Business starter and business manager always face the same struggle of not knowing about whether to increase the number of staffs. Some people see increasing the number of staffs as an increase of overhead while some people view it as increasing the ability to deliver. There are many consideration has to be made while deciding whether to engage a new staff in your company. Of course, the nature of the business itself is definitely relevant to the decision-making of hiring a new staffs. Some businesses do not require high number of workers.
I am here to discuss about service-based businesses. I met many small business startup that maintain the initial size of the business even after years. The reason that they do not expand their business structure is that they believe by increasing the number of staffs will increase their cost, expenses and overhead. On the surface of this belief, it is not wrong to perceive as such, but this is obviously not the only result that one might have.
I have to stress that whether or not to engage a new staff in the business include, but not limited to the following consideration such as whether the staff is really of necessary, whether additional help in the delivery of business is needed, whether a full time staff for that position is really crucial or merely outsourcing / part-timer is sufficient. However, the specific discussion that I would like to deal with in this post is on the different mode of regulation i.e. Customer-driven company, or, Operational-based company.
I see customers as the profit of the business whilst staffs are the overhead of the business. Of course, some may argue that staffs are the assets of the company, in which I do not deny if they constantly make values for themselves, otherwise, the non-value staffs will certainly be overhead of the company. Businesses should focus on retaining their profit rather than spending the effort on making "new profits". A business should focus on maintaining or controlling the overhead rather than not monitoring the expense of the overhead.
A operational-based company will focus on working on the policy and operation of the management or the staffs that may ease the work of the management and staffs rather than focusing on the delivery of service to the customers. A customer-driven company will be spending their effort to increase the number of customer and/or retaining their existing customer, and such company will implement the policy prioritising the delivery of service to their customer, and easing of the staffs are placed after. Being able to strike a balance or stay flexible within this two form of companies judging on a case-to-case basis is utmost important.
Business starter or manager should be focusing on delivery of service in order to drive more customers for the business. The capability of delivery of service directly affects the customer's satisfaction towards the company. I am not trying to push away the importance of the operational aspect but what I am stressing is that delivery of service to satisfy the customer expectation should be placed first. Looking for new customer will cost FOUR TIMES even more than retaining a repeat customer. As such, it is important to retain the existing customer with good strategy rather than being too operational based that will drive customer away. Improvement of operation of the company can always be enhance through training or sharing of experience, and at that time, the with effective operation will reduce unnecessary cost to be incurred in the company.
In short, customer-driven and operational strategy comes along together for the growth of company, but what to focus is purely depending on different situation. To know what is needed i.e. delivery of services or smooth operation of the company, the business manager shall assess the situation accurately to deliver the best outcome for the company.
~Knowing is not enough, we must apply. Willing is not enough, we must do - Johann Wolfgang von goethe
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