Be an Ethical Entrepreneur, Marketer, and Business Builder

You’re a business owner – you did not buy yourself a job!

This is it. This is the most important concept to grasp as a business owner… This colors and influences every decision you make in your business.

Brad Sugars has another way of saying this. His definition of a business is, “A commercial, profitable enterprise that works without me.” Did you read that last part? Without Me!

In other words, if your business requires you then it’s not a business… You have just bought or created a job for yourself. See the difference? Michael Gerber in The E-Myth Revisited refers to this as the owner being the Technician.

Why is it so crucial that your business can run without you? There are hundreds of reasons but I’ll give you 3.

  1. It’s worth more – A business that is sold including a trained, experienced manager is always worth more than one that doesn’t have one. Consider there are basically 2 types of people who buy business. Investors buy businesses to make a return on their cash investment and these guys REQUIRE a trained manager in place. Entrepreneurs often buy businesses to make a return on their money but to also give themselves something to do. In other words, they want to be the Team Leader or CEO. However, if you have one of these people looking to buy your business how hard do you think it’s going to be to convince them that they can buy the business, get the return they want, AND work on what they want when they want? Worst-case scenario they can easily remove the existing manager if they really want to, however most people won’t do that.
  2. You’ll enjoy it more – All business owners want the same thing – A business that predictably puts money in their bank account with the freedom to choose when they work and what they do. The only way that dream is possible is if you have a go-to guy or gal running the operations every day whether you’re there or not. Now if you like actually doing the plumbing for your plumbing business or tax returns for your accounting business who is going to tell you not to? No one. You’re the owner. You can still choose what you want to do when you have someone else in charge of putting out the fires.
  3. The business will be better for it – If your job and responsibility every day is to work ON your business and not IN it, what do you think is going to happen to your business? Let me tell you. It’s going to get better. When you can start spending your time working on improving your referral system, customer experience, team building and retention, and shopping for better vendors (you know, all those things you don’t have time for now) isn’t it obvious that the business is going to be better?

So if you’re the technician in your business and there’s is just no way you’ll be able to leave for 3 months on a European vacation and return to a healthy business what are you going to do?

You basically have 2 options:

  1. Teach yourself everything you possibly can about building a business to run without you. In other words, learn about business. Not your specific business or industry or niche. Just about building businesses in general. To do this, you’ll realistically need to read about a hundred books and put into action all the things you learn from them. Start with the books on my Entrepreneur Books list. You’ll also want to start learning from owners whose businesses do run without them and start attending seminars and webinars to help you learn how to maximize 3 essential parts to every successful business – Sales/Marketing, Finance/Accounting, and Service/Operations. If you’re this kind of hands-on, self-taught person, then by all means take this route. This is obviously what I have done and continue to do. It will literally take you several years and in the process you may realize that your business just isn’t capable of that vision and decide to sell it and look for one that can accomplish your goals.
  2. Work with a Business Engineer to help get you on the fast-track. Enlist the help of someone who has already done the items in number 1 with one or more businesses and who can quickly evaluate the status of your business and help you put together the plan to move it to the next level. If you’re located anywhere in the US or Canada and have Internet access and a phone line, we can help. Contact me to learn more about the process. You can also read my blog about why business coaches and consultants won’t work to get a better idea of what Business Engineering is all about.

So what are you doing to do today and this week to take that step from a job owner to a business owner? Don’t put it off. If nothing else, email me saying you enjoyed the read and would like to try either option 1 or 2 above and would like to know where to start.

To your business-owning success, Bryan

Hire based on the job description… That you write after the interview…

We’ve had a couple of adjustments to make between my 2 businesses lately. Namely, our top sales person based on revenue generated quit with 2 days notice…  The day he provided his notice I launched 2 new radio ads that “indirectly” generated 6 leads in the first day he was out of the office. I say indirectly because none of the appointments have been run yet so I don’t have any feedback from our sales professionals as to the prospect’s reason for calling. Obviously asking them how they heard about us is a waste of time, which is why both ads have a specific offer only available by mentioning the ad. 😉

Writing a job description shouldn't be this hard...

Writing a job description shouldn

At any rate, there are a few important aspects to recruiting:

  1. ALWAYS be recruiting.
  2. Have a plan so when you find the perfect person you can impress them.
  3. Have a basic job description that you then tailor to that “perfect” person.

When people ask me if we’re hiring my standard response is “we’re always looking for great team members.” Finding loyal, hard-working, reliable team members is one of the hardest parts of business so if you meet the “perfect” person for your team while visiting another business are you really going to sit by and do nothing? Great people pay for themselves. Granted, you may not have a spot in your current business right that moment however you may have one over the next few months or years as your business matures. Heck, you may even buy a business for that perfect person to run. I personally had someone recruit me for over 5 years before I called them up one day and said “so do you still have an opportunity for me?” (of course he did).

So now that your eyes are open, how do you know they’re “perfect” for the team? Moreover, how can you make sure they’re “perfect”?

This is where my opinions differ a bit from Brad Sugars, Michael Gerber, Michael Masterson and even Marcus Buckingham (their books are all in my Recommended Reading section). Actually I agree with all of them as well – I just decided to blend their philosophies…

Before we get into the job description, you absolutely MUST have your Vision, Mission, and Points of Culture. Not only is it crucial for you to make sure you find someone who can fit into that culture, it has been the absolute best recruiting tool I possess. When you bring out your Points of Culture during the interview process, people are impressed. They immediately respect your attention to detail, focus on ethics, and business savvy. If for no other reason than it seems to be common sense, yet they’ve never seen anyone else do anything like that. 🙂

Back to the job description… Make sure you have one for every open position in your company. That description does not have to be extremely detailed, but it should include at least the top 3 responsibilities for that position (that’s a Brad Sugar’s concept though I can’t remember from which book), compensation, team members for whom they will be responsible, and a general description of their overall purpose are necessary prior to an interview. My descriptions also include a section for “Test and Measure” where I list specific numbers they’ll be responsible for improving through testing and measuring. For instance, Average Dollar Sale, Closing Ratio, Daily Break-even, etc. may all be important “Test and Measure” concepts for a particular position. It’s my responsibility as the Team Leader to provide them with those numbers and provide the education and resources necessary to improve them.

So your pre-interview job description may look something like this:

Compensation: Fifteen percent commission of all gross sales with a target of $50,000 in sales per month.

General Responsibility: Generate new revenue for the business by presenting the best solutions to our target market.

Specific Responsibilities:

  1. Present products to clients and prospects
  2. Generate leads on your own in addition to those generated through our marketing
  3. Ensure that every client is so happy they’re excited to provide referrals

Test and Measure:

  1. Average Dollar Sale for your sales
  2. Average # of transactions per year per customer
  3. Closing ratio

The need for those basic points is simply to make sure you are being realistic in your search for the perfect person. It’s basically common sense things like you wouldn’t try to recruit someone making $50,000 per year for a $10/hour position even if they are perfect. The job description ensures that you’re focused on the person with the proper traits.

Now here’s the important part, after you find that person, interview them, and learn a bit about their passions, talents, and skills, you need to expand on your job description to ensure that new recruit will be doing what they do best as often as possible (Marcus Buckingham harps on that in all of his books).

For instance, my current openings are in sales. Your stereotypical sales professional can’t stand paperwork, is rather disorganized, but is extremely outgoing, excellent at building rapport quickly, reading people, and isn’t afraid to ask for an order.  That type of personality would lend to having all appointments, follow-ups, paperwork etc. handled by someone other than the sales professional so they can just focus on getting in front of prospects. His job description might include generating new business by cold-calling or canvassing because he enjoys the challenge. However, what happens if you find a talented sales professional who is organized, loves to know how a business works, enjoys building longer-term relationships, and even feels comfortable documenting what they do. Well you write up her job description to focus on setting up relationships with complementary businesses who can be constant lead sources, you have her document the steps she took to build those relationships, and for the most part you don’t require her to do any cold-calling or canvassing because if she’s not passionate about it she won’t be good at it anyway. If possible, you probably still want someone else in your office managing the paperwork, appointments, etc. however a person with that type of personality may be more effective juggling her own schedule because of her highly-organized nature.

This is where I differ a bit from Michael Gerber who focuses on creating your organizational chart right from the beginning with full job descriptions. The chances of you finding the person who fits your detailed job description perfectly on every point is nearly impossible. If Michael Gerber had actually ever owned a business before writing his book he would know that. 😉

Michael Masterson, on the other hand, teaches that all of your top-level people should have the same job description – “Whatever is best for the customer”. Sorry, that’s just a prescription for chaos… Reference my blog on the lessons 5-6 year olds taught me for a better analysis of why.

In summary, ALWAYS be looking for new recruits, be prepared to set yourself apart from any other business the recruit has ever dealt with, and then tailor your job description to focus on her doing whatever she does best as often as possible.

To your success, Bryan

300 businesses failed in NYC for this reason…

Brooklyn Heights PromenadeAt my job I get to talk to all kinds of interesting people from all over North America and on Tuesday (2/5/08) I spoke with a gentleman in NY who used to be a consultant with 300 clients in NYC.

At one point I made the comment that, “one of the problems I see in businesses is that people who can install water softeners think that means they’re going to be good at running a water softening business – and that’s just not true.”

The consultant said “That’s exactly right!”

Me: “It’s just like Michael Gerber talks about in the The E-Myth

Consultant: “What book? by who?”

After giving him a brief explanation of the book, the author, and emailing him a list of 12 books I recommend for improving profits, he begins to tell me a story.

He said that he had a consulting business in New York City with 300 clients who all eventually failed because not one of them would take the time to make a simple business plan. He talked about one client in particular who had a great business of singing telegrams (I believe that’s what he said) that was growing fast and she wanted to expand to other cities. However she refused to make a business plan so the consultant did for her. He showed her that she would never make money at her current prices and needed to increase them. She claimed she knew her costs and could make money and stayed in business for quite a while out of sheer determination. She eventually folded, has a “normal” job, and is in a huge amount of debt because of that business venture.

The fact that 300 out of 300 business owners were “technicians” in their start-up businesses and they all failed because they didn’t know how to work on their businesses instead of just in them is no real surprise. After all, Gerber told us all about that.

What shocked me was that a business consultant hadn’t read a single book out of my varied list of 12 recommended business books. The list included at least 4 best sellers and the The E-Myth Revisited in particular was rated as the #1 business book by Inc. 500 CEOs.

Granted, this consultant turned businessman seems to be doing very well with his current venture and must have an amazing sales presentation as he sells his equipment for at least 50% more than any other similar business that I’ve encountered in all of North America. That takes at least a little skill.

The other thing that strikes me as funny is that a good mechanical engineer friend from college decided to get a MBA. I obviously chose to dive head-first into the business world to learn instead. He claims that the primary goal of a business is to acquire customers – I argued that the primary goal of a business is to make a profit. Sounds like that lady might have gone through the same business classes since she had plenty of customers – and seemed to forget about profit…

What do you think about the consultant? About MBA programs teaching that customers are the primary goal of every business? Of my crazy affinity for books? lol

To your success, Bryan

BTW – I’ve since changed my opinion on the primary goals of a business with some insights from Built to Last.

The best 6 books to teach you how to generate wealth…

When I started business “consulting” at the ripe old age of 20 with no actual business ownership and management experience, I ran into a few problems. My job was to implement a new software system that would significantly change the work flow of a business. In that process I would have to recommend ways to handle leads, in-bound and out-bound calls, inventory, receivables, and offer suggestions on what management reports to run. I learned that to get buy-in it was necessary to explain WHY they needed to do all of this. No matter how much I knew or how many businesses I helped, a 21 year old wasn’t ever going to get much respect right away. So I learned a quick way to build rapport is to use “experts” to make some suggestions instead of me just making them. In other words I learned to use books to backup my expertise and build instant credibility. I furthered that credibility by publishing articles in trade magazines when I was 22… But that’s a different story. 🙂

So after years of reading books on real estate, investing, business building, sales, marketing, and psychology here are the ones that offer the BEST advice for wealth building in the order of importance.

  1. Billionaire In Trainingby Brad Sugars: If you don’t know this guy then you need to. He retired with $10 million in the bank at age 26 for a few years. Then got bored and launched what is now the largest business coaching business in the world, Action Coach International. Now at age 34 he’s been involved in over 50 businesses and is using the formula in this book to become a very young billionaire. The best book of its kind.
  2. Ready, Fire, Aim: Zero to $100 Million in No Time Flatby Michael Masterson: Masterson’s approach is a bit different than Sugar’s which is why I liked it. Masterson talks in detail about starting and growing a business step-by-step, whereas Brad says don’t waste your time starting one, just buy one. Regardless, Masterson has turned himself into a hundred millionaire and retired for the first time at age 39. He provides some excellent tools particularly his insights into marketing and back-end sales.
  3. The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About Itby Michael Gerber: One of the best business books ever according to Inc. magazine. Gerber breaks down the reason most businesses fail to the owners misunderstandings about business. The greatest misunderstanding – that because I’m a good plumber, electrician, accountant, lawyer, etc. I’m gonna be great at running a business that will allow me to use my sweet skills.
  4. First, Break All the Rules: What the World’s Greatest Managers Do Differentlyby Marcus Buckingham: After interviewing 80,000 managers in 20,000 different organizations over 20 years Buckingham has broken down the best way to measure employee productivity and happiness to 12 simple questions. If 12 is too many he even gives you ways to shorten that list depending on your goals. If you EVER plan on doing a performance review or have employees, read this book.
  5. Built to Last: Successful Habits of Visionary Companiesby Jim Collins and Jerry Porras: The greatest lesson I took away from this book was that Gerber and Sugars are right. Even the greatest businesses over the last 100 years were founded to be great businesses from the start NOT to provide a great product. That’s a VERY important distinction. Sorry to dissapoint all those high-ranked business schools that say you need the product first. 🙂
  6. The Millionaire Mindby Thomas Stanley: This book is a compilation of data from survey’s answered by over 1300 millionaire’s. Some of his findings are quite interesting. The most important 2 were that the number 1 thing millionaire’s attribute to their success is “Being honest with all people.” The second is that most millionaires were at or below average according to our fine education system. They were mostly college dropouts , C students, and averaged less than 1000 on their SAT’s.

Though I’ve read Robert Allen’s Nothing Down for the 90sand Hagstrom’s The Warren Buffett Way and Peter Lynch’s Beating the Street along with dozens of other books and online services related to real estate and investing, I have very purposely left those out. I’m not saying they’re poor books, because they are all VERY good (Robert Allen inspired me to buy my first rental property at 21) – however, as Brad Sugars points out in “Billionaire in Training” you don’t climb the capital ladder (i.e. real estate and stocks/securities) until you’ve climbed the cash flow ladder. In other words, until you have cashflow to backup your real estate investments and securities in case of trouble, you’re wasting your time with those. I know in the instance of both my real estate investments and stocks/mutual funds I NEEDED cashflow (from my job) to cover them.

To your success, Bryan