Creating the Anti-Job
Travis McMenimon recently left a comment on one of my recent posts about how it was that I had built a "system" in business that I could "walk away from". I thought his comment was interesting and I wanted to write a post discussing more about systems in businesses and some crucial mistakes many business owners make when going into business.
In all honesty, I'm not very versed on business models, systems, management structures and all that business school mumbo-jumbo. Instinctively, however, I knew one thing: that I wanted a business, not a job.
With that said, though, it is important to note that early on in all start-ups and small companies, the owner must essentially take on some sort of role and duties. Whether that's working as an everyday manager, being the bookkeeper, or acting more like a "real world" CEO and going out to raise millions of dollars of VC money to expand the concept, almost every business owner has a "job". The difference of being on the business-owner side of things from being on the employee side of things is having options and control. In addition to those, a business system provides numerous benefits (which I'll go into later). For now, let me introduce one of my inspirations...
This is the B-I Triangle. Robert Kiyosaki, author of the best-selling book Rich Dad Poor Dad, created this to illustrate a hierarchy of importance in building a business. Focusing on the inside of the triangle, the level of importance goes from bottom (most important) to the top (least important). This is not to say that the product doesn't matter, but that most people attempt to build a business based solely on the product and ignore things like system and cashflow.
Cashflow, for any business (especially young and/or growing ones) is by far the most important aspect. Profitability doesn't matter much if you can't manage the cash that's coming in and going out. And when you have to explain the difference between profitability and cashflow to your bookkeeper, get a new bookkeeper! However, cash, like most anything else, has a pattern... a trend. So in business, the sooner you learn that trend, the easier it becomes to manage that cash.
Systems, as you can see, are not quite as important as Cashflow, but more so than legal or - surprisingly - the product. For me, this triangle has been a huge blessing because sometimes it's difficult to juggle priorities. The long list of priorities that each business takes on becomes increasingly overwhelming, so it's good to have something like this to visit to keep things in perspective.
Business systems can provide many benefits to the company (owners and employees alike). When a system is set up (usually via some practices and procedures manuals and/or some form of technology that allows for easier use or automation), then the business itself can be sustained without the everyday interference of the owner(s). Managers and employees alike (if you run a labor-intensive business like I do) must have some sort of written, tangible protocol so that they know what to do in most situations. Once these procedures are in place, then the "upper" people like shareholders, executives, etc. can concentrate on the bigger picture items such as moving the business to the next level, whatever that level may look like. It also creates consistency in the work place for managers and employees and makes their overall jobs easier and much more automated so they can concentrate on other uncontrollable issues like customer service!
For more on the B-I Triangle, click here.
Aside from the B-I Triangle, there's the issue most businesses face that will almost always increase the risk of failure... they start a business because they're good at doing 'x'. For instance, you're a good cook, so you start a restaurant. BAD IDEA! However, this way of thinking is ingrained in (easily) 80% of the population, business owner or not. When people find out what I do, they always ask me if I'm a good cook. Fact is, I never cook (at least not in the restaurant setting). Owning your business or, as many put it, "being your own boss" is more than just starting a business around whatever it is you're good at doing. Because then what you have is a job consisting of doing 'x' (cooking, building bongos, whatever) PLUS all the stuff you never had to worry about before (bookkeeping, accounts payable, banking issues, legal issues, insurance, investors, employees, etc.). Sooner or later, you begin to hate the one thing that you use to love... that skill that prompted you to become your own boss.
The key is NOT to become your own boss, but to become an employee in a company in which you control. There is a very clear line between the two. Michael Gerber's book, The E-Myth is a great resource in learning the difference between being an entrepreneur and being a technician or a manager. And no, this book doesn't have anything to do with e-commerce. Just a bad name for a book that discusses what the author calls the "Entrepreneurial Myth."
In general, though, the approach to building a true business (as opposed to a really stressful job) is to do so from the beginning. Doing so before the beginning is even more ideal. Look at an opportunity and find where the system can be built. In fact, opportunity... true opportunity... is often found in businesses that have no systems built in just yet and the owner has owned a job and is stressed out, so he/she/they end up selling for far less than the business is actually worth just to move on.
Don't look at an opportunity just to be your own boss... you'll be the worse boss you've ever worked for.
Country/Folk singer Mac Davis sang that "Happiness is Lubbock, TX in my rear view mirror." And while I'm not one who normally agrees with country music, this particular song strikes a familiar chord with me. And that brings me to the latest reason as to why there has been an absence of a new entry on this blog until now. Last Friday, with a little more than a weeks notice, my wife (Kim) and I packed up and moved to Seattle, WA.
Happiness for us was, indeed, Lubbock, TX in the rear view mirror! Kim (who's an RN) was offered a position at Swedish Medical Center in downtown Seattle and it was a position and an offer that we simply couldn't turn down. We both love the Northwest and have always had a desire to be up here. I, in fact, moved to Seattle after finishing my undergrad work at Texas Tech and then moved back to Lubbock to pursue my music promotions company. Lubbock to me was always a temporary stop in life and while it is an extremely friendly town, it just never fit my personality.
And so here we are, again.
Kim is from a super small town in eastern New Mexico and has never lived further than 90 miles from her family. Lubbock, for her, was a big city (220,000 people). And so it will be interesting to see her transition into the city life. But so far, so good.
So, that all said... this is just an update as to why there has been an absence of new entries. I will be writing a lot more in the coming weeks. And if you're in the Northwest, drop me a line and we'll go for - what else - coffee!