Why do so many businesses fail? There are many reasons, but one of the most common is the Absentee Business Owner Syndrome.
In this video we'll talk about:
What it is
How to avoid it
How to make your company thrive
A Business is a Collection of Systems
A profitable business is just like your car. It's a group of vital systems that all rely on each other to function correctly. We've been taught as business owners that owning a business is easy because you get more freedom in life--the concept being that once you delegate the work, you don't have to worry about it again. Being a business owner has nothing to do with avoiding responsibility, it's a position that requires leadership and participation in each of the vital systems. Let's look at them together.
System #1: Sales & Marketing
I always put this first in the lineup of systems. Without a good sales and marketing system in place, the rest of the business doesn't matter. If you can't sell your product or service, you won't last long. When you're working on this system, you're looking for reliability. By that I mean the ability to forecast a return on marketing dollars. If you put $1,000 into Google ads, how many conversions would you get for your investment? Having a decent handle on a formula like that is one of the secrets to growing a business.
System #2: Finance
This is where a lot of business owners check out. Most people don't like dealing with the money, talking about budgets, or jumping into QuickBooks. When you hire someone to take over this function, don't become the absentee business owner and disappear. You still need to participate to know what's going on, and to ensure your accountant gets the information she needs on time to build reliable reports.
Most business owners start here. This is the system that they put a lot of time and energy towards. They want to have the best product or service in their industry. I put this as the third most important system. If you can't sell it and you don't track the money behind it, then it doesn't matter how good your product or service is.
That being said, it's obviously a vital system in your business. Take the time to determine what your competitive advantage is and capitalize on it. Figure out what makes you and your business great and put that feature front and center.
System #4: Recruiting
I attended an amazing conference last year in Boston. The key speakers kept talking about how vital recruiting is if you want explosive growth in your company. The moment we need to fill a position, we start recruiting. This unfortunately puts us into a reactive state. Instead, treat recruiting as the vital system that it is and invest time and money into upgrading it. Make sure you take the time to hire the right people and don't settle for the first applicant.
System #5: Training
Once you hire great people for your business, you need to have a training system in place to help them be their very best. Most business owners don't hire people because they don't want to take the time to train them. They believe they could do the work themselves more efficiently. They rarely trust staff to be fully competent. It's true that they will make mistakes, but so will will you. When you hire help, you free yourself up to build better systems to support more customers with a quality product or service.
The Umbrella System: Customer Service
Great customer service is a business system that connects to each of the other systems. Many business owners shy away from this one because they don't want to hear that their company is failing to meet expectations. I used to be this way. I was afraid to call our customers to see how we were doing. Once I got over it, I found that the fears were mostly unjustified. And where there were issues, I was able to fix them before they became problems.
When you become a business owner, you become the mechanic. Your job is to oversee the systems, participate in them, and maintain them. When the time is right, you should upgrade them with better tools, software, machinery, etc. If you become the Absentee Business Owner and simply hire someone to manage a system for you, you'll destroy your business. When people hire us to manage their finances, we do all the hard work and as long as they participate with us.