City Centre Mirror
Peter Oliver, co-founder of Oliver and Bonacini Restaurants, and Rick Segal, founder of Fixmo Inc., are two entrepreneurs who successfully adapted to running businesses that dramatically differed in size from what Oliver and Segal were used to.
While Oliver grew his business from a small bakery with seven employees to 18 restaurants with more than 1,200 employees, Segal went from holding executive positions at large companies such as Chapters Online Inc. and Microsoft Corp. to starting a small enterprise.
Oliver and Segal spoke about their experiences and offered advice to entrepreneurs at the Toronto Board of Trade’s SMB Exchange event earlier this month.
FROM SMALL TO BIG
In his keynote address, Oliver said attracting the best employees is important to a small business’s growth, as is attracting transformational people.
“They can take projects and transform them to operate at a higher level,” he said.
The most effective way for an organization to grow, however, is through employee engagement.
“If you want to get real engagement from every single employee, you have to engage leadership at the top,” Oliver said.
He said his partner, Michael Bonacini, can often be seen clearing out drains and fixing up patios. And Oliver personally conducts group orientation sessions with all new employees to welcome them and tell them how important they are to the company.
Oliver said they are also committed to ensuring employees succeed in their careers.
Another point that is crucial to understand as a business grows is there are experts who are more competent than the entrepreneur at doing certain jobs, Oliver said.
“There was a time when I thought I could do everyone’s job better than they could. And, in fact, I’m now in a situation that everyone’s job is being done better than I could have done,” he said.
To make things run more smoothly and efficiently, entrepreneurs should be prepared to let others make decisions.
They should also ensure that appropriate systems and structures are in place to handle growth and prevent the business from becoming dysfunctional.
Oliver warned entrepreneurs against developing big egos as their businesses becomes bigger and successful. Rather, they should take criticism and strive to continuously improve.
They should also be financially disciplined as their businesses grow. “People can rush off and take on risk and it can bring everything down,” he said.
FROM BIG TO SMALL
When it comes to making the transition from running a large company to a smaller one, the biggest challenge is learning to do things yourself.
“The first thing you have to know is how to take out the trash, how to find the toilet paper and how to go down and get stuff because in a little company you don’t have the infrastructure that large corporations do,” Segal said.
“It can be very jarring for people. I’ve seen many people fail because they don’t realize they can’t just call the secretary or someone.”
Before starting Fixmo Inc.– a mobile risk management company – in 2009, Segal was a partner at JLA Ventures, a large venture capital fund.
Some of the small businesses he invested in were big failures, he said. This prompted him to create a list of his mistakes, which later helped him run Fixmo.
“The first rule from that list that I find amazing is to hire smarter people than you and get out of the way,” Segal said. “The number one mistake is that entrepreneurs hire dumber people than them because they’re afraid that that person is going to have a shot on them.”
At a small company, it’s important that entrepreneurs interview everyone personally because, unlike at a larger corporation, every person can affect the company culture, he said.
Small business owners should also ensure they keep a close eye on their payroll.
“You can take a basic rule of thumb: take the total number of your payroll and double it and that’s the cost to your company,” Segal said.