In this post, Certified Go-Giver Coach and very successful business owner, Doug Wagner, brings up a terrific point when it comes to any successful and profitable business: it’s not only about creating value, it’s also about expanding that value in order to touch more lives. But, how do you do that? He suggests there are five key areas.
Enjoy Doug’s post! – Bob Burg
Most small businesses are started by someone who is good at doing something. They are experts in the HR field or in the case of a company we know of; experts in delivery Information Technology (IT) solutions.
They seemed to have everything going for them. They had a lot of industry buzz. Prospects saw them as experts in a key and growing technology.
We met with them a few times and they were confident. They had plans to grow and came across as if they knew exactly how to do it.
When you do IT consulting work for medium to large organizations you tend to get paid 30 or more days after you do some work. You can ask for some money up front and break up the work into milestones but the cash tends to lag the work significantly.
As an employer you have to pay people to work for you in real time. You are paying out expenses before you get the income.
This is a big challenge in scaling a consulting business. You need cash in hand before you can grow.
There were two key people in this organization. Both of them were business partners. One was great at the product/service delivery and one was great at some of the business pieces like marketing and sales. But they never really figured out how to transfer their skill and passion to their employees because they were busy keeping customers happy.
Then one partner ran into some personal issues and had to back out of the company. Suddenly, there was a big hole and things started to unravel. The business is all but closed and the debt remains.
I would bet that this could happen to over 95% of the small and mid-sized businesses out there.
Most likely yours too.
The Law of Compensation states:
“Your income is determined by how many people you serve and how well you serve them.”
This is the multiplier effect. Take the value from the 1st Law and increase your reach or impact.
Creating value is relatively easy compared to scaling value.
In The Go-Giver Nicole had an existing educational software company that had already grown pretty big. They had plans to scale it even further.
“How” is not part of that tale.
THE HOW
You have to go from working on your product and services to working on the business:
- You need a strategy or plan;
- You need to hire the right people and embed what matters most in your corporate culture;
- You need to develop and put systems in place to ensure that all new employees can continue to deliver on the promise to your customers as you grow;
- You need to embed learning, creating new leaders and improving into your organization; and
- And in the book they had great coaches and mentors as well (so should you).
What are you doing in your business to ensure that you can increase your reach, scale your ability to deliver value consistently and ensure that you can survive the loss of a key person?
Great post Doug! We do get so caught up in putting out fires we don’t build our business in both good times and bad, hence the huge peaks and valleys we usually experience.
I believe in the thoughts shared here. Been this way all my life.
Thanks Christie. One of the biggest mistakes you can make is building a business in a hot market and thinking you are a genius and don’t need to work on your business.
That is great to hear George, thanks for leaving a comment.
Great Post Doug, and many valuable tips and pointers. We must teach our team what we want our customers to experience. Hiring is great however we don’t teach and lead it is pointless to just hire.
Hi Carly, thank you so much! You are right, so many businesses hire and then just let nature take its course with their team and assume it will all just work out.
Hi Doug,
I am so grateful for the Manifast tool that you have developed. Already, only halfway through the course, I personally have had tremendous understanding of how to work “on the business” as opposed to in the business. I’ve always wanted to be able to put the vision, processes, and people together all in one place, but until now I didn’t find it. Thank You!
Your post relays what I think would be the most destructive to entrepreneurs’ businesses and how to solve them. Thank You Again!
Thank you so much for those kind words. I am truly grateful you are finding tremendous value in both the Manifast tool and the group Mastermind and training program.
All the best building your businesses.
In a report on Developing Small Business Management Skills in British Columbia several years ago small business owners were asked to identify the most significant challenges they faced in running their business. Top 4 responses
1. Hiring/Training/Retaining qualified staff
2. Managing Growth/Change
3. Integration of Technology
4. Marketing
Hey Don, thanks for sharing that information. Pretty significant.
What I find interesting about these reports is that the business owners are doing a self-assessment. In many cases business owners don’t even know what they don’t know they are struggling with. 🙂
Would be interesting to have comparison study of self-assessment versus third party assessment.
So important to be working with a Master Mind, coach, mentor, etc.
One of the interesting outcomes of the Developing Small Business Management Skills in British Columbia report was the recommendation that more peer mentoring groups be established in regional centers and rural communities across British Columbia. Interesting to note that they were not interested in talking heads, but wanted the groups to include other business owners/entrepreneurs who they could trust. The facilitators role was to organize the sessions and lead the group.
Hi Don, definitely all a matter of finding the right people to work with. The most important aspect is that you don’t have to go it alone. Les McKeown mentioned that businesses with 2-3 partners had over a double chance of succeeding over sole owner.
Very well stated Doug…all too often businesses – and those providing direction – can overlook the ‘how’. Your ‘how’ leads to finding and engaging additional perspective, talent and time…which in turn lead to discovering the keys to the ‘multiplier effect’ – Replication, Innovation and Delegation.
Nicely done!.
Bill
Thanks Bill, your description of multiplier effect hits it on the head.