I had a long and rewarding mentoring session with Edward Naylor. I definitely will take away inspiration from his experience in turning a loss making business into a multi million profit making business and certainly will think long and hard about how to expand and when to recruit.
We spoke about my exit aspirations and working backwards, Edward said I need to upscale from 4 employees to at least 12. As regards the potential exit, the existence of term contracts enhances the value of a business as does the existence of proprietary software.
Edward cautioned that I might be locked in for an “earn out” period and I would almost certainly need to give some sort of undertaking that I would not recruit existing employees for a period- which might be an issue for me and my fellow Directors. My big challenge- which is likely to hold back business growth- is recruitment- specifically attracting electrical engineers of the right calibre and with the right attitude. We spoke about how I might be able to make joining my team more attractive- bonus schemes, profit shares etc although existing employees are likely to become aware of these and I need to pre-empt their reaction.
Edward liked the development of our own resources (apprentices) and the use of reliable subcontractors as a way of mitigating this. At the same time, he thought there are grounds for not panicking and playing something of a waiting game- the economic outlook isn’t great and we may see a softening of labour markets over the coming months. It would be sensible to keep an ear out for developments in manufacturing businesses local to us who may be releasing electrical engineers in the event of a recession.
Edward suggested that I may be able to get some purchasing wins as we get bigger and it may well be worth gauging the appetite of Yes Electrical to giving us a rebate based on turnover if you put all your eggs in their basket. I may also need more resources in areas such as finance, admin and HR as I upscale and take on more employees.