If you are an owner as well as a manager, the day-to-day running of too thin. So it's vital to have a series of processes in place to keep everything ticking over and avoid appearing stale to your customers. the business will, undoubtedly, preoccupy your mind. But how often do you think about the way the business is organised?
Small businesses tend to grow organically and chaotically. They do not have a structure at the beginning - the boss is in charge and everyone else falls into their roles. But as resellers grow and accumulate customers, their staff numbers increase, as does the complexity of the business.
That's when the need to organise becomes apparent.
Richard Thompson, chairman of EMS - a business consultancy and field marketing company specialising in the IT industry - says it is important to think about the structure of the business as early as possible. 'Most dealerships are sales-based organisations. They usually start with a group of salespeople selling products and only evolve beyond that when they start to develop relationships with one or two of their key accounts.
'When they get to this point, it's important to strike a balance between servicing and maintaining key accounts and making sure you're generating business so you can continue to grow,' Thompson adds.
In addition to growing, there's a need to avoid confusion, especially in the early days - perhaps before a relationship with one or two key customers has even developed. Applying a structure is important for managing growth - without one, says Thompson, the business can start to fall apart.
Smaller customers may become neglected and put the long-term prosperity of the business at risk.
'A dealer's biggest crime is falling between two rocks,' he adds. 'Either they spend too much time as front manager generating business, or too much time in the back office servicing one or two accounts and not moving the business forward. It's easy to lose focus if you're spending all your time on one or two large accounts and not generating any extra business.'
However, it is not always easy to divest yourself of responsibility when the business starts growing. Mike Hill, managing director of Greengage Computers - a systems reseller with offices in London and the Midlands - says finding the right balance between the locations and the individuals who play the key roles in the business is a hard task.
Last year, Greengage switched from having all its sales in one location and all its support in the other to having sales and support functions in both. But with less than 20 staff and plenty of customers to service, the move has not proved easy. says Hill: 'Because of our size, it is difficult to justify departmental managers and concentrate on the different managerial roles.'
Fellow director Seamus King is responsible for sales and marketing, but because of his traditional role and experience, he tends to get dragged back into support. Hill is responsible for support but, as managing director, tends to be pulled into business issues.
A small dealer needs to be aware of the potential dichotomy. As the business grows, the role the dealer takes will dictate, to some degree, the sort of staff that should be employed. Thompson says: 'If you're a better front person, surround yourself with good process people who can take care of the business you bring in and keep things running smoothly. If you're better in the office, bring in a front person to keep new business flowing.'
Nigel Thomas, marketing manager for UK general business at Oracle, says smaller resellers tend to grow in a fairly haphazard way, especially if they are established by people who are, fundamentally, either techies or salespeople. But they need to be turned into viable businesses if they are to be of any use to the vendor. 'Ideally, we want partners that reflect, on a small scale, the skills and resources we have at Oracle - that way we have a successful channel,' he says.
But can dealers reflect a vendor's structure? Phil Reakes, managing director of Selway Moore, thinks they can. Reakes formed an Hewlett Packard mid-range systems dealership when he left the vendor two years ago. 'We are an HP-style company because that is where we came from. We are customer-focused and set a lot of store on quality. The only way we can measure that is by putting in a set of procedures, measuring these and trying to improve on them.'
Selway Moore has processes for all its activities, modelled on the three key areas of product generation (matching market needs to its abilities); order generation (sales); and order fulfilment (delivery and support services).
Reakes says all of HP's functions would fit into the same categories.
Vendors want dealers to be flexible and successful. The right structure may help them develop skills, which is perhaps where the vendors can really help. Thomas says Oracle, for example, offers help with skills development and marketing and has vast resources.
It is important to allocate responsibility and make sure the right people are attaining the right skills. One way to ensure this is to get the business structure right.
Distributor PSL works closely with resellers in the mid-range market and is particularly keen to help resellers that are in the early stages of their development. According to John Toal, sales director at PSL, most resellers are fairly disorganised, but they don't have to be. He believes experience counts for a lot and points to Selway Moore as an example of what can be done at the start. 'What Phil Reakes brought to the party was his experience of working in a big organisation and he put the processes in place. The way Selway Moore is run is unusually professional for a small business.'
But the structure of a dealer business does not have to be overtly formal, nor does it need to be based on the structures of larger businesses. Even the smallest business can benefit from thinking about the way it is organised.
And the structure at the customer level is just as important as the back-room systems and processes.
Ian Brooks is managing director and co-founder of IB Business Development in Cardiff, which was set up four years ago to address small businesses and still has only four staff. For Brooks, structure is more about clear allocation of responsibility and understanding of core skills. 'Each of us has our own specialisations and we make sure the customer has what is effectively an account manager. That person will be the prime source of contact.'
The single point of contact approach is something many businesses use, as is the project team approach. It can be particularly important when dealing with SME businesses, says Neil Sibson, director at Pipeline - a small Var that was set up three years ago to provide internet-based e-commerce systems. 'We break the teams into production cells including sales and development people and everyone involved in the delivery of the system.'
Pipeline will bring in third parties if other skills are required and the project team approach allows it. 'We get different people involved with the different pieces of the puzzle, but our own people work together from pre-sales through to end delivery,' says Sibson.
A well structured business will be able to run smoothly and efficiently on a day-to-day basis. It should also be capable of growing where it needs to grow. But, says Thompson, thinking beyond the immediate future is what's needed for success. 'A lot of dealerships are fragile as businesses because they rely on one or two people. If those people leave or are out of operation for any length of time, the business becomes highly exposed.'
Many owner/managers leave themselves exposed, but only because they get the allocation of responsibility wrong, says Thompson, adding that too many managers delegate tasks rather than responsibility. The difference is subtle but crucial. 'If you delegate responsibility, you're giving people ownership over what they do and a sense of power and autonomy, which is vital if you're to get people to grow with your business.'
Falter on this point and staff will fail to take responsibility in the boss' absence, act indecisively and leave the manager with a difficult set of problems to deal with. This can lead to further problems and an eventual breakdown in confidence. Staff get into trouble for not solving problems in the absence of the boss and may be discouraged from taking on future responsibility, believes Thompson. The onus then falls back on the boss, defeating the initial object of the delegation.
This can be especially dangerous in a growing business because, as it grows, the owner/managers will have to delegate more responsibility. Having a structure for the business is vital, but it is equally important to make sure you are available and visible to the customers. A business that is relatively small and has too rigid a structure may start to look inflexible.
Small dealer businesses cannot afford to become too bureaucratic.
The Honeyframe Computer Services Group was, until last autumn, a single company. It now consists of three businesses - one focusing on traditional corporate PC sales, one on technical services and another on software development. When it was formed six years ago, it was a traditional reseller that relied largely on selling hardware. But as the market and the business developed, Honeyframe became more dependent on technical services, training and software development and it was this that prompted structural change.
Chris Preece, managing director of Honeyframe, says: 'With products, the quality is largely in the box. With technical services you have to create your own quality. Being structured as one unit is self-conflicting and the only way you can create the right focus and culture is to split the company into functional units.'
This is not necessarily about the size of the business, but about its maturity. A startup software company will not need to worry too much about its structure in the earliest stages, when product development is all-important. But at some point it will need to create some kind of infrastructure to deal with customers and ensure things get done.
A structure is about practicality, adds Preece. As more staff come on board, areas such as cashflow forecasting and management reporting become important. It is also important to get the benefits of scale, to use different parts of the business efficiently and make sure they pay their way. In a business that is a single unit, areas such as administration or sales tend to disappear into the overall cost base. When the business is structured, specific functions can be identified as profit or cost centres for each business. At Honeyframe, for example, the training facilities may be owned by the technical services business and the corporate business will be able to purchase those services as and when its customers need training.
Running the business in this way means costs are clearly identified and can be managed more effectively. It also ensures that a particular service remains competitive.
The drawback is that this kind of structure can lead to competition and an imbalance of resources. Honeyframe employs about 60 staff and has a turnover of more than #3 million, so it is the right sort of size for this method. But that isn't always the case. Selway Moore's original four-strong team has grown to nine and has a set of processes in place, while PSL hit #20 million in revenue terms before it needed to apply any sort of formal structure, says Toal.
The idea of using project teams with all the skills that customers need and having one single point of contact is being adopted by most companies now and it makes sense for many reasons. Instead of being handed around several people in a technical department, a customer will have specific people with specific skills, who know about the project in depth, to talk to. But a single primary point of contact also seems to be favoured.
Cost centres are another idea that most smaller dealers are adopting.
They allow profitable operations to be more easily identified and ensure all functions pay their way and deliver value.
Applying a structure and related processes to the business may enable these ideas to be introduced and allow the use of quality and measurement criteria. These might be alien principles to many resellers but without them, it's hard to see how a business can develop and grow beyond the limits of its owner-managers. 'You want to keep improving but you have to do it in a controlled way,' says Reakes.
The trouble for most dealers is that they are so busy plugging the gaps that they don't have time to impose a structure. But it is vital that they make the time.
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