Building a business that has longevity is a process that requires patience, diligence, and dedication. More specifically, establishing a company that is an enjoyable place to work, profitable, and sustainable will put you, as a business owner, in a position to achieve your long-term goals. Below are some actions you can take to ensure your business meets all three factors mentioned.
- Request feedback from your clients.
Getting feedback from your clients is a must for all service-based businesses because it indicates whether clients enjoy working with you. You must know what your clients think about your performance and working with your team. Based on the feedback you receive, you can change your approach as a service provider if needed or continue to build on what is currently working for you. At Summit Virtual CFO by Anders, we seek feedback from our clients via surveys. We also request feedback when the client least expects it because they are more forthcoming about how they feel about our working relationship when they're not prepared to receive a survey.
- Rate your clients and your team.
While surveying your clients is a much more common action taken by service-based businesses, having a business owner rate their clients and their team is not. However, this particular step is just as important. We recently had Natalie Eckdahl, Founder of BizChix, as a guest on the Virtual CPA Success Show for Creative Agencies. She suggests rating your clients and team members using a system of your choice (e.g., a five-star system, a 1 to 10-point scale). After you've rated your clients and staff, determine who ranked lowest. Doing so will help you decide whether or not you enjoy working with your clients and current team. This practice will also help you identify the pain points in your business and what you should consider changing. For example, if you gave one employee a low score, determine why you rated them so low. From there, decide whether you're interested in helping them reach their potential as an employee or if you think they would be better suited for a position elsewhere.
Natalie explained how having your employees rank your clients and other team members is also an excellent way to gain insight into how your business is currently functioning. More specifically, the responses received will clue you into what's happening with your team and the relationship your team has with your clients. The nswers you get may shine a light on issues you may not have seen otherwise. For example, we've heard of a business owner who had her team rank each client, and one team member ranked a client lower than their colleagues. After speaking with the staffer, the owner realized they did not fully understand the client's business, which translated into a lower ranking.
- Understand the ins and outs of your business's operations.
To ensure your business is profitable, you must fully understand how your company functions and generates revenue. Consider factors such as what actions generate revenue for your company, what costs are associated with that revenue, and how other aspects of the business (e.g., marketing costs) impact your bottom line. This knowledge will help you identify what goes into each client engagement to see if your services yield more profits than costs.
As the leader of your business, it's also crucial that you take ownership of these factors and remain aware of how your company is performing financially and why. Stay engaged even after hiring an internal CFO or a Virtual CFO to oversee these parts of the business; you still need to oversee it and take ownership. Doing so will get you closer to achieving your financial goals as you make informed decisions about company operations.
- Revisit the pace of your company.
Regularly looking at the speed at which your business operates will help determine if you can sustain that pace in the long run. If you're working and growing at a break-neck rate, there's a greater risk that you and your team will get burned out. Burnout can lead to serious business issues and repercussions, such as high turnover and inadequate service. Unsustainable work situations that could cause problems down the line include having too many direct reports to where you constantly have to shift your attention away from working on opportunities and initiatives that will advance your business. A solution might be to hire someone to manage your team or to empower your team members to exercise their judgment and make decisions instead of constantly seeking your input.
Remember that working at what feels like the speed of light is not ideal, if done incorrectly. At some point, you and your team could experience diminishing returns on your work. Also, it's crucial that you set a good example for your team. Don’t be fooled – they are watching you. As the leader of your company, how you handle the pace is the example you’re setting, right or wrong. Doing it right will lead to a higher retention of employees.
Consider acting on the steps listed above to ensure the longevity of your company. If you enjoy what you're doing and who you work with, are focused on being profitable, and creating a sustainable work pace for your company, you will have a much better chance at scaling your business and guaranteeing its continued success.