Business Owners Toolbox Blog Discussions and articles to help the small business owner solve the challenges they face as they grow their business.

November 15, 2011

Cost of training when cash is tight

Are training costs an essential part of your budget? Do you allocate funds to training programs even if your revenues are lower than expected? Linked In question by Eric Saint-Guillain

I advise owners of small growing businesses. When their business is small, money is tight, there’s no budget for training. So one of three things happens:
— Training doesn’t happen, productivity suffers, mistakes get more expensive, good people are fired for not doing a job they haven’t had proper training for.
— Training happens ad hoc, but since it’s not budgeted for, the money is drawn from other sources, such as marketing–or profit.
— Training duty is assigned to people who are already working full tilt, so it’s not accorded the importance it deserves, and gets done haphazardly or grudgingly by people whose hearts are not in it.

It’s a “coming of age” marker for a young, growing business when the owner decides to allocate money and time to training, for all levels–workers, managers, and him/herself.

 My comments were aimed at companies with employees, but they are equally true for solopreneurs. As a consultant, I find that I get most of my training via:
— My industry association, Institute for Management Consultants (IMC USA)
— Webinars and other such events
— My clients! I learn a tremendous amount from them.

Here’s my sermon!

Training needs to be viewed as an investment in the increased profitability of the operation. Otherwise, why are you doing it? An owner who is a strategic planner sees training of valuable people in the same light as upgrading and maintaining valuable equipment.

It’s insane not to do it–even if money is tight. If you as executive let operations slide so that you cannot afford to take care of your most productive resources, then you should be fired. If you’re the owner, you’d better learn the lesson well, or you’ll soon be left behind by competitors, and lose everything you’ve put into the business.

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