Are you chained to your business? Part 2
In our last blog post, we pointed you to Part 1 of a great article, “Do you own your business or does it own you?” Authored by my friend and colleague, Jon Denney (President of the Professional Business Coaches Alliance), Part 1 highlighted the kind of changes necessary to find the freedom you are looking for in your business.
This week, we are proud to have Jon bring us Part 2 as a guest blogger on our site. It is filled with helpful insights and action steps you can begin taking now to build the kind of business you have always dreamed of. Please feel free to share this insightful piece with your networks. Enjoy!
Eric Deschamps | Business Coach, Ottawa
Do you own your business, or does it own you? Part 2
by Jon Denney
Last week, I introduced 27 crucial questions that all need to be answered if you are going to build your business by design. But if you don’t have time to find the answers to these questions- and worse yet, if you had the answers to those questions, you’d know you have a lot more work to do! You certainly don’t have time for more work!
But here’s one more, very important question: “If you don’t answer those questions, and address those issues, who will?”
You already know the answer: Nobody.
And that’s precisely why you feel the way you feel today. Instead of leading your business; developing it and nurturing it, you work in it. You’re just as task oriented as you were in the early days of your business.
Do you know why Syracuse University’s legendary basketball coach, Jim Boeheim, doesn’t score points or block shots during a game? Because it’s not his job! His job is to recruit talent, make sure his team is agile and skilled, has depth, takes initiative, works in synchronicity, and is prepared to win games. His job is the same is yours. Think about that!
You have to figure out how to get out of the proverbial trees and work on the forest.
Here’s your first action step: Read the book The E-Myth Revisited by Michael Gerber. It’s an easy read and is even enjoyable! Most importantly, though, it will clearly show you the problem most small business owners make and how to start to solve it.
Moving your business from infancy – to adolescence – to maturity (your vision) will take time and effort. Like all meaningful transitions; it takes patience and care. It won’t happen all at once; it will require many small steps.
Listen, you deserve the fruits of your risk and your labor. Take the first step: read the book. Then, decide on your next step. Maybe that will be to make a list of the things you can easily pass off to someone else to do. The next step: pass those things off accordingly!
When that’s done, the next step will appear to you, but could include: writing a vision/mission/values document, writing comprehensive job descriptions and developing a formal organizational chart so everyone’s clear on their roles and responsibilities, scheduling and conducting regular performance evaluations, creating or outsourcing the creation of a training program for new hires, scheduling appointments to reconnect with your customers, creating an operations manual for your business (systems / procedures), brainstorming your company goals with your team and creating a bonus game around meeting those goals, revamping your interviewing process and hiring procedures, outsourcing the redesign of your marketing material, enrolling in a leadership development program…the list of possibilities is endless!
If you involve your team in the process, you’ll get some great, differing points of view to consider. Furthermore, your team can take steps for you and they’ll appreciate the opportunity to show you how valuable they are.
Don’t let tomorrow be a continuation of the same old story! Stop the madness today by taking action! It won’t be easy, but you can do it!
Action Steps
1. Read the book: The E-Myth Revisited by Michael Gerber. The reason you should read this book is because you will learn different strategies for taking your business from “infancy,” to “adolescence,” to “maturity.” You’ll also learn why it’s valuable to create a cookie-cutter approach (called the franchise model- without having to be a franchise) in order to eliminate variation in your products or service and so you can run your business most efficiently which results in higher profits. This book is a classic.
2. Answer the following questions, then prioritize them in order of importance, and then create action steps for yourself so that you can address these areas of your business. The goal is for you to answer all of these questions and get the answer you most desire. You need to create a plan to make that happen. It won’t happen overnight; not even close! This is a never-ending process that you should pay attention to and re-evaluate regularly. Here are the questions:
- How much leadership depth have you built? If your answer is, “Not much,” then what are you going to do about it? What action step can you give yourself that will immediately start building leadership depth in your business?
- What systems do you have in place to maximize efficiencies? You probably have systems in place, but when is the last time you analyzed all of those systems to see if you can improve on them? Also- when mistakes happen in your business, do you always ask yourself, “Was this mistake made because we don’t have a system in place, or was this mistake made because our system wasn’t followed, or did this mistake happen because our system failed and needs to be reworked?” What action step can you give yourself to make your systems work even better for you than they currently are?
- How much of your time do you spend handling tasks that someone else could handle for you at a fraction of your pay? It’s highly unlikely you’re paying yourself as an hourly employee, but it is important that you calculate your effective hourly rate so you know how much your own personal time costs you each hour. Also- as you’re answering this question, you may want to calculate your hourly pay based on how much money you “want” to be earning within the next year, rather than how much you’re currently earning. You also may want to calculate your hourly pay based on a 40-hour work week even if you’re currently working much more than that. After all, if you were an hourly employee, you’d be getting paid for every hour you work plus time and a half for every hour over 40 hours you work in a week! Don’t fool yourself into thinking your “extra” time is “free.” Because it’s not. You’re paying for it one way or another!
- How much -or how little, actually- of your own time is spent developing your team? Are you making sure your team is in “constant improvement” mode? Please remember; your strongest people want to be stretched and challenged. They will appreciate any professional and personal growth opportunities you provide them. And if you don’t give them those opportunities, they may choose to find them elsewhere.
- Are you working “on” your business, or are you still working “in” the business? If you don’t understand this question, you’ll completely understand it after your read The E-Myth by Michael Gerber!
- Does everybody have written job descriptions and a clear understanding of their roles and responsibilities? If not, they need to! Written job descriptions not only bring clarity to what’s expected of people, but they can also be used to develop formal training programs. They’re also a major tool in having employee reviews. By attaching “responsibilities” to the job descriptions, people will understand how they fit into the “big picture” even more clearly. For example, after every duty listed in a person’s job description (ie: “Be able to produce 100 widgets per hour with a 99.7% accuracy rating”), be sure to explain how this fits in the big picture (ie: So that our production department can run profitably while client deadlines are met 100% of the time.”
- Who holds them accountable for results? Let’s face it: People do what you measure. If there’s no accountability, then responsibilities become optional; at least in the minds of “extrinsically” motivated people. But when there’s follow-up and accountability, people are more driven to produce. I’m pretty sure we all know that, but does your company have a culture of accountability? Can you improve on it? If so, what’s the next action step you can take in your business immediately so you can start to benefit from having a strong culture of accountability?
- Do you have a formal training program in place for new hires? At a minimum, this should include explaining your company history, your vision, mission, and values statements, your company goals, a workflow overview of your entire operations, a thorough review of the job description, HR policies and procedures, an introduction to department leaders throughout your company, and a comprehensive checklist of necessary training components so that your new-hires can be trained systematically and thoroughly.
- What about developmental training for your existing employees? One of the biggest investments in your business is labor costs. It’s very likely that payroll is the single, largest expense in your business. Shouldn’t you do all you can to make sure you’re getting the biggest return on your investment? Of course! So please make sure you’re providing developmental training for your people. They’ll get better at their jobs and be able to contribute more to your company. They win- you win. Your people will make or break your business. Field the best team you can, and then invest in helping them grow technologically, in leadership, in strategic thinking and planning, and in product knowledge. The higher your people grow, so grows your company…think about that!
- What have you done in past years for your own professional development? If you’re reading this right now, then clearly you are working on your professional development. If this is a new commitment you’re making for yourself and your company, then congratulations! There absolutely will be a return on your investment of time, money, and effort. If this is a renewed commitment to your own professional development, then welcome back! Stick with it. You’re leading by example and by expanding your own capacity; you’re simultaneously expanding the capacity of your business. If this is a continuation of a commitment to your constant professional development, that’s great. You get it. Please remember; the results of your efforts are cumulative. You’ll never completely master “business ownership” and “business development” because there’s always more to do, but you’ll continually improve and your company will follow suit. From time to time, be sure to ask yourself, “I wonder what my competitors are doing right now?” Chances are they’re just trying to get through the day today. And tomorrow, it will just be a continuation of the same old story! But your continued learning will translate into fueled energy, which will result in actions that will create results.
- Is everyone on the same-page? That’s not a “figurative” page…it’s a “literal” page. The “page” is your vision, mission, values statements that your team is accountable to. This topic is covered in depth later in this book. But for now, just consider the importance of everyone having an actual document that aligns everyone in terms of goals, purpose, strategies, tactics, and culture. How could that impact your culture, your customer service, your quality, and your brand?
- Do your individual team members (employees) know why the company exists? “Why” is very important! The reason for these italicized explanations is so you know “why” the questions in bold are important. People are more focused and will be more committed when they know why.
- Do they know why you started it in the first place? There’s that “Why” word again!
- Do they know what it’s supposed to look like? It’s much easier to help build something when you know what it’s supposed to look like. Have you ever put a puzzle together? Why did you look at the picture on the puzzle box while you were doing it?
- Do you know your employees’ goals? Why is that important? Because people don’t care how much you know until they know how much you care about them. When you know what your people are trying to accomplish in their own lives, then you can help them discover how to meet those goals by performing well within your organization. And as they move closer to their own goals, you’ll undoubtedly move closer to yours as a result of your individual team member’s contributions and personal / professional growth. Everyone has to win!
- Do they know your goals? When you share your own goals with your team, you’ll build trust by connecting with your people. When you care about someone, you’ll do whatever you can to help them achieve their goals and you’ll celebrate with them when they win. If you have the right people on your team, they’ll be fueled with passion to help you achieve your goals…especially if you return the favor and do the same for them!
- Do they know what’s in it for them (beyond just a pay check)? What do you think would happen if your people were just in it for the money and your toughest competitor offered them each an additional 50 cents an hour to come over to their place? I guarantee you’d lose most, if not all of them. Employment can’t just be about a “paycheck” or your people will look at their work as a commodity. Instead, allow your people to be part of the entire process so they can meet their own needs relative to personal and professional growth opportunities, recognition, and purpose. Jack Welch (former Chairman of GE) said, “You pay a person for his or her hands, but they’ll give you their hearts and minds for free…all you have to do is ask!” Why would people give their “hearts and minds for free?” Because they want to! It’s meaningful to them. And what’s the result for you? A passionate team working with energy of purpose to make your company even more successful. So why wouldn’t you go out of your way to give your people the opportunity to be part of something much bigger than themselves individually? Using the Visa Card tag line: “Your paycheck is $X. But personal and professional growth, recognition, and purpose: Priceless!”
- Do they understand how a business makes money? It’s obvious to business owners how a business makes money…or loses it. You see the income statement. You know how much it costs to produce your product or service. You know the difference between gross profit margin and net profit margin. You know the impacts of insurance costs, taxes, repairs, maintenance, marketing, legal costs, accounting costs, production waste, and other costs that are often “invisible” to your team members. And you may think your team members know all this, too. But the fact is they probably don’t. They don’t know because you haven’t shown them! When you teach your team about how a company makes money, you’ll arm them with an awareness that will make them sensitive to the importance of every dollar, rather than thinking that a dollar here and there doesn’t really make a difference. I strongly suggest you read the book, The Great Game of Business, by Jack Stack. And then put your new or refreshed knowledge into action!
- Are they in-tune enough with your business to be able to identify and fix the many, little operational holes that money pours through every single month? Again, unless you’re showing them where the money comes in and where it goes out of your business each month, then they can’t possibly be able to find the little profit holes in your business. They’ll find the big ones, for sure. But most profit drains in a business aren’t big ones. The biggest profit hole is the cumulative effect of many small profit holes that money pours through regularly. When you share critical financials with your team, they’ll be able to help you identify and plug those little profit holes. This will have a dramatic impact on your net profits! Again, when you read The Great Game of Business by Jack Stack, you’ll learn much more about this.
- Do your customers still feel as loved by you as they used to? Have you taken them for granted in recent years? Those two questions go hand-in-hand. It’s natural for people to take what was once a blessing and grow so accustomed to it that they end up taking it for granted. You know the old saying: “You don’t know what you’ve got until it’s gone.” And that can cost you dearly in business and in life. So make sure those long-time friends (customers) still feel how special they are to you.
- When’s the last time you talked to your best customers about their business? Do you know what their challenges are? Do you know what their goals are? What do they love about your product or service? How would they improve it if they could? Imagine how powerful it would be if you understood your customers’ business challenges. You would relate to them on a whole new level. With that information, you may be able to customize your product or service to help them solve their problems. Or maybe your billing practices, ordering procedures, quality control, or delivery practices could be improved upon to add more value to your customers. A lot of business owners try to think of how they can improve their value and better differentiate their businesses from the competition. But why guess when all you have to do is ask?! When you understand your customers businesses, their goals, and the challenges they have, you’ll become much less a commodity and much more a value driver. For decades we’ve heard businesses say they “partner” with their customers. Really? Honestly ask yourself the questions that are in bold-print above and then ask yourself one more: “Are we really partners, or am I just a vendor?”
- What would happen to your company if you stopped working there today? If the answer to that question is, “My company would fold,” then you haven’t really built a business. Instead, you’ve built a job for yourself. This means that the value of your company to someone else is diminished to the amount they’d be willing to pay for your fixed assets and for having the ability to have your job. I know that’s a bit of an overstatement, but really, if you don’t have depth and if your business is 100% dependent on you, then you don’t own your business any more than it owns you. There’s no freedom in that and honestly, you’re diminishing your company’s value significantly. If this describes your company, then here’s your action step: Make a list of all the reasons why your company would fold if you went away. Then, work with your team and/or a business coach or trusted advisor to help you create and then execute a plan to make the business less dependent on you. If you’ve raised kids, then you already have experience doing this…unless your 34 year old is still living in your basement with no intentions of ever moving out!
3. Make a list of the things you’re currently doing yourself that you could pass off to someone else to do –including outsourcing business functions- so you can free up some of your time to work “on” your business. Then, pass those things off! As you’re doing this, you may be tempted to not pass something off because nobody can do certain things as well as you do. Don’t let that stop you! There’s a reason nobody can do certain things as well as you can; they don’t have the experience you do. And they’ll never get that experience until you give them the opportunity. So do it! Mistakes will happen, but that’s okay. In the end, you’ll have a business that can run without you and that is how you create a business that works for you and is also much more valuable than one that requires you. Remember- if your business requires you, then you don’t own the business any more than it owns you!
To your ultimate success,
Jon Denney | The Professional Business Coaches Alliance
