Control – an illusion?

Maybe I’m a control freak (or, as someone recently said, everyone in banking is a control freak!) but I like to have a very clear idea about what is going on in my business. So it was quite frustrating when, despite asking Paola to manage the administrative work at Tonic, I often felt like we were not controlling costs properly, and the day-to-day operation was starting to slip into inefficiency. Our sales were going up, that was good, but our margins were dropping again. There were times when J&P came in late and were the only people working that day, so we lost some of the crucial morning takings. There was also the problem of one of them being off sick, then one person could not cope and we’d have to get extra staff in, but that couldn’t always happen instantly, so we lost business. In all, there were numerous aspects of the business that made it so reliant on these two people and I was getting very uncomfortable. It wasn’t that they weren’t good, it was just that there was no margin for error. Ultimately, they were being paid regardless of whether they made profit or not (they would get profit share once we made a profit, but that was far off!). Therefore their incentive and hunger was limited. When you’re an owner operator it’s your business so you work hard on every aspect of it. When you’re getting paid however, you will never be as committed. And that’s when I decided that I had to seriously consider the future of the business. I was enjoying being back in Banking and doing the property business on the side, so I was not in a position to be there full time any more. It was becoming apparent that for this business to work I needed to consider selling it to owner occupiers. So I started looking for buyers.

I have since learnt that it’s not about control, so much as having a handle on every aspect of the business so that you can be sure it is being run efficiently and that your money is not being wasted. That’s the only way a business can grow. Inefficiency is like a mould that will keep growing, so you need to always make sure you run a tight ship. Give employees the freedom to perform, but make sure you know exactly what is going on and where money is being made and lost, then act quickly to plug the holes while encouraging the positives.