Creating Systems So Your Business Can Thrive Without You
13/07
One reason why most businesses fail is because the burden of running the business falls on one person. Eventually, that person is not going to be able to continue to do everything and he or she is going to burn out. Most entrepreneurs have very definite ideas on how there business should be run. The are typically reluctant to give up control. Most believe that no one can do the job as well as they can so they try to do everything.
Most start-up businesses fall into the trap where the business owner sees him or her self as an entrepreneur, a manager and a technician all rolled into one. The entrepreneurial vision of the owner falls victim to the technical needs of making products, providing services and handling customers. The managerial role takes a backseat and the owner gets caught up working in his or her business rather than on his or her business. Unfortunately, this is often a recipe for failure.
A prime example where an entrepreneur fills to many roles is in the restaurant business. This is an industry that has an extremely high rate of failure. There are many great chefs who have an entrepreneurial vision of opening a restaurant. While they may be great chefs, they are not always good businessmen. In their quest for perfection, they typically become very “hands on” and form a belief that no one can do the job as well as they can. While this belief may be true, it is not helpful in the quest to establish a thriving business.
A better approach for the business owner who believes he or she is indispensable, is to focus their efforts on creating systems within their business that can easily be followed by employees. The entrepreneurial vision can remain the same; however, the technical work can be done by employees and the owner can focus more on management than on day-to-day operations. All systems that you create should be documented in an operations manual. If one of your employees leaves, another employee should be able to take over where the first left off. At no point should the business owner being doing the work that can be done by a minimum wage employee. Your systems should be created with the thought that they will be operated by an employee with the lowest level of skill required to still provide your clients with consistent value.
In his book, The E-Myth Revisited, Michael Gerber stresses that all businesses be developed under a franchise model. Gerber uses the example of McDonald’s. Gerber stresses that McDonald’s does not sell hamburgers, it sells business systems to franchisees who sell hamburgers.
When you use the franchise model to develop your business, inherently, you are creating systems so that your business is portable. This is a key factor if you ever want to sell your business. Most entrepreneurs who start their business and see themselves as indispensable in running the business, fail to look at the bigger picture and realize that they may want to sell the business someday.
A better approach would be to look at the big picture and start with the end in mind. Your exit strategy should play a role in how you set up your business. You should be thinking about how you can package your business so that you can sell it someday. If you are indispensable to the operation of your business, you will never be able to sell it because it will not have value to anyone else. If you have systems in place where your business can thrive without you, it becomes much more attractive to a potential buyer.