At HazTek, a Medford consultancy specializing in worker safety oversight for the construction industry, the 2009 building slump resulted in what could have been a disastrous downturn in business.
“As the business declined, we realized we had too much overhead, whether it was salespeople, marketing people, human resources or administrative staff. So, we downsized our field staff and office staff,” says HazTek managing partner Steve Jones. “But when things started coming back in 2010, we realized we can actually support this existing business with the people we have now.”
And since then, says Jones, “Our business has been exploding.”
In 2011, the company added 32 new employees (including only one new administrative staffer) to its 46-person workforce. Now, it’s on track for 30 percent revenue growth this year, which would be HazTek’s biggest year ever. “I’d love to say I’m smart enough to have written out this fancy business plan,” Jones says with a laugh. Instead, he says, what happened was that “business picked up in ways I didn’t necessarily see coming. And now that we can see where the business is, we can focus our marketing efforts toward those things.”
In today’s uneven economic recovery, some businesses are growing as a result of careful planning, while others are experiencing organic growth fostered by close reading of market trends, willingness to diversify and the implementation of infrastructure that enables them to seize opportunities as they come.
For example, even though construction hasn’t exactly begun booming yet, HazTek has thrived by tapping a new market: clients who need part-time consultants rather than fulltime ones (and who are willing to pay a premium for those limited hours). Now, Jones is considering broadening the company’s services offerings and expanding its geographic footprint beyond the mid-Atlantic area. “I’m all for growth,” he said, “but [I’d want it to occur] within our financial means.”
While Jones makes it sound simple, planning for growth can avoid any number of headaches along the way, notes Beth Lincow Cole, a Marlton employment and human resources attorney.
Lincow Cole suggests beginning by examining your companies values and mission statement, and adjusting it for your changing business—especially vital if you’re growing from a family business or one-man show into a larger organization. “The company’s values plays into the company’s culture and the talent pool of employees,” she notes.
Next, she urges employers to assess their current workforce, and identify what additional positions are necessary. This may involve getting feedback from employees, possibly through a focus group. Employers must identify a senior leadership team, as well as those workers who may be able to grow into more senior posts as the company grows. “You’ll want to look at ways in which the management team can delegate more, focus more on strategy and be more visionary—and to really streamline and organize the company structure by having the written job descriptions,” she says. Not only will this position your company for growth, but it could also enable you to become more efficient, she notes.
Prioritization is vital in a growth plan. For For HazTek—like most other companies—growth had to follow a spike in business. So, they hired salespeople first, then the consultants who would complete billable work, and finally any additional support staff.
Then, the plan can serve as a framework for possible expansion in the future. “A company may not have it in their budget to hire a COO,” Lincow Cole suggests, “but they know in order to grow in the direction that they want to, that they’re eventually going to bring that person on board.”
At the Mount Laurel-based mechanical contractor Costa & Rihl, chief executive John Rihl may describe the company’s explosive growth as “dumb luck,” but in reality it took a lot more than that.
The 42-year-old business made the shift from mostly public clients, such as municipalities and counties, to focus on private-sector commercial work about five years ago. They also restructured, creating a new organizational chart to manage the growth.
“I’ve empowered more people to do more of the micromanaging,” Rihl jokes. “But really, everybody here knows their roles and knows what their areas are, and as long as we keep doing the jobs right, we’ll continue to grow.”
As a result, the company increased its sales 20 percent in 2010, and is looking at another 10 percent boost this year. To support that, they’ve added about 50 new employees in 2011, swelling their workforce to around 250. They’re also contemplating expanding into North Jersey, and possibly adding an office there.
“If the work comes and we have the work booked, then we’ll build what we need to handle it as it happens,” Rihl explains. “Our business is more opportunity-driven. If there’s an opportunity, we take it. If there’s not, then we’re pretty content where we are.”
That kind of flexibility is essential for growth in this market, agrees Jones. HazTek has brought on many of its new hires as fulltime telecommuters. “Overhead is one of those things where when you start building it up it can be very difficult to break it back down again. If you think about three- or five-year leases, insurance costs and all that stuff, when it gets up to a certain level, you can’t necessarily bring that down as fast as your business may down-turn,” he says. “The fact that we’re not carrying that level of office space and overhead allows us to be a little more nimble.”
For businesses that hinge less on temporary contracts and more on long-term relationships, though, building out infrastructure may be essential. Amy Sonstein, principal at Cherry Hill’s Sonstein Financial Group, is at the starting point of a carefully planned growth trajectory that she hopes will bring 10 financial professionals into what’s now a two-person business, over the next 24 months. She’s given a recruiter a financial stake in the business’ success and has begun seeking out office space, two steps she hopes will help her secure top talent. “From a recruiting standpoint I want to build the infrastructure of the organization to be welcoming rather than making a promise for that to be delivered down the road,” she says.
Sonstein says this growth plan depends on her “ability to see out into the future what you want it to look like.” She’s planned everything down to how much she’ll need to set aside for infrastructure and marketing investments, and even which phone system will enable her to add sufficient lines.
Bridgeport’s Godwin Pumps is making similar investments. The company, which was purchased by the New York-based ITT Corp. last summer, recently added 50,000 square feet to their facility, making the location more like a campus than an office building. Godwin also added the worldwide sale and distribution of the Flygt line of pumps; hired numerous employees all across the board, including sales representatives and engineers; and opened new sales offices across the United States, including Texas and California. “We are absolutely in growth mode,” said Stephanie Hassler, Godwin’s marketing communications manager. In the future, she added, the company plans to add even more sales offices throughout the country.
Godwin’s integration—across manufacturing, rental and sales of its dewatering pumps—has helped it solidify its place in the market.
In fact, now may be the best time to look at expanding your business and adding parallel services, suggests Sonstein.
“Look at your vendors if you can go and acquire your vendor it would save you money and bring in additional resources,” she says. “Right now investing in your business and in its growth is crucial—and I’m seeing that a lot of companies are able to do that at a discount.”
Published (and copyrighted) in South Jersey Biz, Volume 1, Issue 9 (September, 2011).
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