Chapter 12: Bringing It All Together
The key to almost every issue in business from getting your personal time organised for maximum efficiency to preserving and building your equity in your business lies in systems. In the chapter on systemising, I gave you a “jump start” on how to begin systemising your business. This methodology works wonders on developing your thinking about how you can streamline your business. When it comes to more complex business issues however, it helps to have some assistance. To determine whether or not you should take your systemisation process further, I will give you an overview of what you can achieve, and hopefully answer some questions you may have.
When you start a business, you do so for your own reasons, but it is usually to achieve a certain freedom and lifestyle which comes from being the boss. It’s a sad fact however, that the majority of businesses don’t ever result in making a lot of money for the owner. Often it only provides a mediocre job for the owner until they want to retire. Unfortunately as we have already covered, when a business owner wants to retire, they find that they have few options. Most the options don’t include selling their business and regaining their lifetime investment of time and money. For this reason, my entire approach is focused on getting a business in shape to sell it.
You will nearly always make more money when you sell the business than you ever make by working in the business. So, the underlying tenet of my thinking is that when you start a business, you start it with the intention of building your business in order to sell it. If you begin to think in those terms too, you will start to look at building value into your business. Again, as we have already discussed, if you increase the value of your business you will massively increase the amount of money that you receive when you sell it. I need to stress that you do not actually have to sell your business once you have it ready for sale. Your exit strategy may be to hand your business off to a member of your family. Your legacy is not worth much however, if it is simply a poorly packaged job with little long term value.
In the private equity world a group of investors will invest money in a business, take it over and change the business with the sole aim of selling it. For them, it is a purely financial transaction. When they buy a business, a private equity company typically wants businesses that can achieve six to seven times cash flow. They will buy it cheap and make changes to build up the value of the business to six to seven times the cash flow and then sell it. Most often, this can be achieved within two to five years.
Since you already have a business, are you thinking in those terms? Are you thinking about how you can massively increase the value of the business so that when you sell it, you get a huge amount of money for it and just cash in?
I am going to use an old example of an extremely systemised business: McDonalds.
McDonalds of course is an international franchise, but if we just wind back a little bit we can understand what makes McDonalds valuable. To start with, Ray Kroc, who started McDonalds, never actually worked a day in a McDonald’s store. He was a salesman who sold milkshake agitating machines. The McDonald brothers in Chicago had a hamburger store and they happened to sell a lot of milkshakes. Ray Kroc went to visit the McDonald brothers to see who was buying all the milkshake machines and he saw lines and lines of people waiting to buy hamburgers. He thought, “Hey, this is a good idea.” And looked at how they were doing it. His amazing contribution to the business world was to come up with the idea of developing a system that he could use to repeat exactly what the McDonald brothers did. He could then sell that system to other storeowners and have them execute the exact same process. He started the first real franchise.
But some franchises today forget what they need to be really valuable… it is because of the systems. The power of McDonald’s is the fact that a teenager with less than a high school education can run the store. Everything in the store is completely systemised, and standardised and runs from templates. Employees do not have to think about how to do something in that store, they just follow the predefined procedure and it just works as a system. Now is this approach really creative? Is it really flexible? Well, you could argue that it isn’t, but it is very successful. It is very repeatable and very scalable and that is where the money lies.
Why Would You Systemise Your Business?
For many people, the concept of the perfect business is one that operates with very few skilled staff, that grows automatically, even while the owner is overseas on holiday and that can scale and take on more and more customers. In many ways, the ONLY way you could EVER get close to this is by implementing systems.
Systems allow a business to produce consistent and high quality work, with very little reliance on any individual person. Putting focus on systems, allows the business to improve efficiency and effectiveness. Errors are reduced, bottlenecks are exposed and redundancy is eliminated. All in all, a greater level of cost consciousness comes about. Reducing costs while keeping quality high allows for more sales and therefore more profits. The business becomes more scalable or has the ability to take on more staff and have them quickly and easily trained on how the business works. The business can react quickly to market demands and increased volume.
In this way alone, systems give a business a huge competitive advantage. They allow the business to be valued much higher than their competitors and gain a higher resale price. There is little or no downside to systemising a business.
Can You Systemise Everything?
There are a few areas where systemisation doesn’t make sense for a business. Some of the more highly skilled areas that have key staff, are difficult to systemise. Areas that are artistic, creative or intuition-based are also more difficult.
One of the steps in my Business Autopilot System helps you identify the areas of the business that can be systemized. This is usually the majority of aspects of your business, but even when you find areas of your business that don’t look like they can be systemised, there are usually many core functions surrounding and supporting that area that can definitely be systemised.
Is It Worth Trying To Systemise Everything?
In the end, your business is completely a reflection of the goals and aspirations you hold for it and for your life. With my Business Autopilot System process, you design how much or how little you want to systemise your business to achieve the most benefit and meet your goals.
The Jump Start process I’ve outlined in this book gives you all the elements you need to get started, and is an important part of the Autopilot system. If you want to take your business to the next step, consider investigating my full my Business Autopilot System.
There are several elements to the total system including complete support and expert advice and guidance which will help you achieve the maximum benefits for your entire business. As you step through the process, different approaches are suggested that are unique to your particular situation and position. You can take this “Full Autopilot” approach and follow all the steps to the letter completing everything as suggested. This approach provides the biggest long term benefits. You can also take a scaled down “Partial Autopilot” approach which selectively looks at your business to determine specific areas to systemise. This partial approach enables you to identify the areas which would benefit the most from systemising and allow you to concentrate on just those aspects of your business. You can also take a combined approach depending upon what works best for you.
With the benefit of expert guidance in this area you can have your business completely systemised and earning maximum profits in as little as six months. For business owners that are nearing retirement, or need to turn their business into an amazingly profitable enterprise as quickly as possible, there is no substitute for this expert guidance. Any costs are quickly amortised and the return on investment will far exceed your expectations.
For more information on my Business Autopilot System: