Most businesses rely on the executive to work hard to achieve a level of success just above survival.
It’s a pity because if you operate the way 97% of businesses do, you’ll never achieve the freedom that you desire so strongly.
If you would like to discover the steps to create a scaleable business and the freedom you desire, then read on.
YES. I understand.
There is nothing wrong with hard work.
The trouble is, most business executives are working hard on the wrong things!
But business owners that consistently get huge profits and have the time to enjoy the rewards, do things very differently from everyone else.
In this article you will discover:
- The single thing that stops you to develop a business that can run without you and scale.
- Simple, yet largely unused business development truths you need to know, understand and use.
- The simple, but normally neglected, steps you need to take to ensure you get maximum rewards from your business while freeing up your own time to do anything you want in life.
Sounds great? Then let’s dive in.
The Pursuit Of Freedom
All of us entrepreneurs started our business most of the time to achieve more freedom.
But what is freedom exactly?
There are 3 phases to achieving freedom
- Phase 1 – Achieve Maximum Productivity: Maximum Results with Minimum Time.
- Phase 2 – Achieve Maximum Leverage: Maximum Productivity with Minimum Effort.
- Phase 3 – Achieve Maximum Freedom: Maximum Leverage with Minimum Stress.
Most young entrepreneurs skip the first steps and mentally are in “Freedom” mode, even though on paper they are merely on survival status.
That is a big issue because it is exactly those who struggle most in their entrepreneurial journey.
Be honest with yourself. And about your current situation. And you will get closer to freedom than you have ever imagined.
This article is targeted at those who already understand what it takes to be productive and want to get to the next level: Leverage
Maybe you are asking yourself: What is Leverage?
The Key Factor To Scale Your Business
Well, in simple terms: Leverage income is income, that is generated through your teams and systems.
If you are generating your income on your own (Productivity Income), then you are limited to your personal time and energy capacity. This normally happens if the entrepreneur is a perfectionist and micromanages every single person.
In fact, this issue has been elaborated intensively in the book called the E-Myth.
“The E Myth. Most entrepreneurs are merely technicians with an entrepreneurial seizure. Most entrepreneurs fail because you are working IN your business rather than ON your business.”- Michael Gerber
In other words: To be a successful entrepreneur you must recognize that the skills that made you a successful technician has LITTLE or NOTHING to do with the skills required to build, develop and manage a business!
So how do you leverage?
Here are 3 simple steps you can use to develop your business so that it can run without you and scale rapidly.
Step 1 – Vision: Design Your Perfect Business
This is by far one of the most important questions you should ask as an Entrepreneur: When is your business perfect?
As an Entrepreneur, you are like an artist. All artists have the final picture in their minds. The final result. As soon as that is crystal clear, they get started with the creative work.
At first, many will criticize the artist during the journey, because they don’t see the full picture.
And the artist knows that, but he still keeps painting. He keeps on working because he knows what he is doing.
The artist continues until finally the picture is finished. At that point, everyone is astonished by the final work.
And more importantly, the artist himself is fully satisfied… Then he continues on his next artwork because that is where he gets the greatest joy: Turning ideas into reality.
The same counts for Entrepreneurs. We often get started creating a newly minted venture, in the process, we get critiques from all sides and sometimes we might loose our motivation along the entrepreneurial journey.
The question is: How can you keep your motivation high, not lose track of your journey, and over time create a business that can run without you?
One way to overcome this is to have a crystal clear picture of when your business is actually finished.
Let me introduce you to one of the most effective methodologies to take a dream and turn it into reality: VMOSA Strategic Planning.
VMOSA Strategic Planning
“With clear values come clear decisions”
VMOSA (Vision, Mission, Objectives, Strategies, and Action Plans) is a practical planning process used to help community groups define a vision and develop practical ways to enact change.
VMOSA helps your organization set and achieve short-term goals while keeping sight of your long-term vision. Implementing this planning process into your group’s efforts supports developing a clear mission, building consensus, and grounding your group’s dreams.
Read this article to create a clear picture on paper: https://ctb.ku.edu/en/table-of-contents/structure/strategic-planning/vmosa/main
Once you have a clear picture of how your perfect business will look like and how the path to achievement can look, then you are ready for the next step.
Step 2 – Teams: Define Your Dream Team
“Work hard with the correct people, on the correct things, done correctly”
Well, now you want to include your Dream Team to operate across the entire lifetime of the corporation.
But, who are the people you want to work with?
I’ve actually made a video that describes 3 core characteristics you want to look at potential business partners to see if you can work with them in the long term.
Check it out!
Roles, Goals, And Responsibilities
After watching that video, you want to also answer the following questions regarding your dream team and your ideal business:
- What are the roles, goals, responsibilities in your business?
- What is it you are trying to do here? What is the structure of the business?
- 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 soccer team, or an army.
There is a business model which is called the “Orchestrator Business Model” that makes sure that all partners do their job in the value chain in order to deliver the value promise to its customer segments.
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!
Draft an Organizational Chart
Start to get organized by developing a structure that reflects the functions that go on in the business. There are a lot of tools you can use to draft an organizational chart.
Here is a free online tool you can work with: https://online.visual-paradigm.com/drive/%23diagramlist:proj=0&new=OrganizationChart
You want to put yourself obviously on the very top of the organizational chart (CEO) and for the rest, you want to layout the key roles and team structures that will help you run the business.
Watch this video to see how you can structure your dream team within your business
Defining & Naming Positions
Every business essentially has 5 CORE functions besides the CEO.
- CTO – Responsible for the Technology and R&D
- COO – Responsible for Operations and Systems
- CMO – Responsible for Marketing and Sales
- CFO – Responsible for Tax and Finance
- CHRO – Responsible for People and HR Strategy
When you are defining the different positions within the business it is important to give consideration to the titles that you associate with each position.
The name creates not only a mindset of expectation but an assumption of seniority.
When choosing your board members you want to hire “Mission-Driven” individuals. What do I mean by that?
There are 3 types of people
1. “Sparetime-Driven” individuals. These are people who would actually do work they don’t really like and are just happy to get paid for it. However, they try to do minimal work to get paid. They just go to work and enjoy their time outside working hours. Typical employment-lifetime-value: Short- to midterm.
2. “Money-Driven” individuals. These people are great in sales positions. But as soon, as they realize that they are making generating no money, they search for the next company that can secure that for them. That’s why having “Systems” is important. More on that later. Typical employment-lifetime-value: Mid- to longterm.
3. “Mission-Driven” individuals. These people are great board members, executives, and leaders. These people are motivated by the vision, mission, culture, and training program of the company and want to help you to turn your idea into a profitable business. You want to have these people on your board of directors. Typical employment-lifetime-value: Longterm to exit or retirement.
The Importance Of A Clear & Good Job Description
It is essential that job descriptions are not built around the particular skills that a current team member has. In fact, because people will come and go, the exact opposite is needed.
If you want to attract top talent you need to sell them in the job description.
The people need to fit the job description; the job description SHOULD NOT be designed to fit the people.
Set high expectations!
Step 3 – Systems: Develop Business Management Systems
“The systems run the business and the people run the systems.” – Michael Gerber
You already have a clear vision for your business and you have defined how your dream team might look like to help you to turn that vision into reality. Systems are the last building block in your leverage income.
What is a system?
S.Y.S.T.E.M. – Save Yourself Stress, Time, Effort, and Money.
A system is a series of best practices and steps to get predictable, repeatable, and recurring results. Here are some factors to take into consideration:
- What to do when a customer complaints
- How to greet a customer
- How to interview employees
- How to generate leads
- How to make sales
- Checklist for effective board meetings
Regardless of the business, you’re in, there are best practices, ways to doing things that have the best chance of bringing about a particular result on a consistent basis.
Once you have identified what that “best practice” is, break it down into a series of steps that can be written down, illustrated, or photographed, so they can be repeated again and again.
A great indicator to see if you are lacking systems is when you have for example reoccurring problems or scenarios. Now, before you try to solve the problem on your own, ask yourself the following question:
“How can I solve this problem not ONCE, but forever?”
If your business is NOT system-dependent… it’s dependent on you!
Imagine if Elon Musk from SpaceX telling the staff how to launch a rocket. This just doesn’t work. There are reliable systems in place to make sure that the rocket launch runs correctly (even if it is a test launch).
There are 3 types of systems
1. Hard systems
- Key-Word: Visual
- Definition: Hard systems are what something looks like.
- Examples: Uniform, logo, decor, design, theme, templates, style guide.
2. Soft Systems:
- Key-Word: Auditive
- Definition: Soft systems are what something sounds like.
- Examples: How you answer the phone, how you greet customers, how you deal with complaints, how you sell, upset, cross-sell and follow up, closing script.
Without a script how can you produce predictable results? You can’t expect your employees to sell better than you if you are the CEO of the company. You have to be the best salesperson so you can coach them for success. Set them up for success!
3. Information Systems:
- Key-Word: Operation Manual
- Definition: Information systems are standardized reports or processes.
- Examples: Training program, tracking KPI report, website traffic report, technology, policies, procedures, handbook, tutorials, step-by-step guides, checklists, documents, contracts, agreements, operating systems, onboarding programs for new hires (30 days).
You can’t be just physically there all the time to explain how specific operations work. You can e.g. use an e-learning platform to upload important training materials and combine that with personal mentoring sessions to clarify open questions.
Policies and Procedures Manual and Administration Manual
Start with 1 page. Then with 1 tutorial video. It’s not going to happen overnight.
Here is free software you can use to create visual systems: https://app.xtensio.com/account/signup?fpr=link (*)
Hire a systems specialist or a COO to help you with this.
Don’t confuse what you don’t like to do, with what you don’t need to do!
The solutions to most business problems are systems and training solutions.
Record your online meetings and upload all materials on an e-learning platform.
Here is a free e-learning platform you can use to start out: https://try.thinkific.com/miguelmiranda1013 (*)
You want to run your business not have it run you.
In Summary
Working On, Not Just In Your Business
You now fully understand the need to have a clear vision. You now fully understand the need for structured organization and clearly defined positions so that you can everyone else is aware of their responsibilities.
You now also fully understand the need to have systems to support everyone in delivering consistent standards across every facet of the business.
You can’t even get yourself to do the things you want in life. For example, get fit, lose weight, stop smoking. So what hope do you have of getting other people to do what you want?
You can’t manage people!
But you can manage time, space, and systems. The systems run the business and the people run the systems.
Are you working ON your business, or IN your business? Comment below.
ABOUT THE AUTHOR
Miguel Miranda is Executive Search Consultant for companies in the high-tech & digital media industry and a well-networked expert in the digital world. He is Chairman & Advisory Board Member of startups, safely guiding them from idea to exit. He also supports startups & scale-ups by introducing the right strategic partners and assists in the internationalization process by linking local businesses to global markets.
Miguel Miranda is also a passionate speaker & author on the topics of HR, entrepreneurship, and career development. Miguel’s mission is to serve and help people like you in turning your ideas & inventions into successful businesses and introducing the right players to drive your business to success.
References
Abbreviations.com, STANDS4 LLC (2021). “SYSTEM.”. Available: https://www.abbreviations.com/term/208471 (01.08.2021)
CommunityToolBox.com (2021). Section 1. An Overview of Strategic Planning or “VMOSA” (Vision, Mission, Objectives, Strategies, and Action Plans). Available: https://ctb.ku.edu/en/table-of-contents/structure/strategic-planning/vmosa/main (01.08.2021)
E. Gerber, M. (2004). The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It. HarperCollins Publishers. Available: https://amzn.to/2VmtYor (*) (01.08.2021)
Harnish, V. (2014). Scaling Up: How a Few Companies Make It…and Why the Rest Don’t (Rockefeller Habits 2.0). Available: https://amzn.to/2WD4QKx (*) (01.08.2021)
Lok, D. (2017). How To Systemize Your Business So It Runs Without You. Available: https://www.youtube.com/playlist?list=PLEmTTOfet46PtZClnUPi51RJWhJ4CPo4J (01.08.2021)
P.S. You have any questions on how to implement these steps in your business? You are looking for an expert who can help you build your dream team? Simply comment below or shoot me a quick message to have a small chat!
P.P.S. Affiliate link disclosure: I get commissions for purchases made through links with “ (*) “ in this article.