How to build a follow up system

Last time, we discussed why it’s important to consistently follow up with your clients. Consistency requires a system to manage the process, track the follow ups and remind you when they need to be done. Without a system, daily challenges can take over your day. Result: follow ups are forgotten.

After I posted, @BeckyMcCray suggested that I show how to build a follow up system, so let’s do that.

Identify your touch points

When you build a house, you determine a list of requirements before starting construction. You need to know how many bedrooms and bathrooms you want and whether there will be a basement and/or a garage. From there, a set of plans will guide the construction process and provide the information needed to create the materials list. A follow up system does the same for your follow ups.

To get started, make a list of all the follow up actions (ie: touch points) that you want your follow up system to manage. A touch point is an opportunity to inform, educate, placate, calm, reinforce, remind, warn, notify or advise.

Identifying touch points should be easy because you know your business. I’ll use one of my favorite examples: the small engine repair shop that sells, rents (perhaps) and services outdoor power equipment, like mowers, chain saws, leaf blowers and garden tillers.

Here’s my list:

  • Repair started
  • Repair delayed, parts ordered
  • Repair resumed, parts received
  • Repair completed
  • Repair delivery schedule needed
  • Repair delivery date/time reminder
  • Order placed
  • Order delayed
  • Order shipped
  • Order received
  • Order delivery schedule needed
  • Order delivery date/time reminder
  • Payment plan schedule – upon creation of plan
  • Payment due reminder – 10 days out, to allow for banking online bill pay processing time
  • Payment due reminder
  • Payment overdue
  • Automated payment reminder (payment will be charged to card soon)
  • Automated payment confirmation (payment charged to card)
  • Automated payment failed
  • Automated payment card expiration warning
  • Automated payment card expired
  • Rental return reminder – at beginning of rental
  • Rental return reminder – return due soon
  • Spring tune up for warm weather equipment (eg: mowers, blowers, tillers)
  • Fall tune up for cold weather equipment (eg: snowblowers, ground thawing gear)
  • Oil change reminder
  • Winter storage service offer
  • Winter storage service pickup scheduling needed (ie: in the late fall/early winter, to pick up your equipment for storage)
  • Winter storage service pickup date/time reminder
  • Winter storage delivery scheduling needed (ie: in the spring, to return your equipment to your home/business)
  • Winter storage delivery date/time reminder

My list is intentionally long to give you ideas, but don’t let it distract or discourage you. Keep your list simple by starting with the most important touch points on your list. Build the system around those, then add more over time.

Let’s build a follow up system

Now that we’ve mapped out the touch points, let’s build a system.

Group the follow ups on your list by what drives their use. For example, do they occur when acquiring a new client, when processing an order, or when selling/delivering a service? The type of activity that drives them will be reflected in the system you setup for that follow up.

For example, a service order for a mower might produce a follow up list that looks like this:

  • Repair pickup schedule needed
  • Repair pickup date/time reminder
  • Repair – Equipment picked up
  • Repair started
  • Repair delayed, parts ordered
  • Repair resumed, parts received
  • Repair completed
  • Repair delivery schedule needed
  • Repair delivery date/time reminder
  • Repair – Equipment delivered
  • Repair – Equipment picked up

Each item would have a place to mark that it was done, that a call (or some other form of contact) was made, who did it and the date/time it was done. Want more info? Add space for notes at each step.

The medium used to work and record these steps doesn’t matter at first. What matters is that you perform the steps and refine your system. As it gets more difficult to manage a low-tech system, you should seek out a technology-based solution. By that time, you’ll have a much easier time figuring out what will work for you and what won’t.

To reiterate why a system is important, look at the list of steps and consider how it makes your business look and your customer feel if a step or two never happens or if it’s delayed by days or weeks because “it fell through a crack”.

A system can all but eliminate the cracks.

Constraint and risk avoidance

How do you manage constraints and risks?

The two significantly impact your company’s ability to stay alive, much less grow.

Constraints appear in many different forms: people, equipment, capital, cash flow and mental bandwidth are just a few.

Being constrained by hardware actually makes it impossible to do the things that you want to do as a business.” – Amazon.com CTO Werner Vogels.

Computer server hardware and manufacturing gear like a CNC machine or 3-D printer speeds are constraints that could prevent you from keeping up with demand, much less expanding how much and how many different things you can deliver.

While Vogels’ comment is a little self-serving, it doesn’t make it any less accurate, nor does it change that Amazon Web Services’ (AWS) has commoditized server hardware and eliminated server capacity as a constraint.

Constraints are risks

If you look closely at them, constraints are risks because they limit your ability to grow, deliver and respond to client and market demands.

When you can’t address those demands, your business risks not only the loss of critical staff members and clients to competitors, but potentially deadly stagnation.

Stagnation creates problems with design, engineering, delivery, creativity and new product development, as well as staff retention and sales.

Scalability problems are a common symptom of hitting constraints. Are you dealing with increased delivery turnaround times? Do you have increasing customer service or professional / consulting services response times?

If you think about what prevents you from delivering 30% more product next quarter, it usually comes down to scalability-related constraints.

Raw material availability, production capacity, quality control, engineering/design and other staff and/or manufacturing limits can all cause you to hit a wall where you simply can’t produce more, creating a situation that feels like walking in quicksand. Increasing price pressures are a form of risk that can push those limitations even further.

These issues can be growing pains, but more often than not, they indicate too little time is being spent running the business.

Spend less time running the business?!?

Yes, absolutely.

When you spend too little time running the business, it’s often because you’re spending most of your time on production-related duties.

It may seem counter-intuitive for owners and senior managers to spend less time doing production-related work, but you simply cannot spend all time on these things without putting your management obligations at risk.

For example, it’s your job to make sure that the business can handle the increases in production that your marketing and sales efforts are working toward. Most managers can’t do that when they are solely focused on production.

You can’t lose sight of your primary obligation to manage risk and eliminate constraints in your business, any more than you can prioritize a nice tan over the health of your body’s circulatory system.

A visible constraint changes behavior

A good example of a visible and behavior-changing constraint can be seen in change at Apple.

One of the unique aspects of Apple new product delivery during the Jobs era was a lack of vaporware. Most tech companies have gotten into a habit of announcing a product months (or longer) before delivery, wasting the media attention these announcements create.

When Jobs took the Apple stage in June and September to announce new products, he frequently finished his pitch with an availability date of “Today.” This took advantage of the excitement his announcement created by allowing buyers to purchase and take delivery minutes after Jobs left the stage.

That significant advantage changed in the last two years at Apple, making them like everyone else.

Staff and mental bandwidth

Most businesses have a backlog of physical tasks, workload and services. This isn’t a bad thing, unless the backlog is so big that your ability to promise and meet delivery times has you months out.

Most clients can’t or won’t wait that long. For service-oriented businesses like tech businesses, mental bandwidth can create significant problems for delivery and deployment, as well as constraining the ability of management and design teams to spend time on “the next big thing”. Stagnation results.

These constraints point directly at your ability and willingness to delegate. You and your staff have to be able to focus on the tasks that they perform at levels no one else can reach.

The bandwidth question to ask is “Is this work that no one else can do?”

How to create good surprises? Baby steps.

Surprise...

Recently, a couple of real estate transactions provoked me to write about surprises.

In that piece, surprises were not a good thing.

Yet sometimes, surprises are exactly what you want to deliver. So how do you decide which surprises are good and which aren’t?

You need to find a difference to choose a good one – but how? Try substituting a different word for “surprise”, such as “delight”.

Now ask yourself, what would delight your customers?

You might think lower prices would delight them – and while they might appreciate that, you need to think harder.

We’re looking for things that your customer would talk about the next day or week – and remember long enough to influence them to come back.

If you aren’t sure – think about the last time you found yourself delighted by something a business did. Think about how that felt. With that experience in mind, you’re ready to start looking for places to tweak your customers’ experience. So where do you find them?

Baby Steps

I think one of the best ways to figure out these little tweaks that transform your customers’ experience is to walk through the process of doing business with you in little, tiny steps: Baby Steps.

Walk through the process with each type of customer. Start with the acquisition of the lead – even if that’s a cold call from them to your business. Continue through the entire purchase and delivery cycle, identifying places where trouble could occur, where little touches would transform the experience and where little failures could sabotage the whole deal.

You should keep client expectations in mind as you follow the baby steps looking for tweaks. Expectations will differ depending on the size, type and culture of the client, as well as between business and consumer clientele.

Expectations differ by client size

When looking for things to change for a business client, consider the size of their business. You’ll want to adjust what you do based on their size because size alters how they operate.

For example, small business clients might handle invoicing, payment and receiving themselves – or a single bookkeeper/accountant may handle it. At a large client, you could easily involve dozens of people, depending on what you’re delivering. The experience – and the baby steps – should differ substantially.

Consider building a unique process for each substantially different size of client to avoid making your tweaks into the wrong kind of surprise.

For example, if your billing process is designed to make things easy for a small business bookkeeper, that process won’t likely go so well when implemented with large corporate accounting and receiving departments. Likewise, the reverse will just as likely be annoying to large clients.

Expectations differ by client culture

Client size isn’t the only factor that can alter what you do to delight them. Client culture is just as important.

For example, if you’re a wedding photographer or planner, you’re likely to handle the wedding of a Manhattan couple differently than you would a couple in the rural South or any other place substantially different in culture from NYC. Keep client mobility in mind. Even in the smallest of towns, you may find yourself working with clients from Paris, NYC or London.

It isn’t just about big cities vs. small towns. Internal culture can differ widely from the suits and ties at IBM to t-shirts and Xbox at Google. As a result, your processes and the tweaks you implement should consider how things work internally at your client, as well as how they don’t.

Expectations differ by service level

If you want to fine tune your customers’ experience and put a fence around them that no one can break through, we’re not done yet.

One set of processes for businesses and another for consumers, if that fits your business, isn’t enough.

One process for each size of client isn’t enough.

One process that fits the culture for each client isn’t enough.

You’ll want different processes for each service level your clients purchase: Good, better, best.

How do I get all of this done?

Finish one process at a time, then move to the next.

You”ll want documented processes with systems to make sure they’re done every right time. High tech isn’t necessary. A wall of clipboards works better than going from memory.

Making it easy on them doesn’t have to be hard on you.

The Bulletproof Superhero

When it was just you and you were a bulletproof superhero, you could remember it all.

You could look at code you wrote six months earlier and you knew exactly what it did and why you wrote it that way.

A bit of time has passed since then. Youâ??ve hired new people. Because you didnâ??t write good technical documentation back then (or didnâ??t keep it up to date), there are many mysteries about your business buried deep inside the heads of your most senior, most expensive staff.

And now, they’re being interrupted repeatedly with every new hire because the new person needs the knowledge stored in the heads of the â??old onesâ? in order to do their job and learn your business.

You want a new programmer to hit the ground running. To become as productive as possible as quickly as possible.

Think back to the last new person you hired. Remember that ramp-up period?

Now imagine hiring three or five at once. Just try to get something productive done while they are getting up to speed. You (and whoever is managing them) probably have other tasks to do, perhaps very high ROI tasks. Without strong technical, application/market and process documentation, those tasks are going to get incessantly interrupted with things that should have been documented.

Sure, you’ll get brilliant questions that you might not have foreseen. The other 912 questions likely could be answered in your internal wiki or other documentation. Or you could enjoy their visits to your office, their emails, IMs, texts and phone calls, while pondering the time they’re wasting by getting you them both out of the zone every time they have questions.

Your choice.

PS: Just because you aren’t a programmer or don’t have programmers doesn’t mean you’re immune to this.

Do at least one thing today

If you subscribe to my email newsletter, you know that I close most of the emails with “Do at least one thing today to get, or keep, a client.”

It’s as simple as it sounds…but do you do it?

Even if you can only spare 15 minutes, spend it every day doing something that attracts new clients or helps you keep the ones you have.

Here are a few ideas that can be accomplished in only a few minutes.

You could…

  • Write a blog post
  • Add another 200 words to your upcoming book
  • Review recent contact logs for ideas, potential problems or training needs.
  • Record a podcast
  • Design a new loyalty program or fix something about the one you have.
  • Ask someone who has never seen your website to let you watch while they try to use your website.
  • Ask one of your customers what they most value about what your company does.
  • Call a prospect who didn’t buy and ask them what turned them off to your company. Write them a thank you note (NOT AN EMAIL) afterward.
  • Follow up the “what turned you off” call with a “here’s what we did to fix that” postcard (postcards get seen)
  • Take the answer from the prior question and compare it to yours. Take action on your conclusion.
  • Create a new product or service
  • Write a thank you note to a new (or existing) customer.
  • Tweet about your favorite new product, customer, employee, industry discovery
  • Modify an existing product or service to make it easier to use.
  • Pick one thing off your customers’ pet peeve list and fix it.
  • Call one customer and talk to them about their experiences with your products, company, staff.
  • Call one customer and ask them what your company could do that would most impact their use of your products/services.
  • Call one customer and ask them what keeps them up at night, future-wise.
  • Call one customer and ask them what keeps them up at night, problem-wise.
  • Call one customer and talk to them about their next-big-thing.
  • Spend 15 minutes thinking about your next-big-thing (and take notes). Do so in a way and place that there is no way you can be interrupted during this effort.
  • Ask one staff member what you could do to help them be more productive.
  • Ask one staff member what they would fix first.
  • Ask one staff member about their vision for the company and its customers.
  • Ask your staff which meeting or other regular activity they find a complete waste of time – and what they would do instead.
  • Review your contact logs (or ask the staffer who is the first point of contact) to find out what’s on the mind of your customers these days.
  • Make a video showing off one of your product features that more people should use.

Those are just a few ideas. What would you add?

Jump in!

UPDATE:

[blackbirdpie url=”http://twitter.com/JustinKownacki/statuses/106754362109460481″]

That’s Justin’s tongue-in-cheek comment on what he wanted to happen after unsubscribing from a vendor’s email list today – only to find out it would take 10 days for the unsubscribe to occur. Sarcasm aside, that’s a personal touch not unlike the list above refers to…

Producing Trust

Last time (in the context of being trusted, and what a business must do to re-establish trust), I talked briefly about vendors who announce software years before they plan to ship it, including firms that never ship what they’ve announced and taken payment for.

On occasion, early announcements are a legal requirement for some businesses. IBM and the terms of their consent decree, for example.

Delivery problems can be made worse by substantial changes in market conditions that can make the announced product irrelevant. In some cases, a failure to deliver is irrelevant because the product is so late that it no longer matters. The totally rewritten Netscape is one such example.

Sometimes the product doesn’t meet the expectations it originally set for potential customers even if market conditions havenâ??t changed. On very rare occasions, a failure to deliver is intentional/fraudulent but that’s for legal blogs to discuss.

How do delivery problems happen?

Delivery problems are frequently born months or even years before they reveal themselves. They happen because the firm involved has internal development (yes, management) problems.

While hidden, these problems can lull a business into taking advance payment for a product that they cannot dream of delivering in the short term – even though their intention is to do just that.

Symptoms of a software business with development problems can include:

  • Inability to deliver a consistently high quality product.
  • They can’t name a date and deliver on that date occasionally, much less time after time.
  • They don’t know with any confidence if they will ship on a particular date until that date is too close to do anything about their ability to reach it.
  • They fail to design to a detailed enough level of granularity and get surprised during the development process, finding that something allocated to two days or two weeks instead requires four months of work.
  • They fail to focus on the task at hand and occasionally find themselves chasing a “bright shiny object” that has at best a tangential relationship to their announced product goals.
  • They work in a vacuum (insulated from their industry and/or their client base) and because of a substantial design/strategic product miscalculation, it is months or years before they discover it.
  • If they accept customization work requests for their core products, it tends to appear “duct taped” on, rather than designed-in.

Businesses that experience one or more of these issues simply haven’t decided to do enough enough to ensure compelling levels of consistency in the product they produce. They haven’t decided (or don’t realize they need) to focus only on the things that ensure an on-time delivery of a quality product. In some cases, they may not even be sure what “on-time” will be.

These things are not “just how it is”. They are decided.

Trust that upgrade?

Think about the one software package you use more than any other. Doesnâ??t matter whether itâ??s a development tool (like XCode or Visual Studio), an accounting package (QuickBooks?) or a firmware upgrade for your CNC machine.

  • Will you install the next upgrade without first checking to see if someone else has done the bleeding for you?
  • Are you confident that you can install the next upgrade right away, or do you wait a few days or weeks to see what the fallout is?
  • Do you install new upgrades right away with strong confidence that itâ??ll be solid?
  • Do you install and then spend a pile of time testing obvious things to make sure they still work?
  • Do you routinely wait for someone else to â??do the bleedingâ? for you before you decide to install or not?
  • Is it common to have to “back off” an upgrade because it broke too many things?

Put that hat on your customers.

What do they do?

Do they install what you ship on the day you ship it? Or do they put off updates until they have no choice – such as when industry specification and/or governmental rule changes require use of the upgraded version.

That’s an indicator of their trust in your development and testing process. In YOU.

Problems like this aren’t just about software businesses and aren’t about upscale quality. It’s about management consistently doing the things that create trust. This kind of trust applies to plumbers, coffee roasters, political candidates and construction companies – and many others.

You trust that even the cheapest generic milk from the store won’t have hair or bug body parts floating in it. You trust that when you flip a wall switch, the power will come on.

To produce high levels of trust in your work requires a decision: “We will do what it takes to become (or remain) the trusted party.”

What’s your superpower, Clark?

The Jumping Spider
Creative Commons License photo credit: williamcho

One of the difficult things about entrepreneurs is maintaining your focus.

Most entrepreneurs are interested in many things, so the BSO (bright shiny object) threatens to pull them away from their core mission cuz that other thing would be soooo interesting to work on.

Still others wonder what their core mission is.

Just this morning I heard a guy ask “What if I don’t know what I want to do?”, in response to a suggestion that he find his purpose in life and focus on finding a way to make a living serving that purpose.

If  YOU don’t know what you want to do, I’m not sure how anyone else would. OTOH, why not ask someone? “What kind of work would you call me in to perform before you’d call *anyone* else?”

One way

We’ve discussed this in the past and one pragmatic suggestion was to consider the things that you get asked to do by the smartest people you know. Stuff you actually *want* do, that is

A bit more entertaining way would be to think about some others who do amazing things in their line of work.

Say for example that you asked Clark Kent. He’s Superman. His answers might be “Leaps tall buildings in a single bound”, “Faster than a locomotive” and “X-ray vision”. In other words, he has super-human strength.

If you asked Peter Parker, he might talk about his ability to walk up a skyscraper.

You get the idea.

So…when you perform from your strengths as if you are a superhero, how would you describe your power? What super-human strengths do you have?

Here’s an example

Mine center around a few related areas.

  • Though I don’t always exercise it, I seem to find it easy to have a conversation between warring parties without either of them wanting to fit me for a pair of Jimmy Hoffa Concrete Galoshes (No, I have no desire to play detente-boy in the Middle East).
  • I find it easy to ask troubling but non-confrontational questions about situations and opportunities that others don’t often see, though I think a good bit of that is because people are too close to their situation to be honest with themselves (or to have clear vision). I’ve been guilty of that as well. We all have forests that keep us from seeing trees.
  • Processes (technical, marketing, operational, you name it) have always intrigued me. I feel very much at home looking at them from perspectives ranging from 10000 ft to piece by piece dissection. “Seeing” how they can be improved has been a core strength. I have to be careful with this one because it’s easy to become the guy wielding the shovel. All I have to do is I let “my altitude” get too low – and thus too close to the process rather than going big picture. Yeah, I know. A little wishy washy.

That last one is what merges the marketing side of my head with the geek side.

Enough about me…has that given you an idea how to describe your super power?

I’d love to hear yours.

Changes and Clipboards

While the world wrings its hands over the tax implications of LeBron James’ move to Miami, the rest of us didn’t even look up.

We’re working hard to create (or advance the progress of) our next big thing.

Meanwhile, the economy stumbles forward in some ways, races in others, and limps in still others. Change, both for the better and the worse.

Now is the time to take a look at all the processes in your business and see what can be eliminated (presumably not service, unless people don’t want it), what can be fine-tuned and what needs to be added.

Put a fine chamois on that

Even here at business process improvement’s global headquarters (or something like that), I can find things that need to be systemized or further refined.

For example, I noticed that some of the things I do didn’t have enough of a feedback loop in them. Sure, I ask but I really hadn’t formalized it into a system that *anyone* could use (even me before coffee). As a result, I’ve added a feedback loop in after every coaching session.

I realize that I needed to automate some additional parts of my follow up timeline by creating some tools to talk to QuickBooks and produce email, letters and a checklist of stuff for me to do based on recent sales, expirations of a period of time since a last sale (such as a coaching session), and so on.

Naturally, this is being pushed to my Google Calendar, so I get appropriately nagged by smartphone, iTouch and/or Things.

But you’re a lone eagle

Why did I do all that for a one dude office? Because things (lower case) get forgotten or fall between the cracks, no matter how big or small a business is. Putting these tools in place makes sure that I touch all the bases after hitting that home run.

Why is that important? Because it’s easy for the massively polished sales forces of organizations like Chet Holmes’ (who produces really good sales training materials) and George S. May (etc) to slip in under the radar and try to swipe a client from me. Or 10.

The same thing can happen to you. It’s easy to attract a local small business’ business until you goof up and drop the ball.

Clipboards

When I walk into a business and see 2 dozen yellow pads on clipboards hanging from a matrix of nails on the wall, I know there are balls being dropped.

I know it because those clipboards don’t scream at people who walk by and say “Dude, you haven’t called the customer on this page and told them that their order was delayed because it was damaged during shipment.”

Automated process management systems, even simple ones that “talk” to QuickBooks, can do that. At the very least, if you prefer a human touch (recommended), they will remind you and your staff to follow up (and tell you why). Better that you call before it was due and share the bad news now vs. sharing it 2 weeks after the promised delivery date.

That’s one way that the young whippersnapper (who is 52 and freshly laid off) gets in the door on you because they are more attentive, more timely and they follow up when it makes sense.

Kudos to them if they are on the ball rather than you. They’re hungry.

As long as they don’t forget as their business matures and the client list grows, you’re fighting a tough battle to supplant them.

Meanwhile, you’re fighting all those battles and dealing with inefficient business processes, it makes it that much harder to you (and/or your team, if you have one) to create that next big thing that’s going to be your Hank, LeBron, Junior or Martha.

Speaking of that big thing

You *are* working on or trying to advance your next big thing, right? You aren’t waiting for the economy to “turn”, I hope. Your next big thing is part of what produces that turn. If you’re too busy playing customer service Whack-a-Mole with a wall of clipboards, the time to create that next big thing is hard to find.

Is there something that needs some work? Put your Mark hat on. What could use a little chamois (or even a Sham-wow) to polish it up a bit?

Working ON your business: Make it a habit

You may have noticed that I took a little rest from blogging over the last couple weeks. Some of it was planned, some was due to surprisingly infrequent access to the internet during our trip to Missouri and Tennessee ( one example: a Starbucks with TWO tables, both next to the door in single digit weather, yeah, sure – and that was the only access I found other than a Panera restaurant).

Yep, we drove from Montana to the Midwest and back. Other than the “joy” of 20 below temps in Wyoming during the trip south, the trip was very nice and the roads were clear for the entire trip once we got out of Montana. The same can’t be said for my return home, where I found 2 feet of snow in my driveway and another foot the day after.

By the way, that 20 below thing is rare, but happens once or twice a year to keep the riffraff out:)

Normally when I leave town, I have posts automatically scheduled in WordPress so that my schedule doesn’t interfere with keeping things moving here, but in this case I wanted to use experiences on the trip to seed those posts. I suppose the most noticeable seed from the trip is that in some areas, getting random access to the internet is a pain in the rump roast.  You wouldn’t think so in 2009, but that’s how it was.

Back to taking the time off. We all need it, of course. The only problem with taking time off from anything that you do regularly is that getting back into the game gets more difficult with each day that you’re gone.

People have asked me repeatedly how I manage to blog (almost) every single day. Quite simply, its a habit. Even on the days I don’t write (which are few – even on this last trip), I’m either taking notes about a future article or writing offline.

The secret is that writing is like working a muscle. Left unused, it’ll atrophy. You don’t want your blogging muscles to atrophy, just like you don’t want any other muscles to do that.

Writing, blogging, working out, golfing, reading and many other things are simply habits that must be developed. They aren’t instinctive (which is a good thing). Why good? Because anyone can train themselves to do these things.

Make constant improvement a habit

Most importantly – for your business, at least – the habit of working ON your business is a critical path habit that you need to do daily.

Yes, I said daily.

Even if you only spend 15 minutes a day working on improving your business, you’ll be surprised how it becomes a part of you and your business process. Its something that really must become a part of your business. Being the goto person in your business is fine, just keep in mind that your business looks at you that way too, not just your clients.

You’re one of the few who can help it improve.
[audio:http://www.rescuemarketing.com/podcast/WorkDailyOnYourBusiness.mp3]

How to be a business burnout. Or not.

Just the other day, I was talking with a client about the long term future of their business, and after being quizzed a bit, reflecting with them on what provoked me to sell my software biz several years ago.

This client has a small business people-wise, but its quite successful. Remarkably, that is the problem.

Been there, seen that, done it as well. Lived it again during that conversation.

Nothing else I’ve ever said in this blog is as important as what I’m about to discuss with you.

Simple Simon was a pie man

Growth happens.

Unless you’re rude, a dope, someone who thinks they know it all, unlucky, or someone seriously in the wrong line of work, if you are paying close attention to your customers and their needs (and knocking them out of the park) – your business is pretty likely to grow.

At some point in that growth, many business owners find themselves in the situation that Lucy and Ethel find themselves in below: (2m58s video)

While Lucy and Ethel are employees in the video, the point is the same for business owners.

It’s the classic problem covered in the E-Myth – the pie baker who gets overwhelmed with the business of making pies – but really it’s much more than that.

It’s a big reason I push you to document all your business processes.

It’s the reason I made it easier for clients to document their processes – by creating a simple app for them and their staffs to document, catalog, print and view the procedures.

It certainly isn’t the <ahem> millions in royalties I receive because of all the links in this blog to the E-Myth book at Amazon.com. You’ll have to trust me on that one:)

Pinch point

If you are the technician in your business, whatever that means – your business has a single, huge limitation. A pinch point.

It doesn’t matter whether you are making pies, doing heart surgery through a microscope, negotiating complex international commerce agreements between countries; programming complicated, real-time rocket fuel calculations for the next generation of space shuttles or carving bear figurines out of logs using a chainsaw – you’re a technician.

If you’re the owner AND technician, your business is limited by one thing.

You.

Unless you are very, very lucky (sort of), you are likely to work harder and longer than anyone you hire.

Delta 331 heavy, ascend to cruising altitude

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Creative Commons License photo credit: dsearls

If you are working 14-16-18 hour days to get your dream off the ground, it’s a thrilling time (business-wise, at least). Everything is exciting.

Imagine an airline pilot on their first heavy takeoff. An astronaut on their first shuttle trip. Ok, maybe your biz isn’t as exciting as the shuttle ride, but its as close as you might get.

As for the effort you put in, that’s like a Boeing 777 taking off from your local airport, or the shuttle launching into orbit. The 777 burns LOTS more fuel per mile getting to its cruising altitude than it does once it levels off.

Likewise, the shuttle and its boosters burn thousands of pounds of fuel getting to escape velocity, only to have essentially effortless flight in space until its return to Earth.

You, however, are not like the Boeing 777 or the space shuttle. Fast forward a few years. Perhaps your business has reached cruising altitude.

Despite reaching cruising altitude, you’re still working 12-14 hour days 5-6-7 days a week, burning the same amount of fuel it took to reach escape velocity. That’s ok for a while, but didn’t you start your business to get freedom as well as the money?

(at this point, I’m assuming you’re nodding “yes”)

Those 12-14 hour days still exist because you’re still the owner and technician. Even if you have gathered some staff members to swat the skeeters away so you can focus on the real work, you’ve probably found that the real work (Yes, I mean the technician work) will expand to fill the container you give it.

The difference between you and Mark Cuban

You don’t see serial entrepreneurs in that position. They still have time to run a fistful of multi-million dollar businesses and a NBA basketball franchise, and have enough time left over to annoy the SEC (the government agency, not the athletic conference).

For many entrepreneurs, the startup phase is the only phase they can tolerate.

Everything else bores them and their business easily lives without them. They build businesses with the intention of selling them as soon as the business reaches cruising altitude.

Right at the end of the most expensive, most exciting phase of the business’ lifespan, they can leave or replace themselves with another qualified CEO/owner in short order.

What would that do to your business as it is currently structured?

Imagine if you walked out the door, handed the keys to the new owner and never came back. Would your business thrive? Would it be likely to survive?

Serial entrepreneurs might take a serious bag of management savvy and leadership skills out the door with them, but walking out the door still doesn’t kill their business. Likewise, they often start other businesses, still without having to work 120 hours a week.

The important distinction between most small business owners and most serial entrepreneurs? The serial entrepreneurs aren’t technicians.

Before you make an assumption about the small business owners I’m talking about… we aren’t talking about being smart or not being smart.

It isn’t just small business people sharpening mower blades, making pies, frying donuts and changing oil. The same issue arises for chiropractors, dentists, attorneys, physicians and others in technician roles.

Be careful what you wish for

Here’s another way of looking at it: If your largest competitor had a serious problem such as health, health of a parent, car accident, bailout related issues – and ALL of their business came to you starting tomorrow… Could you handle it?

If you suddenly found the Holy Grail of marketing for your niche and people flocked to do business with you, could you triple the number of clients you serve in a month?

Same issue.

Becoming easily replaceable isn’t easy

Consider that you have figured out that if your business is to grow (perhaps massively), you have to hire someone to do the technical work you do so that you can manage the firm.

If you plan to have the time to actually manage this growing firm instead of getting pulled back into the technical end of things, you can’t afford to hire someone brand new to the field.

Likewise, you can’t afford someone who has to be babysat, so this person (2 persons, more likely) will need to have a similar degree and depth of experience.

Result: It might take 2 or 3 new staff members to replace you to the point that would allow you to spend your time on the right things (marketing and management), much less to go home at a normal time without working into the evening from your La-Z-Boy or rising at 4am so that you can have some form of family life in the evenings without doing that La-Z-Boy thing.

At your current cash flow and revenue levels, can you afford to hire 2 people with your degree and depth of experience? If not, will hiring those two people allow you to make enough deals to pay them?

If the answer is no, or if the answer is “yes, but I really don’t want to do that”, then you have 2 choices.

Decide to grow, or decide to find a business model/strategy that works with you as the technician.

Either way, your business has to be structured so that the world doesn’t come to an end if your cell battery dies while you walk the beach on Maui at sunset with your spouse.

Meh. You old guys are grumpy.

If you’re 25ish, single and reading this, you might be thinking – “Meh. That old guy doesn’t know what he’s talking about“.

Things that might change your mind:

  • When a spouse, kids, a surprise set of triplets, a house, dogs, cats, kid sports leagues and that dust behind the fridge comes calling – and your business suddenly can’t get as much as you as it used to, and neither can your family.
  • When a friend takes off to the Caribbean for 3 weeks without a cell phone or laptop, and you can’t go because the business can’t deal with you being gone that long.
  • When a competitor’s business is up for sale and buying it would allow you to totally dominate the market – but you don’t know how you’d possibly handle doubling or tripling the number of customers you have – overnight.
  • On April 28, 1998, I had 213 new customers that I didn’t have on April 27th. With a staff of 2, of which I was one. On May 1, 1999 I had 269 new customers that I didn’t have on April 30, 1999 with a staff of 4, again including myself. Trust me when I say that these kinds of changes alter your life even if you think you’ve seriously prepared for them.
  • When an opportunity you’ve wished for all your life is suddenly right in front of you, and you have to choose between it and billing hours that you know you need in order to pay next month’s bills (and the baby comes next month).

Desperately Seeking Susan (er, I mean Clarity)

How you structure your business for the future is one of the most important things you’ll ever do for your business, yourself and your family.

If after 3 or 4 years you haven’t structured your business so that you can walk away for a week without total chaos taking over – you haven’t created a business. You’ve created a job.

Just because it’s built that way now doesn’t mean it has to stay that way.

So how do you change your business so that it’ll fit a lifestyle you’d actually want to live long term – while it remains a raging success?

What do you do? Where do you start?

Stay tuned…

[audio:http://www.rescuemarketing.com/podcast/HowToBeABusinessBurnout.mp3]