Growing Your Small VAR Business: 5 Ways To Get To $10 Million


3. NOT HIRING THE RIGHT PEOPLE

IPM, another New York-based IT consulting firm, is expected to do between $25 million and $30 million in sales this year and is squarely in Helow's third-stage "growth" phase. President and CEO Myron Bari relies heavily on managers he's appointed to oversee the company's various practices. "I've got a lot of people who are a lot smarter than me," he jokes.

"Hiring the people and building the culture during that [growth] transition is absolutely critical," said Evolve Technologies founder Sobel, who is now partner community director for Level Platforms, a developer of remote monitoring and management applications.

Recognizing, hiring and retaining talented individuals isn't a skill that comes naturally to entrepreneurs, especially those in the channel, who tend to be better with technology than with people, Sobel said.

"I think that was one of my biggest struggles, picking the best people," Sobel said. His company suffered a setback in 2007 when he hired a service manager that he said looked good on paper. "And God, he was bad," he said. Not only can such mistakes be expensive from a monetary standpoint, they can set a company back if they damage customer relations.

While Sobel said the candidate oversold his qualifications, he said the experience also taught him the need to set expectations and put in place the metrics to evaluate managers and employees. "It's a different skill set from running a five-person shop to running a 20- or 30-person business." Establishing good internal communications and lines of reporting are also key, he said, pointing to insights gleaned from Harnish's "Mastering the Rockefeller Habits" and other books.

The departure of a key service manager from Evolve Technologies was a major factor in Sobel's decision to sell the company. He recognized the company was at a critical juncture ($1.4 million in annual sales, 15 employees) and that getting it back on a growth track would require a lengthy search to replace the manager and rebuild.

Irvine, Calif.-based Vision33 has grown to $15 million in annual sales both organically and through acquisitions and that's increased the need for top talent. Bringing in that talent is a priority for the company: Rather than rely on outside agencies, the company has a dedicated talent recruiting team in-house, said Vice President Alex Rooney.

As young businesses get larger, business owners shouldn't overlook the importance of growing talent from within, what Helow called the "farm team" approach. That can be less costly than hiring expensive talent from outside. It's more proactive than reactive -- promoting from within rather than scrambling to fill management vacancies. And future managers can be groomed in line with a company's culture, he said.

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