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Why I wrote “Making Money Is Killing Your Business”

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I built five businesses from the ground up. Each time in the process I found myself as a hostage of my business, never knowing how it would work out, how I would get off the treadmill, or most importantly, a firm date for when I could look forward to enjoying my business. It all seemed to be up to chance, and that the best I could do was work harder and increase my “chances”.

Along the way I learned two valuable principles that transformed me and my businesses, and helped me build a business I could enjoy for decades:

  1. You get what you intend, not what you hope for… and…
  2. He who makes the rules wins.

Throughout a number of my businesses I intended to work extremely hard and make money, and I got exactly what I intended – hard work and some money. While growing those same businesses I “hoped” they would result in a great lifestyle and worked even harder to increase my chances. But we get what we intend, not what we hope for.

I learned that unless I very intentionally designed my work around building a great lifestyle, that all I was going to get was hard work and maybe some money. I decided I was going to turn the whole thing on its head, stop working for my business and make my business start working for me.

It dawned on me that “He who makes the rules wins”, and that I had been allowing my businesses to make the rules by just “hoping” they would give me a great lifestyle. I added “use my business to create a great lifestyle” to my intentionality, having grown into the belief now that business should not just give us money, but it should give us three things – money, time, and the opportunity for significance, or meaning.

This led me to develop simple tools that would keep me on track to create that lifestyle:

  1. The Big Why – those with a great vision for what to do are more likely to be successful.
  2. A Business Maturity Date – to give me a very clear, measure of the time, money, and significance I now intended for my business to bring me, and a specific date for when I intended to be there – Friday, February 18, 2001, at 10am.
  3. A simple 2-page Strategic Plan – to help me stay above the daily Tyranny of the Urgent so I could focus on the things that would build a business that makes money while I’m on vacation.
  4. Process Mapping – to get me off the treadmill, allow me to train others to do what I do, and create repeatable and consistent experiences for my clients.
  5. Outside Eyes – I have others I meet with regularly who are helping me keep on track. I’m too subjective about my own business to make the kind of progress I regularly should.

February 18, 2011, we’ll be on our way to New Zealand celebrating the maturity of our business, and we fully intend for it to make money while we’re on vacation. Why don’t most businesses get here? Simple, the owner is doing what I used to do – intending to work hard and make money, and “hoping” it will all work out in a great lifestyle. We get what we intend, not what we hope for, And when I realized I could no longer let my businesses make the rules, I was on the road to freedom.

What are you doing to build a business that makes money while you’re on vacation?

UPDATE: The book is now out and available.

Is Your Business Actually Going Somewhere?

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We love to know exactly what the near-term process is we’re supposed to be doing, we’re almost obsessed with it, to the point that at least in business, we’re too often okay with knowing exactly which direction we’re going without any idea where it’s leading us. It’s a little Yogi Berra-like “I don’t know where I’m going but I’m having a great time getting there.” Or in many cases, we have an insatiable need to know the process in all its detail before we will make a single move. Either way we find the process to be more important than the goal.

Mike Shanahan, two time Super Bowl winning coach, would plan the first 15-20 plays of a football game before the game started and not deviate from that plan. What was happening in the world around those plays did not affect his commitment to the order those plays. And he won an awful lot of football games with that approach. It was brilliant football.

But business success just doesn’t work that way. In the early stages of building a business or a new product line, fully knowing in advance the process we use to build it with is never as important as we think. What’s really important is two things:

  1. Great clarity on where we are.
  2. Great clarity on where we want to end up.

If we know with certainty where we want to go, and have equal clarity on where we are right now, we will figure out how to get there. As long as we have the beginning and the end, that will allow us to create a few “next steps” to keep us going.

A stream seems to meander meaninglessly; quiet, rushing, muddy, clear, looping back where it came from – it doesn’t seem to have any clear purpose to it. We see it this way because we’re focused on the process, which does seem random. But the purpose of the stream couldn’t clearer – to do whatever it has to do in order to get to the ocean. And the stream, with all it’s apparent randomness, is 100% successful – every time.

Frodo the hobbit needed to get to Mordor to drop the ring in the volcano. He could see it a hundred miles in the distance with vast expanses of unknown land and obstacles in front of him. He had no idea how he was going to get there, but he knew exactly where he was and where Mordor was, and that allowed him to plan the next few steps. He got to Mordor not by having the entire process laid out first, but by simply knowing where he was and where he was going, and the next few steps.

My mother and father would drive from Ohio to Boston to visit my sister in college. Mom would always take 10-15 miles outside Boston and drive right to my sister’s downtown apartment with no maps. She tortured Dad with this for four years before she told him all she did was point the car at the Prudential building (tallest building at the time), and then turn left to get to my sister’s apartment one block away from it.

Do you know exactly where you’re going with your business? What does it look three years from now at maturity? What does your lifestyle look like then? What is the specific date you’ve picked to get there? Do you know with clarity where are you now – what are the gaps that need to be filled first?

Know where you are and where you’re going, and that will give you enough information to create the next few steps. If you have these three things, you can get to your Mordor. Focus on these and create (and recreate) a process as you go that serves you getting to your destination. Stop serving your process and build it to serve you. You’ll make more money in less time.

The Four Cornerstones of Business Success & Significance

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The Four Cornerstones of Success and Significance are A Big Motivator and Three Bosses.

  1. The Big Motivator – or The Big Why – Lifetime Goals

  2. Boss #1 – A simple Strategic Plan that runs my daily business

  3. Boss #2 – Process Maps and Process Descriptions to create freedom and a reproduceable business (and make it worth a lot more money)

  4. Boss #3 – Outside Eyes on my Business to catch the blindspots and bring balance and completeness to my leadership.

1) The Big Motivator

Why? Why is the least asked question in business and is the most important at every level, from buying a shiny object (Why?) to the reason you do what you do (Why are you in business – what’s the end game?)

Businesses that create success and significance for the owners and in the world around them have all answered why and are driven forward by that Big Motivator. What are your Lifetime Goals, and how are you building your business to get you there? Business should have a purpose – what’s yours?

2) Boss #1

Where and When? – I use a Two-Page Strategic Plan to run every aspect of my business. I know exactly WHERE I want to go and WHEN I want to be there. The second least asked question in business is “When?”

I know exactly what my business looks like at maturity and I have a Business Maturity Date – Feb. 18, 2001, 10am. We all know exactly where we are going on vacation and when we want to be there, and that informs us what we need to do before hand, and how and what to pack. We go blissfully through 30 years of business ownership blindly packing the car of our business day after day with no idea where we are going or when we want to be there. How in the world can we make a decision about today if that decision lives in a vacuum? Is it any wonder most businesses never grow up? Do you have a simple Strategic Plan and a Business Maturity Date?

3) Boss # 2 How?

Process Mapping is that route to freedom for the small business owner. It gets all the processes out of their head on to paper so they can create quality clones of themselves who will produce as well as they do, so they can stop being control freaks and get a life.

A business owner who wants to create success for themselves and significance in the world around them with their business has others doing the production so they can focus on the Important things while others take care of the Urgent things. Do you have your processes mapped on a simple graph with some descriptions of each step? Business freedom is not within your grasp if it’s all in your head.

4) Boss #3

Outside Eyes on your business. None of us can figure it all out, and we’re too subjective about and too close to our own businesses to see the potholes.

The business owners who are intent on using their businesses to create success and significance all have peer advisors, mentors, advisory groups, or others who can speak to their business. Who are you allowing to see behind the curtain who can help you build success and significance?

Summary

Do you have your Big Motivator and your Three Bosses? I know, you don’t have time to do this, which is why you’re still on the treadmill. There is no such thing as lack of time, there are only priorities. If getting off the treadmill is a priority, you’ll find the time to not just make money, but build a business that makes money for you, so you can turn your attention to creating success and significance, not just revenue.

Process Mapping – a Key to Owning a Business

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Last week we talked about why processes are so much more important to small businesses than even big business. This week we’ll cover just how simple it is to put together a good process that will actually have a significant impact on your business. What we don’t need is more stuff sitting on a shelf – Process Mapping is designed to make us more money and free us up to enjoy the business we’ve created. The Key – KEEP IT SIMPLE! The more info you try to capture, the less likely you are to actually use the process. Just the opposite of what you might think.

Get Started – It’s never too early.
Very few companies get a good start on processes until long after they are needed, which really puts us behind the 8-ball.

The best processes will be easy to expand as your company grows and more processes and procedures are required. If you have to throw out the processes you started with instead of just tweaking or expanding on them, they likely were not good processes or weren’t even being used.

The Macro Project, the first process you should map. Map your entire company process (very high level/simple), from marketing & sales, through operations & delivery, through accounting/invoicing, to customer satisfaction. Include everything from the beginning of your company’s marketing process to the very last thing you do to complete the process – cash a check, send a thank you, put someone in a tickle file to be called 6 months from now, etc.

Record the Process – Do this on a piece of paper (or Powerpoint, etc.) using boxes with arrows from one box to the next, indicating what comes next in the process. If you end up with more than 20-30 boxes for your entire Macro Process, you’ve got too much detail – combine boxes until you get it simplified.

Check the Process – see if it is actually what you’re doing – as you go through the process, tweak what you wrote down until it reflects reality (don’t record what you want, but what is.)

Color each box – if you have multiple people in your company, assign a color to everyone and color the boxes with which parts of the process each person owns. If you own them all, seeing one color will motivate you to figure out how to get out of some of the jobs that aren’t at your pay grade. How many boxes do you own? Probably too many.

Assign a Pay Grade – pretend each box is a 40 hr per week job. How much would you pay someone to do that job? Put that in the box. (For your own pay grade – If you want to make $200k per year, that’s $100 per hr (assuming you bill 40 hrs per week, more than likely you’ll need to charge $200 per hr to make $200k).

Redesign the Process – We know what the process looks like. What SHOULD it look like. Get it fixed and re-train your people to the new process.

Circle or re-color the boxes you want to reassign first. The first step in moving from being the producer to being the business owner, is to figure out how to get the low pay grade jobs off my plate and replace them with the activities that are at my pay grade. We think we save money by doing the $20 pr hour job, but if you want to make $200k per year, you are losing as much as $180 per hour every time you do that $20 per hr job. Get someone else doing it (using a Virtual Assistant is always a great first step if you’re a small biz). OBJECTIVE – get your color out of as many boxes as possible.

Regular Review – 15 minutes once a month to make sure you’re actually doing what you say you’re doing, and that the appropriate people are well trained on the process boxes they own. Keep changing it to keep it relevant.

Try not to do this with a lot of your processes. Once you have the Macro Process figured out, you’ll probably want to break it down into a few sub-processes: Sales/Marketing, Operations/Delivery, Finance/Accounting, and Customer Satisfaction. Unless you have a very complex delivery, anything beyond this is potentially a waste of time.

One last thing – for boxes that aren’t self-explanatory, go ahead and write a full process description for that box – this will help people actually go on vacation and know the job will still get done. And it will be a critical first step for you to get out of the Producer role and get into the Business Owner role. After all, wouldn’t you rather own your business than have it own you?

Edward Deming said 85% of a worker’s effectiveness is determined by the process he works within, only 15% by his own skill. How well defined are your processes? Get good processes and get off the treadmll.

Small businesses that use processes create a winning environment that puts them in a different class then their competition. And they are more likely to survive and be profitable.