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.
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.
posted by William J Ritchotte II at 7:31 AM
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