Most businesses start like a one-person band with the owner playing all the instruments. That person can usually play some of the instruments well, but he or she must also play some of the instruments by necessity.
Like any musical ensemble, there are many roles in a small business. In the beginning, owners are often the best person in the company at making or delivering the product or service. And because they have the most at stake, they often wear a variety of hats including sales, accounting and more.
Through a combination of skill, planning, talent and perhaps luck, some businesses will grow. This growth will lead to new and changing roles in the business for everyone, including the owner. Of all the roles an owner has in the business, maybe the most important one is to be the designer for the business.
In the role of chief designer, business owners have these critical duties:
• Provide the vision and direction for the company. Owners set the direction for the values of the company, develop its product and service strategies and set the tone for its relationships with customers.
• Develop and refine processes and procedures. Owners design the “business model,” the big picture formulas and processes of doing business. Then they must fill in the details by analyzing processes and finding bottlenecks.
• Create the organization’s human resource structure. Owners identify the positions and types of people who are needed and find the people to fill those roles. In the words of Jim Collins, author of the bestseller Good to Great, “Get the right people on the bus, the wrong people off the bus and get everyone in the right seats.” The payoff for a well-designed business is immense. With clarity vision, expectations and processes and with the right people pulling together, there is a strong foundation for growth.
Instead of a grim “never take a day off” grind, the business owner can now enjoy the ride – and maybe take a day off from time to time. It’s also possible for the owner to think about a profitable exit because a business that can run without the owner is worth a lot more than one that falls apart when he or she is not at the controls.
To design a better business, take these steps:
• Make an appointment with yourself to work on your business. This applies if you are a start-up or an established business. There’s an old saying that if you are chopping wood, you need to take some time to sharpen the axe.
• Write everything down. Document all job descriptions, processes and procedures and then refine the processes so the result is reliable and high quality output.
In his book The E-Myth, Michael Gerber makes the case that entrepreneurs should build and document their business as if it were the first of 10,000 locations, even if they never plan to expand.
• Try to become unimportant to the day-to-day operations. If your business would cease if you were hit by the proverbial bus, it has little value to a potential buyer. If the business is a turn-key operation with documented and reliable processes, it has much greater value both to owners and future buyers.
• Be prepared to change your role as the business grows. As time goes on, the amount of time you spend working in the business should decrease. Embrace the role of a CEO who is working on the business.
In the early stages of business, the owner’s role is to be like the best and most versatile musician in the band. To help the business grow, owners need to change their role to be the conductor of an evolving orchestra.
If an orchestra has good musicians playing every instrument, excellent sheet music and a talented conductor, the result is beautiful music.
Bernie Meineke is director of continuing education for the Georgia Small Business Development network. Contact him at email@example.com.