A 12-Step Program for Building Your Business

Many business owners complain that if they want something done right, they must do it themselves. They are a slave to their business. They want more than a job—they want a business that operates without them. 

Doing so requires many things. It requires employees (or subcontractors) who do the work properly. It requires sufficient leads to keep multiple crews busy. It requires sales skills to get the proper price. It requires procedures to communicate effectively and manage the business. 

Putting all of this into place can seem like a daunting task. While it is a lot of work, it is not an impossible. With the right tools, knowledge, and implementation you can create the type of business you want to own and operate. 

In this series of articles I will outline a 12-step program to turn your job into a business. You can progress through each step as quickly or as slowly as your time, ambition, and goals dictate.  The steps are:

1.             Developing a Plan– Before you start, you must first identify where you want to go.

2.             Managing your time– Efficient time management will help you focus on working on your business, rather than in your business.

3.             Production Procedures–Production procedures will ensure quality and customer satisfaction.

4.             Production Training–Production personnel must be trained in the procedures you develop.

5.             Production Compensation–The proper compensation system can increase productivity and quality.

6.             Marketing plan–A solid marketing plan will help generate sufficient leads.

7.             Tracking leads–Tracking leads is crucial to effective marketing.

8.             Two-step sales process–A two-step sales process will increase sales and profit margins.

9.             Differentiating your company–If you wish to charge more, you must offer more.

10.         Sales presentation–Develop a sales presentation that focuses on consumer education.

11.         Job Folders–Job folders are used to communicate to production personnel.

12.         Management–Work on your business, rather than in it.

Each article will outline specific goals and the actions necessary to achieve those goals. These steps are intended to provide a systematic process for bringing order to your business.  

Procedures will provide employees with guidelines for their work. It will provide mechanisms for quality control and customer satisfaction.  

A marketing plan, and method for tracking the effectiveness of your marketing, will help create a steady flow of leads. Differentiating your company and developing a consumer oriented sales process will help you sell more jobs at a higher profit margin.  

Finally, by improving communications with your production personnel you will be able to spend your time managing your business, rather than swinging a paint brush. By developing procedures for each part of your business, you can create the company you want to own.  

Focusing on Your Priorities

Much has been written about goal setting, and this article is not intended to focus on this topic. However, goal setting is integral to both time management and organization. 

The Definite Chief Aim is the big, long-term goal. It is essentially the final destination. It serves as the guiding light for the business, and all actions taken should be aimed toward the Definite Chief Aim. Both time management and organization will help us achieve our Definite Chief Aim more efficiently. 

Any long-term goal must be comprised of other goals—sub-goals. These sub-goals are hierarchical, that is, they are not equal in importance or significance. Consequently, we must recognize our priorities and focus on the most important of our goals. In other words, we must focus our efforts on those goals that will do the most to move us toward our Definite Chief Aim. 

Certain tasks, such as developing systems, are not particularly sexy and it may be easier to find other tasks to work on. Remind yourself of your Definite Chief Aim and the hierarchy of your goals. If we develop and implement systems within our business we can improve both our personal efficiency as well as that of our employees. Less effort is required to achieve the same results.

When the owner of the business can work on tasks that are not urgent but important, he can maximize his time management and get the greatest results for his efforts.  Identify the issues or activities that involve the greatest waste of time or create the most problems. Develop systems to achieve consistent results while eliminating the crises and time wasting activities. This will reduce stress, and create time to more to lesser issues.  As the primary time wasters are eliminated, use your time to address less significant time wasters. This process will allow you to slowly regain control of your time. It will not happen overnight, but sudden and dramatic improvements are possible. 

Stick to the process. There will likely be bumps in the road, but each effort that gains you time is priceless. The return on investment is exponential. If an hour of effort saves you ten minutes a day, you will have an additional ten minutes every day for the rest of your life.  © BEP Enterprises Incorporated 2007

Bottlenecks

Every business owner experiences problems and frustrations (bottlenecks) in the operation of his business. A bottleneck is anything that prevents us from achieving the results we desire. It may be jobs that go over budget, shipments that are delivered late, insufficient leads, poor performance, equipment that isn’t maintained, etc. Problems and frustrations seem to go with the territory when you own a small business. 

What if you could magically make your 3 biggest bottlenecks go away? What if you suddenly didn’t have to deal with the 3 biggest headaches in your business? How much better would your life, and your business, be? How much more would you enjoy running your business? 

I’m not a magician, and I won’t claim that the process is easy. But I suspect it’s a lot easier than you might believe. If you dedicate yourself for 30 days, you can likely eliminate or greatly reduce your 3 biggest bottlenecks. The key is to have a process. And that process involves several relatively simple steps: 1.       Identify the bottleneck—Name the problem or frustration.

2.       Identify the cause—This may require some probing. Don’t settle for the first answer that pops into your mind. The real cause may not be obvious.

3.       Identify the actions that will eliminate or prevent the bottleneck—What actions will lead to the desired results? This will likely require change.

4.       Write a detailed list of the steps involved—Make a step-by-step list of all of the actions involved in achieving the desired results.

5.       Train and implement those steps—Train the appropriate employees in the procedure. 

We can’t assume that our employees, vendors, or others will do things the way we want or desire. I used to think that they should and then I realized that I had never told them. I’m not a mind reader, so why should I expect anyone else to be? If we want others to act in a particular way, we must tell them. If we want certain results, we must train our employees. 

Consistent actions lead to consistent results. If the actions that are being taken are not getting the desired results, those are not the proper actions. If you are not consistently getting the results you want, you must change the actions. Only then can you take control of your business.

Time Management

Many small business owners complain that there isn’t enough time in the day. Between meeting with customers, picking up materials, supervising jobs, delivering products, doing the books, returning phone calls, and more, there always seems to be more do to than time allows. 

But the problem isn’t the amount of time in a day. There always has been and always will be 24 hours in each day. The problem is trying to do too much, that is, having more tasks to perform than time will permit. The problem is poor time management. 

Time is a resource. Unlike other resources, time cannot be replenished. We cannot purchase more time. Therefore, we must manage our time efficiently if we wish to accomplish more. There are 5 essential ways to manage time more efficiently:

1.       Delegate—Give employees more responsibility to free up your time. Picking up materials or routine paperwork are candidates for delegation. Assign mundane or routine tasks to others.

2.       Outsource—Hire others to perform certain tasks, such as bookkeeping or graphics design. Don’t try to do-it-yourself when it may be more efficient and effective to hire a professional. You are an expert in your field—hire those who are an expert in theirs.

3.       Planning—Make daily and weekly to-do lists. To-do lists help keep you focused and can help avoid forgetting important tasks. Planning your time will help you use it more efficiently.

4.       Prioritize—Focus on those tasks that move you closer to your long-term goals. Keep the big picture in mind. Spend your time on those tasks that require your attention and cannot be delegated or outsourced.

5.       Just Say No—Don’t over commit yourself. If you don’t control your time, others will do it for you. Learn to say know no rather than take on another commitment that will rob you of precious time and not more you towards your goals. 

The 5 methods mentioned above are methods for managing time more efficiently. To be most effective, each requires specific steps—i.e., a system. 

A system is an interrelated whole in which multiple parts work together to accomplish a task. In business, a system refers to the procedures by which the business operates. If those procedures are consistent, explicit, and integrated, they can lead to desired results. If they are contradictory, vague, and disconnected, results will be inconsistent. The same applies to time management.

If we wish to use our time efficiently, we must identify the specific actions that will lead to that result. And then we must undertake those actions. An example would be spending 10 minutes at the end of each day creating a plan for the next day—making a to-do list, identifying priorities, etc. If this was done consistently, each day would begin with a plan. 

By being pro-active you can manage your time more efficiently. Rather than allow outside events to dictate your activities, focus your efforts on those tasks that will take you closer to your goals. Anything that won’t help you accomplish your goals may not be worth doing.

Technician vs. Businessman

Many small business owners believe that technical competency will translate to business success. While some level of technical competency is certainly necessary, it seldom ensures success. 

A business owner may be good at fixing computers, baking pies, or recommending a travel itinerary. But there is much more to running a business than providing a product or service. A business involves accounting and finance, marketing and sales, production and delivery, management and administration, and much more. A business requires a broad skill set to function successfully. 

Certainly these skills can be hired. An accountant can be hired to do the books. A graphics designer can be hired to design marketing materials. A salesman can be hired to generate revenues. An office manager can be hired to oversee administrative functions. But many, if not most, small business owners wear all of these hats and more. 

Regardless, the owner must possess some level of knowledge regarding these areas. He is the final decision maker, and without a reasonable level of knowledge he will be unable to make competent decisions. In other words, his technical expertise will not help him when it comes to making decisions regarding finance or marketing. 

The failure to obtain this skill set—whether through personal education or by hiring others—is the downfall of many small businesses.  

To use a football analogy, the business owner is the head coach. The greatest head coach is not an expert in every aspect of his sport. His primary job is to hire experts, delegate responsibilities, and then organize the entire operation. He is responsible for the final decision making, but he does not need to micromanage every aspect of the team. 

This is true even of those football coaches who were stellar players, that is, superb technicians. An all-star football player will not necessarily make a good coach—the two roles require vastly different skill sets. 

The coach must be able to organize, teach, encourage, and lead. The same is true of a business owner.

Salesman as Consultant

No matter what business you are in, your success depends upon attracting and securing customers. Every small business owner is a salesman, whether he realizes it or not. If you do not sell your product or service, you will not generate revenues. 

Many business owners have a negative image of sales. They think of sales as high pressure and manipulative. They view sales as a confrontational encounter, in which the salesman tries to persuade a potential customer by any means necessary. But sales does not need to be this way.

Sales can and should be an educational process. The salesman’s primary function  should be that of a consultant. Regardless of your product or service, a potential customer comes to you because he has a need. He may need something delivered to the other side of the country, he might need information, he might need a widget. No matter his need, he is seeking fulfillment of that need.  A salesman’s job is to determine that need, and then propose a manner for meeting it. In some situations this may be very straightforward. In other situations, both the need and the solution may be complex. It may require considerable effort to even identify the need. There may be multiple potential solutions. No matter, the salesman must help the customer find the best solution.  Many times a customer will be uncertain as to his need. He may recognize that he has a problem or desire, but is uncertain what product or service will bring satisfaction. The salesman must ask questions, and listen to the answers. He must probe to find the customer’s motivation. He must seek information. 

Many times a customer will believe that he already knows the solution. He may have done research, previously experienced a similar need, etc. He may know (or think he knows) what he wants. In such a case, a conscientious salesman will still seek information. He will want to ensure that the customer truly receives the best solution. In either case, the salesman must first identify the need. Only then can he propose a solution. First he must obtain information. Then he must impart it. 

The sales process should be primarily educational. The customer should be educated as to the products and services that will meet his need. The customer should be educated as to why your company can provide that solution. The customer should be educated as to his options, and the pros and cons of each. In other words, the salesman should act as a consultant to help the customer make a wise purchasing decision.

Systems Development and Your Definite Chief Aim

If you were looking for a new job, you would likely ask your potential employers a number of questions relating to salary, benefits, insurance, holidays, vacation, etc. You would want to know what you could expect in terms of compensation and career opportunities. Have you ever asked your current employer about those issues? Have you ever asked yourself these questions? 

A business is a tool—a tool to help us experience the kind of life we wish to have. Our business can provide us wealth, or independence, or leisure time, or many other things. Our business is an unlimited opportunity. It can provide us with nearly anything we reasonably desire. 

Every tool has a specific purpose, and when used properly it can help us accomplish significant things. However, when used improperly, a tool can create serious damage or destruction. Unlike most tools, we get to choose what kind of tool our business will be. We can use our business for our purpose. That purpose is our Definite Chief Aim*. 

Unfortunately, many people start their business without ever clearly identifying what they want from the business. “Far too many business owners spend their entire careers not understanding the power of developing a Definite Chief Aim to guide and measure their personal and business goals,” says Mark Havens, President of the National Alliance of Professional Painters. 

Business owners might have some vague thoughts about money, or independence, or something similar. But few identify and document where they want their business to take them. “Until a business owner has a crystal clear idea of what his or her business can provide them personally, they are merely working a job,” says Havens. 

The key is to identify where you want your business to take you—what kind of tool your business will be. This is not an issue to take lightly or answer impulsively.  Ask yourself these questions:

• Why do I want to own my business?
• Why am I willing to work so hard and take on so many responsibilities?
• What do I hope to gain by investing my time and money into a business of my own?

Your answer will ultimately determine what actions you must take and what kind of business you will have. Your answers will determine what systems you must develop for your business. Few people would start a cross country road trip without a map and a plan. Yet a business is a far more complex endeavor. Before you begin that journey you should have a clear vision of your destination. Only then can you begin creating a plan to make that dream a reality. 

*From the In-Gear Business Management Seriesä, Ó 2005-2007

Business Failure and Fear

According to the Small Business Administration, more than 90% of small businesses fail within 5 years. Of those that survive 5 years, another 90% will fail within another 5 years. After 10 years, less than 1 out of 100 small businesses remain open. 

Why do so many businesses fail? 

Among  the most common reasons cited are insufficient starting capital and poor planning. Both can certainly contribute to the failure of a business. However, neither is a necessary cause of business failure—a business can survive with insufficient capital and/ or poor planning. 

A business is a dynamic entity. New products, new technology, economic conditions, consumer trends, and much more makes change a certainty in the world of business. Successful companies adapt to this ever changing business environment. Indeed, leading the change is often the path to success. This change has 2 components—one mental and one physical. 

The mental aspect involves conceiving of or embracing new ideas. It involves changing one’s perspective of the marketplace, procedures, or some other aspect of the business. It involves obtaining new information and knowledge. The physical aspect involves implementation—acting on the new ideas, information, and knowledge. It involves putting that new perspective into action. 

The failure to do this is what causes most small businesses to close shop. The failure—or refusal—to embrace new ideas and then implement those ideas is the primary cause of business failure. (Ideas without action are useless.) 

What then, prevents businesses from embracing and implementing new ideas? Why, given the statistics, do business owners refuse to expand their knowledge, and then act on that knowledge? 

The answer is—ironically—an idea, or more precisely, a set of ideas. 

Change necessarily involves an element of the unknown. While research and planning can certainly mitigate the risks involved, we cannot predict with absolute certainty the consequences of changes. Uncertainty breeds fear, and fear leads to paralysis.  

Fear is a natural response to the unknown. We fear what we do not know. A noise in the middle of the night can instill fear if we do not know its source. Our fear will vanish when we identify the source as a tree limb bumping a window. In other words, we overcome fear by obtaining information. 

On the surface, it may seem absurd to say that small business owners are paralyzed by fear. After all, owning a business is risky. But remember, most small businesses fail. It is one thing to take the risk of owning a business; it is another thing to succeed at it. There is a vast difference between uncertainty and ignorance. While we may not know for certain the outcome of an action, we are not totally ignorant of the consequences either. For example, we may not be able to predict the precise results of a particular marketing campaign, but we can make reasonably valid projections based on past experience (either our own or that of others). 

Successful businessmen learn to overcome their fears by obtaining the necessary information. Knowledge is power. Knowledge reduces uncertainty, and with it, fear. But knowledge alone is insufficient. We must act on that knowledge.  

The failure to act is a sign of remaining uncertainty. The failure to act is a sign of lingering fear. The failure to act is a consequence of not trusting one’s own judgment.  

Confidence is a crucial part of overcoming fear. A confident businessman evaluates the available information, makes a decision, and then acts. He takes calculated risks. He understands that failure is a possibility, but he takes measures to reduce the risk of failure. He trusts his own judgment, and acts accordingly.  

This does not mean that he never makes a mistake. Quite the contrary—he makes many mistakes. But he also keeps his eyes open as he moves forward, constantly obtaining new information, and re-evaluating his results. He is not afraid to act (or overcomes that fear when it exists), because he is armed with an ever growing body of knowledge. 

Businesses fail because of fear. Businesses succeed by seeking knowledge and having the confidence to act on that knowledge.

The Value of an Idea

What is the value of an idea? Some might say it depends upon the idea. Some might say an idea such as the internal combustion engine, or powered flight, or personal computers is a valuable idea. Each has transformed the way we live. Each has made life much easier and more enjoyable. 

I would argue that such ideas are worthless in and of themselves. Indeed, without action ideas have no power. Ideas without action are just idle thoughts, dreams, or fantasies. An idea derives its value from the actions that result. Business involves an integration of ideas and actions. It requires sound business principles, innovative thinking, and long-term planning. It requires execution, performance, and effort. It requires activity—both mental and physical. 

The goal of a business is to make a profit. Doing so requires good ideas and good implementation. Ideas without action are useless, and action without ideas is suicidal. Each of us desires certain things from our business. It may be more money, independence, or any of a number of things. Regardless of our individual desires, we must engage in certain actions if we wish to fulfill those desires. 

Consistent results are a consequence of consistent actions. Consistent actions come from embracing and implementing sound ideas. Sound ideas, when implemented, create consistent results. Rare is the business that consistently achieves the results it desires. Consequently, successful businesses constantly look for new (and better) ideas, or better ways of implementing old ideas (which are also new ideas).  

(In this context, “new” means new to the business. A proven business principle is not new, but it may be new to the business.) Successful businessmen constantly look for new ideas. Business is a dynamic affair, and if a business isn’t moving forward, it is moving backward. The implementation of new ideas is what drives businesses forward. 

Businesses pay hundreds, thousands, sometimes millions of dollars for new ideas. They do so because new ideas are an investment. New ideas, when properly implemented, can lead to great results. In other words, a successful business invests in new ideas because they can help it achieve the results it desires. Certainly, there are bad ideas. There are ideas that, no matter how well implemented, can only lead to bad results. Curing a cold with a massive dose of arsenic is one example. And equally certain is the fact that good ideas will not guarantee the desired results. But implementing good ideas—such as sound business principles— stands a much greater chance of success than muddling along. 

Most small businesess fail. More than 90% do so within 5 years. Most small business owners are competent technicians, and poor businessmen. Competent technicians think differently than competent businessmen.  A technician seeks to reinvent the wheel. A businessman seeks to learn how wheels are made, and then find a better way. A technician repeats what he was taught. A businessman seeks to improve upon what he was taught. A technician does it that way, because “that’s how it’s done.” A businessman does it that way because it is better. 

Are you happy with the state of your business? Is your business producing the results you desire? If your answer is yes, then good for you. You are rare. 

If your answer is no, then you need new ideas, and you need to implement new ideas. If you wish to get new ideas, where do you intend to find them? How do you intend to implement them? How will you make the changes necessary to transform your business and produce the results you desire? 

These are not hypothetical or rhetorical questions. These questions go to the very heart of what it means to own a successful business. Your answers will determine your future. So, what is an idea worth? What would you pay for an idea that brought you less stress in your life? What would you pay for an idea that helped you move towards your goals? What would you pay for new ideas? Your answers will determine your future.  

More importantly, your willingness to implement those answers will determine whether you move forward and achieve the results you desire, or become another small business statistic.

Using Systems to Solve Business Problems

If you are like most small business owners, you are frequently experience frustrations and/ or undesired results. Employees who do not always perform as you would like, late deliveries, payments that aren’t collected promptly, and a myriad of other problems can torment the owner of a small business. 

Most problems in a small business result from 1 of 2 causes: a lack of systems and procedures, or the procedure was not properly followed. 

Consistent actions lead to consistent results. If we know the results we desire, and the actions that will lead to that result, successful performance is simply a matter of following the proper course of action. In other words, if A causes B, and we want be, then we should do A. 

This may seem like an over simplification, but the truth is, actions have consequences. And those consequences are usually predictable. Thus, our business can achieve consistent, desirable results if we consistently take the appropriate actions. 

Undesired results are a signal that we have not taken the appropriate actions. When we experience a problem or frustration within our business, we should view it as an opportunity to correct or implement a system.  By developing and implementing systems in our business, we will consistently take the actions that produce the results we desire. Systems provide the guidelines and the standards for those actions.