With Good Business Management Mentoring You Definitely Can
The question above was an actual one asked of me back in 2001 when a new client (a kitchen renovator) asked it.
He didn’t just want to stop working hard and to grow his business, he had a vision of not working in his business at all.
It was an exciting challenge to be asked this as you can imagine. Michael Gerber, the author of the E-Myth books talked about this in the workshop I attended in 1990.
Frankly, I wasn’t sure of all the steps (at the time), but after working with 140 business owners before then (solving virtually any kind of challenge), and with a very sound knowledge of growing my own businesses after 18 years I had a bunch of good clues from what I had already learned.
So just ten months later, the business owner achieved this fantastic goal, and stepped out of his business, because he had an excellent general manager running it (that we had recruited).
The GM was an ex Coca-cola manager, so that took care of his management skills! He was semi-retired and looking for something to do and so he thought managing a kitchen renovation company would be fun to manage.
After hiring the guy, and going through the complete systems of the business that we had put in place, explained all the KPI’s and strategies to generate sales, six weeks later he was fully prepared to run the business.
The owner booked a two month holiday to go around the world and thoroughly enjoyed his trip with his wife, completely worry free.
Keep in mind, back in 2001 there weren’t mobile phones with emails, so he was completely out of touch with his business whole travelling. He had that much faith thought in the systems, strategies and processes that his business had in place he was comfortable his business was going to operate smoothly without him, and it did.
After Shane, the owner came back to Australia he didn’t go back to work in his business, and his GM didn’t want him to! He wanted free reign to run it and grow it, so he was left to do so.
Shane ramped up his education with property investing and loved his freedom to do that and make investing his “occupation” instead of his part time hobby.
About 2 years later he decided QLD was the place for him and his wife to live so he decided to put his business on the market to use the capital to buy his new home and acreage on the north west side of Brisbane. Besides, he felt he could now grow any business with his new found skills.
Setting up a business to operate without you (the owner) being in it all the time, or even at all like in Shane’s case means you have complete confidence to do so, and that confidence needs to be in facts, not just people.
Having your business setup with a specific ‘management structure’ can turn any business into one that provides business freedom for the owner.
Managing the Risk of Blind Trust
This is a critical factor that few business owners understand and pay the price because if it when they “blindly” trust someone to take care of their finances or management.
We’ve all heard the horror stories of well known people going “rogue” and destroyed a business because the owner wasn’t there.
Trusting people blindly is definitely a risk, but what you can always trust are numbers as they don’t lie.
Think about this…
In any business you need to generate sales, do the work outcome of the sale (i.e. production) and get paid for the work. All of these can be measured in dollars and usually every week (with the right measuring tools and know-how).
If you think of a business like this 3-legged stool, and each leg is a measure in dollars of each of the 3 activities of a business, then ideally all 3 leg lengths (measured in dollars) should be the same every week, at least in theory.
So if your annual turnover per year is say $1,000,000 then in one week it would be about $20,000.
The Tripod of Business Harmony
Measuring all three “legs” generates figures you can trust, especially (when in this client’s case) you’ve been measuring all three “legs” for months.
Over many months the legs have to be about the same in length (accumulative) as what you sell it what you produce and what you are paid.
When you have these measurements (and a few others in each of the three main activities) you get predictability in a business. It becomes an almost a paint-by-numbers guide to growing the business, deciding when you need to hire people – (or put them off when sales are low and things are too quiet).
Without going into too much detail… in a given business it will need X number of leads (on average) to achieve $Z in income per week (average). Watching the leads quantity each week and comparing the figures for 4 weeks in a row very accurately predicts sales income, work to do in production and after that, the cash coming in.
Tracking dollar values in both sales and production gives you “work load”, i.e. do you have too much work/sales or not enough for the number of employees you have?
Without the “tripod” in any business, with figures being generated consistently (and weekly), it’s a huge issue with trusting any person who is running the business. You can look at a P & L Statement, but it won’t predict lack of work to do because leads are down.
The gross margin of a P & L Statement for one month isn’t a good guide as the wages paid rarely match the income received in the same month. This month’s work and wages paid in part are usually for the next month or two of income, and it can vary even more than this.
The majority of businesses where the business owner stepped out and it turned into a disaster I guarantee measuring of the all three legs of the “tripod” wasn’t in place.
Measuring (the three legs) weekly is just one of 7 core strategies that need to be implemented to set a business up to run on autopilot, and to run smoothly, reliably and profitably without the owner needing to be there.
The Importance of Turning Staff (who may not give a stuff) into a Motivated Team
Another major element is team building. Running weekly team meetings is critical as part of building a “bullet proof” management structure that works… without you being there.
So two major strategies (of the 7) are team building and measuring.
A third one (of the 7) is systems.
When you run weekly team meetings (where ALL employees speak in turn), and then bring the numbers of the “tripod” into the meetings you automatically create accountability for all employees.
They then see and discuss the results of the week from a factual, number based point of view, so there’s no debate.
“Numbers don’t lie, but people can assume anything”
When a team is accountable to numbers, in weekly team meetings and discussions, the team automatically talk about the need for system creation, or improvement, which is fantastic!
When you have all the team discussing and wanting to use and improve systems, you start to have the key ingredients of a business that can operate smoothly and super profitably, without the owner being there. (In fact when clients reach the “5th stage” of team building, their staff ask them not to come in to work anymore, because they work better without the owner being there … and its true!)
Since 2001 I’ve assisted a whole bunch of business owners to set their business up to operate without them, by giving them the systems, measuring tools and strategies (all part of the Academy of Business Mastery) to do so.
Some business owners have moved interstate and stopped working in their industry completely. Others traveled for years, while others started new businesses and had two “hobbies” they played with and fulfilled the awesome role of BDM, where seeing clients for lunch and dinner anywhere as a “researcher” was the usual.
What would you do if you didn’t have to work in your business at all anymore?
Believe me, you won’t be bored and that’s the most common answer I get to the question!
My clients have never been bored, when working at all became a choice.
I’m about to interview a client (on video) to hear what he now does with his time. He rang me the other day to tell me he hired a general manager (using the interview systems and job description in the Academy course and workbooks).
After hiring him his manager tripled his turnover and now he doesn’t have to work anymore. He’s enjoying lots of fishing time and family time.
It was 4 years ago he attend the 8 month Academy of Business Mastery business course, and he only had one employee and a turnover of about $400,000 back then, so things have progressed well for him (considering he had no other training since).
How long do you intend to keep working? All your life until you retire, or would you prefer 12 months time?
Are you off the tools, or able to take two month holidays anywhere in the world anytime?
That is one way of describing business freedom. Find out more about exactly how to achieve business freedom by understanding the gap of where your business is to where it needs to be in our free, comprehensive Business Freedom Assessment.
I’ll leave you with this final thought to remember…
The number of hours you work in your business is optional!