These 5 outside partners could help your small businesses grow and thrive
Janine Williams founded her company in 2013 as its sole employee.
Six years later, she’s a CEO leading a staff of 27, plus 5 full-time contractors.
Her company, Impulsify, based in Denver, Colorado, helps hotels design, automate, and manage their lobby retail—so it’s not just an afterthought stocked with a few energy drinks, snacks, and aspirin.
In the last 18 months, Impulsify has surged through a “hyper-growth stage” and tripled its reach from 200 to 600 hotels.
The success may be professionally thrilling, but it also was draining until she realized it was time to outsource some of the work—even if she wasn’t ready to hire whole departments. She wasn’t sure how to figure all that out.
“It can be lonely to start and run a company, especially in those first couple of years,” Williams says.
The rise of consultants
After what she calls her leadership “self-examination,” Williams now relies on outside partners to cover things like accounting, marketing, and hiring. She had to figure out “what can I do well, and what do I not have a clue about,” she says. She added paid consultants as her business grew.
Janine Williams, owner of Impulsify
It’s a familiar story for Steve Laine, a financial professional in Fort Collins, Colorado. Laine mostly advises businesses with fewer than 100 employees. They’re firms that, due to size or growth stage, benefit most from outside expertise. A well-chosen consultant for the CFO role or strategic planning can help drive results without adding the cost of full-time staff.
“Outside partners help you spot potholes that you can’t always see coming,” says Laine, who advises for Principal®.
Meanwhile, the 2008 recession created a bloom of independent consultants who can help with things like workers’ compensation or dental plans. “As companies were laying off people, skilled professionals still had to make grocery money. It might have been the ignition switch for a lot of people to say You know, I’m going to do this on my own.”
Laine says these 5 partners especially help small businesses bridge growth spurts:
1. Chief financial officer (CFO)
An independent consultant could help scrutinize the bottom line, your margins, and costs of goods sold. They can tighten your balance sheets, profit-and-loss statements, and other strategic financial work.
While Impulsify doesn’t need a full-time CFO, Williams says, her company used an outside source for “continuous monitoring” of its financials.
“Too often a small business owner has a friend do their bookkeeping,” she says. But that doesn’t always pass muster, especially if an owner thinks ahead to an eventual exit strategy or sale.
A small business may need specialist marketing skills to help drive awareness and sales to generate more balance sheet activity. This may include digital marketing strategies such as search engine optimization (SEO).
3. Human resources (HR)
A Principal survey (PDF) of 1,020 small- and medium-sized business owners found that one-third lack a HR partner—mostly employers with fewer than 50 workers who said they’re too small to have one.1
For Williams, hiring out HR work was an issue of scale and basic functions like payroll, as well as one of lifecycle. After a few years, original employees begin to leave. Turnover is inevitable and must be managed.
“Once we grew beyond 10 to12 people, we had to tighten up our hiring practices,” she says.
4. Strategic planning
An outside partner can help you plan where you want your business to go over time. What will make you look back in 5 or 10 years and say you’ve succeeded? That sort of workforce management strategy requires planning and expertise.
5. Financial risk management
An advisor like Laine can help protect the value of the business through personal disability coverage for business owners, strategies to retain key employees, and referrals to outside experts such as attorneys or CPAs. “We help owners strengthen their business, and then begin a dialogue about exit planning,” Laine says.
1 The 2018 Principal Financial Group® SMB Trends Survey was conducted by The Harris Poll in October 2018 and included 1,020 online interviews.
The subject matter in this communication is educational only and provided with the understanding that Principal® is not rendering legal, accounting, investment advice or tax advice. You should consult with appropriate counsel or other advisors on all matters pertaining to legal, tax, investment or accounting obligations and requirements.
Janine Williams and Impulsify Inc., are not an affiliate of any company of the Principal Financial Group.
Insurance products and plan administrative services provided through Principal Life Insurance Co. Securities and advisory products offered through Principal Securities, Inc., 800-547-7754, member SIPC and/or independent broker-dealers. Principal Life, and Principal Securities are members of the Principal Financial Group®, Des Moines, Iowa 50392. Steve Laine, Principal National Life Insurance Co. and Principal Life Insurance Co. Financial Representative and Principal Securities Registered Representative and Financial Advisor.