The system is the solution. How to scale your business.
Lessons from The E-Myth Revisited.
I first read the business classic The E-Myth Revisited almost 10 years ago when I became obsessed with the idea of developing a “systems approach” to running my business. Although it’s been 10 years since I first read the book, it’s still the first, and most important resource I recommend to other business owners.
Why you should scale your business
Many business owners find themselves in a similar position. They start a business, get some traction and soon become busy with work that needs to be done. It’s great! They don’t have a boss anymore, they are working for themselves and it’s just what they’ve always wanted.
However before long, reality hits. They find themselves putting in very long days. They are not only doing the operational work anymore; they also find themselves doing all the other things that are required to run the company. So, they decide to get some help and hire someone else. Things seem to be going OK with their new employee until that person decides to leave the business suddenly. The business owner now goes from working 12 to 16 hour days in order to clean up leftover tasks and get through the huge backlog of work. After a while of this, the work begins to suffer, quality starts to drop and deadlines are missed. How did they get themselves into this mess?
They are in this mess because they built a business that relies on them.
The 4 major take-aways from The E-myth Revisited to consider when scaling up business growth
Michael Gerber, author of The E-Myth Revisited says “If your business depends on you then you don’t own a business – you have a job. And it’s the worst job in the world…”
Therefore, the top priority for a business owner should be to build a business that produces a great product or service without them.
It’s worth considering the following 4 major take-aways from The E-Myth Revisited when you are starting to look at scaling your business:
- A business owner does not produce a product or service, a business owner creates a system that produces a great product or service.
- The real product you’re selling is your business not the product that your business sells to consumers.
- You need to build a system that allows ordinary people to produce extraordinary results.
- The goal of a business owner should be to build a systematized business that produces a great product or service without them.
How to scale a business
So how do you build a systematized, process driven business and hire people to operate these systems?
A great place to start is by figuring out where you see your business naturally growing in the next 5 years and what roles you will need to fill inside the business to get there.
- Start by drafting an organizational chart and for each position on the chart and identify the result that the person will be responsible for and the standards to which they must deliver this result.
- From there, you (and your co-founders, colleagues, or business partners) can decide which of your own names will go into each of the positions on the org chart.
- You might find that your name appears in four or five different positions at this point (this is normal.)
The goal is to start from the lowest level position and build systems to replace yourself in each position.
- If the lowest level of your business is a ‘Widget Maker’ and you’ve put yourself in this position, you need to develop a reliable and repeatable system that anyone who will fill this position in the future will be able to execute to successfully produce a result adhering to the standards you’ve set.
- Only after you have built a reliable, repeatable system do you move yourself into a higher position (i.e. Widget Maker Manager) – you can then create a reliable system for that position. You will replace yourself with a system by documenting everything you do to achieve the result that you want, to the standards you’ve set.
Create an Operations Manual to scale your business
A great way to create a systematized approach for your business is to document your processes in an Operations Manual.
Typically, an Operations manual might contain the following:
- Guides and How-To’s
- Standard Operating Procedures
Once you have created your first draft, you can then test your system by following your Operations Manual exactly as you have written it.
Use Operandio to systematize and scale your business
If you are looking for an online tool to help you document and create your Operations Manual, Operandio is a fantastic solution. Operandio can help you create a digital Operations Manual consisting of repeatable daily checklists, instructional videos, how-to guides manuals and standard operating procedures.
With Operandio, you can get started by using the template library or create your own processes from scratch.
We love Operandio and part of the reason why we built it, is because it not only helps make our systems creation process easy, it also helps us run our day to day operations and keeps everybody accountable to the standards we’ve set within our systems.
Hiring the right people that fit your business scaling strategy
Once you’ve implemented your Operations Manual and have verified that your documented system is producing the results that the position in your org chart is responsible for, to the standards you’ve set, you can then hire someone to execute your system!
When hiring people to execute your system (depending on the type of business you have and the role you’re hiring for) Michael Gerber believes you should generally be wary when hiring somebody with too much cross over experience for the following reasons:
- They may not fully buy into your system because they have already developed the habits of someone else’s system.
- If your business success relies on hiring experienced people who have their own ways of doing things, then the business will not only rely on you, it will also rely on each of them.
- It is far better to have the success of your business rely on the quality of the systems that you’ve built.
- When a process driven business with high quality systems inevitably loses a staff member, they can quickly be replaced with a wide variety of people who are eager to learn.
Use your staff to help scale so you can work on the business, not in the business
Once you have an excellent team in place and they begin to master their roles, you will notice your business will begin to hum.
It’s important to encourage staff to improve upon their responsibilities and eventually they will come up with better ways of doing things which will in turn help improve the system.
Another reason we love Operandio so much is that when you do improve and update your systems, it’s really simple to send an update to all relevant staff notifying them of any changes.
When you have staff successfully executing systems for each of the roles in your organization, your business will run like clockwork and you can continue working on the business, not in the business.
Keys to scaling your business
They keys to scaling a business lies in the realisation that it’s the business owners job to make sure all the systems run smoothly together, which also helps ensure that future franchisees or locations are successful running their own operations.
So, if you want to be a successful business owner, it’s going to require more than just knowing how to produce a product or service that people want to buy. You need to know how to build systems inside your business that can produce an extraordinary result without relying on you.
It’s time to get your business working for you.
Are you looking to ease the pressure of managing day-to-day operations in your business? Operandio is designed to digitize business processes, manage internal staff communication and to easily create instructional videos, standard operating procedures, manuals and how-tos for businesses with non-desk based workforces.