This week’s Growth Coach blog is brought to us from guest blogger Fred Kusch. Fred is a Growth Coach franchise owner from LaCrosse, WI. He provides expert, practical counsel to organizations and audiences around the globe. He offers big-picture views of how to build morale and teams, develop people and leaders and enhance life and work. Fred was named Coach of the year in 2012 by The Growth Coach.
You can learn more about Fred at his website www.jfkassociates.com
Be a Sculptor to Strike it Rich
As we enter the first quarter of the year it is time to think about molding your business to run more efficiently, effectively and consistently. Don’t let your business evolve haphazardly and reactively. Proactively shape it or re-shape it to improve your business for smoother operations, consistent customer satisfaction and profitable results. You must turn any chaos, confusion, and anarchy you have experienced in the past into order and discipline. It is time to standardize and document your business.
Challenge your old beliefs about how your business should work. It is never too early to shape or too late to re-shape your business. It doesn’t matter if your business is 20 years old, 2 years old, 2 months old or on the drawing board, start shaping the company to run without you being woven into the very fabric of the business. Design it to run without your supplying all the effort and energy. You cannot control everything, you cannot control everyone. Let go! Start behaving like a strategic business leader/owner.
You do not want to create merely a job for yourself. The ultimate goal of creating a business is to sell it one day, at the highest premium possible, to your employees, family members, or an outside buyer. You deserve an acceptable return on your investment of time, talent, and treasure.
No matter what size, age or industry, every business should be prepared to be sold. Your business is no different. This “start with the end in mind” strategy should help focus you on building an effective business model that doesn’t have you at the center of its universe, relying on your presence, personality and perspiration for its success. Keep this thought in mind, you should not be the business and the business should not be you. This work-in-reverse approach not only maximizes your selling price, but also minimizes your hassles and headaches while you own and run the business.
As stated earlier, your goal is to design or re-design your business to work without you. Your business model should be sculpted in such a way that it can be easily replicated dozens of times in cities around the country or world, requiring only your vision, not your physical presence and exertion. Whether you ever expand or not, such an ambition should help you focus on building a systems-dependent (not leader/owner-dependent or people-dependent) business that generates repeatable performance and consistent results. You must help others get results. Without other people, you don’t run a business — you work a job.
What is an effective business system? It is simply an integrated web of separate processes, procedures and policies. A business system allows you to get consistent results through other people – tremendous leverage and freedom! The business system is your documented instruction manual for “this is what and how we do it” at our company. Some typical operating processes are as follows:
• Inventory management
• Order processing/customer fulfillment
• Customer service
• Billing and accounts receivable
• Procurement/accounts payable
• Facilities management
• Human resources (i.e. hiring, firing, reviewing, promoting, paying, etc.)
• Information systems
• Store opening and closing procedures
Your business with such fully identified and explained processes will allow your employees to deliver amazing consistency. Employee discretion is minimized. Such a system will also free you from having to touch every transaction, make every decision, answer every question and solve every problem. You can manage by exception! Such a carefully crafted enterprise will also give you breathing space to think and act like a strategic business leader/owner as well as the time to do personal activities that matter most to you.
Without such a business system in place, no one will want to pay a premium for your broken business. They would not want to buy a dysfunctional business that is solely dependent upon you for its day-to-day operations and survival. If it were obvious that you are a prisoner to your business, why would anyone want to buy into such a life sentence? They would not or would pay very little for such a systems-deficient business. Please grasp this; no one wants to buy a job, a series of headaches, or a leader/owner-centered and dependent business.
To maximize your company’s eventual selling price, realize that buyers want to acquire a smoothly running, money-generating machine. Buyers want to purchase a business system that runs on near autopilot, foolproof status. They want to buy a fully documented, organized business system that gets predictable results. They want an asset that has proven processes, predictable revenue streams, and strong growth potential. They want to buy a well-designed, hassle-free, cash flowing asset.
The more of a turnkey, self-managing, self-improving system you develop, the greater the value to a potential buyer. If your business runs well without you being there every day, it will be worth gold to others. And until the day you sell, don’t you want to own and manage the same type of well-designed, well-orchestrated business?