Floored by Growth
Division 9 Flooring is struggling to manage its growing business. What are your thoughts on the issues facing Division 9? How should the firm handle its cash-flow problems? What’s the best way to keep its staff well informed? How can the partners stick to their agendas?
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DiggI enjoyed the July/August 2008 article on Division 9’s cash flow and business challenges. Here are a few suggestions for Mike Quinton, Chuck Young and Melissa Boggan to consider. Thanks so much for the opportunity to submit – Paul Benedetto
Regarding cash flow:
See if raw materials vendors will provide financing, not only your clients. At least ask them to provide preferential terms. They might look into crafting letters of intent with key vendors, establishing pricing, terms and volume agreements. These can be either binding or non-binding documents. If volume of commonly used material dictates, they should evaluate their turn and then seek asset based lending to build inventory levels.
Regarding lack of follow through:
Set an annual strategic plan that dovetails towards a new overall 5 year plan. Explore then assign tactics to each member of the team, with mandatory monthly progress reports. Consider engaging key managers below the senior level in the process, thereby building depth in the organization, facilitate mentoring opportunities, and increase the level of communication on where the company is heading.
Consider outsourcing core back office functions such as accounting and human resources, to free up senior management to spend their time more strategically. With the right partnership, tremendous value can be gained. Also, using independent third parties can bring fresh views to the table that are free from bias and/or politics that sometimes come from within an established organization.
Regarding communication:
Develop a dashboard of key metrics that is visible to appropriate levels of the organization, and post these frequently, either physically and/or electronically. Create a shared calendar that lists upcoming client jobs, milestone due dates (e.g. strategy items). Any information that can be shared helps staff feel respected, appreciated and part of a team. I have found that if your employees are in the know and vested, they work that much harder to achieve their, and your goals.
Paul Benedetto
former CFO for a national experiential marketing agency & currently,
Managing Director | Finance On Demand, LLC
an outsourced accounting services provider
Each of the partners has an obligation to follow through on open items and tasks that are assigned to them. One effective way I have found to manage a similiar problem is to use simple tracking software that allows tasks to be assigned to individuals and allows the individuals to post updates as they progress toward completion. In addition to using the software (I use SharePoint) the partners should meet weekly to review open agenda items, to discuss progress, or lack thereof. Managing each others expectations is key. Also, if the new hire is looking for tasks let her act as a project manager. In one capacity she could make sure open items are being addressed and prod the partners to make updates and keep things moving forward. Or, she can take actual ownership for certain projects on behalf of the partners. Combine this responsibility with that of payroll supervisor (as suggested in the article) and you start to have what looks like a Chief Administrative Officer. This relieves some of the pressure on the partners and eases employee anxiety as the new hire now has a clearly defined role.
The best way to keep staff well informed is to over communicate. The owners of Division 9 should hold monthly meetings with staff to discuss the business – from key metrics to future growth plans. The owners should also allow employees to submit questions (anonymous if desired) prior to the meeting so they can be sure to address key questions that employees might not otherwise ask during the meeting.
The company indicates that it uses 15 to 25 contract installers during any given week. My instinct is that these are small independant people or companies that have absolutely no automation to run their business. It is a problem plaguing the small contracting industry. I know this for a fact since I run http://www.MyOnlineToolbox.com that brings these people into the 21st century. Division 9 probably has to make up for these sub-contractor limitations. Send them our way and we will help. Mention this comment and I will give them two months free and eventually the gains will trickle back up to Division 9. Best of luck in the field.
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I think that it may be time to consider hiring an operations manager. Depending on the skill set of Ms. Boggan, I would consider putting her in this role. If she does not completely meet the challenge, I would hire one that would be a compatible match and keep her as an executive assistant. The operations manager could do the day to day financial operations and let the co-owners do what they do best, that is selling and production management. They must be willing to give up some of the authority and then focus on what they do best. Build on each others strengths. This operations manager would still report to them and perhaps even act as a trainer to help the co-owners better understand how the financials work.