The right people and business acumen are vital to a company’s success.
By Gary Shawver, MGWC
Most successful businesses will by their very nature have a tendency to grow.
If the public is of the opinion your business produces a good product, gives good service, or both, it will seek you out. Sometimes a business will grow simply because there is a demand for that service and there aren’t a lot of other businesses offering it.
Regardless of the reason for growth, managing a growing business properly is extremely important.
As my business grew in the late 1980s and early 1990s, I didn’t realize the difficulty managing its growth by myself. I observed my father run his business on his own for 40 years and wrongly assumed I could do the same. However, my father had only 12 or so employees at most. By the early 1990s, I had grown the business from a low of four employees to more than 20 employees.
As time went on and I acquired other related business (pump installation and service), I found it more difficult to grow the business beyond 25 employees and keep things on an even keel. One’s span of control over that many employees begins to diminish in a hurry and I found managing 20 to 25 people effectively is one’s limit.
Managing the Troops
I realized the need for obtaining help managing the business, so I hired an assistant manager in the mid-1990s.
I had to go through a few people before I found the right person for this job. I was fortunate to hire a retired U.S. Air Force lieutenant colonel. While he had no background in the water well industry, he had the skill set and leadership I needed as he was capable of managing people and resources. He soon got up to speed, and as time went on I was able to grow the business to 42 people by the mid-2000s.
As one’s business grows, it is vital to retain the quality of work and service that caused your business to grow. It doesn’t automatically happen without oversight.
One of the things my assistant manager said to me early on was, “It is our job to continually keep the troops focused and channeled on their mission. If they were able to always keep themselves focused, they would probably be out on their own with their own business.”
That statement hit me like a ton of bricks. From that point on, I focused on that.
Given virtually everyone who walked through the door to work at my business had no background in the water well industry, training new people was vital. One cannot just give a new hire to an existing employee and expect them to train the new person. Management must monitor how the new hire is progressing at all times.
Some employees had a natural desire to learn and move up, while others did not. That problem is worse today than it was when I was in the daily operations. It is vital to recognize which employees have the desire to move up and what particular task that person is best suited for and put them in the proper “job fit.”
Managing the Money
Growing your business is also more than just managing current employees and training new ones. There is the financial side of growing your business.
It is vital to have a good accounting system that produces the desired information accurately reflecting your daily, monthly, and yearly operations. You can grow yourself into a financial quagmire and find while you may be doing a lot of business, you’re not making a lot of money.
And so, one needs to either have a highly trained and qualified accountant on staff or retain an accounting firm that has the skill set and resources to help you manage your accounting and financial statements. Without the one or the other, you are headed for trouble. By the early 2000s, I had a full-time accountant on staff with the experience and expertise to help manage our growth.
We put in place inventory systems that allowed us to accurately track our inventory to ensure what inventory was handled each day—so we would have an accurate profit and loss statement at the end of each month. This is vital to every growing business.
Proper financial information isn’t just so an owner can know how the company is progressing. Well-compiled and accurate financial statements are necessary to obtain the necessary capital for expanding operations.
My business had an operating line of capital that was obtained at our local bank. I established a relationship with the bank president, and frankly he felt like a “partner” in the business.
I found it vital for the bank president to understand my business. Once I got him up to speed on the ins and outs of my business, I wasn’t inclined to change banks and go through the process all over again.
We often went out to lunch periodically to simply talk. I found we had a lot in common on many issues of running a business. He not only became a friend, he became a sounding board on business-related issues. To this day, this bank is still the banking and lending institution for our company.
In summary, any business growth requires a plan and continued focus on what will assure you continue to provide the goods and services that helped you grow. You must surround yourself with quality people—your staff is your business and it represents you and your company. Couple that with sound financial information giving you the data to know where you are financially each day, and you’ll have the key ingredients to grow a successful business.
Gary Shawver, MGWC, is president of Shawver Well Co. Inc. in Fredericksburg, Iowa. He has been in the water well industry for more than 40 years and is a Master Groundwater Contractor. He served on the NGWA Board of Directors. Shawver is semi-retired, having sold his business to his employees. He can be reached at email@example.com.