Friday, September 30, 2011

Experts share secrets for managing a profitable, fast-growing business

All entrepreneurs face challenges in their business. But not all realize that information and communications technology offers affordable tools for better managing everything from inventory control and operations to accounting, human resources, communications and customer relationships.

Chris O’Donohue didn’t want to be like those other landscapers, driving around eyeballing sites and coming up with job estimates that might—or might not —make his company any money.

It wasn’t as big an issue when he started Great Canadian Landscaping back in 2000 with a single pickup truck and a few small contracts. However, when a contract is for a $200,000 backyard makeover, finding out that you’ve mistakenly underbid an estimate can cost you thousands of dollars.

“At first, I didn’t realize that technology could provide the solution,” says O’Donohue, who has built Great Canadian into a bustling year-round business in North Vancouver, B.C., with 30 employees and eight trucks running in the high season. “It has taken the guesswork out of estimating and made our operations more efficient and productive.”

All entrepreneurs face challenges in their business. But not all realize that information and communications technology (ICT) provides a range of user-friendly tools for better managing everything from inventory control and operations to accounting, human resources, communications and customer relationships.

Hunches can now be replaced with accurate information delivered in real time, equipping managers to make better decisions and improve their company’s performance.

Entrepreneurs understand the need to invest strategically. A 2010 survey by the Business Development Bank of Canada (BDC) found that most business owners plan to invest in new equipment, including ICT, as a way to improve productivity and remain competitive.

“ICT brings efficiency and speed to an organization,” says Jean-RenĂ© Halde, President and CEO of BDC. “It provides tools to better manage and analyze information about your clients, your finances and your operation. For most, highly functional websites have also become a critical sales channel.”

For Great Canadian, it was a bottom-line decision. Its estimating software takes into account overhead costs, the price of goods and other hidden expenses, ensuring that every job is profitable.

The company purchased a second software package to improve productivity and better manage its crews. Instead of clocking in at the office, O’Donohue’s crews are now clocked in at the work site by their foreman, who is equipped with a smart phone. They are also clocked in and out at lunchtime. Savings on unproductive time and overtime are huge.

“We were paying people for a lot of travel time that wasn’t necessary,” he says. “This software will save us about $130,000 annually in salaries. As an investment, it was a no-brainer.”

Great Canadian also uses GPS capabilities on each truck and smart phone to track crews in real time. If a customer calls to ask whether a job has been done, O’Donohue can tell him or her the exact minute that workers arrived at or left the site.

Despite the benefits, too many entrepreneurs put off ICT investments, fearing ICT is too complicated, too expensive or not what they need. Cost is usually the biggest deterrent until entrepreneurs realize that most solutions are now software driven and affordable for even the smallest companies. Some are even free.

“ICT and Internet-based solutions can be scaled for any size of company,” says Todd Madgett, Director, Small Business, for Cisco Canada. “With the advantages of new network and cloud-based services, and hosted and managed services, the cost of equipment that small entrepreneurs need to invest in is limited.”

Many entrepreneurs also worry about making a bad investment. Halde says companies can reduce this risk by first clearly defining their needs, and then taking the time to thoroughly investigate and evaluate the different ICT options.

“Talk to more than one vendor and other companies that have done this before. It also may be worthwhile to invest in some professional advice,” he says. “And be careful about buying the latest gadget. Cutting-edge technology usually is not for companies with limited resources.”

O’Donohue acknowledges it takes time and money to set up and implement ICT solutions, but says it’s not as expensive or complicated as entrepreneurs fear, and the returns can be significant.

“You will usually recoup this investment in a year or two. Even before then, you’ll see how it is reducing costs and making your operations more efficient,” he says. “It’s been a big factor in our company’s growth.”

BDC is the Business Development Bank of Canada. From over 100 offices across the country, BDC promotes entrepreneurship by providing highly tailored financing, venture capital and consulting services to entrepreneurs.

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