Imagine you woke up one morning and decided you wanted to build a new garage in your backyard. So you hired a truck, picked up a few of your mates and went to one of those hardware outlets that look like an aircraft hanger. You bought sand, cement, steel, timber and bricks and by midday you were off and building.
This would be a dream with nightmare written all over it.
A garage may be a piffling structure, but every year tens of thousands of new businesses start up with virtually the same “go get a truck and some building supplies” attitude as our garage builder.
And what is even more surprising is that many people in micro-businesses, employing fewer than five workers, actually do pretty well for quite some time. But eventually the worlds collide and business problems ignite. A time bomb will explode. And if it doesn’t ruin the businesses, it can badly damage them and a hell of lot of relationships along the way.
I recently talked with an award-winning couple, who had set sales standards that few could match in their franchise system. They had great staff and plenty of business, but they had cash flow problems and they usually did their Business Activity Statement a couple of days before the deadline.
They knew something was wrong and were smart enough to go looking for experience to help them beat a growing problem.
Many of us have heard the cliche: “Small businesses don’t plan to fail but fail to plan.” And then there’s: “Small business people spend too much time working in their business and not enough time working on their business.”
There is a real-life difference between a business owner and an entrepreneur, and it’s that the business owner often works at the coalface. He or she is the shopkeeper, the plumber, the accountant, the consultant, the sandwich-maker or the service provider. They do the work of their business: put in the pipes, talk to the customer, solve their problems, send the bills and collect them as well. But they don’t think about the real product.
Most tradesmen try expanding and find being an employer and a paper shuffler for the federal and state governments extremely challenging. Many just pack it in and go back to being a one-man band.
The entrepreneur comes to see the business as the product he will grow. He or she uses systems to solve frustrating problems in the business and the systems, when they are put together, can define the business: the way a phone is answered, the way a complaint is handled, the way a customer is served and how transactions are recorded.
This is what a whole lot of smarties have done in creating franchise businesses. The guys at Gloria Jeans have a system that means both a school teacher and a journalist can throw in their jobs and become coffee shop owners with the minimum of training.
Last year I looked at the young entrepreneurs who started Sumo Salad and Wellbeing, young people who could see the customer shift to healthy food. The business owner would have created a shop and maybe opened another and then tried to manage both. But these entrepreneurs, from the outset, were looking to systematise the business so others could buy it from them. They worked on the business until it was a product they could sell.
This year the goal should be to systematise your business, not only to eliminate frustrating problems – which makes the business easier to grow and live with – but to make it easier to sell, like a franchise.
As with all things, such as building a garage, get a plan. And if you don’t have the skills to do the job yourself, find an expert to help.
Author: Biz Think Tank
BizThinkTank is a dedicated small business website, with a wealth of regularly updated tips and articles. Whether you’re looking to start a business or grow your business, you’ll find a wealth of handy advice and information.