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Workroom Operations

Growing Your Business
How do you know when it's time?

by Kitty Stein, WCAA, CWP

Yesterday, as I was waiting in line exiting our church, a friend behind me asked how my business was doing. I replied that it is growing and I am spending lots of hours on it. She immediately came back with, “Why don’t you hire someone?” As I turned to answer, she already was in conversation with someone else. Later in the day as I was contemplating what topic I should cover this month, it suddenly hit me. That remark was like a voice from the past.

That very same question and suggestion had been put to me by the first interior designer I worked for. I was not getting her work out as fast as she would have liked, so in order to help her out it was suggested I should hire help—a real employee. Of course, being so innocent and naïve I agreed that I needed to help her to get her work faster and so I hired my first employee. Shall we just say that I have 20/20 vision now that I did not have then?

WHOSE NEEDS MUST BE MET?
In most cases relating to business the customer is the one to please, but when you are talking about growing your business, that is another matter. You, alone, are the only one who knows what you want to give and receive from your business. My guess is that most of you do not have a clear picture of where you want your business to go. When I say clear, I mean exact! Otherwise, how will you recognize success when you get there?

Too often, as I consult with businesses in this industry, I find the owners do not know where they are headed. A while back, I began to require all my clients to submit a summary of their backgrounds, where they want to be one, three and five years from now and answer a list of questions prior to a consultation. For many, crystallizing their futures had been a real problem. For others it was easy to put down on paper what they wanted to do, but in the end they had no concept of what they were really asking for. In some cases, what they thought they wanted was not a good fit for their skills and happiness.

Too many people start businesses sewing in their homes just because they keep hearing well-meaning friends and family say, “You are so good at that. Why don’t you go into business?” I can see the heads out there bobbing up and down. Obviously, the friends and family never owned a business. Right?

What do you want? Do you really want a business? Do you really want to have to determine what you are worth so you can put a price on your services? Just today, I had someone ask me if I had a suggested price list I could sell her. I responded, “If I did, I would be a millionaire by now!”

What do you want from your business? And money is not the answer! Only you can determine and describe in detail what your business stands for and what it will give back to you. This step is essential before you do anything to grow your business. Just because you are working long hours is not a definite sign you need to grow. You may only need to increase your prices!

WHAT IS ‘GROWING A BUSINESS?
Obviously some people think that hiring employees is growing a business. Others think it is making more money. Some might believe that just owning a business is worth it for status. There are others that think moving out of the home and into a storefront is what growing and success is all about. And then there are those who have thought it through and realize that, besides being a pleasure, owning a business also will be their retirement guarantee. By that I mean the business could run itself without the owner’s constant presence or that it’s a saleable commodity that will fund the owner’s retirement years.

Your business can grow slowly and be manageable with minimal risk, or you can invest heavily to make it grow faster and thus “succeed” faster. That investment might be longer work hours or money. Here again, how do you define success and what are you willing to give—sacrifice — to get there?

That’s a lot of ideas, but what is “growing a business” really? Isn’t it taking you where you want to be? Isn’t it the means to allow you to have some of the finer things in life? Isn’t it taking you outside your comfort zone—a little or a lot? Isn’t it about increasing your income as well as your joy in what you do? Isn’t it job security?

If you own your own business, can’t you determine how much money you need to make (or charge your customers) to be financially secure? As I read over the results of the workroom survey D&WC did a few years ago (see D&WC May 2000, page 54; June 2000, page 52; July 2000, page 54), I was appalled that so many people had been in the workroom business so long and still were not happy with their incomes. Would they have worked for someone else that long and feel the same way?

ARE YOU MAKING A PROFIT NOW?
To me, this is a very innocent question that should be answered easily by any business owner. One more so-called easy question would be, “How much are you paying yourself?” Can you answer these questions?

If you can’t answer these questions, then how can you grow? How can you quit the full-time job that is paying the bills so you can go full-time in your current part-time business?

I am reminded of the following joke: William and Allen lived in Alabama on the border of Mississippi. The latter state had a severe drought and feed for livestock was scare. William and Allen decided to buy hay in Alabama for $2.50 a bale and sell it in Mississippi for $2 a bale. They did this a few times and Allen, realizing they weren’t making any money, asked William what they should do. William scratched his head, thought it over and replied, “Maybe we should buy a bigger truck!”

Growing, no matter how you might define it, can’t happen until you are financially secure where you are. If you are happy with what you are paying yourself in salary, with the number of hours you are working and if after you have paid all the bills you have a significant amount of money in your business checking account, then you are at a point where you can grow if you have defined what growing is.

Growing, in the sense we are discussing, is not about making changes in your business because you recognize that what you have been doing is not profitable. If you know your business is not profitable, then making changes is the only way to get different results. That is conscientious business management, not growing, although it could result in growth.

STARTING A NEW BUSINESS
You probably don’t want to hear this, but usually growing is the same as starting a new business. What does that mean? It means you are back to investing time and money into your next success.

If you are working by yourself, you may think that hiring people to help will get you where you want to go. Not necessarily, unless you are trying to work into a management position where everyone else in your business is producing the income. When you hire a person to help you, you must train them, which reduces your productivity and income. It is also the beginning of turning yourself into a manager rather than a producer.

Training in the custom workroom business is a long process. This is why you must be profitable and have reserve capital first!

My own preference, although my business is not like yours, is to rely on technology as much as possible. As a workroom, you too can rely on technology in that you can invest in the proper equipment to increase your own production. You can invest in patterns and education for yourself to improve your efficiency. You can invest in software to do your estimating. Any time you can increase your productivity and income without hiring an employee, you will eventually add more dollars into your bank without it costing you more than the initial investment.

Another important preference I have is to invest in other professionals to do what I’m not good at or can’t do at all. My accountant, my Web master, my computer tech and my software trainers are at the top of my growth investment plan.

Paying other pros may seem to cost more than what you think you can afford, but they are a valuable investment if you choose wisely. By the time you figure out how to do what you are paying them for, you have invested many more hours of your valuable time and your work may not be as good as theirs. If you do the math, I think you will find the pros will be cheaper than you are. While they are doing what you are paying them to do (fabricating pinch pleats, for example), you can be generating more income with a higher profit margin.

Well, are you ready to grow? Or are you ready to make some changes to get your business to the growth stage? What do you want your business to be like in five years? Now get out your pencil and paper and crayons and draw your future. Don’t forget a smiley face—J—because that will be you when you succeed!