On a recent trip to the north coast of NSW for a little break I had the chance to get up close and personal with three small businesses. It was great to look at these business with a small business coaching approach. All three are in a rural area and are based on primary production (you grow something!). Despite bumping into them quite randomly, I was surprised they were all going through very similar challenges, many of which could be overcome by adopting some new technologies to assist with improving inefficiencies to free up time to expand or improve their work/life balance, which is often non-existent for small business owners.
I found a range of learnings that I thought might be interesting and worth sharing in 3 different case studies. The first case study was a rose farm. This is a very well established business run with 2 full time people and 1 part time. Like most producing properties it had its challenges some of which include:
What was clear from the outset was the limited investment going back into the business on a regular basis. The owners have bought a job, doing the hard work and handing the product themselves, from managing the plants to making customers happy.
The business had four components:
Basically the owners are doing everything to save money and keep the profit for themselves. Now there is nothing wrong with this approach. However from a risk point of view, and a business point of view this is not sustainable in the long term. It also reduces the net worth of the business because if you take the owners out of the equation there is no business. The business needs to be able to work without the owners being in the business.
Now it is easy for me to say that having not worked in that particular business, however I was able to identify some easy to implement solutions to begin systemising and automating parts of their business. Like most business owners, I'm pretty certain they never really look at the value of working on the business vs working in the business. By getting a birds eye view on the way they do their business, I could begin to see how they could make life so much easier for themselves, with a potential to expand their business by anywhere from 5 – 10%, easily.
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The mid-north coast of NSW has high unemployment rates and a multitude of government programs and incentives to improve employment outcomes in regional areas, so labor is plentiful. Finding good quality labour is the ongoing challenge.
One solution to improve productivity and get the owners out from under the business would be to break down the picking part of the business and develop a training program. Picking the roses, although an important part of the process, is very repetitive and relatively easy to learn. By developing a fairly simple, automated training system, the owners could begin to step back from some of the most time consuming yet labour intensive parts of the business in order to reclaim some time for other aspects. The systemisation and training aspects could even be funded via government employment training schemes and internships. Effectively you are getting paid to create the training program for getting people employed.
Once the first picking recruits are competent you can hire another couple of trainee pickers as contingencies. You are going to have staff turnover so you use that to your advantage with a consistent hiring system that is fully automated. Using technology like web based learning and video you can create offsite training programs as the induction/ interview tools. Online tests can be used to funnel applicants. Spending a bit of time to develop the recruitment and training videos with accompanying documents for systems and procedures will save significant time and provide consistency each time the owners need to recruit new employees.
If there are new additions to processes or procedures, or for any gaps in training they just do another video and add to it.
In order to retain staff once they've been recruited there's opportunity to implement a promotion plan. As employment is on a casual basis to start off, and as there is only really 36 weeks a year of good productivity, the goal take the best of the casuals and make them full time, after their 6 month mark. They then become the full time supervisor of the pickers. This gives them access to further education on the maintenance of the property and potentially do continued education, again funded by the government.
During the off time the full timer continues to pick the limited number of stock available as well as general farm maintenance.
This process can be repeated for the packing part of the business. With this model the training can be automated (with some hands on at the outset) and completely scaleable, running 1 to 5 days a week. These processes can then free up the owners to work on the business. The best part of this concept is that once the business is showing consistency in the picking and packing, the business can be expanded and sales can be increased. This is the area that the owners should be concentrating on.
Can you believe the owners actually told me that they say no to orders because they cannot keep up or want to work that hard!
Best of all the farm is now a business that does not rely on the owners doing the job. It is producing income without the owners and having employees doing the picking and packing, the most labor intensive part of the business.
I'm sure that the owners would have fear and objections to these concepts and would themselves need to change their thinking about how they do their business and adopting new technology. After all, you don't know what you don't know. Having someone help you open up your thinking to new ideas and concepts can make a very big difference. So often as a small business owner, you're so caught up in the day to day running of your businesses you never have the time to look at what you're doing to identify where you can replace yourself and free some some time and space to work on the business or give yourself some much needed freedom.
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Alternatively make a comment below on what you would do based on the information you have to improve the business.