How To Systemize Your Business So That It Runs Without You (reference Dan Lok)

The majority of businesses depend on the owner to work hard to achieve a level of success that is just above survival.

It's sad but the truth is if you operate the way 97% of businesses do, you’ll never become wealthy or free.

There is nothing wrong with hard work, but you need to work hard on the right things.

Find out:

•How to change the deep frustrations of being stuck with constant business struggle into the very reasons to create an exciting, successful business adventure!

• The basic, but largely unused truths about business development that you need to learn and use to maximize your achievements, while still having time to yourself and living the life of your dreams!

Why did you start your business?

• I'm unemployable

• Freedom

• Self challenge

• Choice on who I want to work with

• Tax benefits

• Help others

• Dictate my own life

The E-Myth or Entrepreneurial Myth

This is the myth that people who start small businesses are entrepreneurs. The fatal misconception is that an individual who understands the practical steps can run the business successfully.

In most cases, the owner of a bakery is the baker and the owner of a design agency is a designer. In their field of work, these people progress by working harder at what they "DO" and resolve problems by using their technical skills.

However, the reality is that most business owners fail because they work in their business rather than on it. Your ability to bake good bread does not equate to your ability in running the bakery. To be a successful entrepreneur, you must recognize that the skills that made you successful in your own field has LITTLE or even NOTHING to do with the skills required to build and manage a business.

There are 3 types of people in a business: Entrepreneur, manager and technician. To run a successful business, you must be more than just a technician.

What is the purpose of a business?

The purpose of a business is to offer what the owner wants! Your business is not about making you unhappy, draining all your time, pushing you to complain about your workers, making you hate your customers and piling up financial stress. Many business owners are looking for MORE- more revenue, more workers, more customers, more income or more of the same.

7 Key Areas to Master – The Entrepreneurial Success Cycle

1. Client Attraction

• Attract clients to YOU, instead of chasing them.

2. Retention

• Everything you do to win and keep a client. Your first sale is the first step in building a long-term relationship with a loyal customer.

3. Optimization

• Optimize the lifetime value of your clients. Sell more to more people, more often.

4. Systematize

• The emphasis of today is on systemization.

• Once something is working in your business, put systems in place to deliver consistent and predictable outcomes.

• This allows you to teach your method of execution to anybody.

• People are hard to manage. Manage the system instead.

• Example: you never see the owner of McDonald's or any other chains, work in the business. The business runs without the owner working in it.

• The goal is to be able to walk away from your business and still maintain, or even increase the revenue.

5. Delegation

• Once you have systems, you can delegate.

• You cannot be wealthy unless you delegate.

• You need to accept that you can only do a limited number of tasks and your income will be limited as well.

• The goal of delegation is so you can use your time on other more profitable tasks.

6. Automation

• Work smarter- use technology to automate tasks.

7. Now you can expand!

• You can’t expand until you have all of the above setup and functioning properly.

3 Simple Steps To Systemizing Your Business So That You Can Live The Life You Want

Step 1 – Describe Your Perfect Business

• What would it do?

• How big would it be?

• What type of products, services, or projects would it be known for?

• How would it be unique and different from the competition?

• What type of customers would it target?

• How much money would it make?

• What would it do for you?

• Would it deliver peace of mind, security, freedom and fun?

Build An On-Purpose Business

• The purpose of owning my business is….

• My business will allow me to…

• So I can enjoy…

• And have the ability to…

What are the roles, goals, responsibilities in your business?

• What are you trying to do?

• What is the business structure?

• Who is meant to do what, when and how?

• Who are they responsible for and answerable to?

• A successful business is like an orchestra, a basketball team, or an army. All of these organizations contain numerous individuals, all with a distinct function, all doing different things but contributing towards the same end objective. You are the conductor!

Step 2 – Create an Organizational Chart

Start by getting organized, by developing a structure that reflects the functions that go on in the business.

Every business essentially has 4 CORE functions.

1. Operations

2. Finance

3. Marketing

4. People

“You have to start thinking of your business as apart from you, not a part of you.” – Dan Lok

Defining and naming positions

When you are defining the different positions within the business, it is crucial to consider the titles that is associated with each position. The title signifies not only an expectation of the role but also an assumption of seniority.

EXAMPLES

• Director of DLIC VS Sales Manager

• Problem Solver Extraordinaire VS Assistant

• Chief of Revenue Generation VS Marketing Manager

• Give some thought to the name of each title. Never use junior or senior in your titles because it makes the senior staff feel like they can boss people around.

3 Types of Employees

• Mercenaries work for money. There is nothing wrong with that and the motivational factor can be put into good use if you put these people in sales positions.

• Grunts do the minimal work to get paid.

• Patriots go above and beyond as they want to be a part of your business. These people are interested and invested in your company culture, training program, and are driven by your goals and mission. You can't teach this. These people are good for management roles.

Kick ass interview Tip for Key Positions

• Give them a dufus test.

• Get them to do something out of the norm.

• Interview at 5am downtown – See how they react.

• Do they make excuses?

• Change it back to 9am after they agree.

• Look for people that go the extra mile.

• Do a few tests to get them to show you your habits.

• Give them a small project on a very short deadline like 7 hours.

• Challenge them to make it better.

The Importance of a Clear Job Description

It is essential that job descriptions are not built around a specific set of skills that a current employee has. You want to have someone that does the job, but it does not have to be in the same ways. You want to attract top talent who can accomplish the role. They are the people who will fit the description. You should never tailor the job description to fit the people.

Step 3 – Develop Business Management Systems

What is a system?

A system is a series of best practices/ standardized guidelines that points towards predictable outcomes. For example:

• What to do when a customer complains

• How to greet a customer

• How to interview employees

• How you generate leads

• How you make sales

• Checklist for setting up at events

Regardless of the nature of the business, there will always be best ways to do certain things and these methods will give you the best chance in achieving a specific result consistently.

Once you have identified the best practice, break it down into a series of steps that can be recorded, either through text or illustrations or photography, so they can be repeated again and again. The set of instructions can be as standardized as possible and any new employee should be able to follow the instructions.

“How can you solve a problem not ONCE, but forever?”

If your business is NOT system dependent… it’s dependent on you!

This brings us back to the point where you will have to invest extra time into the business only to have it above survival. Think about it, Steve Jobs from Apple does not tell the staff how to arrange product displays and Ray Kroc, the founder of McDonald's, does not flip burgers himself.

S.Y.S.T.E.M – Saves Yourself Stress, Time, Effort and Money

Systems take on three forms.

1 Hard systems:

• Hard systems are what something looks like. i.e. uniform, logo, decor, design.

2 Information Systems:

• Information systems are standardized reports or processes. i.e. training program, tracking KPI, website traffic report.

3 Soft Systems:

• Soft systems are  what something sounds like. i.e. how you answer the phone, how you greet customers, how you deal with complaints, how you sell, upsell, cross sell and follow up.

• Here is where your skills in the field comes in. You cannot expect your employees to sell better than you, so you develop a system that allows them to learn your selling method and that way, they continue to produce predictable, good results.

Policies and Procedures Manual and Administration Manual

• The system guides step by step, but it will also be built step by step. Do not expect it to happen overnight. Start with 1 page.

• Hire a systems specialist to help you.

• Do not confuse what you don't like to do with what you need to do.

• The solutions to most business problems are systems and training solutions.

• You want to run your business, not have it run you.

Working On, Not Just In Your Business

You should now understand the need to have a clear vision, the need for structure organization and clearly defined positions so that your employees are aware of their responsibilities.

The systems then support everyone in your business to be consistent. You need to set an example by managing yourself and getting yourself to do the things you want in life before getting others to do those things.

While you cannot fully manage people, you can manage time, space and systems. The systems run the business and the people run the systems.