Running a group of businesses

I currently own a group of four manufacturing businesses.

As a group we have total turnover of around £8m and employ over 50 staff. I also have minority shareholdings in two other businesses. The question I often get asked is ‘how do you manage your businesses?’.

The simple answer is I don’t!

‘Err, but you own them’ is normally the next question. This is true but believing that you must be fully hands on in running your business is actually a limiting mindset, and unless you are the world’s greatest businessman who has no family, friends or hobbies (unfortunately/fortunately none of these apply to me) then it would be pretty difficult to manage these businesses across six locations.

On the other hand, I don’t just totally ignore them. As the owner, I have obligations to the staff, to lenders and I also need a return from these investments so in this article, I wanted to discuss my role and how I oversee my group.

I call myself the Chairman/FD but I have no day-to-day involvement in any of the businesses. I control the bank accounts and liaise with lenders, but each business has its own General Manager (GM) and I work with each GM to set a business plan (with KPIs) and budget. The GMs then report to me with the weekly KPIs and monthly management accounts. If everything is on target then great but if things need addressing I will support the GM where required.

Fingers crossed but this approach has worked well so far but there are a few key success factors that I would advise:

• Mindset – I am fortunate (or lazy) that I am very comfortable delegating and letting people get on with what needs doing in their own way. I imagine this would be difficult for someone who is very detail orientated or a micro-manager.
• Get the right GMs and trust them. I have been fortunate that I have inherited three GMs who were already in senior positions in the businesses, and we have recruited in the other business so I have people in place who know more about each business than I will ever do. Having staff who understand the business and its customers is essential so that as an owner, you don’t need to be there running things.
• Have a clear target and business plan of how to achieve it. This means that everyone is on the same page and day-to-day decisions are orientated towards this goal.
• Regular monitoring. I review weekly cash flow forecasts and KPIs, and monthly management accounts. The KPIs are mainly sales focussed and the monthly management accounts let me know if everything is on track. I also check the bank accounts every day but I think this is just for peace of mind rather than it being an analytical task!
• Provide resources where necessary. Like most SME manufacturing/engineering businesses, my group was weak in its marketing departments. I.e. they didn’t exist! Having a larger group has enabled me to employ a Marketing Manager at the group level to provide a much needed resource to all of the businesses

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