Have you ever wished you had a business that could operate smoothly without you being there for weeks on end? Or conversely, have you ever felt that your business is totally dependent on you? That if you didn’t show up, things would start to fall apart?
Some signs your business is overly dependent on you is when:
- You call in sick to your own voice mail and leave yourself a message you won’t be in today
- You put on different name badges as you move between doing different tasks in your organization
- You try to clone yourself so one of you can go on vacation while the other stays at the office
to work
But I have good news for you it does not need to be that way.
Ron, a friend of mine who is a business broker recently told me 80% of the businesses he sees are what we call “fruit-stand” businesses. In having worked with over 1,200 businesses during the past 17 years I have found there are basically two ways in which a business can operate; a fruit-stand model and a factory model.
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. 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. Unless they do those things or ensure that others do those things, the company does not operate properly.
Conversely, in the factory mode—metaphorically speaking—the owner shows up Monday and builds the factory, but has no revenue. Tuesday they come in, hire the 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 and Monday, they don’t show up, but still have revenue.
Under the factory model, a business owner initially invests the time to develop, implement and optimize the systems, hire the correct personnel, and train and empower them to operate the business without them.
The situation so many business owners fall into is the tyranny of the urgent syndrome where they don’t take the time to develop, debug and optimize the processes in their businesses nor hire and train the people that can run the business without the owner being there. Many times, owners get caught in this syndrome because they are so busy with the business and the demands of getting the work done by “working in the business” they don’t take the time to “work on the business.”
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
To be continued in Part 2 of Taking your Business to the Next Level
