- As VP of Sales at Toronto-area management and sales consulting firm Change Connect, Agnes Lan understands the importance of establishing relationships that will help her make smart hiring decisions that positively impact her bottom line.
- In the early days of running a small business, it’s tempting to take all the cash flow you can get your hands on and spend as little as possible on employee salaries. Instead, you should be picky about clientele and invest in building a staff of experts sooner.
- One of the best decisions you can make as a leader is to stop allowing your time to be billable. Work on innovation instead, and watch your firm take off.
The smartest business owners don’t waste time trying to figure out the formula for success. Instead, they seek mentors who’ve already been there. Luckily, it’s easier than ever to learn from a pool of experts without having to personally meet them.
Agnes is an organizational “change catalyst” and dynamic speaker who credits her entrepreneurial, problem-solving family with gifting her the drive to help business owners implement processes that help them scale.
On this episode of 0 to 5 Million, Agnes talks to Shawn and me about:
- What a new business has to prove to land its first clients
- The relationship between smart hiring decisions and scalability
- Her top three regrets ten years into consulting firm ownership
Drumming up your first few clients
Some elements of early entrepreneurship are obvious, one of which is the need for credibility. But you may not realize just how long it takes to build up.
It’s important to invest in solid relationships from the start of your career if you aim to break out of employee life and become someone other business owners rely upon.
Every person you work with is a potential reference — and a potential source of business down the road. Once you’ve generated a resume and enough references to break out as a sales consultant, it’s time to prove your worth.
It’s not just about who you help; it’s about how you help them.
Your first few client connections are like consultancy entrance exams, and you cannot fail them if you want to eventually enjoy sustained growth.
“You have to show the world that you can deliver on what you promise,” says Agnes.
Think of your relationships with your first clients as two-way streets — which could remain open or become jammed, depending on your actions. If you go above and beyond, the benefits come back to you as an endless stream of new business (and hopefully, revenue).
The counterintuitive choices that can help your firm scale
Beyond client-facing performance, there are behind-the-scenes actions that can make or break a firm’s trajectory.
1. Build a team of experts from the beginning
When you’re at the start of the growth curve and trying to save pennies, it can seem logical to outsource to contractors or hire people with little experience. But this can lead to huge consequences.
You might put tons of time and money into training junior staff, only to find this approach prevents you from offering consistent, high-quality, on-brand services.
Risk mitigation is an illusion when it comes to hiring. Much like other big-money decisions, you essentially get what you pay for.
If she could go back in time, Agnes says she would “hire someone more senior faster.”
2. Spend your time innovating, not providing hourly services
As a founder or CEO, your time shouldn’t be billable. Even though you can charge more per hour for your expertise, it’s simply too costly to spend all your time working with clients.
Agnes claims the smartest thing she did was to take herself out of the billable category and work on growing the business instead.
3. Create a pool of peripheral talent
Hiring is about much more than filling a gap. “Every new hire matters,” says Agnes.
You can make every one of your new hires matter by anticipating the kind of help you’ll need and preparing for it. Find the people whose skills and values align with your firm’s and maintain those relationships.
Agnes keeps a “very full pipe of recruits” at all times. Then, she barely has to post a job listing when the time comes. If you hire before you have a desperate need, you can stay in growth mode.
Top three business ownership mistakes to avoid
Ten years into consulting firm leadership, Agnes can see what she did wrong along the way.
On the podcast, she reveals her three biggest regrets:
- Waiting too long to hire experienced employees. Aside from the aforementioned tangible costs of trying to make up for inexperience, Agnes says surrounding yourself with experts will help you push yourself as a leader. “You don’t want to be the smartest person in the room,” she points out.
- Not understanding margins. In the beginning, you might take every bit of business you can find, but it’s important to understand how each new client will impact your bottom line. Many firms start out with arbitrary or across-the-board pricing, only to discover that some clients require much more effort and time than they initially expected. Decide what type of business you want and be particular about only working with clients who match that profile.
- Letting performance issues brew. One of the toughest things about owning a business is having to deal with team members who aren’t cutting it. Agnes explains that letting “small” performance issues slide was a big mistake. Some of them could’ve been avoided had she articulated her expectations earlier.
Through the 20/20 lens of hindsight, nearly every entrepreneur can identify at least a few bad choices they made in the early days. For most, though, there’s also a clear silver lining.
The lessons Agnes and the Change Connect team have learned have fueled the work they do with clients who are facing the same dilemmas — making their advice priceless.
This is based on a conversation from The 0 to 5 Million Podcast, featuring founders, CEOs and revenue leaders from businesses between 0 and 5 million in ARR. Subscribe to future episodes to find out how they did it.