Maximizing Your Business’ Revenue While Increasing Your Freedom
Recently I met Desmond who owns a small marketing company at a party and as we were discussing what each of us did for a living he shared, “some days I just hate having my own business”. I asked why? He responded, I feel like it’s always there, just like a lurking monster making be feel guilty because I am not spend more time on it”. He went on say the he feels that if he does not do something himself, it doesn’t get done properly within my company. He also said, “I am just tired of doing the same old, same old in my business”.
Desmond is not alone – this is an all too common situation. Having worked with over 1,200 companies during the past 17 years I have found that there are basically two scenarios of how a business can operate, a “fruit-stand” model and a “factory” model.
Fruit-Stands Versus Economic Factories
In the fruit-stand model the owner shows up Monday, sets out the fruit and has revenue. Tuesday they come in, set out the fruit and have revenue. They do the same thing on Wednesday. However, on Thursday, they don’t show up. Consequently, there is no revenue because they weren’t there to make the business happen. Friday they come in, set out the fruit and have revenue.
Under the fruit-stand model, the business is more or less totally dependent on the owner for many things. If they don’t do those things, compel others to do certain tasks or scold others for doing something the wrong way and do the task himself, the business does not operate properly.
Conversely, in the factory scenario, metaphorically speaking -the owner shows up Monday and builds the factory, but has no revenue. Tuesday they come in, hire their personnel, train them and put the equipment in place, but still have no revenue. On Wednesday, they come in, start the factory, oversee operations and have revenue. Thursday, they come in, oversee operations and have revenue. However, on Friday, Monday and the rest of their life, they don’t show up, but they still have revenue.
Under the factory model, a business owner initially invests the time to develop, implement and optimize the products (services are a “product”) and systems that are necessary for the business to operate without them. They fully understand the goals of their customers and then develop the systems and products to meet their customer’s goals. Developing a systematic approach to operating your business and fully satisfying your customers is the key to transforming a business from a fruit stand to an economic factory!
Please don’t think that “fruit-stand” model means that the organization is small. We recently ran into a $20MM company that almost failed because the business owner had not systematized something that they were doing personally. What happened was that they stopped doing a key thing when they got too busy to do it and the business almost failed. Likewise we have a Fortune 500 client who regularly says “even we have many fruit-stand operations within our multi-billion dollar company”.
Steps to Create an “Economic Factory”
There are three steps that must be taken to turn your business into an “economic factory” so that it still operates smoothly while you can be off doing whatever you want.
Vision – You have to know where you want to take your company. This can’t be an ethereal, fuzzy Vision, but instead it must be a concrete, specific, detailed and time sequenced Vision. The Vision must also be keep current and fully communicated to your employees. A good thing to do is to ask your employees “where do you think I want to take this business?” Their response may startle and concern you.
People – You must invest in having the correct quantity of people who possess the proper skill sets within your organization. Your personnel cannot just be an extension of yourself so that you are in a micro-management way saying to them, put the apples here and the oranges there. If you don’t operate your business by empowering your personnel to solve problems, your company will stay a fruit stand. To address this problem critically access your staff and ask yourself, could they run my company if I took three months off to travel on a long vacation?
Systems – Without developing and implementing the systems necessary to achieve the results you desire, your business will remain stuck in a fruit stand mode. You have to first identify your systems and then optimize them. Then you need to fully document them and communicate the systems to your staff. So many business owners keep everything in their head and they basically think “everybody knows how to do that”, when in reality – they have never been told how it should be done.
If you need assistance in fully developing an “economic factory” please contact us so we can show you how to use this concept to tremendously increase your revenue and take your business where you want it to go.
www.FountainheadConsultingGroup.com
Office phone: (770) 642-4220
