GreenSearch People: It's the Revenue, Stupid!

As an example, when a company reaches an annual sales level of $3 million to $3.5 million, things that used to be done in a certain way in the past no longer seem to be sufficient in terms of generating the same level of results. All of a sudden, the criteria employed to make routine operational level decisions that used to be a simple matter of handling new accounts and satisfying the needs of current customers seem to be woefully inadequate. Operational decisions have become much greater in magnitude than they used to be. New equipment must be bought or leased. Cash flow projections are now more important than ever, since for the first time in the company's history, there is a need to invest in the future to support the current rate of growth the company is experiencing.

Lines of credit become stressed and there is a whole new need for accurate management and financial information, that only a couple of years ago was considered nice-to-have, but not essential. The days of seat-of-the-pants management are over and, boy, do you know it!

Like it or not, every aspect of the company is coming under close scrutiny as the crush of new business continues. It's not like the old days anymore, is it? The business has a whole different feel to it. The operations managers' strengths and development needs are becoming crystal clear. The old formulas for determining crew size and numbers in relation to the volume of work that has to be done no longer make sense. Ways must now be found to increase productivity and manpower efficiency, or face the specter of having labor costs spiral out of control. Work that has traditionally been sub-contracted has now reached a level of volume that causes you to consider whether or not it might not be smarter to take it in house and do it yourself.

The financial information and reporting side of the business have some gaps in it as well. Your bookkeeper - a capable, loyal, long-term employee - no longer has the expertise to guide you through some of the complexities of the financial decisions you now must make. Suddenly, you feel like you are driving in the 1999 Daytona 500 in a 1949 Hudson.

Most folks who have participated in the process of growing a business from the ground floor up, have developed a blind affinity for hiring only employees whose positions are directly involved with generating revenue. Many of these positions are either sales or operations-oriented folks and the results they produce are very measurable. As the company grows, however, the notion of simply providing a service or a product may be an overly simplistic path to follow. In fact, there may be forces at work in your business that will require a level of expertise and knowledge that has nothing directly to do with either sales or operations, yet may be necessary to insure the long-term success of both.

A good example of such a position may be that of the controller. For many companies this role may be divided between the company CPA and the bookkeeper. This division of labor and level of expertise may be all that is needed. There may come a time in the growth cycle of the company, however, that a person with relevant and up-to-date financial expertise is needed as part of the management team. The key words here are "part of the management team". This doesn't imply a "feet up on the desk" kind of role at all. Rather, it suggests a person who has a passion for operations, and a gift for the financial side of the business. Good controllers are worth their weight in gold. Good controllers have a broad sense of the business and the key elements that drive a successful venture.

There may be other roles that can also have a huge impact on a growing business besides that of a controller. Marketing may be one of those key positions, especially if positioning the growing enterprise in the eyes of both its competition and the eyes of the consumer is a necessary part of the overall strategy.

The message here is straightforward. As a company's revenue increases, there is usually more at work than just a mathematical extension of the things it has always done. Often, there is a subtle shift in the traditional dynamics that drive a business. Many times what is needed is a more strategic view of where the business is heading and what it needs to get there. This may mean hiring people who bring unique and valuable skills and experience that break the mold in terms of those folks who have been hired in the past.

You decide.

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