Run a business for over two decades and you're sure to learn some worthwhile lessons along the way. My Business speaks with one SME owner about what he has picked up over 22 years in small business.
Speaking on the My Business Podcast, Jacob Ohlson discusses what he has learnt from running PowerNET IT Solutions since 1994.
The first thing he points out is the necessary skills of the workforce.
“Back in the day when I started, everyone had to have the best all-rounders,” Jacob says.
“You had to have the best people who can see customers, quote, do this, do this and do this.”
However, he says the workforce has undergone a dramatic shift since then, where employees are no longer required to be jacks of all trades.
“Business today is no longer [about] the best all-rounder,” Jacob explains.
“It’s about having the best person for the function they need to do.
“Every business will go through that painstaking point where they’ve got to change from being the ... small best all-rounders, to being people who are really great at what they do and clear management of who’s doing what and how that works.”
Be prepared to shed staff
Jacob also learnt that you can’t hang on to employees who don’t believe in the business.
“What would I have done faster? I probably would have implemented some of the stuff we've done the last three years, maybe 10 years ago, and that is involving getting everyone to buy into the vision,” he says.
“You’ve got to have a clear vision and everyone’s got to be part of that process and want to be part of it.
“If they don’t want to be part of it, they have to go. If they don't believe it and feel it, then they just have to leave.
“I’ve become more realistic about that than I was 10 years ago.
“I was scared when people left the company because it's like, 'I’m losing good staff!', but if they’re not part of that vision then they have to go.
Tying cash flow to risk
Jacob also learnt early on that cash flow can be managed by being conservative with money.
“I’m not a very big risk-taker, surprisingly,” he says.
“PowerNET has always been cash self-funded. It's never actually taken any bank loans or anything like that. Because I built it from the very beginning as a low-cost, running from home in the garage, it was able to accumulate its cash.
“I haven’t been a big person who goes crazy on money, I’ve always been conservative. It’s always driven its own. It’s got its own cash. It runs its own. There isn't really a problem with cash flow.”
He adds: “I probably am lucky, because I’m not a risky taker of crazy things. I’m more conservative. I tend to think cash is king and I conserve.”