“Ross, I know that and I thought about outsourcing but not sure how to go about it”
Well outsourcing is just one way to scale your business and it is a key one, but there are actually four things you need to do and I call these the Four Pillars Of Scale…
Now this first Pillar Of Scale, when you have this in place, you’re actually putting the stability or the certainty in your business to be able to grow from, to later scale up.
You’re building a strong foundation here.
Now when you don’t have it in place, there is likelihood that there will be instability in your business as it starts to grow.
You may not notice that initially, but your business needs to be built on a strong foundation from day one.
What I’m ultimately referring to, is the importance of structure in your business.
Structure is about putting the foundation in your business sooner, rather than later to grow from
So having established the right structure now for your business, the next Pillar Of Scale, when you do this, you will be able to put in the agility to scale your business into the future as you grow – and grow efficiently.
Now when you don’t do this, the opportunity for you to grow will become more challenging, more difficult, because you may be spending additional costs or even under-spending, but not be able to provide the types of services to your targeted customers required.
What I’m talking about and what Esther had in mind, is the ability to outsource areas of your business so you can scale but also manage your costs.
Do what you do best and outsource the rest
After structuring your business to build in the foundations for strength and now learning about outsourcing to scale, the third Pillar Of Scale, when you learn this, this will give you further flexibility to run your business wherever and whenever you want.
When you don’t do this, it’s possible your business won’t have the flexibility to be able to evolve as the environment, technology and other impacts come into the marketplace.
What I’m talking about is the importance to automate, or automation.
Automate to eliminate
The fourth Pillar Of Scaleis so critical and really sorts the average business, the mediocre from the excellent, the magnificent.
Do you want to have a business that is the leader of your niche, market or industry?
I am convinced that if you implement this fourth Pillar Of Scale, your business will be set up for the future and will continually be on the leading edge in the niche that you choose to be in.
We have assessed your business overdraft extension application and on this occasion are unable to increase your existing line of credit.
We would also like to remind you of your obligations in respect to our terms and conditions.
We value your business and look forward to working with you.
Have a nice day
Your banking partner in business”
This wasn’t the first letter Andre had received from the bank. He had similar ones from other banks as well.
Today, things were not looking good compared to twelve months ago when Andre was really excited about starting his business.
It’s not that Andre’s business is not viable, or Andre is a poor manager. In fact, he has some really good ideas and built some products which have had some loyal customers who were really happy about them. However recently there were signs that some of these loyal customers were becoming frustrated with the deteriorating service they are now receiving from Andre.
A few of these “loyal” customers had even closed their accounts.
You see, what was really going on was that Andre’s business had grown to a level where it was now overwhelming him – he had not stepped up, as his business had grown.
It is now make or break time for Andre and his business.
If anyone was to observe Andre today, you would think he continually changes his mind on what he is working on. It is as though he has no focus and it appears that his business has become his boss. On a typical day, Andre could be developing marketing campaigns and then he gets distracted on his social media. This then leads to him browsing on the internet where hours go by.
You would also observe, that there is an apparent lack of structure in his business today. No distinction between sales, operations and administration. Even though Andre does most things himself, he bounces around randomly and is easily distracted.
When Andre started his business a year ago, money was coming in and the volume of transactions were manageable, but today this is no longer feasible for him to continue in this same way.
“What can I do” Andre asks Laurie, an old friend from university days.
“Andre, I think you need to do things differently, I am not sure exactly what that is for you, but I got a great insight out of Michael Gerber’s book the eMyth where he said you have to work on your business rather than in it”.
“Well I certainly feel that it’s not working at the moment” Andre replies dispassionately.
“You see Andre, by looking at your business this way, it starts to focus your mind away from you doing everything, to you stepping back, while introducing order and structure”.
At this point of the conversation with Laurie, Andre is starting to realise he does need to step out of the day to day and spend more time thinking about this concept of structure.
While this is just a small step, like a door just opening enough to let some light in, it had the necessary impact on Andre and he said to Laurie…
“Laurie, yes thanks for that and you have reminded me of a similar quote about the definition of madness and that is to do the same thing over and over but expect a different result, I am not mad you know Laurie, passionate yes but not mad!” Andre says with a huge grin.
But of course while this is the first step for Andre, there are likely to be other things he needs to do as well.
So what advice would you provide Andre to help him with his business?
What would you do now if you were Andre? What steps would you take? Who would you reach out to? How would you ensure your current customers are being retained and you can meet your financial responsibilities?
Both words can trigger emotional states inside us, just by thinking about them. In fact as science shows, what we think and dwell on, can actually manifest into daily reality. So quickly now think of a pink elephant!
Great, now you have done that, what about business? What do those words conjure up in your mind?
Well there are numerous statistics on business success and failure you can get your hands on if you just spend five minutes searching on Google. One of these is from Forbes, where they state a reason for business failure is the inability to establish a profitable business model.
From my own experience, it is also that many startups and entrepreneurs have not structured their business in a way that allows them to be commercial and thereby impeding them to be scalable and ultimately sustainable.
Of course there are many aspects to business structure and include, but not necessarily limited to:
We will leave Legal Structure and Financial Structure for another time, because today I want to focus on Operational Structure as I think this is the area that helps startups and entrepreneurs get “their head” around in the early days, meaning they can visualise how their business can work – the mechanics.
You see, what I have discovered over my years in business, conducting research and working with some of the most successful entrepreneurs, is that there are actually five fundamental critical success strategies or imperatives, which you need to have in place if you are to have a successful business today.
When you have these five imperatives in place with the right focus and in the right balance your confidence of taking your unique skills and passions into a business will increase because you will have an overarching framework or blue print to go by.
When you have these five imperatives in place, you will know how to scale-up as your business grows and importantly when to start scaling up with minimal risk and overhead.
So what are these five imperatives you need to have in place if you are to have a successful business?
The First Imperative If you have this in place, with the right focus and with the right balance, it will ensure your personal motivations for setting up a business are aligned to the overall business direction.
Of course I am talking about STRATEGY. STRATEGY is about being clear on the why. STRATEGY is also about defining your niche. Who you want as your ideal client – your client avatar and the SOLUTIONS that you will provide to solve your client’s problems. If I was to use a metaphor, STRATEGY is the brain. STRATEGY, when done right, is about you becoming empowered.
The Second Imperative STRATEGY alone is not sufficient. You also need something else. When you have this, your offerings, products and services will be accessible to your desired clients.
I am talking about SALES or Marketing and SALES. This is about defining the channels that you communicate to your desired clients. It is about generating interest, not just passive, but creating overwhelming curiosity and having the intel or information to measure your impact. SALES therefore is the life force of your business. SALES when done right, is about you being effective.
The Third Imperative Having STRATEGY and SALES without this next imperative means you do not have a business. This imperative is so powerful in that, when you have it, your business will be able to scale-up as your impact or revenue grows – nor will not be that tension between SALES and the ability to service growth.
And what I am talking about is SOLUTIONS. This is where you create, produce, manufacture, supply and service your ideal clients. It is about leveraging the latest technologies the best operating models… whenever, where ever. SOLUTIONS are the heart of your business. SOLUTIONS are about you being efficient.
The Fourth Imperative Next to STRATEGY, SALES and SOLOUTIONS this next one is often overlooked and when it is, it is to the detriment of the business – but in my view it is critical.
What I am referring to is SUPPORT. This is where you take a commercial view from day one and that you have the right approach and financial acumen in place. You are connecting with the right people through partnerships. And you are embracing ongoing learning through coaches and mentors so that you are continually stepping up to the next level. If SOLUTIONS are the heart, then SUPPORT is the skeleton of your business it needs to be strong and when it is it keeps you engaged.
The Fifth Imperative Lastly, as equally important as the preceding four, this imperative is about sustaining your business into the future and leaving a legacy.
What I am talking about here is having SYSTEMS. SYSTEMS that scan the future for trends, opportunities and threats. SYSTEMS that take you from where you are now to where you want to be. SYSTEMS that propel your forward with momentum. If you do not have effective SYSTEMS in your business, then it may be that your business today will not be sustainable. SYSTEMS are the sensors. SYSTEMS keep you evolving.
SALES, SOLUTIONS and SUPPORT are generally more tangible in most startups and entrepreneurs minds however without STRATEGY and SYSTEMS, it is where they are likely to come unstuck. So ensuring you implement these five imperatives is key.
Once you start defining your business under these five imperatives, you can start to align capability needs, functions, activities and resources. Even if you are just starting out as a business of just one person, you, this framework will be the foundation that you are building your legacy on.
How often do you set off on a journey without a plan?
I know I often do and it is sort of exciting because it keeps my options open. If I see something along my travels I then make a detour and often at the end of my trip there are always some great experiences and stories to tell.
But if I am to be honest, I actually did have some sort of overarching plan in my mind and certainly I managed my risk in respect to contingencies of money, health and insurances. But that’s me though. What about you? What about your business?
You see when I read stories about many successful entrepreneurs there is something in common in all of them that contributed to their success apart from their tenacity and work effort. Whether it is the story of a local franchisee owner or the Richard Branson’s and equivalents, to me this “ingredient” if I call it that, is a critical success factor. When you have this, or do this when kicking off your startup or starting a business, then the likelihood of moving forward is more greatly assured.
Furthermore, when you do this, it will give you the visibility or certainty of your business in how it should operate both now and into the future. When you do this, this will ensure you are set up for today, while laying the foundation in how your business is set up for growth.
What I am talking about is the need to design your business from the beginning. See it as a business, not something that is a hobby or part time job, even if the business at the moment is just you. In essence, what you need to do is to “structure” your business from day one. By doing this, it helps you be more commercial and more focused as to where you place your efforts as your time is one of the most valuable assets you have in the early stages.
What this also does is identify all the components that make up your business – the functions, the activities and the required capabilities, so by doing this, it lets you identify where there may be short comings, possibly short comings of those you know quite intimately… like yourself!
You see while I admire some of my clients for their sense of responsibility to do everything, I remind them that there are no awards in this category. I think one of the greatest lessons a new business owner or entrepreneur can learn is to how to move to the next base rapidly. Yes by all means, be hands on at the start, but eventually you have to let go of some of the activities and delegate and empower others to do them. This of course is achieved by having the structure of your business very clear and then by building a team around you. Possibly the most important role you need to take on, is the role of the talent scout.
In my business, I have identified people which I would like to work with, not as clients but as partners. They do not know that yet and I am not ready to have those conversations either, but my eyes are open and I am progressively building this team. I can do this because I have a clear view of the structure of my business, and clarity around the role I wish to fulfil and where I need to reach out for capability which I just do not have.
If you are serious about following your passions into some sort of startup or business, well go for it. However also have a vision on how your business could be structured both for today while you are bootstrapping it, and as it grows and scales up. It will pay back tenfold in the long run – after all, don’t you want to create a legacy as well?
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