Organizing Your Business for Success Part 1A

Planning Your Way Out
Organizing your business part One-A
Monday November 14, 2005

Writer’s note: I have begun a multi-part series called ‘Organizing Your Business for Success’ and posted part one. This article plus several additional parts were written by me in 2004 for a group of investigators, repo-men, and skip tracers throughout the world and received it’s fair share of success. I will be interjecting these applicable pieces along with the new articles to give you a comprehensive guide to managing your business instead of being mired in it. Thanks for reading.

This article will help you begin to look at your business as an investment and not as a job.
Planning your way out of your business without losing the income your business provides or the ownership you have takes planning.
I am a business consultant who owns a couple of businesses. I spend time planning, writing, and designing how a business has to be designed for it to run on its own.
Designing a business that runs on its own does not mean you get to lie around and play while others work but it is meant to specify the kind of work a business owner should be doing.



Part One: Business Systemization and Franchise Modeling
Most entrepreneurs are doing the wrong kind of work.
Business owners should be on top of their business instead of in it.
If I am confusing you with cliché statements, I am sorry.
Business systemizations and franchise modeling are pretty much the same but their meaning is easily lost because 90% of businesses do not follow the two methods that have made Merry Maids, McDonald’s, Mrs. Fields Cookies, and many others into multi-million dollar organizations that have long outdistanced the life or capabilities of their original owners and run on their own.

For this week I want you to weigh the substance of the following story.

Year 100 BC.
In ancient Rome there stood a village near the country of Gaul. This village sat between two mountains and for centuries had a stream of water that ran down from a mountain lake to a central pond shared by all who lived there.
One night while the village slept a powerful earthquake struck causing a lot of damage. Many homes were snapped apart as well as the central meetinghouse. But one piece of destruction would not be known until morning when the ruffled villagers desired bathing and drinking water for their families; the stream was no longer running and the pool which had never seen a loss of its source was now empty.
Many wells were dug but no source worth drinking could be found.
A meeting was called and soon two young men were appointed to seek out the problem and a solution.
Aquatis and Domino, both recent returns from the city of Rome and eager for the challenge that would begin the next morning.
Their job was to figure out what had happened to their stream and once ascertained they would have to figure out how to bring other available sources of water into the village well.
The first leg of their journey followed the stream bed that brought them to the mountain lake a half days journey away.
The lake’s source of water was deep beneath the ancient volcano on which it stood. Now the opposite side of the cone was gone and the water with it. Had the damage been on the side facing the village, all would have been killed in the rush of water filling the valley; sweeping all in its path to their death.
Both men sighed, turned away, and sat down. Aquatis and Domino thought about the problem and began scanning the area. Down the valley, along the eastern flank of the village sat a gorgeous blue lake. After a short rest the men continued on their journey.
Arriving at the lake both men walked its perimeter and found it served neither village nor farm save the many wild animals that were drinking from it.
The diameter was twice the distance of the mountain lake and after a length of rope, tied in segments, and lowered by a weight could not reach the botton, it proved to be very deep.
Aquatis and Domino drank heavily and drew silver cisterns full of the water to bring to their village.
Again a meeting was held to honor both men and to test the water. The water was more desirable than their former source. The elders called Aquatis and Domino and said a large brick well would be built where the pool once stood and they both needed to get the water here as soon as possible. They would be paid for the water they supplied.
To prevent a battle over who ran what or who collected what, the elders ordered both Aquatis and Domino to start separate operations and provide the water.

Domino began his business immediately. He organized his family members including his sons, many cousins, uncles, and aunts to begin making the journey with clay buckets and containers to bring the water from the lake to the well.
For four months Domino charged sizeable fees for his labors while he and his family traveled the two miles many times per day to fill the well.
In the fifth month, Domino ’s problems began.
First his grandfather who took care of all the ledgers and journals died. So at the end of his day, Domino began tackling the books.
The next week one of his sons was bitten by a snake and could no longer work as his leg became infected and was amputated. Domino had to create a temporary new route. His family suffered several broken legs and arms from the falls over the uneven ground. Domino also had to hire an exterminator to remove the nest of snakes.
Now Domino increased his labor time to make up the shortage and continued doing the books when he was done.
One by one, Domino’s family dropped from the business. Either through problems with getting paid, illness, or plain fatigue, the family labor force was now gone. He tried to hire several laborers but the pay wasn’t equal to the work and complaints as to how the water was drawn and filtered began from the sediment, bugs, and branches that were now in the well water.
Domino now exhausted from the extremely long days missed the ledge crossing coming back from the lake, fell into the ravine, and broke his neck.
Eleven months from rich businessman to death. Domino's family having not the drive or desire to continue the business closed all operations at once.
As the village mourned, Aquatis, Domino's old friend came to console the family. It had been some time since anyone had seen him.
The elders seeing Aquatis for the first time in months went to him and pleaded for a reason for his absence.
Aquatis said he would explain everything in the morning.
Early the next morning the village shook with a bang. All the citizens marched into the center in their morning clothes expecting to see more damaged houses but to their surprise they saw a fountain of water pouring out of the end of a brick wall that had the top layer of bricks u-shaped to allow the water to have direction while it emptied into the well.
Eleven months before when Aquatis began his operation, he understood that he and his wife would tire too easily laboring to bring the water to the well. As the village grew the needs of the people would only increase. For the next two weeks Aquatis drew out a plan.
Then for ten months, Aquatis laid down a series of pipes, drilled through solid hills, and created his brick waterway to bring the water from his collection well that stood halfway between the lake and the village. In that separate well sediment and branched were removed by a series of separators that would push the water upward and onto the brick waterway that flowed into the village.
A test site was setup to bring water to his house and the houses of his brother and sister. Several types of piping and cement were found faulty and Aquatis made the changes and tested again.
Once the system or methods of aquiring and delivering the water were sorted out, Aquatis finished the distribution network to within a few yards of the well until last night when it was finished for this morning's grand opening.
Aquatis sold his water for a penny per gallon but it flowed constantly, on its own with minor labor to free debris and fix leaks.
Within a year, Aquatis Ductus set up the Apian Aqueduct Company and created similar operations throughout the Roman Empire. The water flows without stopping and has continued in operation, in some respects, to this day.
Aquatis Ductus made a fortune many times over without his labor. He makes money while he sleeps, he makes money while on vacation, and he continued to make money when he retired.
***
“Most Entrepreneurs are doing the wrong kind of work!”
What kind of work are you doing?
See you next week!

***This story was inspired by Michael Gerber who wrote the E-Myth.









Please send all feedback to billritchotte@bjgordonandcompany.com

Organizing Your Business for Success Part One

Organizing Your Business for Success

Are you managing your business or is your business managing you?

Part 1: Businesses That Work You.

American businesses in the 1980’s adopted the Ready, Fire, Aim attitude in the conduct of their businesses.

Junk bond and enormous real estate deals sent people to jail and large established companies into receivership. Companies left and right were going ahead with plans, construction, buying, and funding without ever first justifying the reasons for doing so.

Sadly a huge recession in the late 80’s was totally forgotten in the late 90’s when it was repeated all over again.

Money was handed left and right to companies that gave a great talk to a room full of investors who fronted billions to startup Internet companies but had nothing in the way of plans, goals, and timelines to justify the funding; the bubble burst again.

Where do you sit in all of this?

Are you a person that effects plans or someone who is affected by them?

You have come here to read something new about building a successful business and I congratulate you in that effort but if you have already opened your doors and are serving people in a full time effort then it’s too late for you to take the warning in this article. You are up to your neck in it already.

If your reply is, "I am minding my business quite well thank you," then you already know the secrets to building businesses that work and do not need this but as a refresher.

There isn’t a best place to begin my lecture because I get so excited and passionate about the subject of business and process management. If you have worked in large companies you may have heard this term, process management, or the alternative, businesses systems or just systems.

When you take a job in a firm with systems you are given a full course or manual as to how to perform every aspect of your job; what to wear, cleanliness, attitude, performance guidelines, detailed instructions, management trees, etc. You are given everything you need to perform that job successfully.

A set of systems, whether written for people or written for automation, are designed to run your business smoothly, consistently, and successfully.

The systems run your business.

"I thought I ran my business," says you.

The sad truth is you do and this is the problem I want you to avoid.

Writer’s note: This is a touchy and confusing subject with many people who are small business owners. I must and will explain the difference between running your business and minding it.

Building a business or replacing your job?



Many people who go into business are looking for a way to replace their job. They come from all over the trades and professions with one common emotion; they hate their bosses or companies but love their work. They want to do it for themselves and let no one tell them they have to stay late, work harder, take the measly pay, etc.

Let’s take the case of Jillian, a master plumber. She loves her job but hates the low pay and stupidity of her boss. She is just fed up. She has changed companies twice in five years and she is ready to go for it on her own.

Jillian leaves her current job with plenty of advance notice, buys a van, tools, advertising, and a phone and begins to build her business.

She is well known in her community and it isn’t very long before Jillian is getting clients and charging about 90% of what her former employer would charge.

The facts about Jillian’s Plumbing and Heating are good and positive. Over the next year she builds a client base that brings in twice the income she had for only 30 work hours per week and another 10 hours in paperwork.

Now you may be saying what’s wrong with this.

I say there is nothing wrong…at this point.

Jillian would love for this work schedule to go on forever. Life, ironically, does not like to stand still.

If you could be where Jillian is right now could you refuse the referrals that are about to come to Jillian’s business from all the satisfied clients?

Could you pass up just 10 more hours of work? 20 more hours?

I am going to stay positive and say Jillian is smart enough to just take no more than 10 hours of extra work. She sets her schedule each week and cuts off at exactly 40 hours give or take 30 minutes for jobs that may go under or over the time she set.

What is happening to the people who are being referred to her?

Some are disappointed they cannot fit into a convenient schedule but they know how hard it is to find a great plumber so they wait. Others are going elsewhere.

Again I will be totally positive and say this has no ill effect on Jillian’s business or her greed, which she has kept tempered.

But slowly without Jillian realizing it, her 40 hour limit has crept over the last four months to 50 with paperwork taking up at least 15 hour per week.

Plumbers also have emergency calls. Jillian has been spared such calls up to this point but as the winter of her second year creeps in the calls start. Jillian now is rising at 3 or 4 am 2 to 3 times per week. In two months that figure will rise to 3-4 times per week.

Again I will remain positive but as you can see no matter what you do a successful business will not stand still.

Jillian has entered this business with her own rules in mind but the laws of business are as immutable as the laws of physics.

Jillian successfully replaced her boss but as anyone who is not a fool knows, the client is the boss.

Jillian built her business on her reputation solely. She is the reason why so many people want her.

She is the focus of her business.

Without realizing it, her personal mannerisms and habits are so loved by her clients they think of no one else.

Can you think of a business that you frequent just because a certain person works there that you like?

Ninety percent of us do it.

A body in motion tends to stay in motion until acted upon by an outside force.

A business in motion tends to do the same thing.

Early in Jillian’s third year an outside force has crept upon Jillian called exhaustion. In the middle of the night at one of her best customer’s house she places a rather heavy metal toolbox on the edge of the stairs near the boiler. The box is not set right, teeters, and falls on Jillian’s right arm while she is soldering a broken pipe.

The result is a broken right forearm and a burn on her left hand.

I want to note there are far worst or lesser things that could have happened but in any case this is a showstopper. Jillian can not do her job for 6 to 8 weeks.

Does Jillian have employees? No

Does Jillian have a backup plan? No

One of two things is going to happen:

Jillian hires the nearest available master plumber.
Jillian does nothing but explain the situation to her current clients but doesn’t lose them all. She loses 25% due to time constraints but still loses 6 to 7 weeks of income.
Which one do you think Jillian does?

In a perfect world, Jillian had saved enough money in the first two years or bought workman’s compensation insurance and could ride out the eight weeks comfortably. She could have the greatest clients in the world and all of the current invoices were paid up in full.

In a perfect world, Jillian would or should have chosen number 2. I say should have because if the prospect of losing up to 8 weeks of income could pass by your own desire or greed, would you do it?

That decision would have reduced Jillian’s current hours down to the original 40 she desired, it would have slimmed her operation, and reduced her overhead in inventory. At the end of her injury she would still have a company to run.

Instead, Jillian chose to hire the only available master plumber she could find. She was in such desperate straits, in her mind, that she called her old company where her friend in HR gave her a name of a plumber that came across her desk.

The plumber John showed up with his pickup and tools ready for work. With only a cursory glance at his licenses (drivers and plumbers), and arranging on a rate she would pay him, she sent him on his way to the first job.

To Jillian, she was getting the job done and for a couple of weeks the business ran quite smooth with no complaints and no problems. But after the 2nd week the trouble began.

Clients called with a few minor complaints of shoddiness in both the work and manner of Mike’s dress. There was a call or two about lateness. And though this type of behavior has been documented for years, as leading reasons for failure of a business owner, they were not the reasons that would take the toll of Jillian’s Plumbing.

On a late job in the 4th week, Mike slipped down the front stairs of a client’s house. He reported to the hospital. The doctor’s diagnosed Mike with a concussion and a set of slipped vertebrae in Mike’s back and neck.

Mike’s wife called about his workman’s comp the next day and was informed by Jillian that Mike was a contract employee and she did not carry insurance for his injury.

Mike’s wife made a complaint with the State of NH and Jillian’s business, which wasn’t a protected corporation, but a sole proprietorship was fined and sued by Mike and the State.

The business closed. There was nothing left after Mike’s accident swallowed it whole.

As a master plumber Jillian had learned all the laws, codes, and skills necessary to do her job perfectly. However, she did not learn to form and run a business properly.

In my example, I gave Jillian a lot of freedom from the usual problems of starting a business. I gave her a straighter and more reliable road to travel so you wouldn’t think I was so negative.

Jillian could have had any number of problems I didn’t mention:

Slow paying customers
Not enough money for equipment
Discrimination
Broken down equipment or vehicle
Any number of personal problems.
Perhaps I should have included one or more of those things, but the reason I didn’t is no matter how hard Jillian worked she still failed.

If not properly prepared you can be the downfall of your own success.

The Hard Fact

:
The Department of Commerce says only 10% of businesses survive their 5th year. Only 10% of those companies who survived their 5th year will make it past their 10th.

Jillian is now at a new job that earns more money than her previous employer paid her and she is the senior manager in charge of all the plumbers.

Jillian ended up posting $50,000 in settlements and fines and had to take out a 2nd mortgage on her house to do so.

It was a very hard lesson to learn.

That was an example of a business managing you.

Remember a business once going strong wants to grow and stay strong. It begins to take on a life of it’s own.

How is it that the owner of the bakery down the street has so much to do he can only take care of the one store while Mrs. Fields has more that a 1,000 stores across the country?

How is it my father could barely manage 5 apartments but Ed Soha didn’t have to lift a finger to manage his 600?

What are the differences?

What are you doing wrong?

This series begins to answer those questions.

This information is for you to think. BJ Gordon and Company can help you implement real world plans so your business is a lot more like your investment and not a job.

About BJ Gordon and Company

BJ Gordon and Company
in Manchester, NH was founded in 2002 as a consulting firm to aid new companies and budding entrepreneurs with ideas that would keep them from making the largest business mistakes most start ups make.
1. Not seeing their business as an investment.
2. Not seeing their business as an independent structure
3. Trying to replace their job with a business.
There are some very clear reasons why one business owner can own and manage 100 or more stores and why one business owner can barely manage one.
The Department of Commerce says businesses organized with the mistakes above have only a 1% chance of lasting 10 years. But the DOC also says a company who does not make those mistakes and implements sound business processes or systems has a 75% chance of making it big.

Our mission is to put you in that 75 percentile range.

For close to 15 years our consultants have lent their knowledge and skills to the Fortune 500 and 1000 companies throughout New England and continue to do so today.
We urge you, the up-and-comer, to use us as an advisor for ideas and influence.
Your initial consultation (2 calls and 10 emails) is free. After that, if what you hear is helpful and you want to continue our talks, we charge $39.99 per month.
Other service fees come in when it's time to implement those ideas into real plans.

Core Services:

Business Process Management
Franchise Modeling:
Many entrepreneurs are mired in their business wondering what happened to
their time and energy.
What do you do when your business is managing you instead of you managing your business?
Production Modeling:
Spent any time inventing something great; something that's going to change
the world?
But when its ready to go into production you can't have engineers like you building them one at a time.
Understanding how to break down your creation into its most basic parts allows a greater access to labor and decreased costs with high output in production.
Risk Analysis:
Hiring a few people to perform multiple roles could cost you thousands to millions in losses.
Are you cutting your bottom line costs or cutting your throat?
Your company is a living thing. Understanding the process flow and how it is managed will minimize your company's risk of white collar crime.
History has shown that managers account for 75% of all internal crimes.
Remember the Bounty?
If you have placed a lot of duties on too few shoulders and the stress is high, it could be years before you feel the effect of your actions but when it occurs you will have little chance of stopping the blood flow.

Marketing/Tracking/Reporting
Your business must thrive and grow.
Be on the move forward or be left behind.
What's your strategy? What's your plan?
Do you collect too much data or too little?
What do you do with the data you collect?
Mining the diamonds under your feet may be as easy as opening your database and
forming trends that have been there all along.

Database Programing/Performance
Companies today need information faster than ever before.
Do your SQL Drivers, the men and women who program your database, have what it takes to cut run times or create complex data queries that give you the information you want?
Clear concise information that's up to the minute or not?
What do your people deserve?

Here are some informational sites that I have been publishing. Hope you enjoy them:

• Additional information about VOIP
  
  
  


• Aquariums: A lot more than a bowl and water.
  
  
  


• Art For Businesses
  
  
  


• BJ Gordon and Company Inc
  
  
  


• Business Process Management Step by Step
  
  
  


• Cellular Information Center
  
  
  


• Digital Camera Mania
  
  
  


• Dogs, Dog Carriers, and Dog Accessories
  
  
  


• Dream Vacation Rentals
  
  
  


• Human Resources Informational Site
  
  
  


• Internet Security Issues
  
  
  


• Lawyer Information Services
  
  
  


• Photography
  
  
  


• Poker Game Pros
  
  
  


• The Crystal Grove Gift Shop and Apothecary
  
  
  


• The Golf Pro
  
  
  


• The Martial Arts
  
  
  


• Virtual Pets Online
  
  
  


• What you need to know about Voice Over Internet Phone (VOIP)