Small business adviser Andrew Griffiths has a client who runs a boating service company. This successful boatie has a big team of workers but refuses to let any of them take control of the business, even for a day.
“I can’t take holidays; I can’t be sick,” he says. “I can’t leave the guys to work without me there. They just won’t do it to the same standard that I’m going to do it.”
Griffiths, who is the best-selling author of The Big Book of Small Business, sees this situation often. He understands why owners can feel like this – after all, it’s their livelihood that’s most at stake if the company fails. But businesses run by owners who refuse to let anyone else take any control can’t thrive and will never grow, Griffiths says.
“You’ve just got a disaster waiting to happen because you will burn yourself out, you will get sick,” he says. “If you don’t do something about it, something will be done about it without your input.”
This is just one of the potential dangers faced by small business owners once their businesses expand beyond a one-person operation. Many struggle when they find themselves needing to employ casual or full-time staff, many of whom may work on the road, or having to manage constant administrative demands. This is especially true when the owner is not only controlling the business and the paperwork, and looking for revenue-raising opportunities, but is also responsible for being at the front line, servicing customers in the field.
The biggest challenges facing Barry Hunt, who runs GRS Towing in the Sydney suburb of Smithfield, are straight forward – finding enough time and making enough money. He looks after the books for his heavy-duty towing business, manages up to 15 staff (including eight full-time drivers plus casuals), and is available to respond to emergency calls at any hour, on any day.
“It’s getting to the stage now where it’s fairly stressful on my wife and myself,” Hunt says. “It’s a 24-hour business. If I could shut up the business and go home it’d be different. But at night I might drive the truck or wait up to see if any calls come in. If you pay someone to do the phones and then send a driver out to do a job, is it even going to be a profitable outcome?”
Established in 2003 by Hunt and wife Sunny, GRS Towing specialises in retrieving and transporting extra-large trucks and mechanical equipment across Australia. It now has a $5 million fleet of nine state-of-the-art, heavy-duty trucks and trailers.
“We’re at the stage that if we get more trucks, then we’ll have to get a manager, and a new site, and concerns of losing profitability prevent this move. Even at the size we are, taking one or two steps back wouldn’t be too bad. With a young family, I’m at a testing point – a fully productive point for myself right now.”
He says he has six trucks with full-time drivers working at full capacity, Monday to Friday. On top of this he receives urgent jobs, breakdowns or accidents that keep him and his crew busy on weekends or at night.
“We could have five blokes out there for 10 hours during a night and then we’ll all sleep the next day,” Hunt says. “I went out two nights ago and did four hours at midnight, otherwise I’d lose a daytime driver the next day. And if you’ve got to pay for a full-time, night-time driver – it just hacks away at the profit.
“I envy those tradies who have $10,000 worth of gear in the back of a ute and they’re getting $120 an hour.”
Griffiths acknowledges that every business is different, and each has its own opportunities and challenges. But he advises owners to have a clear view of their own strengths and weaknesses. Referring to his client with the boating service business, Griffiths says that owners with really high standards may need to compromise a little. “They normally don’t do this until they’ve got enough pain. They say something like: ‘If I don’t change now, I’m going to have a nervous breakdown’.”
Griffiths says a dangerous situation develops when owners insist “it’s easier to do it myself”. “They will always be stuck with a really small business that is totally dependent on them. The minute something does happen to them, the business basically goes broke because the staff don’t think for themselves and don’t act for themselves, because they’re never given the opportunity.”
Mobile workforce management and accountancy software have greatly simplified backroom demands for small businesses. But owner-operators should consider the value of bringing in specialist assistance, even if the hired help ends up managing the owner’s work as well, Griffiths says.
“[It’s a good idea] if you’re one of those people who says, ‘Look, I actually love being on the tools, and I take great pride in it, but I’d hate managing people and administering people, and running the business, and paying tax, and doing all those kinds of things. [It’d be great if] someone could do all that stuff, and I could just focus on problem-solving and what I’m good at.’
“I think if that model works for you, it’s a really good model. It’s just not traditional.”
Auckland’s Straightline Electrical found it easier to bring in an operations manager based in Wellington, Marie August, so that senior electrician Dan Farrell could get on with his job. “From Dan’s perspective, I know that he would rather be doing the electrical side than the admin side,” August says. “It makes sense to outsource the admin to someone else so that all of his time is spent on money generation.”
In the end, though, it’s important for owner-operators to never lose sight of why they got into business in the first place. Many owners face constant challenges in running an office and a workforce, but they still enjoy the chance to make money for themselves by using their skills and experience.
Despite dealing with tight margins, large on-going fuel and repayment costs and personal sacrifices, Barry Hunt remains passionate about his towing business. “You wouldn’t do this if you didn’t love it,” he says.