Thursday 24 October 2013

Don't kill your business with overcapacity



One of the disguised pitfalls in small businesses is lack of teams or employees. We always focus on finances, location, accommodations, machines and others. But employees are the most important resources in every business.

It is very easy for your business to collapse when you don’t handle your employees very well. Perhaps, it’s because you can do most of the work by yourself and that’s the trap. If you maltreat your employs too, then you are collapsing your business and this canker is equal to the fatal effects of over capacity. Over capacity is when you have too much demand than you have enough resources to manage. Only a few people are doing the job.

You need employees because of over capacity. When you start a business you do everything by yourself. You don’t have enough money to employ another person. With time you get burdened with so much work that you lose your effectiveness. It is like carrying something much heavier than you, it’d collapse on you.

At this point you need to think about expanding your business. Most people think that when you get a big place then your business is expanded; actually it is when you increase your workforce. Your workforce is your true expansion. That is why you were doing well when you had few jobs, but now that the demand is high, your business is collapsing. True expansion is increasing your team.

I guess we don’t want to employ more people because maybe the person would be taking too much out of what we make. In the beginning it’d look like you are paying that employee with most of your income but, as you begin to take in more orders you’d start gaining. You have to lose to gain.

You have to segment your business and allocate one person each to a particular function. This way they are run better and they function much more effectively.  If you alone manage many things you’d never be effective, all your efforts would be diluted.

Employing help from another person would free your hands and give you options. The jobs that you couldn’t take previously now can be taken. If you are not available somebody is there to take care of your customers. You can do more adverts because you have extra hands.

It puts positive pressure on you to succeed. You get embarrassed when you can’t pay your employees at the end of the month. It forces you to work hard to make more sales.

You are able to produce efficient work. Allocating one area to another person can make it better. For instance, if you let someone else take charge of sales and marketing you’d do better in business.

What to do

Payment
Pay employees well. I have heard too much of this that I get tired of it. Either the boss is delaying payment or there is under payment. If you keep doing this it’d be difficult for you to get good people to work with, because everybody would know about you and would not like to come near you. Pay their social security, it makes more credible.

Contingencies
When somebody works for you his problems become yours too. Save money out of your income every month, when somebody is sick or has a problem with fees or something, you can help. Employees get disappointed when you can’t help them in their time of need. Whether you have it or not they’d say you are wicked.

Convenience
If their salary is small make room for them to do their rounds. Create opportunities for them to earn extra income in addition to what you are giving them. They have parents to support, a family or girl friend or something.

Growth opportunities
When you help employees increase their stature in their education, the easiest thing is that they live for greener pastures. You might think you are losing but it’s not true. This would allow you to attract good workers and they work with passion because they know they are going to get something. Furthermore, it gives you a chance to be philanthropic. Some satisfied employees would never leave you.

Remember, it is not the infrastructure that makes your business a big one but the number of workforce you or team you have; this is true expansion.


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