The business worries that give SME owners sleepless nights
Time management, finding the right staff and cash flow are chief concerns
Enda McCormack and Gill Toal of Genovese Foods: Getting into major food production has been even more full-on than expected
Running an SME can be exhausting. Owner-managers shoulder the lion’s share of the decision-making, problem-solving and trouble-shooting within their business, and on a bad day, they know exactly how Sisyphus felt trying to push a boulder uphill.
Every SME has its own troubles, but the top three for the group of owner-managers mentored by Cormac Kelly on the Plato small business support programme are: time management, controlling costs and making good hires.
Kelly’s day job is as a senior manager with Microsoft, where he has responsibility for a team of 50 people. But once a month he coaches a group of SMEs (typically between 12-15 companies per group) as they thrash out the pros and cons of the topics they have selected as being of interest and relevance to them.
For the purposes of this article, Kelly asked them to rank their chief causes of concern right now. Time, or the lack of it, topped the list.
“Time management and focusing on the ‘right’ parts of their business were big issues,” Kelly says. “What came out was that it is not always evident to the SME manager where he or she is spending their time until they start digging and actually look at it.
“They get stuck into the admin tasks such as billing and ordering, as they are the most immediately urgent. But they are not spending time thinking about how their industry is evolving and how they need to evolve to meet it, or about sales and marketing strategies, hiring strategies, technology improvements or business model evolution.
“There are lots of very good reasons for this, but our group is trying to tackle it at the moment. The key messages we are working on are: write down your longer-term goals and a plan to achieve them and start trying to hold yourself accountable to deliver.
“One area we asked the SMEs to look at was putting an hourly price on themselves. Turns out that some of them are the most important (expensive) administrators around!”
Gill Toal is the co-owner of Genovese Foods, which produces fresh pesto products and is in the process of transforming itself from a small business with limited Dublin distribution to a national brand. Toal and her business partner, Enda McCormack, bought the business two years ago and it has been nonstop since. Both have experience of the food sector, but Toal says .
Recognising that she needed help to take a step back to plan for the future, Toal signed up for the Skillnet Ireland business development programme.
“There’s time and money involved so you have to be committed, but I needed the discipline of having to leave the business one day a month to get the time and space to think strategically,” she says.
Unsurprisingly, cost was number two on the SMEs’ hit list. “Cost is a big one for all businesses but, for the group, managing cash flow in and out, hiring third parties and getting their stock and services at the right prices are all areas they struggle with,” Kelly says.
“Most small companies are also terrible debt collectors, because they don’t want to jeopardise customer relationships. This makes getting money in on time a major challenge.”
The consequences of a bad hire can be catastrophic for any business but particularly for a small one where their potential to do harm is much greater. Choosing the right person with the right skill set and getting them at an affordable price is the third major challenge identified by the SMEs.
“The labour market is massively competitive and, if you are going to make a hire, there is considerable risk and cost associated with it,” Kelly says. “One of the ways the SMEs are coping is by outsourcing where possible, not least because it helps with the all-important time issue.”
Hiring and firing
Toal has recently taken on part-time help with social media marketing.
“I don’t know enough about social media and I don’t have the time to start learning,” she says. “The prospect of hiring is very scary, not least because the cards are stacked against the employer.
“My solution was to hire someone I knew. However, if that’s not an option, my advice would be to get outside help. Pay a professional to do the hiring and, if necessary, the firing for you. Very few SME owners have HR knowledge, and employment law and procedures are complex. The last thing you want, need or can afford as an owner-manager is to end up in court.”
“We would like to hire, but are not impressed by the attitude of would-be employees,” he says. “They seem to think they can start at the top rather than work their way up.”
Like Toal, Tomlin found getting away from his business to be almost impossible. “You get bogged down in day-to-day activities and what joining the Plato programme did for me was to stress the importance of taking time out.
“I now spend an hour a day working on the business not in it. As a result, I have a more structured and strategic view, and because we’re more focused we’re better at making decisions and we get more done.”