Many entrepreneurs start a business in part to make money and in part to gain freedom, financial and otherwise. They listen to the success stories of entrepreneurs who have made it and they take the plunge. They have a vision of their desired future and a plan to get there. But for many entrepreneurs they look back after several years and find they have made very little progress.
What usually happens to many new entrepreneurs is that they leave a job with fixed working hours and guaranteed pay for a new job where they are now employed by their business 24/7 wearing numerous hats, for an indeterminable profit which they may or may not be making. Many entrepreneurs cannot take a holiday for a month or spend any significant time away from their business without running the risk of a crisis or business melt-down.
Robert Kiyoski in his book the ‘cash-flow quadrant’ identified four types of people in four quadrants. Those who are 1. Employed; those who are 2. Self employed; those who 3. Employ others; and those who are 4. Investors. The first two are selling their time for money and the last two are leveraging their assets and capital for money. Many entrepreneurs think that they have a business when actually they have a job, the only difference being that they also have several assistants whom they pay.
The only way to have a business and then reap the rewards of leverage is to build systems, procedures and processes into your business so that your business can run perfectly without you.
Current practice in most businesses is that the ‘owner manager’ knows what he wants and he trains his new employees to do some of the things he just does not have the time to do. There are some things that he feels no one else can do, so he keeps those jobs to himself. For as long as the company is still small, the workers few and stable, and he is always around; the business manages to get by. He prays and hopes that his son or daughter or some close relative will express a willingness to join the business with time. He hopes that he can then hand down to the next generation and take his well deserved rest or retirement. If any of these helpful conditions fail to exist the ‘owner manager’ either fails trying to run the business or the business dies at his death.
Clement Ashley Consulting’s Solution
Clement Ashley Consulting recommends a new paradigm where the entrepreneur starts the business, with a plan to sell or walk away from the business in the shortest possible time. You don’t have to sell your business of course; but you should have a perfected and implemented plan in place to do so. This very plan will also help you keep your business, grow your business, put a value to your business, have time away from your business. and ensure that your business succeeds you. This plan can only be implemented if you have documented systems, policies, procedures and processes. Five key things are necessary to achieve the systematization of your business. It is important to note that a S-Y-S-T-E-M is So-You-Save-Time-Energy-Money
- A Strategic Plan– This helps you clarify your vision,mission and values and enables you prioritize what will be systematized and documented, and in what order to maximize customer satisfaction and shareholder value.
- Personalized for You- The system should not be a one size fits all, borrowed from a neighbour or friend. It should be designed to suit your vision, mission and values.
- Documentation- According to the Internationals Standards Organization (ISO), if its not documented, it does not exist. You cannot have a system in your head. Documentation of your systems is vital to business success.
- Implementation- A study published in the Harvard Business review said that ‘most large corporations typically realize only 63% of their strategies potential value due to deficiencies in planning and execution’. For small businesses that percentage could be ass low as 25%. A performance monitoring system for plan implementation is key to achieving results.
- Measurement – Having documented the system it is necessary to assign measures of success to your system and to evaluate the results on a regular basis. As it is commonly said ‘it is what you measure, that you manage’
Using this approach you are able to speedily train and induct new staff into your business.
Using this approach you will not be as susceptible to the loss of cumulative experience and learning when key staff leave your organisation. Meanwhile this systematized approach enhances your ability to retain motivated staff.
Using this approach you are able to take extended holidays away from your business and come back to meet it, as good or even better than you left it.
Using this approach you are able to maximise the returns that your business earns you, and ensure that your business succeeds you, or that you sell your business for a size-able profit if you choose to do so.
Planning to sell your business even when you have no intention of doing so can be one of the best things you do for your business. Building the systems that will enable you sell your business profitably, will also help you run your business profitably.
To learn how we can help you please call or chat with us live at https://tinyurl.com/y3ehkbw4