The Gap
For most business owners, there’s a giant gap between what we EXPECTED running our own business would be like and what it’s REALLY like.
When we decided to take the plunge and start our own business, most of us hoped that success would bring freedom to work on our own schedules, a level of financial abundance that our jobs couldn’t provide, and the fulfillment that comes from knowing that you’re making a positive difference for your clients.
Unfortunately, when you look at the experience that most small business owners are actually having, you really don’t see overflowing financial abundance, total fulfillment and satisfaction, or the kind of freedom that we imagined we were creating for ourselves. In fact, you see a whole lot of the opposite.
More often than not, business owners are tied to their computers and phones at all hours, struggling to make ends meet financially, and spending most of their time doing everything OTHER than what’s most fulfilling or inspiring.
And why is this all so predictable? What are we missing?
Stop Building a Job
The reason is that most entrepreneurs are fundamentally confused about what it takes to build a business.
We’ve grown up believing that the primary ingredients for success in business are hard work, intelligence, and maybe a dash of luck. By the sweat of your brow and the superiority of your thinking, it’s assumed, you’ll beat the competition, prove the doubters wrong, and rise to the top.
And of course, success in business does require hard work and clear thinking.
The problem is that most entrepreneurs are applying their hard work and focused thinking to the wrong things.
Imagine back to the 1940s when the McDonald brothers started their first hamburger stand in San Bernardino, California. They opened the doors and started flipping burgers, and people loved them and the quick service they offered.
But where would they have gotten if they thought the key to success was flipping more burgers faster? There are only so many hours in a day, after all. If they thought that starting earlier in the morning to make more milkshakes, more fries, and more burgers was the answer we wouldn’t have a McDonald’s on every street corner in America today. (Which, of course, would be a great thing… but that’s not the point of this story.)
There’s no possible way that you are going to achieve your vision of freedom, financial abundance, and fulfillment by answering more phone calls, handing out more business cards, making another appointment, or working longer hours.
The very best possible outcome down that road is that you’ll create a JOB for yourself. Maybe it’ll pay ok, and maybe you won’t have a boss. But you can expect to be frantic, always maxed out and to have a hard ceiling on your financial future. After all, there are only so many hours in a day.
Working harder and faster to do more WORK is not business building. Its job-building and ‘being your own boss’ is never going to get you what you set out to get when you started your business.
Now maybe this sounds familiar, and you know where I’m going with this, and you’re saying to yourself ‘that’s not me, I have employees that do a lot of the work’ but stick with me because it takes more than simply getting other people to do the doing of your business for you.
So, if working harder IN your business is not the answer, what is?
Start Building a Business
The answer is, of course, working harder ON your business. That is, to focus less on doing the work and focus more on building systems and processes that are designed to do the work.
Building SYSTEMS is the work that is the actual building of a business. You will never perform enough services or sell enough gadgets to build a business because those things have nothing to do with business building.
Business building is system building.
The McDonalds brothers did not flip-burgers their way to success. They (or, actually, the guy who bought the brand, Ray Kroc) built systems and processes for burger flipping and fry frying and hat wearing and napkin dispenser refilling, which he cumulatively called The McDonald’s Operating System and which he taught at Hamburger University to over 80,000 franchisees. Even today, McDonald’s is one of the top ten most valuable brands in the world because they built a business, not more burgers.
Why Systems are Good
So, let’s consider the value of system building specifically: why are systems better than not-systems?
Systems are Predictable
Imagine running a bakery without a system for baking cakes. Every day the cakes would come out a little different. Some days they’d be great, but sometimes they’d probably come out a little flat. Some customers would love your cake and come back, only to discover that the next time it didn’t turn out so great. Even if they got lucky twice, it would be only a matter of time before they got a dud cake. This is no way to run a business.
The same is true in every area of your business. If you follow up with a new lead differently every time, then the experience you’re delivering is going to be hit and miss. Some clients find you prompt and professional while others feel like you’re dropping the ball and maybe can’t be trusted with their business.
If you were to do your accounting a new way each month… well, you can imagine.
In order to have any consistency in the products or services you deliver, there must be ‘a way’ you do it every single time. An operating system for your business. For many small businesses, this happens naturally out of habit and ‘the system’ is never clarified or written down. That’s a shame, because when they are clear and written down…
Systems are Delegate-able
Until you’ve got clear systems in place, you are doomed to one of three possibilities:
- Doing it yourself.
- Being frustrated that your employees don’t do it right.
- Being hostage to an employee who DOES do it right.
Here’s how this goes.
When you start out, you do everything yourself. You answer the phones and set the appointments and perform the service and sell the goods. You are the best at it because this is your baby, you’re smart, and you care.
But eventually you run out of time in the day to do it all and you decide it’s time to bring on someone else to help out. You assign them some work – answer the phones and manage the appointments – and hope for the best.
The first person you hire stinks at this. They can’t get it right. Appointments are double-booked or forgotten entirely. People show up at the wrong times. It’s a mess. You are frustrated beyond belief and can’t understand why this new person can’t get it right. You decide they must just be dumb.
You suffer through until they go find another job that’s less stressful.
Then you hire a replacement… and you strike gold. They’re awesome. Not only do they manage the phones and appointments, they’re great with your customers and they even start managing billing and the books. It’s a miracle. You are relieved and feeling good about yourself and your business.
A year goes by. Life is good.
Then one day, your employee comes to you and says they’ve gotten another job offer for twice the money.
You panic. You can’t afford to pay them that much, but you also can’t imagine running your business without them. You literally don’t know how to do their job. (What’s the login for the new appointment system they’re using, and how does it work?) Worse, you wouldn’t have time to do it even if you did know how.
You realize that your employee has you over a barrel. You have to pay them double and beg them to stay or risk having your business fall apart.
You have just learned – like almost every entrepreneur before you – the difference between delegating responsibility and abdicating it.
Without clear systems, you can not successfully delegate an ongoing responsibility. You can turn it over and get what you get, leaving yourself at the mercy of your employees.
With clear systems, delegating responsibility becomes easy. Training someone who has the skills required for the job becomes a simple matter of orientation. Expectations are clear.
And you can rest easy knowing that the job is getting done well because…
Systems are Measurable
When things are done the same way each time, they become measurable in a new way.
For example, if your sales presentation is done differently every time you do it, then you can’t possibly know what’s working and what isn’t. Sometimes you’ll make the sale and sometimes you won’t. Some salespeople will get dramatically better results than others, but you won’t know why or how.
On the other hand, when you write down and train a new sales team member how a presentation is done in detail, then you can reasonably expect them to (eventually) achieve results that are pretty close to others who have gone before them. And you could expect them to take a similar number of calls each day or week, to manage a similar number of leads.
You could also expect a new baker to make a nice fluffy cake every time, just like you did, if the recipe were detailed enough and the baker had the required skills or experience. And you would know how many cakes a baker could be expected to make in a day. And how many people walk through the door on a typical Tuesday, and how many cupcakes get sold on an average week.
Your entire business could become something that is measurable in detail. Looking at those numbers, you would quickly be able to see when everything and everyone is operating normally, when something is wrong, and when it’s time to step in and make some changes.
Best of all, when you made those changes, you’d know if they were working or not because…
Systems are Improvable
When you’re able to measure the details of your business, you suddenly have a whole new ability to improve things.
Sticking with the sales presentation example, you might know that your current presentation inspires, on average, 25% of the prospects who hear it to buy your main product. Armed with this knowledge, you could try a new style of presentation or share the benefits in a new way or shorten it or make it longer. Pretty soon, you’d be able to measure your new results and determine whether the changes you made are an improvement over what you were doing before.
From there, you could try again and, step-by-step, experiment your way to a much more effective presentation.
Or a better cake. Or better packaging or customer service or advertising.
Without systems, you are guessing at what works and what doesn’t, who’s good at their job and who’s not, and what your clients like or don’t.
With systems, you have the ability to create a measurably better business over time by using the one strategy that is time-tested and proven to work in ALL businesses: trial and error.
Systems are Scalable
When you don’t have clear systems in your business, growth is extremely challenging. Since delegation without clear systems is hit or miss, you’ll find yourself overwhelmed trying to keep things from falling apart all the time. Quality will suffer, customers will notice, and everything stops being any fun at all.
Once you have systems that are predictable, measurably working, and clear enough that you can delegate them successfully, doing more becomes a simple matter of throwing resources more at it.
If you want to bake more cakes, hire more bakers. If you want to manage more leads, hire another salesperson. Growth becomes a choice.
Better yet…
Systems are Automate-able
A famous investor named Marc Andreessen once said that “software is eating the world.” What he meant is that industry after industry is being upended by companies using software to automate systems at a previously unimaginable scale.
Amazon uses software to sell books, LinkedIn to do recruiting, Apple to sell movies and music. Pixar makes movies with software. Skype makes phone calls with software.
In every industry, even yours, companies are replacing high cost systems (managed by people) with low cost, high volume systems managed by software.
Salons and yoga studios are booking appointments and selling passes online. Restaurants are taking reservations online. Coffee shops are taking orders and payments online.
Of course, not every system is automate-able, but for those that are (and it’s more than you think) employing software to reliably, instantly and inexpensively run things can be a game changer.
Systems are Sellable
Finally, and possibly most importantly, systems create massive value in your business.
Companies that are run by the seat of the owner’s pants are virtually worthless. Any prospective buyer or investor needs to know that if or when you go, there’s a viable business left behind. Having a couple of well-trained employees is cold comfort to a new owner who knows that any employee can leave at the drop of a hat.
To a prospective buyer, systems that are documented in enough detail that they’re easy to follow and easy to train are, as much as the customer list or anything else, what they are buying. Systems ARE the business.
So, in the truest sense, the building of systems is the actual stuff of business building.
How?
So, the value of systems is clear. What may be less clear is how to actually get such a daunting project done and done well.
In the next article, we’ll cover where to begin, how to document, who should document, and what needs to be included. We’ll share a link to our system documentation worksheet and show you specific examples of what a good system looks like.
And in part three, we’ll share how we manage the hundreds of systems we have at Ontraport, how we report on them, and how we improve them over time as we grow. Stay tuned.
