As a Maryland State Master Electrician, Kenny Daniels started his own electrical services business. It was 2004 when he established Dynamo Electric, LLC. A few years later, when the economy was booming, he had to face the strategic questions that small business owners typically face. Should I grow the business by hiring more technicians or keep the company small?
It’s worth pausing and thinking about the benefits of each path here. To use an analogy, deciding to expand or focus the business is like deciding what kind of tree you want. Do you want a large oak tree outside with sprawling branches and wider coverage? Or do you want a petite bonsai tree inside with carefully manicured branches?
To hire more staff enables you to increase your work capacity, expand your influence, and diversify your team. But it also requires you to shift roles and become more of a manager and entrepreneur. To stay small means keeping control of the business, knowing every customer personally, and being the expert in all aspects of the business. But it also means turning down some work because you can’t do it all.
Kenny decided he wanted the business to expand. In Part 1 of this article series, we’ll learn from Kenny’s journey as someone who took the expansion track. In Part 2, we’ll look at a business owner who decided to keep his business small and focused. Both options are valid. How do you decide which one is best for you?
Technician, Manager, and Entrepreneur
Michael Gerber’s bestselling book The E-Myth discusses the three roles a business owner plays: technician, manager, and entrepreneur.
- Technician: does the client work
- Manager: oversees the technicians and optimizes operations systems
- Entrepreneur: sees opportunities and creates innovative ideas
Each level requires different skills. Technicians need to enjoy the work and do it well. Managers need to keep things orderly and running while exercising people skills. And entrepreneurs need to see things that others don’t, including problems and opportunities.
- Which of the roles do you enjoy the most?
- Which one fits best with your personality and passion?
- What would it take for you to have your ideal role or ideal mix of them?
Growing your business typically means expanding into manager and entrepreneur while delegating work to technicians. When Kenny first started Dynamo Electric, he was doing a lot of electrical work himself. Now that he has 6 electricians in the field, he’s grown out of the technician role. As much as he enjoys picking up the tools, he only spends 1% of his time in the field because he needs to spend 99% of his time as manager and entrepreneur.
“I learned the skills to be an electrician, but my personality makes it easy and natural for me to be a manager,” said Kenny. “I’ve always thought out of the box, so as an entrepreneur, I want to work on creative ways to keep things moving and expanding. I want everybody to keep growing.”
Working in or Working on Your Business
If you decide to expand your business, one of the major shifts you’ll have to make is going from working in your business to working on your business.
If you’re spending time doing the actual client work that your business is paid to do, then you’re working in your business, being the technician. If you’re spending time putting systems in place, developing business strategy, networking, and managing a team, then you’re working on your business, as a manager and entrepreneur. You may not get paid directly to work on your business, but it’s essential for your business to grow and move forward.
It’s difficult, however, to actually make the transition. Kenny learned the hard way when he responded to an influx of work and expanded the company too quickly. He realized that hiring experienced technicians meant that they might come with baggage.
- What needs to change if you want to work on your business instead of in your business?
- What kind of support do you need to help you through that transition?
“There were a lot of headaches along the way when I was trying to operate with too many electricians. They didn’t do things our way,” Kenny shared. “I had to trim down the company to operate efficiently again. And then I’ve been growing slowly since then, so I can train the guys I hire and guarantee quality control. But that also means I have a lot on my plate, until I can train someone else to take on more of the manager role.”
Business Coaching through the Process
When I coach business owners through this shift of growing their business, we typically go through five steps:
- Which of these steps stands out to you and why?
- What could you do to make progress in these areas?
- Get a vision
As with any change, it helps to know where you want to go so you know how to get there. What could your business be like when you’re working on it, not in it? We clarify this with visioning exercises that give you a tangible and memorable picture of the preferred outcome. Part of the vision is also clarifying your metrics. What will you measure as you change your perspective and focus? For example, you might shift from measuring how many billable hours you had in a week to measuring the company’s profit margin, employee satisfaction, or customer reviews.
- Identify the temptation
When there’s a technical challenge on the job, we small business owners often find it irresistible to dive in and be the hero. Who doesn’t like to feel the satisfaction of a job well done? However, this can deter us from putting systems in place that equip other team members to do the same. It helps to identify what this temptation feels like—knowing the signs and seeing the temptation coming is half the battle.
- Make an action plan
An action plan helps you prepare for resources before you need them. Consider some “what if” scenarios: What if your business suddenly doubled? What if your biggest customers cut their engagement in half? What if your key employee was no longer able to work? Anticipating change can help you take these events in stride, and challenges your decisions about working in versus on your business.
- Invite accountability
When you’re supported throughout the process, you’re more likely to make the business change successfully. During coaching, I allow you to talk through things and hear your own thoughts. I ask powerful questions so you can get clarity on your decisions. I make helpful distinctions, so you can discover the difference between your perception and the facts. And I keep the vision before you so you can stay on track.
- Stay nimble
It’s important to have an action plan, but plans are also meant to change.Be open to new circumstances, and adjust the plan when circumstances do change. Stay curious about how your business is doing, and how you’re doing in your business.
- How would you and your business benefit by expanding the company?
- What would be the disadvantages of expanding the company?
- Preventing burnout
If you’re trying to do everything yourself, you’ll eventually reach your one-person limit.
- Boosting productivity
You’ll get more done when you delegate to other team members and are free to do the things only you can do.
- Increasing diversification
When you grow a team, each member is able to spend more time doing what matches his or her passion and skill.
- Expanding your influence
When you train team members, you pass on your wisdom and skills through shared opportunities. You make a bigger impact.
Support Through the Growth Pains
After experiencing periods of slow growth and fast growth, Kenny has learned that slow growth is the best path for Dynamo. He is able to keep things more controlled because he knows his guys well. “Keep making small changes for improvement,” he encourages others business owners. “The small changes add up to big changes.”
But expanding the company isn’t the only valid growth path. In Part 2 of this series we’ll look at another entrepreneur and see how his company is growing while staying small.
By the way, if you are facing business growth decisions and would like to explore the options with someone, get in touch.