Imagine in its most basic form that for any business to truly excel it requires 3 main pieces. Picture a triangle with following at each point:
- Sales & Marketing
- Finance & Administration
- Operations & Service
Here’s the basic idea, without marketing you can’t sell and you won’t have any customers. Without effective operations and service you can’t install or service what you’ve sold. Without finance and administration you can’t pay your bills, issue paychecks, track if you’re making money, or if your margins are high enough to cover your overhead.
If your business has excellent leaders taking care of all 3 then you’ll be humming right along. Without even 1 piece, and your business will never reach its full potential.
As a team leader I take a portion of the responsibility for each one. Not necessarily because I have to, but because I enjoy it and like to think I’m good at it. 🙂 My leadership requires me to control marketing, handle financials and payables, and manage all of the numbers and systems. That means I have a few gaps to fill. My business still requires a Sales Leader and Operations/Service Leader. As a matter of fact, nearly any business that I’ll be involved in in the near future will require leaders with a passion for those areas of business. Eventually the goal is to find leaders for all aspects so I can completely step away or simply work on marketing and reviewing the numbers.
Let me explain more thoroughly. As a mechanical engineer, it’s no secret that I love numbers. Cash flow projections, margin calculations, break-even analyses, closing ratios and ROI evaluations are a few things that get me excited. 😀 On nearly a daily basis I’m creating one or more spreadsheets to help me track the proficiency of some area of my business in the hopes of finding areas of improvement. Those (and many other) numbers help me find, address, and then ultimately plug holes. Then as we implement changes the numbers again tell me if we’re going in the right direction or if we need to make a U-turn. Every business owner uses his or her “gut” to make decisions, but completely shooting from the hip will never allow you to make the most educated decisions. Additionally, as my aunt recently pointed out to me “You love to know how things work.” For that reason, designing and implementing systems for my business gets me pumped. Scripts, check lists, flow-charts, training materials and on and on are great fun for me. (As a matter of fact, this blog itself is a system of “indoctrinating” my team leaders without having to repeat myself every time.)
My other talent and passion is marketing. Without getting into too much detail, cross-marketing, up-selling, sales scripting, back-end sales, and the like are all areas where I focus a good deal of my time. As Michael Masterson pointed out in Ready, Fire, Aim: Zero to $100 Million in No Time Flat (Agora Series) a Stage 1 business’ main priority is sales. If your business doesn’t have an efficient system for generating leads and closing sales then you probably have a lot of room to grow. Which probably also means I’d be interested in buying your business. hahaha
So what do the 3 pieces to the business triangle mean?
- This is about the most basic way to create an organization chart for your business to make sure you’re taking care of the crucial aspects of leadership.
- If you’ve read my last blog and are still a little fuzzy on how you could fit into the picture as one of my team leaders this should narrow down the passions my leaders will need.
For example, if I’m looking to buy an oil services business and you don’t know a thing about sales, marketing, finances, administration, or systems BUT you know how to lead people and are passionate about the service and operations of customers in that field, then you have the potential to be the Service and/or Operations Leader.
If you have the ability to sell and you have the talents and motivation to teach others how to sell, you could be a sales leader for almost any business regardless of what you’ve had experience selling before.
However, that thinking is a bit backwards don’t you think?
Before we delve into why that’s backwards, let me quickly reiterate why I keep saying “Leader” instead of “Manager”. My main goal as a Team Leader is to enable all of my team members to do the absolute best that they can at their jobs. Leaders lead people and managers manage resources. To fire on all cylinders, the main leaders of a business need to not just tell someone they aren’t performing up to standards – they need to be able to lead them into improving themselves. James Rhome, I believe, was the one to say “Work harder on yourself then you do on your business” and the same is true for your team members. A leader is willing to invest in her team and gets excited when someone improves. Leaders with a passion for and ability to positively communicate with their teams are the people I’m constantly searching for.
Since my strengths are Finance and Administration its my contention that with the proper Sales and Operations leaders we could grow any business. Conveniently for me, calculating profit margins, closing ratios, lead sources, or creating systems for phone scripts etc. etc. etc. are almost exactly the same for every business everywhere in the world. So with a little adaptation to a few spreadsheets I can quickly get all of the important numbers from any business. However, without a sales leader and operations leader I can’t effectively make the changes the numbers tell me I need to make.
For that reason, my approach to buying businesses is shifting. My first goal is to find the 3 main leaders I’ll need (usually it will be 2 since I can handle Finance & Admin with a bit of help) and THEN I’ll find the business that would allow all of us to excel at something we’re passionate about. That is why I’m completely vague on what businesses I’m researching, evaluating, and looking to purchase in my blog – If you have the ability to be a top-notch leader of service or sales, I’ll find a business we can excel in together.
“The only failure is the failure to participate.” – Brad Sugars
To your success, Bryan