Philip Rielly and Eric Hill co-founded a small private company and they run it like a small private company. Every decision they make, they ask themselves, “Is this big-corporate stupid?”
“Large bureaucratic businesses often make decisions that are far removed from where the decision should be made,” says Hill, vice president and co-founder of BioRx LLC, a national provider and distributor of specialty pharmaceuticals. “We internally say that those practices are ‘big-corporate stupid.’ We don’t have to make a big corporate decision; we have to make a small business decision.”
Making those decisions aren’t always easy, but Rielly and Hill work well together.
“You have to be respectful of each other’s leadership,” says Rielly, who serves as president of the $55 million company.
Smart Business spoke with Rielly and Hill about how they have managed growth of a small company.
Manage cash flow
Hill: One of the primary challenges is access to capital and finding the right corporate structure environment and partners to get the business started from a funding standpoint. We have to make sure we manage within our capital structure and don’t allow the growth to exceed our ability to fund it. You have to absolutely know what it’s going to cost to enter a certain market. Is it a new product, a new sales rep or employee, a different product line? There’s no one-size-fits all, but the commonality amongst all those things are: Do I know within some reasonable degree of certainty what that’s going to cost me and what my timeline is to recoup it, and do I have currently, on hand today, the ability to fund it?
Rielly: Just like any business, we have typical growing pains, and just trying to stay ahead of the line of credit has been the biggest challenge. It’s day-to-day collecting your cash on time, it’s managing and watching your inventory and being very precise about when you hire and when you expand. Don’t underestimate the importance of having a good banking relationship and don’t underestimate the importance of managing your cash flow because it’s obviously critical.
Find what customers need
Rielly: Now, more than ever, you need to focus on your customers, and now, more than ever, you need to show them how much you appreciate their business.
Hill: When we viewed this market, I’m not sure that we viewed it as a market where we had to be revolutionary in the way of product services and delivery. Rather, we viewed the market as having a deficiency in terms of high-quality customer service that can be delivered quickly with decisions made at a field level. If you’re just going to enter a market and just do what everybody else has done, it may work — the market may accept you just because of shear effort in the marketplace. But if you can go into the market delivering a service that’s needed but not being provided or even
used to be provided, your acceptance and uptake and revenue growth is going to be a lot higher than if you just go out and try to plow with the same model.
Rielly: When you do find the right people, you have to really empower them to make decisions that impact their job and impact the business. You have to empower people to do their job and let them go. Let them fail from time to time and let them make mistakes and let them learn from their mistakes. As an organization, you will be better five years from now, because they’re actually growing a lot faster because they’ve been kicked down and brought back up.
Hill: It also helps to think about how you can adjust your managing style. Be the manager that you would have always wanted to have. Meaning, when you weren’t a manager but thought, ‘If I was ever a boss, I would do this.’ Well, do those sorts of things because it probably has some merit.
Build strong infrastructure
Hill: Make sure that you have an infrastructure in place to anticipate the growth. Try to hire maybe not way in front of your growth curve but in line with your growth curve. You have to set expectations that you’re going to manage for a year or two out, not just for today. You have to be thinking … in advance in terms of policy setting, staffing, structural procedures that you have to manage on a day-to-day basis and preaching that mantra to the organization that what we do today not only has to work today but has to be productive two years from now.
How to reach: BioRx LLC, (866) 442-4679 or www.biorx.net