three lessons. This lesson highlights a number of reasons growth might not be effective for you. It is worth a quick scan at least to see if growth is on your horizon. The other two lessons cover “Planning for Growth” and “How to execute a Double your Profit strategy”. They may be of interest but not as relevant for a Micro Business.
Configure for Sustainable Operation
A business can never be sustainable if the various “levers” in its accounting system are not in harmony. Most businesses work on the equation:
Revenue – Expenses = Profit
Consequently, they only find out what their Profit is sometime after the accounting period has closed; and they have to take what they get. If you want a sustainable system, it makes sense to set your target Profit and then manage Revenue and/or costs to get the required profit.
Course: SM6.0 Profitable Business Autopilot
The Profit Autopilot system provides a mechanism for setting a desirable Profit in advance. It then manipulates the business to provide that level of Profit with much more surety than the conventional approach.
“Piggy Banks”
A common problem in business is having the necessary cash to pay debts when they fall due. This can be particularly difficult with infrequent payments, like tax, that tend to sneak up on you. Or alternatively, you have trouble budgeting for in advance when you don’t know how much the payment will be. Just like a child’s piggy bank saves money out of sight, the “Piggy Bank” strategy does the same for your business. Importantly, you can use “Piggy Banks” to save up a salary buffer to offset the shock of a new staff member’s salary before they are earning their way.
People
Any business can only be as good as the people who work in it. In turn they need to be well trained and well led. A sustainable business needs good systems for recruiting, motivating, leading and remunerating. Learn more about the resources available on the link above. Also covers other people relationships, for example, suppliers.
Mentor Support
It can be lonely being a business leader. Sometimes you will feel you can benefit from another person’s advice or guidance but can’t ask staff. We offer a volunteer Business Mentor Service on an as-requested basis for just these times. Use the link above to learn more.
Managing your First Few Hires
In the Solo to Micro Business phase, you are moving from a “one person band”, or Solopreneur, to the employer of staff. The learning curve is probably just as steep as starting a family! This section collects some of our resources on specific topics relating to your first hires.
Diagnostic: People
Any business can only be as good as the people who work in it. In turn they need to be well trained and well led. A sustainable growth business needs good systems for recruiting, motivating, leading and remunerating. Learn more about our collection of people resources accessible via our Diagnostic System on the link above. Also covers other people relationships, for example, suppliers.
Prioritising Work
Not all work is equally important. By focusing on what is important, and largely ignoring the rest, you will get much more done, much faster, and with less stress. Go to the work prioritisation resources.
Hiring First Staff: When and Who
The big step moving from Solopreneur to Micro Business is the commencement of hiring staff. Your first hire effectively doubles your wages bill and maybe requires 2-3x increase in Revenue to pay the new wage bill. We suggest things to consider to reduce any problems that might arise.
Managing Time
A big drain on a business leader is having too much work on their plate. Our sustainability goal is to get that under control. There are a number of Time Management Resources to help. Go to the link above.
Manage Stress
Stress can be very debilitating. It saps your energy and upsets your mental state. The resources to manage stress are grouped within this link.
Work Flow
Work flow refers to the input of raw materials and customer orders at one end of a production line and the output of finished goods at the other. It applies to all types of industry. A production chain is only as strong as its weakest link. Read more on Optimising the production chain work flow at the link above.
Funding your Micro Business Expansion
Generating the money to support the hiring of staff and related growth expenses is one of the vital aspects of surviving this stage. Your first hire means at least a doubling of the revenue you will need. Adding later staff is not such a challenge as you start to get momentum. This is known as the flywheel effect. Funding comes from savings and investments and from revenue generated by sales. This section collects our micro business resources on this topic.
Diagnostics: Revenue Creation
Revenue is created by more than just more sales of the same things! Although you don’t have a lot of room for experimentation in the early stages of your Micro Business expansion, there are other tools you can use as you get more time. Explore our resources via this topic in the Diagnostic System.
Flywheel Effect
The first few steps into becoming a Micro Business have a very steep learning curve; just like your first child! But it tends to get easier as you get more experience and have more resources behind you. This is known as the Flywheel Effect.
Micro Business Resources: Monitor Your Business Health
Right from the start of your sustainable growth, you should be monitoring the health of your business. Early on, this will show how your journey is progressing and give you positive feedback on progress. Once over the initial stages, you need to be confident that your operating circumstances don’t change for the worse without you realising. Constant changes, like inflation on wages and goods, will eat into your sustainability unless monitored.
Tools: TrendBoard
TrendBoard is our principal monitoring tool. It is designed to be updated every month with current financial data from your accounts. Furthermore, it takes only 1-2 hours a month to be confident that your business is progressing satisfactorily. it also monitors your cash flow and ability to pay staff; vital issues for a Micro Business.
Tools: ChangeBoard
ChangeBoard is built into TrendBoard. It will show you the impact on profitability of a change in any of the major accounting “levers” (Revenue, Gross Profit and Operating Profit). You use it to check on what adverse changes are costing you and the potential impact of intentional change.
Diagnostic System
The Diagnostic System allows you to click on a link for any adverse Symptom or problem you have in your business and drill down to possible Treatments. It saves you a great deal of research and often raises possibilities that have not occurred to you before.
Accounting System
Often your accounting system is used for annual Tax Accounting and not for monthly Management Accounting. You are wasting one of your most valuable monitoring assets. Much more can be got from your accounting system; and generally at very little extra cost. Learn more about good accounting system configuration.
Repeatable Routines Build Efficiency and Reduce Stress
Good repeatable Routines introduce good habits. First for you and then for your new staff so you don’t generate more work for yourself telling them what to do and ensuring they do it properly, We talk about the value of routines and introduce our library of Prefab Routines so you don’t have to start from scratch.
Backup Resources
There will be many issues that come up in your business that we have not covered or not covered clearly enough.
We have other tools to help clarify how to attack the issues that are worrying you. Please use them as much as you wish. We can respond and use your input to improve our service to others who come after you.
Mentor Support
It can be lonely being a business leader. Sometimes you will feel you can benefit from another person’s advice or guidance but can’t ask staff. We offer a volunteer Business Mentor Service on an as-requested basis for just these times. Use the link above to learn more.
Community Forum
Our Community Forum is open to any registered business as a FREE service to our community. You can post a query here for others to comment. You can, and are very welcome to, respond to questions yourself.
12Faces Feedback
If you spot a broken element on our website or an error in our resources, we appreciate you advising us on reception@backstop.business
Email us Directly
You can pass on questions and comment to us directly to our main email address; reception@backstop.business
This article was provided by Scott Williams AO FAIDC. It describes the way best practice in many management areas has been brought together in the 12Faces GamePlan System. The Goal is to provide an easy to use and repeatable “flywheel” to improve small business owners’ outcomes. Scott is the Founder of NFP small business support services 12Faces and MentorSME and has a Philanthropic Foundation supporting students in education. Scott’s business Petals Network was National Small Business of the Year and 4 times in the Top 100 Fastest Growing Australian Businesses LinkedIn