Poor George Calombaris was in the news for all the wrong reasons recently when it was discovered his staff had been underpaid. Being a celebrity would not help in this situation. Many might brand George as unethical or dishonest. The truth is this sort of issue happens a lot.
In my experience, these oversights are not intentional, rather a function of a business outgrowing its ‘platform’ (systems/processes and structures). Growing a business is like managing a teenagers’s wardrobe. You’ve got keep the waist size on the pants ahead of the growth or they will split.
You can draw an analogy between the capacity of a business and a cup. The size of that cup represents the total theoretical capacity (measured in revenue) when everything is running smoothly and you have a full book of clients. The water level is the actual revenue.
It is very important to know how full your ‘cup’ is. I keep seeing evidence that many businesses don’t understand this metric. It ‘feels’ busy but they’re not sure why. Is it busy because of inefficiency or capacity? It is possible to be running a half-empty cup and feel frantically busy. Not knowing this can lead to dangerous decisions.
Solving an efficiency problem with capacity will send you broke. Solving a capacity problem with efficiency will burn your team out.
If your suit pants are feeling tight and you are in danger of splitting, work out an objective measure of your capacity and where your water level is really at. Services companies are traditionally easier to measure than product companies but, no matter what business you are in, there are ways!