Many small to medium sized companies, including road and passenger transport bus operators are influenced and managed by their founders as they grow, often to their detriment. As this develops new and different skills are required to ensure continued business success. Transport Finance expert, Donal Dempsey outlines below that the COVID- 19 crisis can highlight this problem and he explores ways to deal with this matter.
Even in large Irish transport firms many business decisions are made by one person at the top. Contacts with customers, are at times on operational and financial levels, flow through that person. Staff and family members realise there is no point in attempting to make decisions or suggestions. Therefore the success or failure of the business really does hinge on the ability and actions of one person. Of course the firm can insure that key person for ‘Key-man cover’ but it really doesn’t address the key issue of proper business delegation and training of key staff in running the business.
This situation has arisen in these companies originally out of necessity. The business no doubt expanded in size but the role of the Managing Director did not alter with the magnitude of change and thereby leaves a business exposed especially in these times of crisis. When the business was developing, the owner was covering everything from sales, finance, transport management, purchasing, maintenance and banking and instead of delegating. Many individuals simply increased their workload in the self-belief (often at times correct) that no one can carry out these functions better than themselves.
It is obvious to financial institutions and to prospective business buyer that a ccompany that has only one key individual that has not put in place a system for business continuity is prone to failure. The most successful businesses owners have a policy of recruiting only individuals that are more capable than themselves. They are not under pressure with this as they see the success of the business resting on many capable shoulders and it’s their skill of recruitment and retention that is key to business success.
In the current crisis employees are tending to stay put with their current employers but a strong business links staff remuneration with business success, so that employees have an interest in business continuity and are treated as part of an overall team. Employees and managers want to work in a business that is successful, exchanging information and news with employees, offering rewards in line with industry norms with incentivises to work better and progress in and with the business.