Business Systems

Your business is either run by a GURU or a SCALEABLE-TEAM.  

Not sure which one you are?  Ask your employees and customers, they know.  

The Guru   

Timmy just started his own YouTube channel and is putting out videos about personality types.  Timmy is young and doesn't have alot of business knowledge or experience yet.  That’s ok because he is damn good at what he does and has the passion to work harder than anyone.  Statistically, there is over a 90% chance Timmy will stay small and barely break even if that over the next 5 years.  That’s ok though, he’s optimistic and confident he won’t make the same unconscious mistakes everyone else does.  He plans to share his unique knowledge, skills, and products through a variety of monetization channels.  He is working on ebooks, classes, webinars, consulting, merchandise, and advertising revenue once his channel gets enough views.  Within a few years he’s sure he’ll be hiring some employees to keep up with it all.  Timmy basically sees himself as becoming a miniature Tony Robbins.  He’s a big shot in the community, everyone loves him, he’s already starting to make some sales, he’s super happy, and is completely clueless to just how bad he fucked himself.   

 

Super Gurus

Let’s pick on Tony Robbins just for a bit to make a point.  First off, Tony Robbins is the greatest guy in the world, changed my life, love him to death, you get the idea.  What happens when Tony Robbins and Timmy get sick, busy, burnt out, or dead?  What is going to happen just 6 months after they are gone?  Will anyone continue on with their work?  Is Tony Robbins just a really amazing person we get to experience in our generation and then when he’s gone the party is over?  Tony himself says that only 10% of the books he sells people even open and read.  That’s kind of scary to think about.  And what does Tony sell the most?  Live events with... him (the Guru).  That’s all the people want, you can’t blame him.

 

When Steve Jobs died, I remember a very short time later Apple came out with multi-color, plastic, cheap iPhones.  Wow, that was sure fast.  What happened?  The new leadership team of Apple had no idea how the hell Steve Jobs was magically moving the people.  Many marketers have come in later and reverse engineered Job’s sales approach and have been able to figure it out to some degree.  The point is, once the Guru was gone, the magical selling show of Steve Jobs was over.  Sure, Apple will continue to sell “machines” and the Robbins Institute will always sell “books” but the real show is over when the Guru is gone.

 

Working For A Guru  

The self professing Gurus don’t hold themselves to any outside standard or objective method.  All of the best ideas, skills, and authority are funneled up to the guy at the top.  The Guru may hire 100 employees but they all know who they work for.  The Guru even named the damn business after themselves just so no one forgets.  Anyone working for the Guru is privileged to sit around their feet and learn from them.  After all, if it wasn't for the master, none of the employees would ever have such a great opportunity.  Employees tend to have a pretty up and down relationship working for a Guru.  At first it’s nothing but compliments, high hopes, big dreams, and then in the end the employee leaves disillusioned, betrayed, and feeling hurt.  There was too much personal investment that didn’t get fulfilled.    

 

Guru Illusions   

If you ever want to get a good view of the power of how much a true Guru is blinded by their own subjective views, just watch a few episodes of the Shark Tank or The Profit.  You will see business owner after business owner all failing for the exact same reasons.  You would think people going into season 5 of the Shark Tank would have watched a few episodes before they walked into the Shark Tank spewing the same subjective nonsense as the 100 people before them.  “Oh that’s right... your idea is “special” and you're really “passionate”.  I’m sorry, go ahead, tell us about how there is nothing out there like your product and how we should all be throwing our money at you because you really care more than the last guy...”

 

In the show The Profit with Marcus Lemonis, you see him often going in trying to help businesses that are drowning under their own success.  He has to fight the owners to get them to unclutch from their death grip on the business so it can truly grow without them as the bottleneck.  The owner is running around with their hair on fire, and they have no idea what the numbers are.  Here is my favorite part every time, because the owner “CARES” so much and they are so “PASSIONATE” for the business, they won’t let anyone else do the important work.  Not that anyone could, because there is no systematic way to even take the trash out each day.  It’s just one big chaotic clusterfuck which makes for a great show.  You should watch it sometime so you can feel better about your own shit-show life.    

 

Death of a Thousand Bees   

Any true Guru will never quit, they are too convicted by their vision and passion.  Even if everyone leaves them, the Shark Tank laughs at them, they lose all their money, all their employees quit, they will still go on by themselves.  What finally takes down the Guru is not any one big thing, rather a million little things all adding up over time.  The debt collectors from years ago are getting more aggressive, the partner quit, the market changed, a new competitor is taking customers, someone just wrote another bad review online, they can’t log in for some reason, they lost their password sheet, their car is leaking oil, their kid needs braces, the dishes are piling up, the neighbor's dog won’t stop barking, they can’t sleep, the phone is ringing while they are in the shower, their mom just died, they have a presentation today, their iPhone is nagging for another update, they just got jury duty, their cat hates them... you know I could go on.  The best part is, it gets worse every year, it gets harder every year, it compounds every year, and your body gets weaker every year.  That’s how a Guru dies.

 

Most Gurus Are Good     

Here is a big slap of contradictory information to everything I just said.  Statistically speaking most Guru-run businesses are good.  When you look at the numbers, the majority of businesses in the United States are made up of small business owners.  Most of these small businesses are just run by some mom and pop making shit up as they go.  When my friends come to town I take them to the best local deli to get the best sandwiches, not McDonalds.  In fact, my favorite hardware store, hobby shop, electronics store, burrito place, and car repair shop are all run by some mom and pop.  Their business systems are shit, they can’t hold onto employees, they are stressed as hell, they are probably losing money, but they do what they do better than anyone.  You can’t walk into some big chain store and have that magical experience like you can with these small business owners.  So, you gotta ask yourself, do I want to stay a small business?  Is this working for me?  Am I happy being this identity?  It’s really up to you.

 

Your Conscious Choice  

Every business owner starts by default in the subjective, sole proprietor, one man band, Guru role of some kind.  That’s how you have to get started.  Where else is the energy to build something from nothing going to come from?  The point I am driving home here is it’s your conscious choice on how you want to run your business and life in the long run.  Maybe you found a niche inside a niche and only a super small business can win in that sector.  Great, do what’s best for you.  Maybe you have a sandwich shop you run your whole life and you pass it on to your grandkids.  Consider yourself very fortunate (even though they are probably screwed).  We are talking to those who have been down the road of “doing it all themselves” and have crashed and burned.  They don’t want to be the Guru anymore.  They want to build a business that can run without them and continue to run long after they are gone.

 

E-Myth Again      

If you ever read E-Myth you can see all we are talking about here is Sally and the pie shop.  The people we have worked with over the years have never gotten anything different from us other than that damn E-Myth book smacked over their heads.  When it comes to business we have nothing new here, all we know is how to build small systems from the ground up, one brick at a time.  It’s so hard and very few do it not because it’s “complicated” but because everything inside of you is screaming to “go fast!”  The tallest building in the city took the longest to plan, had to dig the farthest down, and the foundation had to be made with the highest quality concrete, before they ever made the first floor.  The facts are, 100% of successful long term businesses are built with scalable systems, not a better Guru.

 

Mouse Trap

The most common business question we get is, “How can I get more traffic/sales?”  More, more, more, everyone wants more.  Here is what very few stop and think about… If we brought you 1 million views overnight… what would happen?  Could your order process handle that?  Can your shipping department deal with that?  Are you in stock?  Can you handle all the customer support?  You can die from not having enough water and you can die from drowning in water.  The worst thing you could have is more traffic.  That is like having more mice run through a broken trap.  There are so many clever ways to get traffic, build your website, and even use personality types to customize your marketing campaigns.  These are all really great “tactics”.  There is a big difference between making alot of money, and building a real business.  You first need a solid foundation, a business model, and a real team.  

 

Scaleable-Team  

There are always two sides to every coin, and the opposite of the Guru-run business is the Scalable-Team-run business.  A Scalable-Team is a group of people all working together to build and share something that goes beyond just them.  The original team at Ford Motor Company is a popular example of a scalable team.  Many people don’t know that in the early 1900’s Henry Ford was just one of about 200 Gurus producing automobiles in their personal garages.  Just as today, there were many “one-man-Johnnies” all doing automobiles their special way.  Henry Ford was the first and only guy to systematize his automobile so that others could build it too.

 

Amazon, Google, even Tesla Motors are examples of big scaleable teams working together.  Sure any good company may or may not have a Guru like Elon Musk, but PayPal, Tesla, and SpaceX will live on after Elon blows himself up in an electric powered rocket.  There is no “bottleneck” of ideas or special skills being held by one special individual or small group.  So it’s the old saying of “go alone and go fast, or go together and go far.”    

 

Post Deathbed

What do you do when you have put years of your life into trying to build a business only to still have it fall apart faster than you can fix it?  You’re burnt out, out of money, out of time, out of friends and family, and are an inch away from death. What do you do then? You die, you give up, you stop doing what you are doing.  Admit defeat so you can learn and come back stronger. Everyone who built something great had to get through what you’re going through my friend.

 

They say there are two kinds of motorcycle riders.  Those who have crashed, and those who have not yet crashed.  Either you have gone through years of business hell and have crashed and burned, or you haven’t yet.  The younger you can just run out and start your first eBay business and get beaten down, the better. You have to go and master every way to fail before you’ll ever know how to win.  You have to die and become something else, someone else. You must become the leader, the builder, the warrior.

 

Pulling Levers    

When you read books like E-Myth and the 4 Hour Work Week you can see that the overall goal is simply getting to the point where you can pull levers.  When you are really good, you just pull one lever, that then pulls all the levers for you.  Meaning, you don’t “fight” to get shit done everyday, you let the machines and systems do 99% of the heavy lifting for you.  Every young business owner rebels against the “man” and wants to run a “cool” business for themselves and their friends… How’s that working out?  Every real business owner has their shit together, and that starts from the bottom up.  You must build systems and machines, that’s how a real business is run.

 

Real Leaders   

Think of all the movies you’ve watched.  Who are the leaders you respect?  It’s the leader who gets in there with his dying troops and cleans the blood soaked floor with his own shirt.  The true leader does all the shit that they expect all the grunts to do.  In-N-Out Burger is famous for only hiring managers that have worked the rack first.  Meaning, the overqualified, college graduate, who wants to be a district manager has still got to start with greasing fries with everyone else.  You want to be a real leader?  You want to build something that lasts?  You have to go through what every other great leader had to go through before you, and that is dive into the shit.   

 

The Hard Way   

Most people we run into haven’t thought through the difference of a “money making opportunity” and being a real business owner.  When I first started business in my early 20s I was looking to serve myself.  My unconscious thoughts were along these lines.  “How can I make more money?  How can I work less?  How can I retire by 30?”  Basically, my mindset was how can I find the easy road to get more, faster.  Now, for most people out there it would do them alot of good to be honest with themselves and just go with it.  Just don’t confuse yourself and think that making lots of money is the same as building a business.

 

Being a business owner is like being a parent.  Your life is over and you are now a servant.  This doesn't mean you don’t get to have lots of money, go on vacations, have nice things, someday retire, and all that.  The difference here is those things are not your priority anymore.  Your priority is taking care of others.  Your staff, your family, your customers, and the next generation.  Your business machine is a tool that you build to help others in the long run, not selfishly take for yourself now.  If you want to make tons of money now so you can go party, do it.  You are just causing yourself alot of unnecessary grief if you are saying you are one thing when you are really another.  The path to building something real is hard and it starts with the little things.     

 

The Little Things    

Look at you, you’re trying to run a business and in your own house you have laundry piled up, dishes on the counter, floors aren't swept, the car is out of gas, the phone is always ringing, and you’re always late.  Somehow you believe that you could “win at the big things” even though you haven’t yet mastered the little things.  Oh that’s weird, you made the same delusional mistake everyone does at first.  It’s absolute hell and it separates the warriors from the weak, but the first thing to do is systematize your personal life and home.  The good news is, you’re not alone, hundreds of thousands of people that have it much worse than you have already done it.  

 

The first thing we do when trying to help someone is getting them through the first steps of systematizing the little things.  This provides a platform, a launching pad, a safe zone, to collect your forces and be able to attack larger things.  Sometime later, once you have transformed your home and office into a productive, organized safe space, you now have time to think.  You can’t activate that “human mind” if your “animal” is always threatened by all that drama and chaos, if that makes sense.

Clear Objective   

Once you can get some consistent time to relax and think, you now start looking ahead.  The key is, you have to be looking ahead from a good state.  If your internal animal is threatened, scared, and exhausted, you’ll just do what everyone does and make unconscious decisions based on self protect.  This defensive mindset will paint you into a corner in the long run.  You need to have consistent days in a row, going for long walks, and really processing where you want to take your business.  What is the 5 year, 10 year, 50 year goal here?  Here is the catch, you can’t just ask yourself or you’ll lead yourself off a cliff again.  You have to ask the Universe using market research.

 

Market Research   

This is oddly another step everyone skips but once they get into it, they love it.  Think back to the Shark Tank show, the Sharks are always asking, “What is the current market for this?”  They are thinking in a “pie shaped” picture.  If they can get 2% of the market, and they know who the other market players are, they are happy.  The newbie business owner has no idea what they look like in the bigger picture of the market.  Once they get out into the market they get destroyed because they had no idea what kind of ocean they were jumping into.  

 

What you want to do is have a Google doc of 10-20 real businesses that are in the same market as you.  In just a couple evenings, you can have a massive amount of deadly information in your arsenal.  Imagine if you could answer these questions and your competition could not.  “Who are the top 10 biggest companies in this market?  How long have they been around?  What failures have they had?  Who went out of business and why?  What is the average selling price per unit?  What is the average cost and profit margin per unit?  How many ways are there to monetize this product?  Who is automating what?  What kind of marketing is working and not working?  Why is the first place guy in first place and the last place guy in last place?  If the last place guy wanted to catch up with the first place guy, what would he have to do?”   

      

Think of bending a piece of mental back and forth before it breaks.  This is how you go for long walks and think about what you want to do in your business, and then contrast that with market research.  Take in a bunch of facts and info you might not like, go for a walk, process that, and repeat.  You get in a rhythm of back and forth of what you want to do, vs what is actually happening out there.  It takes time, but you will eventually DISCOVER (not create) your sweet spot.  Thomas Edison said he saw more opportunities out there than he could ever chase.  This is where your mind will get after putting in your market research work.  It does get easier, this does work, and you can do it.

 

Formulate A Plan  

The UFC is a good example of an underdog company that had one hell of a plan.  The Fertitta brothers and Dana White looked at the old UFC of the 90’s and saw that it had painted itself into a corner.  It was some underground fighting club that was illegal in most states.  They did their research and narrowed in on the boxing industry and made much of their plans from their example.  That makes sense, right.  Now get this, they also modeled their business off Vince McMahon and the WWE.  Wait, what?

 

I’m skipping alot here, but what they basically did was run towards government regulation, not away from it (learned this from the boxing industry).  And they created a long tale of sales for every fight (like they do in the WWE).  So when they sell just one fight, they make money from many different avenues (all the promotional shows, conferences, events, selling the tickets to the fight, all the shit sold at the event, pay per view, merchandise, YouTube, TV reruns, etc).  The point is, they started with a business that was absolutely in the dumps and in just 10 years they were able to turn it into one of the biggest sports in the world (which is what they said they were going to do).  They had a clear vision, they did their market research, and they put together one hell of a plan.  

 

Many people have a hard time at this point and they don’t need to.  Every time we talk to someone who is having a hard time coming up with a business plan we find that they haven’t put in enough market research.  If you’re having a hard time putting together a business plan it’s probably because you’re not ready to put together a business plan.  Go do some more market research first and then come back and try it again.  Once your mind is full of all the “building blocks” it will become obvious on how to organize them.

 

Measurable Progress  

I know building a business is extremely complicated and feels endlessly overwhelming, but if you stay in that stressed out state, you’ll never be able to think clearly to formulate a plan.  Pulling this all together, your steps moving forward are simple (yet hard to do).  First, you must get really clear on your numbers.  You need to have a full assessment of your business so you know what is really going on in reality.  Next, you must put together a step by step action plan.  We often say, “If it doesn't work on the whiteboard, it won’t work in real life.”  Meaning, your plan needs to be simple and easy to be understood by all team members.  The third and last phase is now to just put in the work and measure the progress.  Measuring the progress is the trick because the objective numbers keep people accountable.  Step by step you can do it just as so many others have.  Building a business is a “science” and if you follow the rules you will be rewarded for it.  

 

Recommended Reading   

E-Myth.  Stop doing everything "one to one".  Learn to to build systems that scale.  

4 Hour Work Week.  You really can get 40+ hours of work down to just 4.

Finding Meaning.  How we found meaning in life by systematizing our damn dishes.

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