Every small business needs to improve its product and maintain customer satisfaction to survive, but a business professor warns entrepreneurs forming an LLC that mismanaged, runaway growth can actually hinder a business.
Smaller companies must be careful in high-risk ventures because they don’t have the capital to withstand an interruption to operations, according to a Bloomberg BusinessWeek interview with University of Virginia professor Edward Hess.
Instead, small businesses should look to increase revenues through scalability of existing operations. Hess notes that as a company grows, the required skills change – as having more employees means more personalities, and inevitably, more conflicts.
"One CEO told me, ‘I have learned that I have to hire slowly and fire quickly.’ Most people do the opposite," Hess told BusinessWeek. "[The entrepreneur] must learn to delegate, manage, lead and change roles nearly every day."
One way to improve revenues is by enhancing employee satisfaction and engagement.
Michelle Smith, a human resources consultant, told Premium Incentive Product magazine that the department store Sears discovered increasing employee job satisfaction by 5 percent resulted in a 1.3-percent improvement in customer loyalty – which corresponded to a $200 million increase in revenues.
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