Things I learnt in NFP that for profit business, can profit from
I’ve worked with non-government, not for profit organisations (NFPs) for over 7 years. Those years have taught me a lot; most of it good and some interesting. Working in the NFP sector is an experience that I wouldn’t change.
Why is this important to you? Well, it’s what NFP’s do well and don’t do well that can be applied to your for profit business. So if you’re not where you want to be in your business yet and not sure how to get there, then keep reading.
Hire the best people that you can afford
NFP’s are known for paying less than corporate businesses. That tends to attract, lower quality and often, less capable employees – this is a fact. I’ve seen NFPs do this. I’ve also seen them do it differently and there is a massive difference between the two scenarios. The ones that pay more, attract a higher quality employee. These higher quality employees are more efficient, work harder, are more capable and take on more challenges than the lower quality (and lower paid) candidate. The unfortunate but, nonetheless, true adage that if you pay peanuts you will, unfortunately, get monkeys certainly applies. Your businesses remuneration and rewards have to be cognisant with the quality of employee you want to attract. The argument that you have a great work environment is a good one, but a great work environment does not pay your employee’s rent, so your pay scale must be competitively structured in an increasingly competitive job market.
Invest in infrastructure
Small businesses and NFP’s are always looking for ways to cut expenses in order to improve cash flow. As a business coach, I am a big supporter of cutting fat and expenses that are not needed. HOWEVER, if you’re failing to invest in systems, processes and infrastructure, your business will never be able to grow to the extent that you want it to. You HAVE to invest in measures that will drive costs down in the long run. Measures like fast, working technology, software, systems and processes. Don’t skip on this! The more that your team is supported by outstanding infrastructures the more likely your business is to be able to run via momentum without your constant involvement in the day to day.
Get outside help
I’ve heard from a lot of people working in NFP’s that one of their big mistakes in growing the organisation was that they didn’t bring in expert help sooner. Their obsession with the current bottom line prevented them from bringing in outside help. Failure to do a proper cost/benefit analysis, caused the business to stagnate. Once they bit the bullet and brought in outside help, their “business” grew beyond their previous expectations. Don’t wait until you can afford it. Make it happen. If gaps in your knowledge are holding you back from achieving your business goals, get advice and support from those who do.
Have a clear vision and purpose
NFPs have a big thing going for them – they have a really strong vision and “why” (if you aren’t sure on what this “why” is, refer to Simon Sinek’s fantastic book – Start with Why). NFPs have a purpose, and everyone in the organisation knows what that purpose is. Everything that the team does is linked to the purpose that the NFP is looking to achieve. Too many times I have seen small business owners unclear on why they are doing what they are doing and so their teams don’t come for the ride. They have lost their passion, and fail to engage their team on the journey. Morale is low and turnover is high. Building your business based on a key why and purpose and ensuring that you build a culture around that is key to attracting the best employees who are going to stay passionate and engaged for the long-term.
Give them something to believe in
People work for NFP’s because it fills our human needs to contribute. When you’re building your business, it’s beyond important to ensure that you work to show how your team’s efforts are contributing to something bigger than the sum of the part that they are doing. Link their sense of purpose to the contribution that they are making to the business. This will ensure a much greater engagement with your team and less turnover.
There are many correlations between NFPs and businesses, but by looking into what they do well, you have the opportunity to do a better job of a high performing and profitable businesses.
Love to hear your thoughts on this so leave a comment!