New Years, New Directions….
My mission in 2015 is to bring Automated Business Systems to the forefront of small business owners. I truly believe that many small businesses will continue to struggle in today’s economy without focusing on the future.
My main objective is to introduce the concept of Automated Business Systems so that living the American Dream becomes a reality again.
It’s time to make America great again!
What is an Automated Business System?
If you’re a small business owner, maybe a business with 10 employees or less, then simply it means a way of conducting the mundane details in the most effective and automated way possible.
For example, you might not know how to integrate your billing systems with your accounting software.
By automating this process, you’re saving yourself hours upon hours of data entry. Sadly, many people, just like you might not even know the first thing when it comes to setting up a financial system to stay on top of your day to day activities.
An automated business system consists of several key components. Just so I can speak in terms that are familiar to you, I’m going to use the body as an analogy.
You’ll have the Brain and Nervous System, the Heart and Circulatory System, the Lungs, the Muscles and the Skeleton.
The body cannot exist if you are missing any of these systems. And the same goes for your business. So let’s get started shall we?
The Brain: Business Strategy and Execution
Let’s start by asking the question: How does business strategy and execution relate to automated business systems?
It’s quite simple really. Let’s just say that you own a traditional brick and mortar convenience store. A family run corner store perhaps.
The business strategy that business owners have is simply to have the best location possible. Often times it’s a “build it and they will come” strategy.
So as the demographics or competition changes in the neighborhood, the small guy tends to die off.
However, if you’ve created an intelligent business plan, adaptation becomes automatic because the strategy was already there.
Let’s put this into a real life example.
I’ve observed many, many businesses in my neighborhood go out of business within months of opening. Small and large businesses. Franchises and mom and pop shops.
It is very clear to me that these businesses didn’t have the right strategy. Or if they did have the right strategy, that they didn’t execute it well enough.
So let’s just call this store Fran’s Candy Store. Let’s say Fran is the Sole Proprietor and invests her life savings into this dream.
The neighborhood she chooses to open up shop is an up and coming neighborhood with plenty of well to do and middle class folks with a fair amount of disposable income.
In her mind she’d always pictured kids riding their bikes to the candy store getting candy with their allowance money and happily leaving when they bought all the candy that they ever dreamed of.
The business strategy she used was merely based on a “hunch” and “good location” that this candy store would do well.
Well the “hope and pray” approach to business is a recipe for disaster. As you can imagine, this business went belly up in a matter of months.
So what could Fran have done differently?
The answer. Automate her business strategy and execute it.
The way you automate your business strategy is to plan for every conceivable scenario possible. This is not an easy task by any stretch of the imagination.
- Create a Solid Business Plan
- Have that Business Plan Evaluated by Accountants, Lawyers and Other Small Business Owners
- Create Contingency Plans for Every Worst Case Scenario Possible
These three steps as simple and obvious as they might be are neglected by some of the biggest dreamers in America. When you invest your life savings into a business, you have a sense of excitement and nervousness to want to make that money back. In fact, short cuts are taken, poor and misinformed decisions are made and business failure is inevitable.
I can say this because I’ve had several failed business ventures!
But don’t worry, I’m here to tell you that life goes on and if you keep working at it. Eventually you’ll become the great business owner you’ve always dreamed of becoming.
The Heart: Research and Development
Does it make sense for a traditional brick and mortar, Mom and Pop shop do research and development?
I think the traditionally trained person is going to say no. But after working with and visiting many of these businesses since I’ve been “entrepreneurally aware” (yeah I just made that up), I’ve noticed that many of them have a mindset where they can simply open up shop and they’ve done all of the work.
When in reality they should be consistently researching their target market, looking for trends, evaluating costs, counting profits and coming up with new, fresh, energizing ideas.
What does an automated business system look like in terms of research and development?
For me, it’s having a set of research steps that are used over and over again to find the right mix of products, services or processes that generate maximum revenues and minimize expenses.
Development should be an exact science. For example, have you seen how fast Walmart and build a store? Or have you noticed how fast Apple can produce new iPhones?
The development process is a sequence of steps that are used over and over until the product or service is perfected. This is exactly how small businesses need to think in order to survive.
To Automate Your Research and Development Do This:
- Think Like Your Baking a Cake: Compartmentalize Each Step of Research
- Don’t Stop Until Your Research is Complete: Make a Note of Each Winner and Loser
- Develop Your Ideas Thoroughly and Move Quickly to Test Market
- Rinse and Repeat: Don’t Think Just Do
The Lungs: Marketing and Sales
Marketing and sales in my opinion, is where you can have the most fun. But you have to automate the mundane or else you can really end up hating it.
Automating business systems inside of your sales and marketing is actually a lot easier with the internet and the type of technology that’s available.
Like you need air to breathe. You need marketing because it leads to sales. And sales leads to cash. Cash gives businesses life.
The one thing that I’ve always hated seeing were businesses that went out of business within months. 99% of the time it was because they lacked the capital to stay open long enough to make a profit.
Because they didn’t build in a marketing budget into their start up costs.
So how do you create an automated business system for marketing and sales?
The #1 Principle is to KNOW THY MARKET!
If I were to ask you who your customer avatar is, you should be able to know them so well, that you know what they had for breakfast.
I’m being dead serious.
This is an afterthought with the traditional brick and mortar business and its brought on because of the “build it and they will come” mentality.
The systematic research of your target market should begin with you identifying who your perfect customer is.
Questions to Ask to Identify Your Customer Avatar
- What are their buying preferences?
- What demographics do they belong?
- Do they have children?
- What kind of cars do they drive?
- Do they own a home?
- Do they have pets?
- What kinds of clothes do they wear?
- Where do they shop?
- What kinds of jobs do they have?
- How much money do they make?
- Do they own businesses?
- Are they self-employed?
- Do they have credit cards?
- Do their kids go to private school?
- What activities do they do in their free time?
- Do they travel?
- Where do they like to vacation?
I think you get the point.
Remember, this is like air. You need this, so there are no shortcuts for this step. You must identify these people.
Want to know the secret? Go on the internet, take a picture of what you think they might look like and give them a name!
Obviously there’s more to talk about here, so keep your eye out for the links to a more comprehensive training that will change the way you think about your business.
The Intestines: Customer Service
I named this section after what it is. The digestive system. Yes there’s some crap in there, but there’s also the process of giving you energy and life.
When you pick your customers, you can truly design your lifestyle around your business.
Customer service is an overlooked skill in business. Most people picture massive call centers and angry customers.
But it doesn’t have to be that way.
The rule is this, treat your customers well and they will treat you well. My favorite example of the businesses that I hear about are the businesses that make hero’s out of their employee’s customer service experiences.
Where the boundaries of business and humanity blur and the good deed goes more than noticed because of how above and beyond the employee went with serving the customer.
This is a mentality that has to be learned. Automated doesn’t truly describe this the right way. I believe this starts with the right corporate culture that brings the teams to hire ethical, honest people.
People that have integrity.
Integrity to do what’s right without fear of repercussion.
To automate customer service, would be to automate the process and procedures to handle each issue that might come up.
That means being meticulous with the tracking of all interactions with clients.
This not only provides a better customer experience, but it also allows for ample training opportunities for each person to grow.
But to be fair.
Some aspects of customer service really do suck. I mean who wants to deal with an unhappy person!?
I know I don’t. But if I do, I like to treat them with respect. Learn how I can resolve the situation and if possible. Satisfy their needs and make them happier.
The automation of this is simply the following:
- Create Exceptional Corporate Culture
- The Customer is Only Right When They’re Right
- Meticulous Tracking and Training of Each and Every Situation
The Muscles: Finance and Accounting
Business grown is measure in revenues and profits. Just as muscles need to exercise to grow, you need to exercise your financial IQ to grow your business.
Having an automated system built into your business will allow you to be more financially savvy when it comes to the really big and tough decision.
Financial discipline will be an easy decision.
When most people see accounting and finance, they shudder, channel their fears of elementary school where they didn’t want to get called on because they didn’t know the answer, deep seeded embarrassments…
But the reality is that you have to practice reading your financial statements as much as the next guy.
More importantly, you need to make sure that you know where every, last penny is going and where every last penny is coming from.
Most small business owners are not accountants or bookkeepers, nor are they loan officers and underwriters. They’re not lawyers either.
There is a language that’s tough to understand. There’s ratios that tell you how healthy your business is.
There are simple equations that tell you if you should spend or save. Or even make the tough decision of firing the people you love because they work for you and you can’t afford to pay them anymore.
When people think small business accounting systems, they think Quickbooks.
I’m here to change that perception. An accounting system goes beyond the bookkeeping software. You have to go deeper as a small business owner.
Ask the questions:
- How are my numbers input into the bookkeeping software?
- How do I interpret what my financial statements are telling me?
- How do I use my financial statements to make business decisions?
These questions are critical to the design of the finance and accounting systems you have in place. Your life could be a lot harder and you wouldn’t even know it.
Today, you can have your expenses automatically saved and synced to your accounting software, like Quickbooks, and you would be good to go on a daily basis. That’s like having a bookkeeper doing your books without having a bookkeeper.
That’s saving you probably an hour a day.
When you hire a CPA to review your financial statements, they could interpret the story of your financial statements in a way that would help you understand what the heck they’re telling you.
And you should be doing this every single month.
But the question is how do you truly automate the process?
Here’s how you automate your finance and accounting systems:
- Choose a Bookkeeping Software
- Choose a Receipt/Expense Tracking Software
- Hire a CPA
For a list of resources and a more in depth analysis on getting this set up, make sure you keep your eye’s on this post for when I update it with resource links and other articles.
The Skeleton: Foundational Business Principles
Principles are like the body’s skeleton. It forms the shape of the business. A strong skeleton makes a strong body.
The beauty of this is that you can always re-evaluate your business principles when the business isn’t functioning properly.
Sometimes, we make mistakes and our principles don’t align with our goals. This is 100% acceptable ONLY if you work on adapting them to align with your goals, morals and ethics.
I’m not going to pretend that I’m the foremost business expert in the entire world, but I’m a sensible, logical person.
Your business principles should mirror your personal principles. So if you’re wondering what those principles are, you should just look in the mirror to start out with.
Is this a corny perspective? Maybe.
But it’s an honest perspective. I’ve been with companies where I’ve severely questioned the ethics and morals of some of the people there.
It’s a crazy world out there.
At the end of the day. It’s on you to leave a lasting legacy on the world. You can do that by automating your foundational business principles.
The most simple thing to do would be to create 3 to 5 principles that govern all decision made by every single person in the company.
I’ve seen this work flawlessly for a multibillion dollar company and I’ve taken this with me throughout my entire career.
Take a look at the Five Principles of Mars for some inspiration. I can tell you with confidence that you don’t grow to a multibillion dollar company without strong principles.
What do you think? Did you like this post, was it informative? What else would you like to learn? Let me know in the comments below…
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