Willingness to adjust made it possible for In-House Concepts to reduce some costs with up to 40%.
BY JOHN DURR
CHANGING the mind-set of the business owner and employees to embrace needed changes is one of the biggest challenges a business faces. In the many projects that we have taken on at businessknowhow, we have found that we can design the best possible intervention, but if the people in the business aren’t 100% behind the initiative, it can all come to nothing.
This is particularly the case when a business moves from its start-up phase to a more mature phase. At his point systems, rules and procedures are required to pull together the various resources and initiatives.
It is when the owner manager can no longer control every aspect of the business, where he or she can’t oversee what all the staff members are doing, that a shift is needed in the way things are done. In many cases the change-overtop a more sophisticated business involves the redesign of jobs and payment structures.
Control over materials and resources are also issues that such growing businesses have to address.
VREDEHOEK LASER CENTRE
Recently we supported the Vredehoek Laser Centre with similar re-engineering project after it was bought by the new owner, Maryke Mathee. We were asked by the financiers to provide mentoring and coaching services since they were of course interested in ensuring that the business succeeds through the transition period. W
e were required to attend to all aspects of the business including, administration, systems, cash flow and profitability, with the main objective to ensure business survival in the critical transition phase. To begin with we made sure that the business had the correct focus in the market and was able to deliver its promised services. We also had to ensure that there would be minimal customer attrition during the handover to the new owner.
Businessknowhow designed the administration systems from petty cash to accounting, ensuring that all costs were recorded correctly. We also guided the client towards running the business based on cash flow principles. Businessknowhow performed the role of non-executive director.
Key parts of the project included the smooth transition from the previous owners business to the new business; guidance in the purchase of the business and the loan from the bank; setup of administration and financial systems; setup of stock control systems; creating a daily cash flow book, so that the business always knew its cash position; online marketing campaigns including a new website; and guidance on budgets.
The approach adopted by Maryke Mathee, as owner-manager was conducive to making the project a success. As she said after we completed our support: “John has helped me to keep focus in the start-up of my business. He motivates you and helps you prioritise the correct path ways to a successful business.”
The support we provided her allowed her to understand and make a full commitment to all the needed elements of the changes we introduced. We also focused on the administrative challenges faced by the business. For instance, funding of equipment and the first few months operations; setting up of administration systems; legal compliance; managing cash flow –these were all the issues we had to deal with and which he staff had to see as important for the future of the business and their future as employees.
To address these challenges a daily allocation of time was established to attend to administration so that it did not get out of hand. Systems were devised for each of the areas. The clinic is now a stable successful business with great growth prospects. New leads are generated through the Google Ad campaign and the business is being run professionally by the owner-manager.
IN-HOUSE CONCEPTS
Another business we worked with recently is In-House Concepts.
Typical of a new, growing company they were experiencing a growth crisis. The main issues were poor information systems that were not suitable for decision-making; no systems for stock management and control sales at below acceptable margins; legacy paper processes with little IT automation; raw material purchasing based on cheapest supplier resulting in overstocks; and poor customer service levels with late arrival or completion times for jobs.
Businessknowhow was tasked with a turnaround project for the entire business. The overall focus was to lift the business from a “mom-and-pop shop” to a professional and respected business.
This required a big mind-shift from all employees and to some extent the owners too. In-House Concepts relocated to a business park next door to Builders Warehouse, who literally became the warehouse, resulting in much more up market premises at half the price. We also attended to completer-engineering of all systems and processes; re-design of the distribution value chain; moving to new premises to reduce rental by almost 40%; new IT systems, forming the backbone of all operations and administration; new accounting systems, reducing accounting costs by 70%;introducing just-in-time supply principles negotiated with Builders Warehouse; and new systems for tracking job progress using job costing systems.
As the one would expect, the new approach introduced to both In-House Concepts and Vredehoek Laser Centre required a mind shift from the people working there, starting with the owners. It was through the shift in approach from the people working in these businesses that they could create chance for success.
Introducing the business advisors…
AS members of the Institute of Business Advisors (IBA), the consultants at businessknowhow are active in supporting businesses with project management since2001.
Their approach is based on building teams around clear goals, leadership commitment and an outcomes-based plan. In recent years the increased demand for mentorship, coaching and business optimisation, resulted in businessknowhow adding these services. Their team has extensive experience in working with both blue chip organizations and small businesses, including companies such Metropolitan Life and Willlard Batteries.
We get actively involved with your key employees in the actual execution of their tasks. Learning by doing is our methodology, requiring everyone to get involved and get their hands dirty. There are no places on the side lines. We assist in helping illuminate the path for some while dealing with individual growth for others as the needs arises.
Businessknowhow has assisted many start up companies through their critical early phases with our mentorship programs, adapting these to suit the diverse client requirements. Call us to help your middle managers understand the bigger picture. Businessknowhow can execute your strategies to unlock the future value of your organisation.
Using Project management tools and techniques, we are able to plan and implement the strategy with your team, while you continue with your core business operations. Our portfolio of projects is diverse including blue chips and SME’s and includes new businesses, process re-engineering, and back office automation amongst others.
- You can contact John Durr of businessknowhow [email protected] phone 082 555 7874.