In my previous article, Small Business Planning Steps for Growing Your Business I discussed various small business planning steps that you can use to grow your business. I mentioned that in having worked with over 1,200 businesses in the past 15 years I have found that there are basically two ways in which a business can operate, namely, a fruit-stand model and a factory model. At the end of that article I looked at four small business planning steps that you can go through to start to take your business to the next level and move from a fruit-stand model to a factory model.
This fruit-stand versus factory model issue plays out in another way. So many business owners fall into the “tyranny of the urgent” trap where they don’t take the time to develop, debug and optimize the processes and products in their businesses. Many times, owners get caught in this syndrome because they are so busy with the business and the demands of getting the work done, which is in essence “working in the business”, that they don’t take the time to “work on the business.”
As a small business planning firm we have found that while it takes more time and effort on the front end of a business to develop the systems for factory-type business, including adding additional “products” to sell, the benefit is the business ends up not being dependent on the business owner for its daily operations and you avoid falling into the tyranny of the urgent syndrome. I have found the following are the typical attributes of fruit stand versus a factory-model business.
Exhausting fruit stands:
- Not fully systematized
- Not scalable and difficult to grow to the next level
- Overly dependent on the business owner
Economic factories:
- Fully systematized
- Scalable and not difficult to grow to the next level
- Not overly dependent on the business owner
In reality I am over simplifying the differences between a fruit stand and a factory business model because in the real world there is a continuum of each model. Additionally, in providing small business planning services we have found that not all fruit-stand businesses are small. Recently I ran into a $20 million business with over 100 employees that suffered greatly because it operated in many fruit stand ways.
Small Business Planning Involves Fully Systematizing Your Business
How do you move your business from a frustrating fruit stand to an economic factory? In my previous article I discussed that you need to ask yourself two things:
- First, what can I do to enhance my product’s ability for my customer to achieve or reach their goals?
- Second, how can I develop new products that will enable my business to more fully to meet their goals?
After the above issues are addressed, the next step is to start to fully systematize your business by developing the Processes and Procedures within your business in order to consistently deliver your current and future products. When this step is combined with the previous small business planning steps you will be able to start down the path which will move you from the “endless fatigue of an exhausting fruit stand” to the “enduring freedom of an economic factory”.
