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How to Simplify A Complicated Business System

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Focusing on One Shovel Full of the Mountain at A Time

With my years of construction experience, I tend to view things from a building perspective. The things needed to build a good structure are the same for building a good business.

 

These things are:

• Purpose – The why, the reason for building it, who is it going to serve?

• Design – How is it going to look, how is it going to serve (products, services or both)?

• Style – Personal preference of the finished project, not everyone wants everything to be the same, we are all individuals.

• Foundation – This is what supports everything else, the core values of the construction.

• Framing – This is what sets on the foundation and connects everything, it is the system of operating.

• Tools – These are used to put everything together and maintain it daily.

• Team – The people employed to put the pieces together and to perform the daily operations.

 

There is a lot that goes into building something. I have written about how building and operating a business can be like standing in the shadow of an overwhelming mountain and the importance of having a clear plan and being organized. It is easy to be pulled in many different directions when trying to build and operate all the different pieces of a business.

 

By nature, I tend to make things complicated (sometimes more than they need to be). This is in part due to my focus on detail and isn’t all bad. The down side to being like this is that things don’t get done very fast. I know that I need help to build my business and move my mountain.

 

I have been working to get better at sharing shovels. I have determined that one of the things I’ve done in the past is to overwhelm new team members. So, to avoid this I am working on ways to simplify the system and to focus on one shovel of the mountain at a time.

 

Our business has three areas of focus; Sales/Marketing, Production/Operations and Administration/Finance. There is a lot in each of these areas and they all are critical to the support of the business. Keeping them operating equally is one of the most important and difficult tasks.

 

The focused shovel today is preparing a Proposal. This is the area that I’m currently working on in preparation for my Administrative Assistant. It involves things that both I need to do and things I can delegate.

 

Preparing a Proposal involves:

• Meeting with the customer – Finding out what the project consists of and helping them figure out what their dream is. Take pictures, get measurements and make the necessary notes needed.

• Writing down the scope of work to be done – Fill out the areas and categories of the Bid Sheet with the explanation of the work to be done.

• Preparing the price for doing the work – Use the information gathered to determine lineal feet, square feet, cubic feet, etc. of the different areas described in the Bid Sheet and enter it into the Worksheet.

• Compiling this information on to the Proposal – Take the information of the two previous bullet points and put it on the Proposal to be presented to the customer.

I know that I have almost forty years of developing this system and I need to get it out of my head, simplify it and put it on paper if I ever hope to move this mountain.

The Importance of Intentionality for Building Your Dream Life

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Because It Isn’t Going to Magically Build Itself

For years people have asked me where I came up with the business system and procedures that I use. As I thought about it, I realized that my business and life had been developing for years without much intentionality.

After my accident in 2012 it caused me to think about what my life was and what I had expected it to be. Not that my life was terrible before, it just wasn’t what I had envisioned it to be. I had been living without a clear plan and there was so much more that I wanted to accomplish.

At that point I decided to become more intentional. I’ve always been a planner but it’s sad that it took a hit in the head for me to realize the importance of being intentional about the plan.

When we’re young the tendency is to think that we’ll have all the time we need. There’s no hurry to plan for the future…we’ll get around to that someday. Then one day we wake up and realize life is flying by and we haven’t done all those things we wanted to.

 

You don’t have to wait until you’re smacked in the head to become intentional.

 

While explaining my business operating system to my team, it became evident that even though I now have an intentional plan, it needed to be written down. When working alone, I would just do the next thing that needed done. I didn’t need a written plan, so I thought. Not only do I need a written plan to communicate to my team, but it helps me to be clearer.

Think of your life or business as a construction project. It all begins with a dream. You can see the vision of the completed project in your mind. The tricky part is getting that dream out of your head and making it a reality? Having it drawn out will let you see if it looks like your dream or not. It’s better and easier to make changes and corrections during the planning, rather than the construction. It improves the clarity of communication between all parties involved.

It’s also a good idea to have the help of a professional when drawing out your plans or building your dream. Their experience, knowledge and skill, can save you time and money. Done well, it will make the entire process more enjoyable.

In last week’s post, it once again was reinforced how important intentional planning for the future is and how rarely it is done.

Having a clear picture of what it is that you want your life or business to look like when you’re finished building it, takes intentionality.

Be intentional.


Don’t wait to be smacked in the head to get intentional about planning for the future. Let me know what areas you need some help with planning or building the life or business of your dreams

Why It’s Critical to Save Money in Business and How to Do It

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Setting Up a “Rainy Day Fund” for Your Business

 

Currently it is common for people to spend everything they earn and not save anything for future investments or emergencies. For the most part, as a society here in America we have become comfortable. We have forgotten how important it is to save money.

There have been times through out history when things weren’t good financially, i.e. the Great Depression of the 1930’s. Enough time has passed since then, that for most people it’s become a distant memory. If you have ever talked with someone who went through the depression or a similar experience, saving money was more than something that needed to be done, it often was the difference between life and death.

As reported in a Market Watch post* from December 2015, approximately 62% of Americans personally have less than $1000 saved and 21% don’t have any savings. Businesses aren’t doing any better and it’s every bit as important. Part of a good business financial plan includes saving money for those irregular and unexpected expenses.

Just like in our personal lives, in business we get busy with the process of daily living. We work hard at the normal operation of the business and we neglect to intentionally plan for those “rainy days”. Things like; equipment maintenance and repairs, building maintenance and repairs, quarterly and annual taxes, irregular payments, etc.

When I started doing construction work I learned the skill of building from some of the best craftsmen. When later I went into business for myself I thought I knew everything that I needed to be successful. The problem is that while they taught me how to build a solid, well built structure, they neglected to teach me how to build a business that way.

Early on in my business career one of those business building lessons learned the hard way, was the importance of saving money.

I was working hard to keep construction moving forward. The material figured, ordered, and suppliers paid. The subcontractors and employees organized, having what they needed and paid. Things were going well and there was even some money left over. So, naturally I spent it. Then it happened…the accountant showed me how good my year was by telling me how much I owed in taxes. How was I going to pay them? I didn’t have that kind of money. What was I going to do? I was going to have to make payments. Just so you know, tuition to Hard Knocks University is high.

That’s why over the last 35 years of learning lessons the hard way I designed and developed a system to help me avoid pitfalls. I needed to find a way to separate money that would be needed later. How was I going to do it? Several years ago, my wife and I found out about Dave Ramsey and his Financial Peace Program**. It is a program that teaches you to, “Live like no one else, so that later you can live like no one else.” The very first lesson he teaches is “Super Saving”. It is a common-sense approach to saving money and the reasons it is important to do so. This was great for my personal finances but wasn’t an exact fit for my business.

So, using the basic principles of Dave’s plan for personal savings I began working on a way to do the same thing in my business. The “Savings Transfer Sheet” is the result and a small piece of the bigger Business Blueprint puzzle. The “Savings Transfer Sheet” is a simple spreadsheet that with a few basic entries will give you the dollar amount that needs to be separated from any received gross dollar amount. That separated money can then be put into a different account or turned into cash and put in a safe. This way that saved money won’t accidentally be spent on the wrong thing.

After talking with a lot of different business owners I realized that every business could use a solution like this. That’s why in the next few weeks we will be making available a free downloadable “Savings Transfer Sheet” including instructions.

 

Next week I will go into more detail about the “Savings Transfer Sheet” and how it can help you solve your business money problems.

 

*https://www.marketwatch.com/story/most-americans-have-less-than-1000-in-savings-2015-10-06

**https://www.daveramsey.com/

How to Determine If a Business Size Fits “Just Right”

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The Goldilocks Method for Deciding What Size Is the Right Size

 

You’re probably asking yourself, what does “Goldilocks and the Three Bears” have to do with business. Let me see if I can explain. As we work on expanding our business to add coaching and consulting to the construction, I have been thinking a lot about what size is “just right”. I have experienced too small and too big. I know how uncomfortable either of these can be. So how do we determine what size is “just right”?

In the story of “Goldilocks and the Three Bears”, a little girl named Goldilocks, has been walking through the forest when she comes across a house. She knocks, but no one answers. She smells the warm porridge and realizes the walk has made her hungry, so she goes in. Inside she finds three different sized bowls of warm cereal. She tasted the big one and it was too hot. Then, she tried the next one, but it was too cold. The small bowl was just the right temperature, so she ate it.

After she finishes eating, she finds herself getting tired. So, she goes into the living room and finds three different sized chairs. She tried the big and middle-sized chairs, but they were both too big. She found the small one to be a good fit, so she sat down. Just as she began to doze off, it broke.

Now she really needed a nap. She found three beds, all different sizes. The big one was too hard, the middle one was too soft. The small one was just right. So, she lay down and went to sleep.

While she was sleeping the bears came home to find that someone had been eating their porridge, sitting in their chairs and sleeping in their beds. Just then Goldilocks woke up and ran screaming from the house.

There are several business lessons to be learned from this story. First is Goldilocks skipping through life without a plan. Second is Goldilocks having helped herself to the bear’s things (this is a business lesson for a different blog). The one I want to focus on today is the bears having figured out what temperature, size and mattress support was the best fit each of them.

I have done business when I was the only one. I did everything; sales, marketing, admin., finance, the construction, all of it. This can work, but there is a maximum that one person can do. A maximum number of people that one person doing everything can help. This business model is neither right nor wrong, it just needs to be the right fit.

I have also been a partner in a small construction company that was doing great. Because we were doing excellent work and were filling a need, we began to grow and GROW…and GROW. This high-speed growth is a common situation that I have experienced and seen happen over and over. It often ends in disaster with unhappy customers and/or going out of business.

This brings me back to Goldilocks and the bears. Being successful in business is less about the size and more about the fit. You need to be intentional about what fits you, not what fits someone else or what someone else tells you should fit.

As Goldilocks grows up she will mature and need bigger bowls and furniture. This growth happens gradually and with intentional purpose. This is why I am working hard to surround myself with quality people that are a good fit. In order for these people to know what is expected of them and how the different positions fit together, there needs to be an intentional plan. This is the piece that is missing in most companies as they go from the small to the big.

As Goldilocks matures hopefully she will make good decisions and take advantage of the Solution Building “Business Framework’, go back to the bears for some experienced advice and to repay them for the food and the chair.

Trying to Spin Too Many Plates at The Same Time Can Make You Dizzy

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The Same Thing Happens When You Try to Run a Business Without a Plan

 

Most of us have seen plate spinning acts done in some form or another. When I was growing up I remember seeing Erich Brenn performing his plate spinning act http://www.edsullivan.com/artists/erich-brenn-plate-spinner on the popular Ed Sullivan Show https://en.wikipedia.org/wiki/The_Ed_Sullivan_Show. I remember the running back and forth, trying to keep all the different plates spinning at the same time. It was really pretty amazing.

I’ve concluded that most businesses are being operated in a way that feels a lot like trying to keep all those plates spinning at the same time. Just like the performer who keeps putting more and more spinning plates up on the end of sticks, we keep trying to do more and more.

There is a limit to how much a single individual can do. We can only run back and forth keeping the plates spinning for so long before they start falling and breaking. This means there is a maximum number of people that I can provide my services to by myself.

As I have been looking to serve more people, I have been adding more help in the form of assistants and subcontractors. The difficulty with this is that my business system has been developed and stored in my head for forty years. It’s hard to present a clear plan to others when it’s in my subconscious.

This is why I’ve started the process of sorting through the system in my head and putting it on paper (and in there is a scary place to work). Just like constructing a building can be done with a plan in someone’s head, it’s much easier to share the plan and the work when it’s drawn out for others to see.

 

Most business systems are going to be very similar. They are going to consist of the same basic areas of operation.

Sales/Marketing:

  • Prospecting for customers
  • Follow up on leads
  • Meet with prospective customers
  • Pricing and Proposals
  • Sales Reports
  • Advertising/Promotions
  • Marketing and Sales Planning
  • Customer Relations
  • Market Research
  • Public Relations
  • Product Development

 

Production/Operations:

  • Project Management
  • Project Assignments and Scheduling
  • Productivity Monitoring and Control
  • Quality Control and Documentation
  • Production Team Prep. & Development
  • Communicate with Team Members
  • Project Troubleshooting
  • Inventory Planning and Control
  • Purchasing and Vendor Relations
  • Customer Service
  • Equipment Maintenance and Repair
  • Facilities Maintenance & Repair

 

Administration/Finance:

  • Computer Systems
  • Team Member Records
  • Team Member Policies and Benefits
  • Office Support
  • Office Maintenance
  • Information Archiving and Distribution
  • Data Processing
  • Communications
  • Contract Preparation
  • Budgeting
  • Invoicing
  • Cash Flow Forecasting
  • Financial Reports
  • General Bookkeeping
  • Accounts Payable
  • Taxes
  • Banking

As you can see here, even just the basics are a lot of plates to keep spinning and there are a lot more to spin than just these. All of those plates going around and around are making my head spin.

I plan to share my adventure as I get this system out of my head and on to paper, so that I can get those spinning plate neatly organized.

Keep following along if you would like to know how to organize your plates.

 

Building Your Business Is Critical to The Survival of The Business

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Just Like the Construction of a Building – You Need a Blueprint for Your Company

 

If you own your business and aren’t being intentional about the organizational operation of your company, it is likely that you won’t make it past your 5th year. This is according to the Bureau of Labor Statistics https://www.bls.gov/bdm/entrepreneurship/bdm_chart3.htm. Just think about the number of businesses that you have seen come and go.

Whether you are a solopreneur or you have a team. It doesn’t matter if you have been in business for 30 years or just starting out. Regardless of the kind of work you do, the organizational plan is just as important as the work you do…maybe more.

I know in my 40 years of being in business I have learned some lessons the hard way. Let me tell you, the tuition for ‘The School of Hard Knocks’ is expensive. There were times when I got behind on taxes to pay bills and times that I got behind on bills so that I could pay taxes. Neither of these is a very good business plan. One of my SHK professors once told me, “that when you steal from Peter to pay Paul, you make Peter a Paul bearer”. If you want to avoid the need for a pallbearer for your business…you need a plan.

It is common for people to start a business without a plan. Generally, someone has learned a trade or a craft and for whatever reason they decide to go into business on their own. Most of the time they have given little, if any, thought to business structure. They show up every day working hard and then…surprise, you owe some taxes and haven’t saved any money to pay them. They needed a plan, a blueprint for building the business.

Being in the construction business I see a lot of similarities in constructing a sound building and a constructing profitable business.

  • Both need to start with design plans – the thing that gives you a clear direction of what you want the outcome to be.
  • Both need an architect – the person that can see the vision of what the finished product will be.
  • Both need a good solid foundation – the thing that will support you when the storms come.
  • Both need good framework – the thing that holds everything together.

     

  • Both need a builder – the person that reads and understands the plans and puts all the different pieces together correctly.
  • Both need the proper tools – these are what allow the pieces to be shaped and fastened together in the right places in the right order.
  • Both need a good team – these are the different people with the different skills and knowledge needed.

It doesn’t matter if you have been in business for years or are just starting, YOU NEED A PLAN. If you would like to minimize the time you spend attending ‘The School of Hard Knocks’, then keep following our blog. We are working on some Business Building Solutions for just this purpose.

 

What areas of building your business would some ‘higher education’ be helpful.

Riding on a Runaway Train

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Getting Control of Your Busy Life

 

For years I have used the example of a runaway train as a comparison to my busy, on the go, over scheduled, out of control life. It’s like I am riding on a speeding train of which I’m supposed to be in control. The problem is that instead of being seated comfortably in the engine at the front, I am barely hanging onto the ladder on the back of the caboose trying to not fall off. The train keeps speeding along, with no way for me to get control from the caboose. I start pulling my way forward, one train car at a time. First one, then a second, then a third. Look at me I’m making some real progress here. It won’t be long now and I will have this train back under control. Then, wouldn’t you know it, the train hits a bump. I lose my grip and catch the caboose as it goes by. Now I get to start clawing my way back toward the front all over again. How am I ever going to get this crazy train, called life, under control? If you’ve ever felt like this, then here are some ideas that might help.

You need to have a plan –This is where getting control starts. How are you going to make it to the engine? The key is to not quit. Don’t ever let go of your train unless you’re dead. As long as you are still alive you can do something about your situation. You need to be intentional about how you want your train to operate.

            Review the past – Look back at what has worked and what hasn’t. What was it that caused you to lose your grip from the train? Determining this will help you to know how to hold on as you move forward next time.

            Figure out what your purpose is – God has given each of us specific talents that fit who we are created to be. It is up to us to find out what they are and put them to good use. This determines who we are and what kind of train we have. Is it a freight train, a passenger train or maybe something different?

            Don’t overload your train – Once you have determined what kind of train you’re on you can decide what kind of cars should have. Most likely there are some that will need to be disconnected and left behind. Overloading our train is a very common problem. Most of us think we have a ‘super train’ that can pull as many cars as we hook to it. It’s okay if we don’t pull them all. They will fit in someone else’s train better, or are just a waste of good train fuel. Who knows maybe you will need to add some different ones. The important thing is to know how many are too many and which ones don’t belong.

            Help from other trains – Sometimes when our trains are overloaded there are others that can help us with our load. Maybe they can give us a push, a pull or take some of our cars. It’s okay to get help. Our train isn’t the only one. If we get our load right, then we are better prepared to help other trains when they need it.

In this world there is no such thing as a perfect train. We will never have complete control or a ride without any bumps. What is important is to not give up or quit. Keep working to make your train better. To be aware and observant of what our train should be. Work every day to make your train the best train it can be and remember, ENJOY THE RIDE!

Be Careful About Short Table Legs

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Supporting and balancing your business.

Have you ever felt like your business and/or your life were out of balance? It’s a little like a three legged table with a short leg, it can get wobbly.

I know I have felt this way and sometimes still do. You have probably heard the saying ‘feast or famine’ when talking about the building industry. This refers to the common problem of either having way too much to do. Or worrying about how you are going to pay the bills if you don’t get some work soon. Sometimes this is caused by situations beyond our control. The economy, the weather or some other external force. I think more often than not this ‘out of balance business’ is like a table with a short leg.

Most of us that are self-employed, started out by learning our trade as an apprentice while working for someone else. I know that is how I started. The problem with this is that while I learned how to build a building I wasn’t taught how to build a company. After years of struggling and learning things the hard way and paying the expensive tuition to the ‘school of hard knocks’, I am getting closer to graduating.

One thing that I learned is that my business is a lot like a three legged table. When each of the legs are the same length, it helps provide a level sturdy platform for my company to sit on. When any one or two of them is short the table starts leaning and begins to tip over. If it tips too far the company will slid off. It’s not good when the company slides onto the floor.

My three table legs are:

1 – Sales/marketing – Searching for and finding customers that you can help by providing your service and/or product through word of mouth, advertising and awareness. Meeting with potential customers, determining what they want/need and preparation of estimates, proposals and contracts.

2 – Production – Organizing, scheduling and maintaining the project or product. Determining who and what the specific people and parts that are needed and making sure they fit. Maintaining communication between all parties involved.

3 – Administration/finance – The preparation documents needed to communicate, track and record all aspects of the business. The filling out and filing of income, expense, banking and tax papers. This leg is one of the easiest to get short and when it does can really cause the table to lean.

The table top is the big picture planning and organizing. It’s what connects the three separate legs. It’s easy to give too much attention to one or two legs and forget the others. To get so focused on the production of a project that we forget to follow up on a new customer. To get so into preparing proposals that we forget to invoice. To work so diligently on tracking expenses that we don’t leave enough time for working on the project.

There is no perfect answer to keep the table from ever leaning. The most important thing is to realize that it can happen and work to keep the table balanced.