Background
This particular business had grown from a one-person stall selling organic, gluten-free biscuits and cakes into a retail store-front and wholesale provider. The business owner was concerned because production was down, deliveries were late, quality was dropping, and he was tired of yelling at his manager. He felt he always had to be looking over everyone’s shoulders.

A Naturally Dysfunctional Progression
It’s a familiar progression common with many small businesses. You start out doing something well and business increases until you can no longer fulfill all of the demands. One person can’t do it all anymore.

So, you wisely see that more people are needed to cover all the bases and decide where another person would have the greatest impact.

You hire somebody with a certain skill set or previous experience. Maybe you start with a bookkeeper who relieves you of a task that you’re happy to pass on.

Things are all right for a while. The bookkeeper has established a routine for managing the weekly accounts and suggests that she could take on some additional work. So it’s decided that she will also answer the phones, giving you more time to make sales calls, handle deliveries, manage stock, develop new recipes, and think about promotional campaigns.

Months pass by, and the bookkeeper/receptionist/customer support person suggests that, as she’s now familiar with the accounts, it might make sense for her to take over the stock ordering. Then, perhaps it’s time to hire someone to take orders and manage the production scheduling.

Just as you’re beginning to feel some increased freedom, having offloaded some of the tasks that were the most time-consuming and least interesting to you, things start to get missed.

The problem is that people are no longer clear about what’s expected of them. They’re juggling too many disconnected positions. They have risen to every opportunity to contribute to the business but they have no clear picture of the end result.

Tear up your organisation chart
This is the point at which you need to tear up the current organisation chart (if there is one), in which the bookkeeper is the office manager is the purchaser etc.

It represents an organisation that is based entirely on the particular combination of qualities and duties that people have evolved into over time. It doesn’t show you the positions that need to exist in your company in order to support your vision. It doesn’t reveal who is responsible for what and how they’re held accountable. It’s not serving you – and only you can change it.

Five steps to a functional organisation chart
1.  Start by listing all the functions that are required in your business. Forget for the moment the people you have doing them now. Think in terms of functions – not people – and state the unique and particular result that each of those functions produces.

2.  Arrange those results in order and observe the relationships and interdependence between them. It should start to resemble a workflow chart with several branches.

3.  Identify where similar and complementary results can be grouped together into naturally-occurring ‘work stations’ that require similar levels of skill, capability or expertise. It is at this point that you can start giving them generic labels or actual position titles: Baking,  Bookkeeping, Debtors, Delivery, Counter Sales, etc.

4.  Write in the names of your current staff next to the functions they’re doing. Step back and consider how many actual ‘positions’ each of them holds and how many of them have stretched their responsibilites thinly across different branches of the organisation.

5.  Consider new strategies for those responsibilities and examine where work can be consolidated, where existing people most naturally fit in, and where they should be repositioned so that they can each achieve more satisfying results with increased clarity and better accountability.

Your people can hold several roles as long as the roles are clearly defined and make sense within the bigger picture. As your company grows, your organisation chart will show how you need to plan for and fill specific needs in your business.

How clear is your organisation chart? I’d be interested to know.

By the way, if you think this doesn’t apply to you because your business is small and doesn’t have a finance department, please read on. Remember that E-Myth principles always apply to even the smallest business.

The blog sets out the four main roles (not necessarily different people, but distinct functions), with translation from the American terms where necessary!:

- CFO (Finance director) – who advises the CEO on trends that may impact the business, supports you in analysing financial reports and helps to establish and monitor the systems used by your accounting department.

- (Financial) Controller – who oversees the personnel in your accounting department, prepares reports, and makes recommendations to improve the financial outlook of the company.

- Bookkeeper – who is the technician on your team, handling the day-to-day tasks of organising and inputting data.

- Qualified accountant (CPA) - whose main role is to advise you on tax-related matters.

The blog then talks about the essential steps that you as a business owner must take to manage your finances. Here’s a summary:

1. Be open and curious about how your financials and your business activities are connected.

2. Have a financial team around you that provides support, direction and recommendations.

3. Regularly review and analyse your income statements and balance sheets.

4. Establish a budget and a system for using it.

5. Set up a way to track and manage your cash and make it a routine.

6. Use accounting software.

Full the full story, see the E-Myth blog.

Please let me know if you need help setting up systems to allow you to put all this in place, or post a comment with your thoughts.

A recent article by Judith Lerner, Business Coach with E-Myth Worldwide, explains how to go about it.

E-Myth breaks a business down into seven major areas for management attention:

•  Leadership
•  Money
•  Management
•  Client fulfillment
•  Lead conversion
•  Lead generation
•  Marketing

Each area, taken in isolation, is a combination of little systems that work together.

One key point is how to approach the scope of the systems development project, and the other is how to begin it.

Have you ever seen one of those Magic Eye books or images? They’re pictures that, when you first look at them, appear normal: two-dimensional, colourful images of, say, a field of flowers. But when you hold the page up to your face and slowly extend your arms, focusing through (rather than at) the picture, a shift occurs.

Instead of the field of flowers, a three-dimensional image appears. Suddenly you’re looking at a labyrinth. As long as you hold on to that longer view, you can move your eyes and follow the maze.

As with any optical illusion, until you learn the trick, you can only see it one way.

Beginning your system development is a similar process of forcing your brain to see things differently. It starts with that acute awareness that the Technician, the Manager and the Entrepreneurial mindsets operate in distinctly different dimensions.

So, which perspective is required when thinking about the development of the financial management system?

All three have a part to play, but only one could effectively do the system development work.

Where to start

To build any major system in your business, start at the top with the result you’re seeking.

Ask the repeating question: “What do I need in order to get this result?” Keep asking until you get to the smallest parts. This is the managerial work.

Then, once you’ve identified those parts, create those systems and work your way back up. This is the tactical work.

It might help to imagine the trunk of a tree, with your repeating question leading you out along a network of branches that in turn lead to networks of twigs.

As you get out to the thinnest twigs, you’re getting down to the simplest parts of your larger system. You’re identifying the smallest essential components that contribute to the larger result you want.

What you find out there on those thinnest twigs are what we call ‘end systems’.

Maybe it doesn’t seem very dramatic to begin your financial system development by making sure you have a system for, say, capturing and recording your source documents, but only with that and other routine but essential end systems in place will you have a complete and robust financial system.

Having the little parts in place provides the nourishment that supports the larger, ultimate results.

Seven steps

Now that you know where to start, you can continue the process by implementing these easy steps.

1. Get to know the different voices of your Technician, Manager and Entrepreneur.

2. Recognise how your perception is altered, attention shifts, and priorities are reordered by which hat you are wearing.

3. Identify a system you think you need.

4. Using a spreadsheet, mind map, white board or blank sheet of paper (whatever you use to capture and save your thoughts), start with the name of that major system at the centre.

5. Keep asking, capturing the progressively smaller components with each of your responses.

6. Arrange all your captured responses in their logical, linear order – largest to smallest.

7. Start your system development by designing from the bottom up.

Your end systems will dependably feed each next larger assembly until you’ve reached the top.

For the full article, go to E-Myth. Do let me know how you get on.

This is understandable. It is also insane. A recent article by Joe Wollenweber, a senior coach with E-Myth Worldwide, explains why…

Business owners may have ideas about the future. They may have numbers scrawled on napkins or whiteboards and a general sense of where they are heading financially, but they haven’t understood the importance of a budget process.

Budgeting is hugely important, and so is reconciling a budget as part of your financial discipline. And it’s simple.

For some of us, even the word ‘budget’ makes us bristle. Try ‘Profit Plan’ instead. Your budget is a proactive tool for ensuring your business creates value and so generates a profit.

Clearing the windscreen

Nearly all larger, successful businesses that operate from the top down have budgets firmly in place. Nearly all successful small business owners have begun to recognise true growth and development only after they have begun to embrace the strategic planning power of their Profit Plan. You can sleep easy at night if you understand every number on your P&L and if you have a clear, quantitative plan for how to produce more profits.

Many business owners may have a decent P&L, but they soon learn that reviewing these is like looking in the rear view mirror. The P&L (or income statement) is a historical document. It shows you where you’ve been, but doesn’t give you any idea where you’re going.

Once you engage in budgeting (profit planning), however, you start to see the business through the windscreen. It might be a murky windscreen at first, but as you gather skills and think more about the numbers and the various activities of the business, it will gradually become crystal clear. 

This newfound financial intelligence gives you a sense of control. And it’s the budgeting process (coupled with cash planning) that allows you to soar.

Just try it

You simply need to begin. Organise your P&L into understandable accounts or line items and look at them. Think about what each line means.

This is what the budget process is all about: getting you to work with your numbers routinely – to think about them, so you understand them and, over time, learn to forecast the future with increasing accuracy and confidence.

Start with a piece of paper, or a spreadsheet, with columns for your forecast, the actuals, and the difference (variance), along with plenty of extra space to explain your assumptions about the variance.

Maybe at first you can’t see far at first, but you’ll get better. Forecasts consist of projections about the past (using that P&L) and predictions about the future. Look at your histor: are things going to be the same, or different? Think about the future and what you can predict. Have your sales systems achieving better results; are you getting more leads? Will these bring more revenue? If you think so, forecast it. Don’t worry if you’re right or wrong.

At the end of the month, write in what actually happened. Now, instead of staring blankly at the rows of numbers your bookkeeper or accountant provided, you’re looking at the truth – the actual results compared with your best guesses. Think about where you were exactly right. Think about where you were wrong. This way, you’re thinking about every single line item, every single aspect of the business through the numbers. Spend an hour or two each month reviewing the way you think about the business, and explaining to yourself what went right or wrong.

That’s basically all there is to budgeting.

• Step 1:  Get inspired
• Step 2:  Do it
• Step 3:  Do it consistently and watch your financial intelligence grow

For the full article, go to E-Myth. Do let me know how you get on.

You’re probably the lead salesperson, the chief financial officer, general manager or field supervisor, and director of marketing. What else? Receptionist? Customer service representative? Buyer? Installer? Trainer? HR? IT?

Taking on all these roles may have been required in the beginning. But there comes a point in the life of every business where, if it is going to grow and give you what you want, it is going to outstrip your capacity to do it all yourself. In the beginning, you hope you’ll have more business than you could handle. When that becomes a reality, if you haven’t laid the groundwork, things will inevitably fall apart.

You can’t always be the salesperson and still deliver on your promises. You can’t always be the lead technician while you’re struggling to keep warm leads in the pipeline. You can’t just focus on balancing these two activities while ignoring your financial management. Even if you were able to achieve a balance between these three critical pieces, you’ve run out of time to recruit, hire and train people to cover everything else!

It’s about balance So, you need to find a balance between all the roles you have in your business. You need to find a balance that works for you. And that’s true whether you’re wearing only three hats in your business, or 30. To find that balance, to develop that self-discipline, you need to cultivate the ability to choose – to discriminate and prioritise.

But when you’re bogged down in the day-to-day activities of running a business, prioritising can be a struggle. You may wake up on Monday morning with a well-crafted list of priorities, and walk in the door to face a barrage of fresh demands for your attention.

The 5 important steps. There is a way of finding your ideal work balance:

1.  Start by tracking your time. Write down what you do every minute of your workday. Be thorough. Be accurate. Do it in ‘real time’.

2.  As you track your time, create categories for the things you do. Come up with about six or eight broad subject areas (Sales calls, Management, Training, Admin, Fulfilment, Finance, Personal, In-transit) that give you a broad picture of how your time is used.

3.  After a week or two, analyse your data. What are the numbers telling you? What percentage of your time do you spend in each category? How much of your time is devoted to maintaining the status quo – repeating routine tasks? What is the work that you do that supports the greatest long-term, strategic value? How much of your time is spent in activities that further your business goals in tangible ways?

4.  Identify one routine category – or perhaps a collection of activities – that clearly should not be yours. (By the third or fourth day of tracking your time, there is bound to be an assortment of activities that begin to embarrass you even to document!)

5.  Make a plan to free yourself of those selected tasks. Make that hand-off a priority. Pick a date for when you will have freed yourself of those functions. Commit the time now to prepare for that transition and think about how you will reapportion your time more effectively when you have rescued yourself from that work.

The mere act of doing the time logging can often change behaviour dramatically. This simple tool allows you to see the assumptions you’re making and the habits you have allowed to define your role.

For the complete article, follow this link: e-myth

This is a story of how a very positive experience fell apart because of one small incongruity in the customer experience. It happened to the writer of the article.

Not too long ago, I decided to try a new upscale restaurant in town. As I pulled up to the restaurant that evening, I saw that the signs for the restaurant were tasteful and informative. The parking lot was spotless and the landscaping was immaculate. Even before I set foot in the door, I knew this was a five-star establishment.

The maître d’ was friendly, polite, and seated me promptly. Though the restaurant was nearly full, it felt like the other members of my party and I were the only ones there. I felt like royalty.

The interior was subtle, upscale, and perfectly lit. I was led to a courtyard that looked as though it belonged in ancient Greece or in a Maxfield Parrish painting. It had been a hot day, but somehow the courtyard was the perfect temperature. As I sat down, I was delightfully surprised; the chair was comfortable to sit in! It was the sort of chair that not only looked nice, it was also the sort of chair I could see myself sitting in for hours, lingering over desserts and coffee, long into the evening.

The white linen tablecloths were crisp and without a hint of fold lines. The staff were dressed in spotless white shirts, black dress slacks, aprons, and were keenly attentive without being overbearing. They were stationed around the periphery, but were never intrusive. I could see a waiter at all times, and I knew that at my least whim, I could summon one over with a look.

The meal was exquisite. The appetiser was sublime, and each course was better than the last. The flavours were expertly combined in unusual ways, and at the end of the meal, I was pleasantly full without feeling stuffed. The desserts were masterpieces of culinary creation.

When the cheque came, it was in a discreet leather case. Though expensive, the meal and the experience seemed well worth the price. But when the receipt came back for me to sign, I took one look and stopped cold.

They had thoughtfully provided me with a pen to sign the check. But there, nestled in the black leather case, was a cheap pink pen with a little fuzzy tassel on the top.

I stared at it. I thought, “This is absurd! This pen doesn’t belong here, of all places.”

But there it was. I held up the cheap, plastic, pink tasselled thing and looked at it. It was a non sequitur. I wondered if they had done it on purpose. Were they so worried about a customer taking a pen that they replaced all their regular pens with pink tasselled ones? Had they run out of nice pens? Was this just an oversight? Out of an incredible dining experience, that pen was the only thing that didn’t fit.

It was a systems failure. And no matter how hard I tried, no matter how much I told myself  “it’s just a pen” I couldn’t get the image of the pink pen out of my mind!

It was just one tiny element of a fantastic evening. But it was so incongruous, it was all I could think about. Even now, it’s still the most memorable part of the experience. It’s the only story I tell about my evening there.

The Three Steps

How many ‘pink pens’ are you handing out in your business each day? As a business owner, you need to develop your ‘pink pen radar’. Your customers aren’t stupid; they won’t miss the little things. You can’t afford to either. You need to be on the lookout for inconsistencies in each customer’s experience.

To do that, you’ll need to change the way you think about your business. You need to get out of your head and into your customers’ heads.

Here are three steps to get the process started:

1.  Review your lead generation material through a new lens. What is the promise that you’re communicating to your customers in your message? What expectations will they have when they come to you?

2.  With those expectations in mind, look at your business with a set of fresh eyes – the eyes of your customers. What do they see? Walk through each step of their experience as if you were a new customer – from the initial visit to your website, to the time they leave your store.

3.  Ask yourself: what are the ‘pink pens’ that dilute, distract, or even destroy the experience you intend to create for your customer? Once you’ve determined those inconsistencies, fix them!

Don’t let a small incongruity become the one thing your customers talk about. Value, like beauty, is in the eye of the beholder. And the most important beholder of your business is your customer.

As the article says, no excuse you make can change a bad customer experience. You made a promise to your customers. Maybe you said it. Maybe it was implied. But you made a promise to do something for them. Everything your business does either delivers on your promise, or doesn’t. The customer’s satisfaction stems from their experience of how well you deliver on that promise.

I am sure we all remember instances of being let down by companies where you had high expectations. I recently had a bad experience with having a bed delivered by John Lewis. I have always been impressed by their customer service and quality of their products, so when they lost parts of the bed and we ended up sleeping on a mattress on the floor for several days (as we had disassembled our previous bed on the anticipated date of delivery) we felt particularly let down. Even more so when they finally delivered the remaining parts to find the whole bed had been damaged. Although I still do have better expectations of John Lewis than many other high street companies (they did handle the complaint reasonably well and we did end up with a significant refund), it has left a bad memory.

As a business owner, not only do you have to create positive impressions from the start, you must ensure the customer experience remains outstanding and consistent throughout repeated exposures to your brand.

To read the whole article, go to e-myth. What are your ‘pink pens’? I would be interested to hear.

Why do we often put off the things that we really should do in favour of the much less important things?

I read an E-Myth article recently that gave some insight into this.

Apparently there are loads of reasons why we procrastinate. And there are often telltale signs that we are indeed procrastinating even when we think we are being truly productive.

•  Do you stay busy doing low-priority tasks despite the high-level, strategic work that remains undone?

•  Are you checking and re-checking your email without acting on them?

•  Do certain items keep getting ‘carried over’ to another day on your To Do list?

•  Are you perpetually waiting for a ‘good time’ to tackle certain tasks?

If you answered “Yes” to any of these questions, you may be struggling with this issue.

Although there are many underlying causes, here are seven that are particularly common and easily identified:

•  You are feeling overwhelmed by a particular task

•  You are afraid that you will fail

•  You feel unwilling or unable to make a decision

•  You are overworked or too tired

•  You just don’t want to do it

• You are too disorganised and distracted to budget the time effectively

•  You don’t want to commit to starting a task unless you know it will be perfect

Deferring some tasks, especially low-level or unimportant tasks, is not necessarily procrastinating. Part of the art of self-management is being able to prioritise and where possible, delegate. It might also be a good strategy to intentionally hold off on high-level or critical tasks if you are not able to focus effectively due to fatigue or unavoidable distractions. But that should be the exception, not the excuse.

Many people develop the habit of putting off unpleasant tasks simply because they don’t want to do them. But that doesn’t make them go away. They just build up, adding to stress and further distracting you from being able to fully focus on any task at hand. It is a vicious cycle.

For some people, the greatest enemy to getting important things done is perfectionism. If it can’t be perfect, it can’t be done.  Nothing is perfect and striving for perfection is just another way of putting things off indefinitely. Sometimes, ‘good enough’ is good enough.

Plan Your Work, Write it Down, and Work Your Plan: the old cliché about planning your work and working your plan is a powerful maxim. I added the bit about writing it down because there is enormous power in putting things on paper. There is an extra force in making your objectives visible and ‘real’.

Getting effectively organised and developing effective time management practices will not happen overnight. But today is a great day to start! Confronting your own particular procrastination demons will not be comfortable or pleasant. So be it – today’s a great day to begin! Create a realistic To Do list each day with only three priority tasks. Put the least inviting one on top.

Begin. Experience the pleasure of getting something you’d avoided off your list. It’s a monkey off your back! Move on to the next. It gets easier with each little success.

Are there still tasks that you will dislike? Well, yes. But they are getting done, and a completed unpleasant task feels a lot better than one hanging over your head.

You can read the full article here

Let me know if you have any great tips on avoiding procrastination. I could do with them!

There’s so much of you personally vested in your business that at some point you will ask: Is all this work really worth it?

A recent article I read from E-Myth Worldwide looks at this question.

It’s the actions you take – or fail to take – that will determine the future of your business. In other words, what you think and do has the biggest influence on your results.

So how can you overcome the self-doubt and fear?

First, accept the inevitable. Experience has taught you that yes, it will hurt, but not for long and it’s better for you to just grin and bear it. It’s often the unknown that causes anxiety, so go ahead and accept that feelings of doubt will absolutely creep in. But it’s how you deal with them that matters.

Then, ask yourself which part of you is feeling the doubt. Is it the Technician in you? The Manager? The Entrepreneur? The more you can distinguish between these identities, the more you will be able to manage their conflicting demands on your time and energy.

Your next step is to develop your plan to deal with doubt, discouragement and uncertainty. Do you need to talk with someone you trust about how you are feeling? Do you need to go for a walk or get some other form of exercise? What else could you do to get yourself centred?

This is a deeply personal process: what works for you may not work for someone else. It’s really about identifying what can bring you back to your centre, and then using triggers to help you get there. Make a list, keep a reminder nearby, and visit it whenever the doubt surfaces.

You may also need to take some action in your business, but make sure you centre yourself before you make any significant business decisions.

Fear, uncertainty and doubt are rarely comfortable emotions to be with. But look at them for what they are: evidence that change is happening. The Technician within you is expressing the fear as a form of resistance to change. Change is inevitable. Change is also necessary if you are going to create the business and the life you really want. Isn’t that why you built your own business in the first place?

Follow this link to read the article in full and find out in more detail.

However, as I got a Kindle last Christmas, I doubt I will ever not have a book to read ever again. Anyway, I thought I will test myself to see how many of the books I have read, and whether I could think of any to add to the list.

The answer is that, to my surprise, I have only read 7 of the books on the list, although all of them are in the top 13 (assuming the books are ‘best first’ order). Those are:

• Rich Dad, Poor Dad
• The E-Myth
• One Minute Manager
• E-Myth Manager
• Who Moved My Cheese?
• The 7 Habits of Highly Effective People
• The One Minute Millionaire

These would probably be in my own list of top wealth creation books:

• Good to Great – Jim Collins
• Built to Sell – John Warrillow
• Practice What You Preach : What Managers Must Do to Create a High Achievement Culture
• The Inside Advantage:  The Strategy that Unlocks the Hidden Growth in Your Business – Robert Bloom, Dave Conti
• The 4-hour workweek – Tim Ferriss
• Eat That Frog – Brian Tracy
• The Slight Edge:  Secret to a Successful Life – Jeff Olson

See here for the full Amazon list

Do you have any you would add to Amazon’s or my list?

I am sure we all feel like this at times (if not all of the time), so I was interested to read an article from E-Myth Worldwide, which suggested how it is possible to organise worklife to get on to those things that really should get done, but never do. We have probably all heard this before, but it is good to be reminded of it periodically.

Did you know, for example, that on average we all get interrupted once every eight minutes? No wonder we never get on to anything.

The article gives us all a challenge – to set aside one hour a day to think more strategically and see how much our business (and our lives) improve – and suggests ways of doing this , even by just going down to the local coffee shop for some much needed time out to be able to think.

Read the full article here – and let me know how you get on…