First 2 Rules of Working on Your Business

There is a sense in which being self employed or owning your own business can be more challenging than being employed. A self employed person who looks at the business as a place to work in will in most cases find that the business is like a wheelbarrow which only moves whenever she pushes it. At the beginning the business provides great goods or services to clients but as sales and clients grow quality begins to decline, timelines get missed and clients either grumble or vote with their pockets and opt to spend elsewhere.

You need to realise that your business is not your life. The purpose of a business is to serve the life of its owner(s). If you are caught up in the rut of working in your business and things are not moving very well you will need to change tact and start to work on your business instead. In the following portion of this article we discuss the first two rules for working on a business.

1. The business should provide consistent value to clients, employees, suppliers and lenders beyond what they expect.

Value is what people perceive it to be. It can be a word of greeting to a client, a word of recognition to a new employee for a good performance or reasonable price for products. Great businesses seek to understand and provide what clients, employees, suppliers and lenders value. The great business provides value consistently and provides it beyond the wildest expectation of the value recipient.

There is a stock brokerage firm which always offer me a drink whenever I visit their office. The choice drink could be a glass of water, a soda, a cup of tea or coffee. I go to the broker to buy or sell shares but I have come to associate the drink offer with the value they give me. The drink makes me feel welcome to do business with the broker.

Compare my brokerage experience with the experience of a passenger in a Kampala commuter taxi. When the passenger is still outside the vehicle the taxi staff will extend extraordinary courtesy to her but once she is inside the taxi the same staff will overcharge her, call her names and in most probability refuse to stop where the passenger would have wanted to alight. The taxi passenger experiences inconsistent value that falls far below her expectations.

How about Fuel Stations that advertise low fuel prices but manipulate their pumps to deliver less fuel to the unsuspecting motorist?

The question you must always ask as a business owner or manager is what value do clients, employees, suppliers and lenders want and what are you doing to ensure that the business provides the perceived values in a consistent way?

2. The business model you develop should be operated by people with the lowest possible level of skill

If you develop a business model that depends on highly skilled people it will be very difficult for you to replicate such a model. Highly skilled people are expensive to hire and keep which will force you to raise the price charged for your product or service.

The business model should be such that the employees needed posses the lowest possible level of skill necessary to fulfill the functions for which each is intended. A legal firm ought to have lawyers and a medical firm should hire doctors. But you don’t need brilliant lawyers or doctors. What you need is to create the best system through which good lawyers and doctors can be leveraged to produce excellent results.

Many small business owners do not build systems but opt to hire highly skilled people in the belief that they will make the business owner’s job simpler. The business owner simply leaves the work to the hired person - a case of management by abdication as opposed to management by delegation.

Staff that work in an environment lacking systems only work and produce results when they are in the mood. If they are not in the mood nothing gets done. Mood driven employees can be very frustrating.

Building a business around the skills of ordinary people forces you to build a business that really works.