Ask any small, independent music retail store owner in the country what he or she sees as the major challenge for growing the business and improving his or her overall success rate, and that person will probably say, “Creating more sales.” Next, ask any medium or large retail store owner about his or her challenges in recent years, and that person will probably point to structural growing pains: specifically, putting the necessary processes in place and creating a business environment that will accommodate growing a higher volume of business.
The reality is that many businesses that reach this turning point miss the mark and stall because of their inability, or unwillingness, to develop a solid structure for growth. Creating new workflow processes and lining up all the changes for sales growth is the key. Although it might seem to come easier to some businesses than to others, remember that this is an ongoing process and needs to be continually nurtured. If your business is at this phase of development, take time to assess your strengths and weaknesses to ensure you have all of the tools in place to achieve the success you’ve planned.
Key components to prepare and solidify include systems, processes, staff and organizational changes. These areas are crucial to your growth, and they must be developed and nurtured to match your type of business. Factors such as the focus of your business, your capital requirements, products, services and customer demands all will have to be addressed.
Certain structural growth issues, excluding financing and real estate issues, are shared among all growing retailers; they fall into three areas:
1. Organizational Structure
2. Policies and Procedures
3. Systems and Technology
Organizational Structure
Some of the more common pains that smaller retailers experience are those related to the organizational structure of the business. The way a four-person store is managed differs greatly from a larger store of 20 or more people. Most owners can manage things effectively until the staff grows to about 10 people in the organization. At that point, the hierarchy starts to break down. The challenge here is that virtually nothing can be done without the owner’s involvement. In turn, this causes a continual logjam and a barrier to business growth.
A common indicator of such a situation is the line of employees waiting outside the boss’
office door, waiting for a decision before they can return to work. The best way to prevent this from happening requires, as a first step, creating a new workflow process and placing trust in your key employees. This will help you learn how to delegate your authority more effectively.
This doesn’t mean removing yourself from the decision-making process; it only means that you can move yourself to the end of the process, when the final decisions are made. Let your employees sort through and manage the time-consuming, day-to-day issues that continue to distract you from the larger, more strategic matters. Step in when decisions are ready to be made.
The key to this first step is to set up an organizational chart and list the managers to whom your staff will report. Be sure to detail the job descriptions for each of these positions. This will eliminate a lot of confusion at the beginning of your new regime.
While you are listing the descriptions of each managerial position, make sure you pay extra attention to the level of expertise each will require. A common mistake for businesses that try to take this important step is not to properly match their employees with the required skill set needed for the position. It’s a good idea to periodically get an outsider’s opinion of where certain levels of expertise might be lacking within the organizational chart. You don’t need to hire a consultant: plenty of resources within your community are willing and able to help you with business advice. Check out score.org or sba.gov.
Many businesses miss the mark and stall because of their
inability, or their
unwillingness,
to develop a
solid structure for growth.
Policies and Procedures
For most retailers, written policies, procedures and customer service points of action are nonexistent. Worse, they might be overly scrutinized or ignored by staff. Typically, since these policies were not properly introduced or correctly implemented, they were immediately met with resistance. The final blow is that most of these policies are just not documented. The lack of these documents and poor execution put a stranglehold on the business and plans for growth.
If you are growing at a pace that is fast enough to require frequent additions to your staff, formalized policies are a must for training purposes. How is anyone going to know what is expected of him or her without clear and concise guidelines and goals? Once you hit 15 to 20 employees, it’s time to ensure that these documents are in place.
As you grow larger, you will need more formalized communications channels for employees and customers. An informed and involved staff is usually more productive and more enthusiastic. A staff that’s left in the dark will often feel alienated and unappreciated. It’s a good idea to have regularly scheduled employee meetings, periodic employee-only e-mail newsletters and an easy-to-access repository of your internal communications. Try using Google Drive or Documents.
By now, you’re probably wondering what level your business is at and how severe your own growing pains are. Here are some sure signs that structural changes might be in order:
• Overall sales continue to grow, but profits do not.
• Everyone is working increasingly long hours and morale is down.
• People spend too much time putting out fires, rather than focusing on their own jobs.
• There is a constant backlog of decisions coming out of the boss’ office.
• There are no regular meetings, and there’s poor communication with employees.
• Blame is continually being placed on outdated or nonexistent policies and procedures.
• Aging equipment is not replaced with tools for doing a better job.
Systems and Technology
Smaller businesses are often the last to upgrade to newer equipment and technology, usually due to cost. Bear in mind that the costs of not upgrading are usually much higher. People need the right tools for the job. Without them, time is lost, results are disappointing and customer expectations are not met. This leads to low productivity, frequent downtime and internal frustrations that can stop a business dead in its tracks. And that’s not to mention the continual challenge of keeping up with your competitors, both operationally and across product and service offerings.
The average computer is virtually obsolete in just three years, and most of the widely used software applications come out with new versions every two years. So, keeping on top of technological advances must be an ongoing endeavor. Start out by working regular capital upgrade costs into your budget. Consider dedicating some, or all, of an employee’s time to managing your technology assets (including your social-media outlets and your Web site). It’s important to help them stay current on the latest technological developments. Although you might not be able to afford all the latest equipment, at least you’ll be on top of trends and know what your competitors are up to.
Key Points to Remember
• Most businesses stall due to their inability to develop the structure needed for growth.
• Structure evolves as your business grows, meaning that you constantly need to develop new workflows, policies and strategies.
• Get an outsider’s opinion from time to time, and ask where your business expertise might be lacking.
• As your business grows, make sure you create and maintain well-documented policies and procedures.
• Keep your communication open with your employees by having regularly scheduled employee meetings and sending out periodic employee newsletters.
• Create an internal repository of important employee documents using Google Drive or Documents.
• Keep your business growing by upgrading to new technology in a timely fashion.
David Hall is Vice President, Sales & Marketing for Cutting-Edge Solutions. Their e-commerce products, The Generator and Pro-Active Websites, are utilized by leading vendors and retailers within the music products industry. Contact him at david@pro-activewebsites.com.
Ask any small, independent music retail store owner in the country what he or she sees as the major challenge for growing the business and improving his or her overall success rate, and that person will probably say, “Creating more sales.” Next, ask any medium or large retail store owner about his or her challenges in recent years, and that person will probably point to structural growing pains: specifically, putting the necessary processes in place and creating a business environment that will accommodate growing a higher volume of business.
The reality is that many businesses that reach this turning point miss the mark and stall because of their inability, or unwillingness, to develop a solid structure for growth. Creating new workflow processes and lining up all the changes for sales growth is the key. Although it might seem to come easier to some businesses than to others, remember that this is an ongoing process and needs to be continually nurtured. If your business is at this phase of development, take time to assess your strengths and weaknesses to ensure you have all of the tools in place to achieve the success you’ve planned.
Key components to prepare and solidify include systems, processes, staff and organizational changes. These areas are crucial to your growth, and they must be developed and nurtured to match your type of business. Factors such as the focus of your business, your capital requirements, products, services and customer demands all will have to be addressed.
Certain structural growth issues, excluding financing and real estate issues, are shared among all growing retailers; they fall into three areas:
1. Organizational Structure
2. Policies and Procedures
3. Systems and Technology
Organizational Structure
Some of the more common pains that smaller retailers experience are those related to the organizational structure of the business. The way a four-person store is managed differs greatly from a larger store of 20 or more people. Most owners can manage things effectively until the staff grows to about 10 people in the organization. At that point, the hierarchy starts to break down. The challenge here is that virtually nothing can be done without the owner’s involvement. In turn, this causes a continual logjam and a barrier to business growth.
A common indicator of such a situation is the line of employees waiting outside the boss’
office door, waiting for a decision before they can return to work. The best way to prevent this from happening requires, as a first step, creating a new workflow process and placing trust in your key employees. This will help you learn how to delegate your authority more effectively.
This doesn’t mean removing yourself from the decision-making process; it only means that you can move yourself to the end of the process, when the final decisions are made. Let your employees sort through and manage the time-consuming, day-to-day issues that continue to distract you from the larger, more strategic matters. Step in when decisions are ready to be made.
The key to this first step is to set up an organizational chart and list the managers to whom your staff will report. Be sure to detail the job descriptions for each of these positions. This will eliminate a lot of confusion at the beginning of your new regime.
While you are listing the descriptions of each managerial position, make sure you pay extra attention to the level of expertise each will require. A common mistake for businesses that try to take this important step is not to properly match their employees with the required skill set needed for the position. It’s a good idea to periodically get an outsider’s opinion of where certain levels of expertise might be lacking within the organizational chart. You don’t need to hire a consultant: plenty of resources within your community are willing and able to help you with business advice. Check out score.org or sba.gov.
Policies and Procedures
For most retailers, written policies, procedures and customer service points of action are nonexistent. Worse, they might be overly scrutinized or ignored by staff. Typically, since these policies were not properly introduced or correctly implemented, they were immediately met with resistance. The final blow is that most of these policies are just not documented. The lack of these documents and poor execution put a stranglehold on the business and plans for growth.
If you are growing at a pace that is fast enough to require frequent additions to your staff, formalized policies are a must for training purposes. How is anyone going to know what is expected of him or her without clear and concise guidelines and goals? Once you hit 15 to 20 employees, it’s time to ensure that these documents are in place.
As you grow larger, you will need more formalized communications channels for employees and customers. An informed and involved staff is usually more productive and more enthusiastic. A staff that’s left in the dark will often feel alienated and unappreciated. It’s a good idea to have regularly scheduled employee meetings, periodic employee-only e-mail newsletters and an easy-to-access repository of your internal communications. Try using Google Drive or Documents.
By now, you’re probably wondering what level your business is at and how severe your own growing pains are. Here are some sure signs that structural changes might be in order:
• Overall sales continue to grow, but profits do not.
• Everyone is working increasingly long hours and morale is down.
• People spend too much time putting out fires, rather than focusing on their own jobs.
• There is a constant backlog of decisions coming out of the boss’ office.
• There are no regular meetings, and there’s poor communication with employees.
• Blame is continually being placed on outdated or nonexistent policies and procedures.
• Aging equipment is not replaced with tools for doing a better job.
Systems and Technology
Smaller businesses are often the last to upgrade to newer equipment and technology, usually due to cost. Bear in mind that the costs of not upgrading are usually much higher. People need the right tools for the job. Without them, time is lost, results are disappointing and customer expectations are not met. This leads to low productivity, frequent downtime and internal frustrations that can stop a business dead in its tracks. And that’s not to mention the continual challenge of keeping up with your competitors, both operationally and across product and service offerings.
The average computer is virtually obsolete in just three years, and most of the widely used software applications come out with new versions every two years. So, keeping on top of technological advances must be an ongoing endeavor. Start out by working regular capital upgrade costs into your budget. Consider dedicating some, or all, of an employee’s time to managing your technology assets (including your social-media outlets and your Web site). It’s important to help them stay current on the latest technological developments. Although you might not be able to afford all the latest equipment, at least you’ll be on top of trends and know what your competitors are up to.
Key Points to Remember
• Most businesses stall due to their inability to develop the structure needed for growth.
• Structure evolves as your business grows, meaning that you constantly need to develop new workflows, policies and strategies.
• Get an outsider’s opinion from time to time, and ask where your business expertise might be lacking.
• As your business grows, make sure you create and maintain well-documented policies and procedures.
• Keep your communication open with your employees by having regularly scheduled employee meetings and sending out periodic employee newsletters.
• Create an internal repository of important employee documents using Google Drive or Documents.
• Keep your business growing by upgrading to new technology in a timely fashion.
David Hall is Vice President, Sales & Marketing for Cutting-Edge Solutions. Their e-commerce products, The Generator and Pro-Active Websites, are utilized by leading vendors and retailers within the music products industry. Contact him at david@pro-activewebsites.com.