Logging Articles
Taking your business to the next level
John Wilkey
Interior Loggers Magazine
Many entrepreneurs start out with themselves and a pickup truck, and “record keeping” means receipts kept in the glove box until it’s time to record them. As the business grows, it acquires more equipment and needs to keep track of maintenance, hours of operation and depreciation. It acquires employees, office space, and equipment service facilities.
It can also provide massive stress for the business owner, who may be accustomed to keeping all of the business details inside his or her head.
Based on the experience of accounting and consulting firm BDO Dunwoody LLP, there comes a time in the life of every business when the owner reaches a saturation point and can no longer do everything alone. His or her proper role shifts from doing to leading. This means establishing vision and direction, and allowing others to tackle the more mundane, day-to-day activities.
Think of this as the difference between “entrepreneurial” and “professional” management styles.
Using budgeting as an example, in the early years, budgeting may have been ad-hoc with no follow-up to discover why what was planned may not have worked out. Under the professional management style, however, budgeting is more formal with set standards and accounting for variances. Similarly, an “entrepreneurial” organizational style may be informal, with overlapping and undefined responsibilities; a “professional” organization has formal, explicit job descriptions that are exhaustive and mutually exclusive.
Some business owners are able to determine when this change should occur. They recognize when their temporarily effective, untidy methods actually become counterproductive, and need to be replaced with a more formal structure. Other entrepreneurs can only sense that somehow, what worked before is not working now, but have no clear idea of what’s wrong and how to proceed.
Unfortunately, many business owners’ personalities work against them. They may have trouble delegating responsibility, have difficulty trusting others to do the work as well as they could, or fear becoming non-essential to the business.
In some family businesses, authority positions are reserved for family members. This can cause problems if the family members do not have the necessary skills, and this preference may drive away the non-family talent that the company does have.
There are no easy answers. Perhaps most important is the owner’s willingness to change, the commitment to seeing it through, and having someone in the family able to lead the process.
In many cases, an outside professional advisor can see issues more clearly than can people who are too close to the situation, or who have their own strong biases. Professional advisors can bring a wealth of experience of having seen situations before, and have a clear idea of what needs to be done to bring a business to the next level.
John Wilkey, CA, works in the Revelstoke office of BDO Dunwoody, where he provides assurance and tax advice to entrepreneurial companies. He can be reached at tel. 250.837.5225; jwilkey@bdo.ca.
