When should you hire an Operations Manager?

So you’ve started your business, taken the risk, invested your cash and now you’re married to the job you’ve created.  If this sounds familiar, you’re not alone.

In order to maximize efficiency in the face of your many competing priorities, you might consider hiring an operations manager. An operations manager can help you ensure business operations are effective, and that you are meeting customer needs in a resourceful manner. Knowing when to hire an operations manager, however, requires careful consideration.

I once had a customer tell me, “If you don’t grow big you will never get a vacation.”  Such is the life of the passionate business owner who spends as many waking hours as possible in start-up phase to make sure his or her business reaches sustainability. I call it “gas in the tank” in short, working capital.

Where does it come from? In the start-up phase you provide the cash needed to pay the bills until sales reach a level where net of expenses you actually turn a profit. Without a profit, you have to keep subsidizing your working capital requirements. If you are subsidizing you are not yet sustainable, so profits are the key.

To ensure you have command and control over your numbers, you should review them every week, if not daily. If you don’t, you won’t know when you’ve reached your sustainability target. In some cases, business owners know within three months of startup if they’re going to make it. Notwithstanding when profits become assured, you’ll know you’ve reached your target when you are no longer subsidizing bill payments. Just don’t make the mistake of thinking cash flow, as opposed to profits, are sustaining your business.

When you pass the sustainability test, you enter the growth phase of your enterprise. You’ve honed your financial command and control skills, and have added infrastructure that will improve sales and garner greater stability. At this stage, you still may not be taking time off because you’re married to the day-to-day supervision of staff, and cannot let go of being in charge.

If you do not actively mentor someone who can take over your duties, you may run the risk of suffering from burnout somewhere along the way. Every business owner needs to recharge their batteries, and taking the time and patience to work with someone you can leave in charge will go a long way to improve your business’ stability.

So when do you hire an operations manager? Before you burn out from stress, but after you have attained sustainability. Profits improve propensity for growth, and are essential for making it possible to bring on an operations manager to help share some of your workload.

Roger Downie is a Commercial Account Manager with BMO in Kamloops, B.C.