If the purpose of the entrepreneur is to create an Asset of Value, how do we get from where we are to the Asset of Value? What is it that the entrepreneur actually does? What is the “job” of the business owner?
Let’s break down the business. No matter what sector you are in, every business works utilizing the same basic functions: marketing, sales, supply, operations, human resources, money management and general management.
If you look at any one of these functions, you’ll see that it is made up of many activities that are performed on a daily, weekly and monthly business.
Take marketing. The intention is to generate leads. To that end you do hundreds of different activities, from analyzing customer data, to briefing an ad agency, to updating your company website. The sales function has to convert these leads into sustainable customers. Again, many different activities are performed every day, week and month, in order to do that.
And so it goes, for each of the core business functions mentioned above. That’s one heck of a lot of activities! The job of the entrepreneur is to organize these activities and functions into coherent business systems and then find the right people to run the systems with you managing the results.
Here’s an example of what happens when you don’t organize those activities into a manageable system. I’ve been working with a client, Kevin, who has fantastic technology to sell. It’s really better and smarter and cheaper than anything you’ll see internationally. His business should be growing in leaps and bounds, but it’s not. Why? Because Kevin can’t let go of the idea that his job is not to sell the technology, but rather to organize all the activities of each function into business systems that point him towards his ultimate destination – building an asset of value. Kevin is absolutely consumed by the daily, weekly, monthly activities. He’s over-involved in the minutia. His staff finds his nit-nitpicking infuriating and so his staff turnover is high. You would think that his obsession with his technology would be an asset in the sales arena, but in reality it’s not. He’s scornful of the customers who don’t understand how brilliant his products are, and he lets them know it. He even manages to alienate his suppliers with his interfering and correcting.
When business owners don’t create systems which allow them to take a step back from the hundreds of activities that every business performs every day, month and year, they eventually hit a ceiling. They can only do so much, no more. They get exhausted. Their entrepreneurial energy is depleted, and with it, their passion, their love for the business and their joy in what they are doing. They lose sight of the vision. They doubt themselves. They alienate staff and customers.
Only through realizing that your job as a business owner involves organizing the building the activities of your business functions (marketing, sales, HR, supply etc) into organized systems, and then delegating the management of systems to your staff with you managing the results of the systems, will you progress! This is a vital change needed in any business that is going to grow and non-negotiable if you are building an asset of value. This will allow you to spend less time working in the business, and more time working on the business. Get out of the engine room and up onto the bridge of your ship to sail it in the direction you want it to go.
If you are not consumed by the day-to-day activities of your business, you have a better perspective. You have more time. And what do you do with that time? You lead the creation of value by introducing new products or by finding new customer groups that your system of delivery can deliver products and services to.
Kevin is someone with a great idea, a brilliant product – and a not so brilliant business. Why? Because Kevin has not got his head around the fact that the job of the entrepreneur is to niche the business, build systems of delivery for the product or service, and lead the creation of value. Don’t let that happen to you!