Your Money or Your Time

When we talk with owners, there is a need for them to ask certain questions immediately that always makes me think they may or may not be ready for the next step in the evolution of their business.  The issues are money and time.  If you want to have a strong business, you need to spend either more money or more time or both.  If you are not ready to do so, please find the time and money and then find the help in getting started right.

Business owners has a desire to fulfill a vision for what the business should look like and sometimes miss the basics of how the business should run.  I do not blame them for that fact.  If you start a business from scratch, even a franchise, requires that you are a real estate expert, contractor (or at least oversee the contractor), and the middleman between the business and the government agencies that require that you have permits and fees paid before you are allowed to make any money.  Transitioning to from that to handling the day-to-day operations can be a dilemma when the store opens.  At this point, they either invested well enough to hit the ground running or they stumble out of the gate.  You spend a lot of money and time getting things rolling.  The last thing you want to think about is how much more time and money it will cost to get the business open and keep it open, but that is where your thinking should be.

More often than not, owners stumble on day one.  The problem starts with having the basic operations knowledge and then translating it to a function of getting the job done by leading the team and communicating the vision.  Working in an industry for more than a year is a sure fire way to learn from the ground up.  This gives you a chance to work as a leader, find the answers on how things should work, and how to communicate effectively to employees.  Most entrepreneurs do not spend that kind of time or want to make that kind of sacrifice.  It is the difference between being in business in five years or dying out your first few months.

One problem that I see very often is - Ego.  When someone wants to start a business they say it is for the money.  That, unfortunately, is only half the reason.  The other reason is that it is something that will give them the ability to tell friends and family that they are a business owner.  Most people you see each day do not own a business.  They are happy to work for someone else, but do give credit to others who jump over to being an owner.  Ego gets in the way because the owner wants to be the owner more than the operator of a business that may require them to be on the front line.   Do not think you can delegate to a successful business.  Bulldog Rule # 14 - The right people never want to work with the wrong people - hits the nail on the head.  Make sure you are the right person to lead…not yell at people and be angry or make the place a “work-hell”.  Otherwise, you will spend more money to hire the right person to lead.

I have been enjoying reading for the millionth time The E-Myth Revisited by  Michael E. Gerber.  He makes many valid points on hiring people who can be trained and can follow your lead.  This requries that you have a training program for them to follow and are able to lead someone through training to be the best employee for the job. You can’t have a big ego and lead employee through training (no one would follow).  Creating a great training program removes you as the main focus of the business and makes the system most important.  I was also reading What the Dog Saw by Malcolm Gladwell where he made this point.  He interviewed Ron Popeil, the founder of Ronco and the Inventor of many products you probably have in your kitchen.  I was impressed with the way  Ron took the interest off himself and made the product the star.  Coming from a family of salesmen, that was always the formula, but for someone without that kind of knowledge and with an ego going into business, it is easy to see where a person can slip up and make the product or service second to the messenger.  Lose the ego and make the system follow the sale.  You may want to take a vacation.  If the emphasis is on you and your ego, what happens when you are not there?

Great leading through training requires a few items:

• Each job has a cost and an outcome.  List the parts of the job and the desired outcome.  Be prepared to change the training and the costs as your business grows.  There is never just one way to do a job and costs change over time.
  
• Be a coach, a mentor, and a teacher that someone would want to learn from.  This implies that you can lead through teaching.  If you can’t or are not very good, find someone who can.  Yes, this costs more money, but it will save you from wasting time and money in the long run.
• Invest money and time early in the game to make more later.  When you spend, spend wisely.  Getting the ship headed in the right direction from day one is the best way to jump ahead of the competition and find better people who want to work with you.
• Fire yourself if you need to.  Being an owner does not mean that you need to be the leader of the organization.  Set the tone, set the budget, keep up with the data, and get the heck out of the way.

There are great ways to make a great business and they all come back to spending your time and money in ways that make you more down the road.  Be prepared to keep spending time and money on training, firing/hiring, better information, and better processes.  The investing does not stop when you start making a great paycheck.

This entry was posted on 2. January 2010 at 12:12 and is filed under Customer Service, Training, Making Money. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response or trackback from your own site.

| Print