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Connecting business owners with financial expertise to grow their businesses.
Sarah Petty (00:44)
Hello Nicole, nice to have you on the Olive Insights podcast.
Nicole Smith (00:48)
Hello, thank you so much for having me. I'm really excited to dive on in and have this conversation today.
Sarah Petty (00:53)
Me too, me too. So you are the founder and director of The Artisans and you're an experienced chief operating officer. Tell us a bit more about what your business does and the type of clients you work with.
Nicole Smith (01:08)
Absolutely. yeah, so my business is the Artisans Business Solutions and I'm what's called a fractional COO. And what and how we support our clients is we come and we partner with our clients in a stage of business where ⁓ there are
about to grow, they've grown and it's feeling a little bit sticky. ⁓ That sort of change management pace from going from a startup into an established and scaling business. ⁓ We are not industry specific, we're very much about stage and phase of business and also ⁓ very much connected with the right aligned values clients for us. That's really, really key and important.
Sarah Petty (01:53)
Yeah, love that because also I guess if they're letting you into their business to really go through all of the operational side of things, you want to make sure that you're both aligned in terms of the value side of things and the approach.
Nicole Smith (02:08)
That's all right. And it's a really a privileged and trusted position that I don't take, you know, I hold it very close to me. You know, we are right in there in the trenches, hearing all the things that maybe people have known about and not had the opportunity to say or not maybe feel comfortable or confident to say. And it's yeah, it's just creating that space really. And then finding that solution going forward. That's the fun part.
Sarah Petty (02:16)
Yeah.
Yeah, yeah, and I'm sure we've all got ⁓ a few of those in our businesses. We were like, ⁓ this is a bit messy and I'm a bit ashamed to admit it, but if someone can help me sort it out, that would be amazing. Excellent. Well, your expertise is going to come in handy today because we have quite a detailed question from a business owner called Jenna. So I'm just going to read through this and then we'll jump into the discussion about it.
Nicole Smith (02:45)
Yep, that's right. ⁓
Sarah Petty (03:01)
So Jenna says, my business partner is keen to scale our business further. We've built it to just under $8 million in annual revenue and we've still got strong demand. So the opportunity to scale is definitely there. But honestly, I'm feeling hesitant. Our systems are pretty stretched. The team is super busy and I feel like if we grow too fast, we'll end up breaking what is already working.
I want to scale, but I don't want to compromise service quality, burn out the team or create a huge mess I'll have to clean up later. And I'd hate to put in all of this effort to be in a worse financial position. How do you help businesses figure out if they're really ready to scale and what needs to be in place before pushing the accelerator? Assume this is something that you would come across in your work Nicole quite often.
Nicole Smith (03:50)
Absolutely, ⁓ fabulous question, but a huge awareness there for Figena. Because what tends to happen is we create this business out of a passion or a skill. Most of my business leaders who I work with, they're really skilled in their craft or they've got a real passion for that speciality. ⁓ And all of a sudden it grows to this thing that happened quite quickly and organically. And they're at that moment of
Sarah Petty (03:55)
Yeah.
Nicole Smith (04:19)
Okay, right. don't, which way do I go? What's next? ⁓ So where do we start? Great question.
Sarah Petty (04:22)
Yeah.
Yes, so
where do you start? Where do we start with helping Jenna or any business that's trying to figure out if they're ready to scale?
Nicole Smith (04:36)
So ⁓ we take everyone back to the foundations. Everything starts at the foundations and we find tooth combs. So first of all, we look at what's your mission, your vision and your purpose. So why are we here? Where are we heading? Then we are also looking at who's in the zoo right now. So we're looking at org charts. Do you have an org chart? Do you have ⁓ job descriptions and really clear roles and responsibilities within the organization right now? ⁓ I also really bring an opportunity
Sarah Petty (04:47)
Yeah.
Nicole Smith (05:06)
and aligned to the business leaders as well, especially if they're in a partnership ⁓ or solo leaders. ⁓ What is it that they're doing right now? What tends to happen and what I see is they're trying to do all the things.
And so they're stretched out and they're still probably managing their inbox or they've got a VA or an EA ⁓ and they're not really handed it over. They're still in there even though they've got that support there. So we always start right at those foundational elements first and then we look at what is it that we're actually doing in the business.
Sarah Petty (05:20)
Yes.
Nicole Smith (05:43)
And so when I talk a system, it's not tech. That's one part of it. A system is the execution from the start to the end. So what's that click off point?
What's the pathway that we go through? Who touches what parts? How are we doing it? Where are we doing it? What parts of the blockages? Who's the bottleneck in the business that's stopping things from moving forward? Where there is that feel of everyone's at capacity. What that shows to me is that the process itself is not efficient. Most times.
Sarah Petty (06:16)
Hmm.
Nicole Smith (06:18)
⁓ you know, I'm working with some amazing clients at the moment and we're fine tooth combing all of these processes and there's so much manualness in what they're doing each and every day. Could be as simple as an email that they're creating from scratch. That could be actually a templated email triggered from a piece of tech that automatically goes out at a certain time. So there's lots of parts to it. I wish I could go wave a magic wand and this is the one thing.
Sarah Petty (06:45)
Yeah.
Nicole Smith (06:47)
We all, have to go back to the start and like strategically make those tweaks. Something as well that I tend to see is we'll come in and a business leader and leadership team, they say, this is the problem. Right here, this is what we need to fix. And I'm like, fabulous. Okay. So let me just, and then what we normally find is it's actually over there. And that's where we need to start first. Yeah.
Sarah Petty (06:50)
Yeah.
Yeah, yeah, yeah. Yeah, yeah. I
can imagine there's probably lots of things that once you start asking the questions and uncovering and look, that's hard sometimes when you're in the day to day of it as the business owner. It's really hard to take that step back and be able to see it. There might be one thing that is just really frustrating you every day and you think that's the problem, but it is caused by something else.
Nicole Smith (07:22)
Yeah. Yep.
Sarah Petty (07:34)
And I like, you when you say talking about systems, it's not just the IT systems, but it's the whole kind of ecosystem of how the business operates, which I can imagine would be ⁓ sometimes non-existent or sometimes in the founder's head. And I know that was my problem some time ago. It's like, yeah, I a system. It's just all sitting in my brain. So no one else knew what to do. ⁓
Nicole Smith (07:41)
Yeah.
Sarah Petty (07:59)
How do you, what are the signs that a business is, the foundations are strong enough to scale? Like, do you need to work on, you talked about sort of stripping it back and getting those foundations. At what point then do you feel you've got those foundations in place? Yes, we can think about the next step of scaling the business.
Nicole Smith (08:19)
So as a business leader, if you can confidently step away from your business day-to-day operations, then you're set.
Sarah Petty (08:25)
Yeah.
Nicole Smith (08:26)
Yeah, and it might be a little part of the time and it will build over time, depending on the the scale of your team right now, the capacity that they have the also the skills and the knowledge, you know, within your internal team, or you look to bring somebody in like me or yourself if it's a financial element. That's the other thing know your numbers to which obviously you're all over and talk about talking to talk about that part. But that's really key to know, okay, if we've looked operationally at this over here.
Sarah Petty (08:48)
Yeah ⁓
Nicole Smith (08:55)
for the changes and the shifts we're wanting to make to bring in that stability, what do we need? Is it an additional resources in a human? Is it an additional piece of technology? Is it whatever that might look like? Can we actually sustain that long-term? What's the growth projection? So like if we are looking to bring in a new piece of technology, the one that you started with 100 %
I say 100%, depends on what your selection tool was at the start. More often than not is not going to be the one that you're going to be using going forward. Yeah. Yeah.
Sarah Petty (09:27)
Yes, yeah, yeah, yeah, it's funny.
I found that as my business has evolved. think, yep, I've got the tech stack sorted. This is exactly what I need. You know, then the business grows and it starts to break and you're like, quite.
Nicole Smith (09:41)
Yep.
Yeah, and as you grow, and you know, you, you become more established, and you become a leader in your space, you really solidify your ways of working, right? So at the start, an email chain that would go back and forth, they suffice, but then as you have three or four or five people potentially touching the project, or, or the deal or whatever it might be, you need to have a centralized hub that everybody can see ins and outs and all the communications. So that in itself brings that level of
Sarah Petty (09:51)
Yeah.
Nicole Smith (10:11)
of trust and that certainty that everything's covered and that you can all, your team member can go away. That's something I hear quite often is Jane wants to go on holidays, but she feels she can't in a way because she's gonna come back to an inbox that's bigger than been her. That's not what we want for our team. We want them to feel supported so they can go and live their lives.
Sarah Petty (10:28)
Yeah.
Yeah, absolutely.
It would help if people stopped sending spam emails as well, then it wouldn't be so bad when you returned from holidays. Side problem. Anyway, ⁓ so even if you have built up those strong foundations and you've got it working really well, what would you say to a founder who's nervous about breaking what's already working?
Nicole Smith (10:44)
Mm-hmm. Unsubscribe. Yeah.
Sarah Petty (11:03)
Hahaha!
Nicole Smith (11:04)
If you...
Well, it's a fun part for me. I can understand how you could be quite trepidatious if that's the right word about breaking or twiddling with something. But my real view is if we're not curious.
Sarah Petty (11:12)
Yeah.
Nicole Smith (11:20)
and we ask, is there a better way consistently? It doesn't mean we're going to go back and change things, right? So when I come into a business, my aim is not to go and break everything and pull everything in new, right? We're gonna keep those parts that are humming away in the heartbeat of the business and that the team enjoy using as well. There is an element of what you like to use and then it is an element of what's actually useful for the team, ⁓ you know, cause we all have different working styles.
But be curious if you're seeing that there is a block in your process right now and it's getting stopped there every time. Why? What's happening? Is it the system that's broken? Is it the person that needs some more resources or training? Or could it be that that person started with you from day one and they're actually not the right person to be in that role anymore? Because that also happens quite often. Yeah.
Sarah Petty (12:15)
⁓ Yeah, yeah, yeah, definitely.
⁓
That can be tough, right? Because sometimes those people that have started with you, they've taken a chance on you when you haven't got things running properly or the business isn't ⁓ as big and as many opportunities. And so you sort of feel this loyalty to them, but it is important to understand whether they're the right fit to help your business going forward or it can.
Nicole Smith (12:23)
Yeah.
Yep.
Sarah Petty (12:45)
stall the business growth or create those bottlenecks and issues for you. I can understand it's tough for business owners sometimes going through that situation.
Nicole Smith (12:52)
Yeah.
And if we've, when
you're hiring at the start, ⁓ you're still learning yourself. You don't really know what your business needs. You might have an idea, but you know, I've gone through that. This is my sixth year in business and I've brought people in and I've hired from heart.
Sarah Petty (12:59)
Of course, yeah.
Nicole Smith (13:13)
versus what the business needed. And also not fully values aligned as well. When you're clear on your personal values and your business values and you intertwine that in that recruitment process, you're going to find that you're to attract the talent for the business that's actually going to be really aligned with your values. And then it's just such a more
Sarah Petty (13:13)
Yeah. Yeah.
Nicole Smith (13:41)
beautiful experience than maybe not. Yeah, it's challenging to people because there is a real opportunity there to, you know, to nurture and provide training and ⁓ that's a point. When you do bring in someone new, that onboarding experience is essential. And as part of that, your operational playbooks, which are your SOPs, your specific ways of working,
Sarah Petty (13:43)
Yeah. Yeah.
Yeah.
Nicole Smith (14:10)
They're those things that you start, if you haven't already, start to collect and build that library of SOPs. Because that's going to really help as you do continue to grow. So say you're a team of 20 right now, and your aim is to get to 100. We need that consistency of growth, right? So when Fred comes in, and then Sally comes in, and then James comes in, that onboarding experience is the same.
They've had the same training, they've had the same support. And so then when the next three come in the same, right, and everyone's going through that exact same consistent pathway, which is strong, and that will help give that, you know, sustainable growth.
Sarah Petty (14:37)
Yeah.
Yeah.
Yeah, and it's
that clear expectation and then everyone is set up the same way from the start versus someone thinking it's this, someone thinking it's that, and then there's complete misalignment in the business. And the other point, no, you go ahead, Nicole.
Nicole Smith (14:55)
Yeah.
It also as well. Sorry. I was just, I was just going to
say, you know, ⁓ when you actually look at those foundations, right? So get your systems in place, you get your operational playbooks in place. ⁓ If you are the aim of the game is to sell the business in the future, you become a turnkey business, right? So the valuation of your business goes up because it means if you are a team of a hundred, the buyer or the purchaser can confidently look at that.
Sarah Petty (15:24)
Yeah.
Nicole Smith (15:35)
and the valuation of the business and go, well, I can see how I can easily double that or whatever that might look like. So that's a key point.
Sarah Petty (15:40)
Yes. Yeah. Yeah, very good point. ⁓ We've talked
on previous podcasts about setting up for selling a business and just that repeatability of your processes, your people, know, having consistency and predictability to some level in your business. Of course, you can never predict everything, but yeah, that makes it much more attractive for a buyer.
Nicole Smith (15:58)
Yep. Yep.
And for your team internally as well, you know, like, even though your vision that might be the end goal, you might not be planning to get there for 10 years, right? Because you love your business so much. And so by creating that consistency throughout that stability, it really supports your team to be confident and resourced. And so they can be showing up in their most amazing ways and feel
Sarah Petty (16:08)
Yes.
Yeah.
Nicole Smith (16:33)
safety and support to deliver the work that is is tasked of them. It's just this beautiful, like encompassing experience when when that's set up. The transition period can be a little bit like this a little bit up and down and a little bit ⁓ testing at times as all change can be. However, when you do go through that those waves in that ride and you get it right, the
the results and the experience post that is just amazing. Worth the time and investment to do that.
Sarah Petty (17:08)
Yeah, yeah, absolutely agree with that.
⁓ I just wanted to go back quickly to when we're talking about the founder who's nervous of breaking what's working. And you mentioned about needing to be curious and look for better ways to do things, but sometimes I've also seen where even if things are working and they're trying to maintain that status quo.
external factors don't let you do that. ⁓ And you know, whether that's a change in the market, a client ends up, you know, stopping working with you or something sort of external changes, and you need to think about changing the way you're doing things anyway. ⁓ Do you see that happen where external factors are impacting a business? And what's the importance of being adaptable ⁓ in that type of situation?
Nicole Smith (17:41)
you
Yeah,
agility is, you as an entrepreneur or business leader, it's top, top of the list, right? Like, as much as we want stability, which we do.
Sarah Petty (18:09)
Hmm.
Nicole Smith (18:10)
when an opportunity or a shift or a change say in legislation, you know, I've got one of my clients that literally I was in their office and we had a conversation one day overnight, the next conversation, something had shifted and we're like, okay, well, this is the plan going forward. You know, we need to have that ability where the, I guess the uncertainty comes is when you do have a team, right?
Sarah Petty (18:15)
Yes.
Nicole Smith (18:36)
And it's really about how are we communicating change? Because change happens every day. don't know, know, Joanne's off on leave and now she's the key contact and someone else that change happens, right? So how do we as an organization communicate change?
Sarah Petty (18:40)
Yep. Yep.
Yeah.
Nicole Smith (18:54)
What I see ⁓ with many amazing entrepreneurs is we have these ideas and thoughts and we want to get them out and include people in the journey. We're like, ⁓ and we thought about this. actually, we thought about that now. And I actually know. So we're to think about that. What that does is actually reverse engine reverses the experience that you're actually trying to create there by oversharing. So the communication stages is
Sarah Petty (19:18)
Yeah.
Nicole Smith (19:24)
What are we communicating to who for what purpose at what time? And when you allow yourself that, that process,
you actually find that any agility shifts will become a lot smoother because you've done a lot of the thinking and the brain work before we start to bring the team in. So the team now know that anything that comes to them has already had the plan in place that they're going to feel safe. It's not like, you know, entrepreneurial mind has just created this bright sparkly thing. Am I going to change things? It's like, no, this is a strategically aligned decision based on
fact that external, internal, whatever it might be. So it's a little bit of a smoother experience. That's something we, I support a lot of my clients with actually, because it is so exciting to do something new and shift something. And I'm like, ⁓ let's let's car park that for a minute, just, for a little minute. And go through that project prioritization ⁓ discussion with the leadership team, you know, what is actually operationally
Sarah Petty (20:14)
Yeah.
Yeah.
Yeah.
Nicole Smith (20:32)
important right now for us to focus in on who's leading it as well. If no one's leading it, no one's doing it. Yeah, single leader.
Sarah Petty (20:39)
True, true. And I guess it is important
to have that person like you to bounce those ideas off and to kind of help guide you because it can be really exciting you think of great things and that could be an idea down the track that you want to bring to life.
but switching and changing constantly can be really confusing. I remember many years ago working for a manager who had that kind of mindset like next shiny thing. ⁓ okay team, let's work on this. okay, how about we do this? And it was so confusing. We were unclear on expectations. ⁓ Am I meant to finish the last one or are we moving on? Is this still important? I don't know. Like we were all so confused and end up just not making any progress because no one really understood what we were prioritizing.
Nicole Smith (21:22)
Yep,
Sarah Petty (21:23)
So
Nicole Smith (21:23)
that's right.
Sarah Petty (21:24)
yeah, you kind of have the person that you can bounce those things off, but then get clear in your communication to the team.
Nicole Smith (21:31)
And it's introducing that, like obviously I love a plan, no surprises, ⁓ but introducing the consistency of your planning for the business. As I think I've shared, I'm part of a business mastery program. And one of the things we do every quarter is create that space to do the planning. So what is the focus for the next 90 days? And when you do have a bigger team,
from those top level focuses, what are the focuses for the finance team, for the IT team, for the HR team, for the operations team, for the whatever it is. And then they've got their focuses as well. So everyone is working to the bigger business visions and missions, but they've got their little chunk of the pie that's gonna move us all forward. When those outside things come in,
Sarah Petty (22:10)
Yeah.
Nicole Smith (22:23)
You just have to come in, have those conversations. Where does it fit now in the priorities and realign? Hopefully they don't happen too often, right? But when they do, it's that ability to remain calm, find out all the information, create the plan, get the team in that you need to help execute the plan and communicate it clearly and properly. And then that should alleviate some of the stress.
Sarah Petty (22:28)
Hmm. Yeah.
Yeah, that makes complete sense. But what are some of the mistakes that you see business owners make when they're trying to scale too quickly?
Nicole Smith (22:59)
hiring the wrong people, ⁓ trying to bring in all the pieces of tech, thinking the tech's going to actually solve the issues. The tech is a device for execution. It is not going to solve your problems if you don't know how you're actually working and operating.
Sarah Petty (23:01)
Yeah.
Nicole Smith (23:21)
So that's one of the main ones I find. You know, I remember one business I went into and I, we do a tech audit. You know, I say here's the spreadsheet. I want to know all the tech you use in the business. What's your subscriptions? How many do we love it? Do we hate it? All those things. One of the businesses had two different HR systems and many other multiplying overlapping products that
they weren't even utilizing properly. And so that is one of those things. It's a huge, costly ⁓ affair when you've got more staff members as well, subscription fees go up. So really not taking that opportunity to understand how the business works. And I say it's not a mistake. It's more when you don't have the right people.
Sarah Petty (24:09)
Yeah.
Nicole Smith (24:19)
to support you to understand what it is that you are doing on a day-to-day basis. ⁓ Cause sometimes with organic growth, ⁓ things shift and change and ⁓ that's the other one. You've got a key staff member or a talent in the business who decides to depart and hasn't actually downloaded any of the IP of the business anywhere. That's it. That's a big one too. Yeah.
Muted. You're muted.
Sarah Petty (24:56)
Awesome, well, thank you. To wrap it up, I've got five tips from a virtual CFO perspective that might help James and any, sorry, might help Jenna and any other listeners who are thinking about scaling their business. So the first one is to assess your margin from a scalability perspective. So it's really important to understand your current cost structure.
and making sure that your team and your current resources can support more revenue without completely blowing out costs or margins. know, sometimes I look at scaling, but then it's not in a profitable way and ends up diluting your margins and you're in that worst position than when you started.
Nicole Smith (25:40)
Absolutely, that's so true. And ⁓ that's at that point, if you haven't had the opportunity to actually streamline your foundations, you'll end up in a whole lot of hurt. Yeah.
Sarah Petty (25:52)
Absolutely.
The second one, I think I say this every week, but forecasting is really important, ⁓ particularly cashflow when you're scaling. So running forecasts under different scenarios. You you talked about having plan A, plan B, what does that look like? How would you mitigate any risk? Do you have funding gaps? So it's really understanding what does that future picture look like? And then what are the different decisions you would need to make if certain scenarios happened?
Number three is quantifying the cost of growing. So what I mean by this is sometimes there's hidden costs in growing that you don't think about. And yes, there will always be potential risks associated with it too. So, you know, what happens if you grow and there are
service failures or you know, you're a product business and it overwhelms your logistics and you can't get product out in time. What are the things that you would need to think about? Do you need to, you know, rework products? Do you need to hire more staff? Will there potentially be staff turnover? What are the different types of risks and have a think about how you would mitigate some of those and have that bit of a buffer just to
anything that might happen that could potentially pop up. We won't plan as much as we can to make it go smoothly, but sometimes there's always something ⁓ unexpected that pops up.
The next one is just setting up a financial buffer or a funding plan. So you've got some cash reserves aside. If you're in that position where you're proactively looking to scale, build up a bit of a cash reserve so you're not caught short during that growth phase because it may also require some upfront investment and whether that's in hiring new roles, ⁓ know, might be pre-purchasing inventory, ⁓ new equipment, new technology, and you might need to do that in advance.
of the growth coming so just make sure you're planning for that in advance. And the last one would be to just continue to track your key financial and operational indicators regularly. ⁓
either get the expert to come in and create something for you or just create a basic dashboard with the key metrics so you know how much cash have you got in the bank, what's the team capacity, what does your margin look like, what are the kind of key things that you need to be tracking to help you spot early warning signs so you can stay in control and make decisions to pivot as you grow. So that would be my five. Any final thoughts from you, Nicole?
Nicole Smith (28:42)
Yeah,
data is key. Queen, king, whatever you'd like to say. It doesn't lie, right? The data does not lie. I know you can manipulate it, but if you're looking at it raw data and you're doing the recordings and something that just popped up as you were talking about that is really bringing into play those scheduled...
Sarah Petty (28:45)
Yep.
Yeah.
Nicole Smith (29:08)
times for checking your finances for checking in with your leadership team for having those strategic planning meetings and sessions in place. So locking them and loading them in your diary. So they're there. I always say if it's not scheduled, it won't get done. And those key points in your weeks, in your months, in your years will help to bring that consistency again, you love the word consistency. There we go. You're welcome. ⁓
allow you to look at those things and you'll be able to see as you said with that forecasting or the dashboarding hang on why is that going downwards when actually this time last year it was going upwards what's happened the reflective piece as well what have we changed what shifted what did we then now do with that information to make sure it goes the other way unless it's expenses we want those going down but the profit they're going up yeah
Sarah Petty (29:47)
Yeah.
Exactly, Yeah,
good data is always going to show you the insights that you need. So very important to have. Yeah.
Nicole Smith (30:07)
Yeah, and keep it all simple as well. We
try and we tend to over complicate everything. Break it, make it simple. You know, what is it the kiss keep it simple, stupid or something? ⁓ Yeah, simple is fun.
Sarah Petty (30:16)
Yes.
Yeah, exactly.
Amazing. Well, thank you so much for all of your insights today. If people would like to know a bit more about you and your business, where can they find you?
Nicole Smith (30:33)
Yeah, absolutely. So our website is theartisans.com.au. I'm also on all the places, but come and say hello on LinkedIn primarily. ⁓ So Nicole Smith or look for me at the artisan solutions. Two S's in the middle might be easier because Smith, you know. ⁓ But yeah, I'd love to connect. Come and pop in and have a chat.
Sarah Petty (30:54)
Excellent. Well, we'll put all of that in the show notes so people can find you easily. And of course, for any listeners who would like their question answered, you can submit a question via our website or through the link in the show notes. Thank you, Nicole. You've been fabulous.
Nicole Smith (30:59)
Yes.
Thank
you for having me. It's been a pleasure.