“A KEEN sense of the obvious” is how Paul Harrison sums up the lessons he learned during his time at Curtin Business School.
Mr Harrison is typical of the business owners who enrol in Curtin’s growth program.
Originally an employee of Beaver Tree Services, he purchased the Kelmscott business in 1999 when his former boss retired.
Mr Harrison plunged into the business, working long hours, seven days a week.
Staff numbers tripled, extra equipment was purchased, but Mr Harrison eventually realised all was not going well.
“I was working harder and making less,” he said.
Mr Harrison initially attended a one-day course at Curtin, then enrolled in the part-time, year-long growth program.
One of the first things he did was drop one of his big contracts, when he recognised the contract was ruining his profit margins.
“That was the crux of the whole thing, to work on profit rather than sales,” Mr Harrison said.
“It’s too easy to get more work, that’s the killer.”
A rule of thumb he now applies in the business is to limit turnover growth to no more than 15 per cent.
And there’s a much stricter focus on cash flow.
Managing accounts payable and accounts receivable is now a major priority, rather than something that gets done when there is a bit of spare time.
Mr Harrison also works out the expected rate of return before committing to spend money on new capital equipment.
One of the strategies he employs is to sub-contract associated services, such as stump grinding, so as to limit the amount of capital equipment he needs to purchase.
Yet by keeping a close partnership with contractors Beaver is able to offer a seamless service to clients.
Since attending the Curtin course, Mr Harrison says he has developed a much more detailed understanding of his business.
Beaver’s market is comprised of four segments – local government contracts, State government agencies, business customers, and private customers.
With detailed information, Mr Harrison is able to assess the margins and profits from each segment.
For instance, he recognises that payment terms offered by State government agencies are much slower than for private clients.
For a small business, with a dozen staff, Beaver has a very strong focus on company culture.
Mr Harrison has developed Mission, Vision and Values statements, which are displayed on his office wall.
He has introduced company shirts and added company signage to the trucks.
“You see lots of chipper trucks with no signage. That means people are missing their best marketing opportunity,” he said.
The Curtin course made Mr Harrison more aware of the many dimensions of good staff management, such as formally recognising staff achievements, giving staff an opportunity to air grievances, allowing staff to act in more senior roles and providing potential for promotions.
As part of this process, he has scheduled monthly meetings with all of his staff.
Mr Harrison has been steadily extricating himself from the day to day running of the business, focusing instead on finance, marketing and budgeting.
He keeps close tabs on the business via weekly reports, prepared by his operations manager, on a handful of key performance indicators.
The many changes that are being adopted by Mr Harrison are steadily taking him closer to his goal of having a business that will keep on running smoothly without his involvement.
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