Australian Franchise News – 22-07-10
TRANSITIONING from a small to a large business can be a difficult task and one that requires a strong vision, organisation, determination and ongoing change according to Ernst and Young 2010 Entrepreneur of the Year finalist John O’Brien.
Chief Executive Officer (CEO) of national pool and spa care network PoolWerx Mr O’Brien knows how hard it is to make the shift from business owner to leader of an international company and said in his 30 years of business he had witnessed many businesses fail.
“There is quite a leap to be taken in order to successfully transition from being a small business owner to leader of national company or franchise,” he said.
Mr O’Brien said one of the biggest mistakes that prevented a successful transition was the inability to plan well.
“Growing too quickly without the necessary structure to handle the increase in business can prove fatal.”
“Business owners can help themselves by being strategic and organised about the growth process. I created 10 and 20 year plans, spent a further 12 months developing systems, manuals, organisational and human resource structures before going ahead with the transition.
“It’s also essential to have a clear picture of where you want to go and what you want to achieve because at some point everyone will lose focus and it will be up to you to see it through.”
With over 25 years experience in franchising Mr O’Brien has grown his national pool and spa care network considerably since purchasing the company in 1992. In 2009/2010 the company achieved a 10 year growth milestone from $3 million to $63 million with a compound growth rate of 39 per cent.
Mr O’Brien said the process had not been without challenges especially in finance, recruitment, natural disasters and the economic downturn. He recommends a number of strategies for ensuring smooth and sustainable business growth.
“The most important and obvious element is weekly monitoring of cash flow. You need to make sure you are watching your debtors and creditors like a hawk.
“It’s also vital to maintain close relationships with suppliers, have ongoing access to capital, set key performance indicators for all areas of the business and delegate appropriate responsibility and accountability among your team.
“Establish rigorous monthly reporting and checking mechanisms and hold meetings with the executive team once a month to review performance across all key sectors of the business such as operations, marketing, IT and human resources to name a few.”
As a business grows leaders face new challenges like the need to modify their management style to accommodate growing staff numbers, developing better systems, financing expansion and managing employee retention.
Mr O’Brien said despite the large number of franchisees in the PoolWerx network he still made a priority of meeting with each one of them at least once every year.
“You can’t lose sight of what made your business great in the first place. It’s crucial to stay in touch with your team in order to get their feedback and to understand what is really happening on the ground in each area.
“Any lapse can result in losing market share or failure to capitalize on new trends or opportunities.”
Mr O’Brien said acceptance of mediocrity and a lack of adaptation were common business mistakes.
“So many business owners are happy to go along with the flow – their bills are being paid and things might be ticking along – but there is no real drive to move the business forward.
“Your management style must evolve with the business. I have always had mentors and I rely on them to help me expand my leadership skills and business thinking.
“As the leader of a company it’s up to you to constantly change the way you do things and how you look at things and how you deal with people and share the vision of the company. You have to be prepared for growth and change and all the challenges that come with it. If you aren’t how can your company be.”