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CEOs

Why Your Small Business Should Invest in Infrastructure Now

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In 2012, Jeff Unger retired after 30 years as a career military officer. His last role was as Chief of Staff of the U.S. Army Medical Research and Materiel Command, where he oversaw more than 6,000 people.

But white sand beaches and games of bridge weren’t in Jeff’s future.

Instead, he embarked on a new career, founding management consulting company Stratitia along with two partners. As a military officer in numerous command positions, Jeff had plenty of experience and ample leadership development training. But starting his own company still posed new obstacles. The government “is a very closed financial ecosystem,” says Jeff. “Everything is very regimented and your processes are already in place.”

Starting a new company meant being the ones to put that ecosystem into place.

“Our first step was to start building a very strong infrastructure,” says Jeff. The company started with four employees and has since grown to 90 team members spread out across the U.S. But even at the early stages, “we gave the company the infrastructure of at least a midsize company.” They hired a full-time CFO from a Fortune 500 and a controller. They hired VPs, HR professionals, recruiters, and others. “If you don’t make the leap and invest in infrastructure, you can’t grow the company.”

For CEOs of fledgling companies, this can be difficult in practice. Jeff and his partners had ample experience and the ability to take risks, thanks to financial cushions from their government retirement practice.

Start small.

Perhaps you outsource your HR for the first year or two, then invest in a dedicated professional. Try to find a CFO who buys into your business and is willing to take a lower-than-market salary for a few years (perhaps in exchange for equity) in order to be part of something new. The key is to give yourself as CEO as much room as possible to focus on strategic vision, instead of payroll, finance, and personnel issues.

Define roles. 

Before starting his company Great Lakes Caring, William Deary had successfully exited a business in the publishing industry after taking it public. “I thought an entrepreneur was a person who couldn’t make it in the corporate world. What I didn’t realize until I started my own company was that I was an entrepreneur in the corporate world.”

William says he called upon the business principles he learned in his days at the large publishing houses. He wrote job descriptions for his employees when he only had four employees. “Even back then it was run as a big company,” he says. “It wasn’t part of the plan — I just didn’t know any other way to do it.”

Bills matter.

Gary Unger, founder and CEO of CPG Architects, says that “architecture is the easy part” of his business. It’s the details that are challenging.

Eighty-seven percent of CPG Architect’s business is from repeat clients. Based in Stamford, CT, CPG works with companies like Newman’s Own, Nestlé, General Electric, Dannon Yogurt, and Snapple. “We’re design-oriented, but really we’re a great process and procedures group. You don’t get the next job without processes in place.”

Unglamorous back-office tasks like billing — “the things no one likes to talk about” — are crucial. “You have to get your bills out the first week of the month. If you don’t — no matter how good you are — you don’t have the money to manage your company.”

As CEO, your role is to institute processes that make your company run smoothly, or hire someone else who will. Then, you can have the mindspace (and the money) to sit back and focus on strategic planning.

Plan for the future.

Maybe you only have four employees right now. It might feel silly to create an organizational chart.

Do it anyway. It’s a lot easier to build an org chart as you go rather than try to reverse-engineer once once you’ve hit a few dozen employees.

Create a chart for your current structure as well as at least the next two stages you envision in the company’s growth trajectory. Make sure that every employee has a direct supervisor — this can help stave off future conflict and uncertainty. Have frank conversations with fellow executives about what areas you see them leading in the future, and take their feedback into account. Sure, things will change — but having a blueprint will ensure everyone at the business is speaking a common language.

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