This is the first of a series of posts following up on our previous discussion;”Why Small and Mid Sized Firms Grow”. We will be describing some of the various ways companies become successful. It all starts with surviving the precarious first year or two.

For example, you may have worked for a firm that used temps and knew their shortcomings of the staffing firms they used, so you drew upon your hiring and candidate contacts and started your own firm. You placed people, hired a small staff and found a niche. But you did not separate yourself from competition and figure out how to become special. Too many companies are complacent and are happy to get by. That’s OK, but if you want to become a large and profitable company this doesn’t happen by magic. To be effective you may need people with an outside perspective as to best practices, how others have succeeded and what mistakes you want to avoid. Remember your competitors are not standing still. And don’t listen to Satchel Page the famous baseball player who said “don’t look back, something may be gaining on you”.

After getting to breakeven you realized you needed an assessment of your strengths, weaknesses, threats and opportunities and do a SWOT plan to figure out how to grow by increasing your market share. To do this requires a series of action plans targeting what you found out in the SWOT analysis, with specific responsibilities and financial targets by individual with hard due dates. Successful, growing companies don’t accept any excuses for not meeting assignments. And when one task is completed another one is added to the list. Doing this well requires hiring and retaining good staff, setting standards, targeting key accounts, retaining clients, minimizing risk, using metrics, doing a cost benefit assessment and a lot more. Successful companies set aggressive goals but have a realistic vision of what is possible, work hard and the leader should set an example for others. We will deal with these and other areas in future blogs.

Optimal Management is the premier management consulting company to the staffing industry. We act as mentors to owners and managers to maximize their sales, profits and value of their company. We become an extension of our clients operations and are there for all of their staffing and business needs, from sales, marketing and compensation plans, to finance, M&A, general management and everything in between.

Did you ever wonder why small companies want to grow? Large companies are a headache and have complex personnel, accounting and legal issues. But most people want to grow. Why? Having been a senior executive from start-ups to Fortune 500’s we have seen what it takes and why people give it their all to become a big fish.

Those who start companies want to run things and large egos. And for sure being large has its advantages, they: are able to attract more talented employees and advisors, can absorb the loss of key clients or employees, command a higher price upon sale, raise capital less expensively, use donations to their advantage, amortize fixed cost to increase profits, entertain to retain key clients, can fund investments and buy other companies, establish their brand name, enjoy both a nice life style and retirement and fail less often and survival is no easy chore as 37% fail in the first 4 years.

In the next installment we will get into the specifics of how does a small and mid sized company go about becoming large? Follow up blogs we will discuss the specifics of achieving success and growth.

We welcome your questions as to personal and business challenges you face in order to grow.

Optimal Management is the premier management consulting company to the staffing industry. We act as mentors to owners and managers to maximize their sales, profits and value of their company. We become an extension of our clients operations and are there for all of their staffing and business needs, from sales, marketing and compensation plans, to finance, M&A, general management and everything in between.

Doing the same thing may allow you to stay in business, but it is the big idea that will separate you from your competitors and allow you to maximize your sales, profits and value of your company. So what are some things that can be converted into the next big idea?

 We can go back a few decades to find seminal ideas that helped boost the staffing sector. The big ideas: that corporate clients could better afford paying hiring fees instead of job seekers, that companies would be willing to pay for the outplacement of executives who they terminated, using temp for interim assignments who could also do the job less expensively and MSP/VMS for economies of scale, just to name a few.

 So what will be the next big idea? We can look around for current changes taking place in the economy, life style changes or other situations ripe to create a staffing opportunity.

 We now have both the new healthcare laws starting to go into effect this year and next and the elimination of the payroll tax holiday. For smaller clients the difficulty of having to deal with theses changes can become our opportunity if payroll their employer and become the employer of record, relieving them of this burden and do so less expensively as well. Those doing pay rolling are already primed for this, but those who are not need to get up to speed to provide the same service. This will entail develop an infrastructure to handle pay rolling, documenting the savings they can provide, package this service and then aggressively market this service.

 As a result of the current political climate, there is now a major divide between the right and left on many social issues that we can take advantage of; as the AMAC formed a socially conservative senior organization as an alternative to more liberal AARP. Staffing company can rebrand themselves based on local social values (i.e. American Values Staffing or Rainbow Coalition Personnel), or just create a promotional tag line to their services. 

There are possibilities for big ideas we can create out of who cloth. Automation has been a driving factor in a tepid job recovery while corporate profits and stock prices have risen markedly. The impact of which has eliminated millions of jobs while making the US more competitive. This pace will only accelerate and those who ignore this trend do so at their peril. The government is keenly aware of this situation which is showing up in anti-immigration polices, tensions over the second amendment and general social unrest. We can help in this transition. Larger staffing company’s big idea can come up with alternative solutions for a smooth transition (perhaps even funded by Federal and State monies). Smaller companies can work at the local level to retrain workers, get into career transition counseling, reposition themselves into the right niches, etc……… We will explore other “big ideas” over time.   

Optimal Management is the premier management consulting company to the staffing industry. We act as mentors to owners and managers to maximize their sales, profits and value of their company. We become an extension of our clients operations and are there for all of their staffing and business needs, from sales, marketing and compensation plans, to finance, M&A, general management and everything in between.

We wanted to take a moment and announce our newly redesigned website for Optimal Management. This new design allows for a more user-friendly navigation into our services and products. You can also find some of our Success Stories of some of our previous clients. We hope you enjoy browsing our new site.

Optimal Management is the premier management consulting company to the staffing industry. We act as mentors to owners and managers to maximize their sales, profits and value of their company. We become an extension of our clients operations and are there for all of their staffing and business needs, from sales, marketing and compensation plans, to finance, M&A, general management and everything in between.

We were wondering about your thoughts about what the  staffing industry is going to look like in 2013 here in California. Things are looking good now with temporary and contracting continuing to increase its penetration rate which is up from 1.6% to 2.4% and is on track to reach 3% in 2015. While there are still many uncertainties in staffing here in California, it is up 6% from this time last year and back to 2008 levels. But things certainly vary by locale and by specialty and we’re off our previous highs. Nationally, we are almost fully recovered. Direct Hire is coming back up strong as well. What do you think?

Optimal Management is the premier management consulting company to the staffing industry. We act as mentors to owners and managers to maximize their sales, profits and value of their company. We become an extension of our clients operations and are there for all of their staffing and business needs, from sales, marketing and compensation plans, to finance, M&A, general management and everything in between.

As we begin 2013 with the excitement of fresh starts and new opportunities we are thrilled to announce some exciting news about how great 2012 was for us at OM.

Optimal Management has been selected for the 2012 Best of San Mateo Awards in the Business Management Consultants category.  The San Mateo Award Program recognizes local companies that have achieve exceptional marketing success.

Thank You San Mateo Award Program.

We are thrilled to receive this honor from our community and are thankful for all those that have worked with us to achieve it. This is an amazing way to send off 2012 and gets us excited for what is it come in 2013.

Optimal Management is the premier management consulting company to the staffing industry. We act as mentors to owners and managers to maximize their sales, profits and value of their company. We become an extension of our clients operations and are there for all of their staffing and business needs, from sales, marketing and compensation plans, to finance, M&A, general management and everything in between.

Everyone wants to earn more money, but in today’s new normal economy raises are hard to come by. And where raises exist they amount to rather little. A highly incentivized comp plan presents the best opportunity for the company and its producers to be on the same winning ticket and amounts to potentially a lot more then a raise. For sales reps and recruiters, commission can be tied to margin cost with a sliding scale to motivate and retain people as they become more valuable to the company. Appropriate steps and risers are needed, with the levels and rates to be determined by the market, the competition and ones own P&L. Although we have designed dozens of plans over the years, no two are ever the same. The values are typical set on an annual production basis, but other time frames can work. A trail and error approach is best to arrive at a “win-win” program that works best and is reset as conditions warrant.

Optimal Management is the premier management consulting company to the staffing industry. We act as mentors to owners and managers to maximize their sales, profits and value of their company. We become an extension of our clients operations and are there for all of their staffing and business needs, from sales, marketing and compensation plans, to finance, M&A, general management and everything in between.

Everyone wants to earn more money, but in today’s new normal economy raises are hard to come by. And where raises exist they amount to rather little. A highly incentivized comp plan presents the best opportunity for the company and its producers to be on the same winning ticket and amounts to potentially a lot more then a raise. For sales reps and recruiters, commission can be tied to margin cost with a sliding scale to motivate and retain people as they become more valuable to the company. Appropriate steps and risers are needed, with the levels and rates to be determined by the market, the competition and ones own P&L. Although we have designed dozens of plans over the years, no two are ever the same. The values are typical set on an annual production basis, but other time frames can work. A trail and error approach is best to arrive at a “win-win” program that works best and is reset as conditions warrant.

Optimal Management is the premier management consulting company to the staffing industry. We act as mentors to owners and managers to maximize their sales, profits and value of their company. We become an extension of our clients operations and are there for all of their staffing and business needs, from sales, marketing and compensation plans, to finance, M&A, general management and everything in between.

“Metrics” isn’t a dirty word that some people use as a report card; it should be used as a tool to help people succeed. We can breakdown metrics into two topics, productivity and efficiency. Productivity is how hard one works, as measured by the number of telemarketing, tele-recruiting or email conversations one has over a period of time. Efficiency is how that is converted by a series of steps to a placement, i.e. job orders/telemarketing and e-mail conversation; candidates/tele-recruiting call and email conversations; placement/job order (fill ratio), send outs/resume submitted, hours/placement (assignment filled), margin cost/bill, cost (margin rate), etc. If these values are high one will make more placements and everyone wins, however, there are tradeoffs. For example, if one prices (margin rate) are too high their fill ratio will suffer and so will their margin cost and commissions. A profitability algorithm integrates the various term into how many margin costs are generated so one can evaluate these tradeoff to make the best decision.
How have you used metrics to help your team succeed?
Optimal Management is the premier management consulting company to the staffing industry. We act as mentors to owners and managers to maximize their sales, profits and value of their company. We become an extension of our clients operations and are there for all of their staffing and business needs, from sales, marketing and compensation plans, to finance, M&A, general management and everything in between.

Source: Optimal Blog  

“Metrics” isn’t a dirty word that some people use as a report card; it should be used as a tool to help people succeed. We can breakdown metrics into two topics, productivity and efficiency. Productivity is how hard one works, as measured by the number of telemarketing, tele-recruiting or email conversations one has over a period of time. Efficiency is how that is converted by a series of steps to a placement, i.e. job orders/telemarketing and e-mail conversation; candidates/tele-recruiting call and email conversations; placement/job order (fill ratio), send outs/resume submitted, hours/placement (assignment filled), margin cost/bill, cost (margin rate), etc. If these values are high one will make more placements and everyone wins, however, there are tradeoffs. For example, if one prices (margin rate) are too high their fill ratio will suffer and so will their margin cost and commissions. A profitability algorithm integrates the various term into how many margin costs are generated so one can evaluate these tradeoff to make the best decision.

How have you used metrics to help your team succeed?

Optimal Management is the premier management consulting company to the staffing industry. We act as mentors to owners and managers to maximize their sales, profits and value of their company. We become an extension of our clients operations and are there for all of their staffing and business needs, from sales, marketing and compensation plans, to finance, M&A, general management and everything in between.