Recently I called three of my friends to find out if they wanted to join me for a Saturday morning mountain bike ride followed by a leisurely breakfast and catch up session. All three are business owners and all three turned me down. One had to spend time compiling and sending out invoices that were three months overdue, the other had to work all weekend to push out a tender that was due on Monday morning and the final person had to visit a client who had called in that afternoon with a major problem that needed to be sorted out by noon the next day.
As I pondered the situation I realised that my friends were really working hard and becoming overwhelmed by the challenge of managing a small but growing business. They were genuinely feeling the strain of being responsible for too many facets of the business; they felt like they were being pulled in 20 different directions and they were working crazy hours just to try and keep up with the everyday demands of the business.
This is a common situation for business owners. Early on in the lifecycle of the business the entrepreneur lands up doing everything themselves, from product development to marketing to sales to accounting to delivery. As the business grows, so these demands increase. With the increasing demands, the entrepreneur does not have the time to put in processes and systems to deliver on the company’s offering. They land up being drawn more and more into the detail of every aspect of the business and the business becomes more and more dependent on the owner to keep delivering. This turns into a vicious cycle that restrains the growth of the business and can lead to burnout on the part of the entrepreneur, or to poor quality products and customer service.
What can entrepreneurs do to structure their business so that it can grow without consuming them and becoming totally reliant on them?
One of the answers to this question is to approach the building of a new business with a “franchise mindset”, as described by Michael Gerber in his excellent book The E-Myth Revisited. In other words, as you build your business, set it up as though you are going to franchise it. A franchise is a recipe for a business that can be replicated many times over. You may have no intention of ever franchising, but if you adopt the franchise mindset you are forced to define the various roles in the organisation, set up the systems and processes for product and service delivery and put the goals and measures in place to ensure success. This establishes the foundations for effective business growth.
It is not easy to bring this sort of rigour and discipline to a small, growing business. It is much more fun to just create, sell and deliver. But if you don’t define who does what and how things should be done you will eventually find yourself doing absolutely everything and forsaking every other aspect of your life to keep the business growing.
