Creating Strategy in a Small
Business
Presented By: Chuck Jerome
Presenter
Chuck Jerome
– Vice President, Business Development
• previously, VP Operations

• Professional Roles:
– Softwar...
E-Myth Revisited
E-Myth Revisited:
Why Most Small
Businesses Don’t Work
and What to Do About It
By Michael E. Gerber
Questions
• Who is business owner?
• Who is thinking of starting a business?
• Who is a part of a management team that’s
i...
Pledge
“I pledge to be honest with myself and step
back to take a good hard look at my
business”
Startling Facts
• Annually
• 1 million+ new businesses start in NA
• At least 40% will not make it

• Year 5
• 80% of busi...
Startling Facts

No

Yes

To change those
odds you need to
understand:
• what a business
really is
• what it takes to
make...
Entrepreneurial Myth
• Romantic Belief that small
businesses are started by
entrepreneurs – most are not
• Fatal Assumptio...
Questions to Ask Yourself
• Do I want to start a business because I want to
be my own boss?
• Do I want to start a busines...
The Entrepreneur, The Manager
and The Technician
Technician

Manager

Entrepreneur

Doer

Pragmatic

Visionary

Supplies t...
Split Personality
The typical business builder personality is:
10% Entrepreneur
20% Manager
70% Technician

A very good bu...
Questions to Ask Yourself
• Do I have a vision of where I want my business
to be in the next 5 years? 10 years?
• Do I hav...
3 Growth Phases of a Business
• Businesses, like people, are supposed to grow;
and with growth, comes change
• Three phase...
Infancy: The Technician’s Phase
• The owner and the business are one and the
same thing
• Without you there would be no bu...
Questions to Ask Yourself
• Do I feel like no matter how hard I work, there
is always more work waiting for me?
• Do I onl...
Adolescence: Getting Some Help
• Owner makes the decision to let the business
grow
– Hires new employees
– Handle the work...
Questions to Ask Yourself
• Do I hire people to do what I do not want to do?
• Do I assign my employees work that I do not...
Beyond the Comfort Zone
Person
Technician

Boundary Defined by
How much he can do himself

Manager

How many technicians h...
Maturity and the Entrepreneurial
Perspective
• A Mature business knows:
– how it got to be where it is
– what it must do t...
The Entrepreneurial Perspective
“How must the business work?”
• Sees the business as a system for producing
results
• Star...
The Entrepreneurial Perspective
Thomas Watson’s 3 steps to Success:
1. Clear picture of what the company would
look like
2...
The Entrepreneurial Model
• Know who their Customer is

• Meet the Perceived Need - Innovative
• Not about the commodity –...
Questions to Ask Yourself
• Do I have a clear vision of my business in the
coming years?
• How does my business stand out ...
Part II: The Turn-Key Revolution:
A New View of Business
The Turn-Key Revolution
• Creating an effective, consistent, and orderly
system of doing business
• Aim to build a success...
Questions to Ask Yourself
• Can the system I wish to create operate
without my constant presence?
• Do I want my business ...
The Franchise Prototype
• Franchising refers to the Business Format
Franchise – entire system of doing business
• Provides...
Questions to Ask Yourself
• Can my business transform into a system that
works predictably, effortlessly and profitably?
•...
Working On Your Business, not In It
• Mistake: spend their lives serving their
businesses, when the businesses’ original
p...
Questions to Ask Yourself
• Do my products and services vary based on
different employees?
• Is my business dependent upon...
The Business Development Process
The business development process has seven
distinct steps and a foundation of three key
a...
Business Development Process
Innovation
• Process of brainstorming new ways to do
things
• Increase Efficiency & Effective...
Business Development Process
Quantification
• Comparing and measuring the impact of
different innovations in the business
...
Questions to Ask Yourself
• Do I constantly think about new methods to
improve the way my business work?
• Do I know all t...
Business Development Process
7 Distinct Steps

Step 1: Primary Aim
Step 2: Strategic Objective
Step 3: Organization Strate...
1: Your Primary Aim
• What kind of life do you want – your
values, your beliefs, and your dreams
• Your business is an ins...
Questions to Ask Yourself
• Do I live my life intentionally? Do I know what I
wish my life to look like?
• Do I know what ...
2: Your Strategic Objective
• Vision of your finished business
– Principles concerning money
– Kind of business you would ...
Questions to Ask Yourself
• Do I know how my business will fulfill my life’s
goals and Primary Aim?
• Do I have a clear vi...
3: Your Organizational Strategy
• Must have to succeed
• Difference between owner and employee
• Responsibilities that own...
Organizational Strategy
Shareholders

Chief Operating
Officer

VP Marketing

Sales Manager

Marketing
Manager

VP Operatio...
Questions to Ask Yourself
• Do I see myself as an employee of my own
business?
• Do I understand every position’s job
desc...
4: Your Management Strategy
• Business that will run smoothly and actually
work without problems
• Manage the system – sys...
Questions to Ask Yourself
• Does the system I created provide my
employees with a clear, step-by-step
description of tasks...
5: Your People Strategy
• Beyond the system, people are your variant
• Must follow the systems standards perfectly
to ensu...
Questions to Ask Yourself
• Do I hire my employees because their
personalities, core values and primary aim are
“fitted” f...
6: Your Marketing Strategy
• Acquiring and Retaining customers
• Clearly define:
– target customers’ preferences
– buying ...
Questions to Ask Yourself
• Do I know what my customers want? Do I
know what my customers expect to get from
my products a...
Your System Strategy
• A system is a set of things, actions, ideas, and
information that interact with each other, and
in ...
Your System Strategy
• Information Systems examples:
– Inventory control
– Cash flow forecasting
– Sales activity summary ...
Business Case for Investing
• Financial Impact Assessment
– Cost not to Solve the problem
– What new Opportunity needs to ...
Questions to Ask Yourself
• Does my overall business system provide
consistent results every single time?
• Does my system...
E-Myth Expert Series

http://www.michaelegerbercompanies.com/
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BAASS Connect 2013 - Creating Strategy in a Small Business

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BAASS Connect 2013 - Creating Strategy in a Small Business

  1. 1. Creating Strategy in a Small Business Presented By: Chuck Jerome
  2. 2. Presenter Chuck Jerome – Vice President, Business Development • previously, VP Operations • Professional Roles: – Software Developer & Business Analyst – Ops Manager – Distribution, Manufacturing & Retail – Consultant, Business Applications • Partner with BDO Dunwoody LLP, 12 years • Business Owner – last 16 years, 4 companies
  3. 3. E-Myth Revisited E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It By Michael E. Gerber
  4. 4. Questions • Who is business owner? • Who is thinking of starting a business? • Who is a part of a management team that’s involved in strategic planning? • Do you or your organization have a Strategic Plan?
  5. 5. Pledge “I pledge to be honest with myself and step back to take a good hard look at my business”
  6. 6. Startling Facts • Annually • 1 million+ new businesses start in NA • At least 40% will not make it • Year 5 • 80% of businesses will fail • Year 10 • 80% of those businesses will fail • 40,000 of 1,000,000 survive – 4 %
  7. 7. Startling Facts No Yes To change those odds you need to understand: • what a business really is • what it takes to make it work
  8. 8. Entrepreneurial Myth • Romantic Belief that small businesses are started by entrepreneurs – most are not • Fatal Assumption: if you understand the technical work of a business, you understand a business that does that technical work “Why am I working for this guy? I know as much about the business as he does. Why not start my own business?” So you go into business for yourself.
  9. 9. Questions to Ask Yourself • Do I want to start a business because I want to be my own boss? • Do I want to start a business just because I am good at and enjoy doing the technical work?
  10. 10. The Entrepreneur, The Manager and The Technician Technician Manager Entrepreneur Doer Pragmatic Visionary Supplies the Output Does the planning, Creates a great deal keeps things in order of havoc around him
  11. 11. Split Personality The typical business builder personality is: 10% Entrepreneur 20% Manager 70% Technician A very good business builder would be: 33% Entrepreneur 33% Manager 33% Technician
  12. 12. Questions to Ask Yourself • Do I have a vision of where I want my business to be in the next 5 years? 10 years? • Do I have an orderly system of doing business? Is it documented? • Am I thinking about how the work should be done and how it can be improved? • Do I see my business as something apart from myself and my life, or am I the business?
  13. 13. 3 Growth Phases of a Business • Businesses, like people, are supposed to grow; and with growth, comes change • Three phases of a business’s growth: – Infancy – Adolescence – Maturity
  14. 14. Infancy: The Technician’s Phase • The owner and the business are one and the same thing • Without you there would be no business • Then subtle changes begin to occur: – You begin to fall behind – More work than you can possibly get done – Drop some of the balls! • Change or Death is inevitable
  15. 15. Questions to Ask Yourself • Do I feel like no matter how hard I work, there is always more work waiting for me? • Do I only see the work that has to get done rather than learning how to grow my business? • Do I ignore financial, marketing, sales and administrative accountabilities since I do not want to do anything besides the technical work in my business?
  16. 16. Adolescence: Getting Some Help • Owner makes the decision to let the business grow – Hires new employees – Handle the work that they don’t want to do • Management by Abdication - the owner completely lets go of some of their responsibilities without supervising the quality
  17. 17. Questions to Ask Yourself • Do I hire people to do what I do not want to do? • Do I assign my employees work that I do not know how to do well? • Do I review my employees’ work to ensure ? • Do I feel that nobody is willing to work as hard as I am? Do I feel like I’ll be better off doing all the work by myself?
  18. 18. Beyond the Comfort Zone Person Technician Boundary Defined by How much he can do himself Manager How many technicians he can supervise effectively Entrepreneur How many managers he can engage in pursuit of his vision As a business grows, it invariably exceeds its owner’s ability to control it.
  19. 19. Maturity and the Entrepreneurial Perspective • A Mature business knows: – how it got to be where it is – what it must do to get where it wants to go • Maturity is not the result of the 1st 2 phases • Mature companies started out that way • Mature company goes through Infancy, Adolescence and Maturity in an entirely different way
  20. 20. The Entrepreneurial Perspective “How must the business work?” • Sees the business as a system for producing results • Starts with a picture of a well-defined future, and then comes back to the present with the intention of changing it to match the vision.
  21. 21. The Entrepreneurial Perspective Thomas Watson’s 3 steps to Success: 1. Clear picture of what the company would look like 2. Determined how this company would have to act 3. Began acting that way from the start
  22. 22. The Entrepreneurial Model • Know who their Customer is • Meet the Perceived Need - Innovative • Not about the commodity – it’s about the way it’s delivered is • Focus on Differentiation
  23. 23. Questions to Ask Yourself • Do I have a clear vision of my business in the coming years? • How does my business stand out from my competitors? • Do I know how my business looks to the customer? – Do I know what my customers want now? – Do I anticipate their needs in the future?
  24. 24. Part II: The Turn-Key Revolution: A New View of Business
  25. 25. The Turn-Key Revolution • Creating an effective, consistent, and orderly system of doing business • Aim to build a successful business model and then sell the business format • Construct a Franchise Prototype – a business that is system-dependent rather than peopledependent
  26. 26. Questions to Ask Yourself • Can the system I wish to create operate without my constant presence? • Do I want my business to work so well that other people would want to buy it? • Do I want to see my business expand yet still manage to deliver the same value?
  27. 27. The Franchise Prototype • Franchising refers to the Business Format Franchise – entire system of doing business • Provides the way to run a system that provides products or services rather than the way to make the products or services
  28. 28. Questions to Ask Yourself • Can my business transform into a system that works predictably, effortlessly and profitably? • Does the vision of my business allow me to get free from controlling it? • Can I create an orderly system for my business to run by itself so I can have time to live? • Am I comfortable with learning a way to transform my business from people-intensive to system-intensive?
  29. 29. Working On Your Business, not In It • Mistake: spend their lives serving their businesses, when the businesses’ original purposes were to serve them • Franchise Prototype: – Provide excellent yet predictable value to customers, employees, suppliers, lenders – Run with people having the lowest possible level of skills – Documented in Operations Manuals
  30. 30. Questions to Ask Yourself • Do my products and services vary based on different employees? • Is my business dependent upon highly skilled people? • Does my business have an unorganized structure • Does my business lack clear, uniformly predictable values to my customers and employees?
  31. 31. The Business Development Process The business development process has seven distinct steps and a foundation of three key activities: – Innovation – Quantification – Orchestration
  32. 32. Business Development Process Innovation • Process of brainstorming new ways to do things • Increase Efficiency & Effectiveness • Keeps the business alive and competitive
  33. 33. Business Development Process Quantification • Comparing and measuring the impact of different innovations in the business • How the business is doing, how close it is to achieving goals, and identify problems early Orchestration • Coordinates, assimilates and implements the effective innovation with Change Management
  34. 34. Questions to Ask Yourself • Do I constantly think about new methods to improve the way my business work? • Do I know all the important numbers relating to my business? • Do I know how my business is doing relative to my competitors?
  35. 35. Business Development Process 7 Distinct Steps Step 1: Primary Aim Step 2: Strategic Objective Step 3: Organization Strategy Business Development Process Step 4: Management Strategy Step 5: People Strategy Step 6: Marketing Strategy Step 7: Systems Strategy
  36. 36. 1: Your Primary Aim • What kind of life do you want – your values, your beliefs, and your dreams • Your business is an instrument for you to realize your Primary Aim in life – your dream • Knowing what you expect from it will shape the way your business develops
  37. 37. Questions to Ask Yourself • Do I live my life intentionally? Do I know what I wish my life to look like? • Do I know what I would like to do 5 years from now? 10 years from now? • Do I know how much money I will need to do the things I wish to do and when I need it?
  38. 38. 2: Your Strategic Objective • Vision of your finished business – Principles concerning money – Kind of business you would like to be in – Who are your customers • Build goals for your business first – Decide whether or not they are realistic – Are they worth your time • Product of your Life Plan
  39. 39. Questions to Ask Yourself • Do I know how my business will fulfill my life’s goals and Primary Aim? • Do I have a clear vision of my Prototype and when it will be finished? • Do I know how much money I want from my business?
  40. 40. 3: Your Organizational Strategy • Must have to succeed • Difference between owner and employee • Responsibilities that owners easily miss or ignore • Define positions needed and responsibilities they are accountable for
  41. 41. Organizational Strategy Shareholders Chief Operating Officer VP Marketing Sales Manager Marketing Manager VP Operations Production Manager Service Manager VP Finance AR Manager AP Manager
  42. 42. Questions to Ask Yourself • Do I see myself as an employee of my own business? • Do I understand every position’s job descriptions, goals, responsibilities and how they fit together in my business? • Do I understand how I can later replace myself with a system of doing business so that other employees can fulfill all the responsibilities
  43. 43. 4: Your Management Strategy • Business that will run smoothly and actually work without problems • Manage the system – system will manage the people – consistent results • Self-reporting, self-correcting and QA Simple systems will be put in place which will allow ordinary people to produce extraordinary results.
  44. 44. Questions to Ask Yourself • Does the system I created provide my employees with a clear, step-by-step description of tasks they have to do? • Can the system I created produce consistent results over and over again?
  45. 45. 5: Your People Strategy • Beyond the system, people are your variant • Must follow the systems standards perfectly to ensure quality and consistency • Motivation comes from understanding the big picture - the value of the work rather than the work itself • Not merely a “job” but a device to fulfill their own Primary Aim in life
  46. 46. Questions to Ask Yourself • Do I hire my employees because their personalities, core values and primary aim are “fitted” for the business? • Do I make sure my employees understand the vision and value behind the business and how the work they do impacts the business as a whole?
  47. 47. 6: Your Marketing Strategy • Acquiring and Retaining customers • Clearly define: – target customers’ preferences – buying behaviors – how to capture their attention • Know your customers’ demographics and psychographics • Focus marketing on competitive strength
  48. 48. Questions to Ask Yourself • Do I know what my customers want? Do I know what my customers expect to get from my products and services? • Do I know who my customers are? Their age? Sex? Income level? Education? Preferences?
  49. 49. Your System Strategy • A system is a set of things, actions, ideas, and information that interact with each other, and in so doing, alter other systems • 3 kinds of systems: – Hard System – Equipment, Furniture, Brand Colour – Soft System – Dynamic i.e. Sales System – Information System – provides you with data about how the other two systems interact to produce the best results
  50. 50. Your System Strategy • Information Systems examples: – Inventory control – Cash flow forecasting – Sales activity summary report • Support the business objectives: – Increase Effectiveness – Increase Revenue – Increase Efficiency – Reduce Cost – Compliance – Mitigate Risk
  51. 51. Business Case for Investing • Financial Impact Assessment – Cost not to Solve the problem – What new Opportunity needs to be supported Why do companies hold off on investing money in business management systems when it will support their business objectives?
  52. 52. Questions to Ask Yourself • Does my overall business system provide consistent results every single time? • Does my system incorporate an effective selling system? • Do I know how to effectively use my information system to construct, improve, and perfect my Franchise Prototype?
  53. 53. E-Myth Expert Series http://www.michaelegerbercompanies.com/

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