Every business should have a structure

Many small businesses owners muddle through.

Every day is a challenge to get through the things that come at them. Buying the stock, dealing with a difficult customer, speaking to the bank manager, paying the latest tax bill, sorting out an employee problem and so on. A relentless treadmill of stuff to be done. And it feels never-ending.

There is a better way. 

Michael Gerber in his seminal book about small business, 'The E Myth Revisited', advocates drawing up a structure chart for roles and duties in the business from day 1. 'There's only me in the business!' I here you say. That is pretty typical. A start up may initially just be the business owner doing everything. Even so, Gerber argues that listing what needs to be done and then drawing up a structure chart with the different roles, provides some organisation from the outset.

Initially the business owner will fill every position on the structure chart. Importantly though, they need to wear those different hats at different times and ensure that essential work gets done. The marketing, the selling, the invoicing, collecting the money.

As the business grows some of the positions on the chart start to get filled. Maybe a part-time bookkeeper first, then someone to help in the shop whilst the owner places the orders. Gradually the team starts to take shape and the job descriptions ensure they do the right things.

Creating the organisation chart is not a one-off exercise. It needs continuous review as the business grows and develops. Every now and then it might need a significant overhaul as processes and activities are revised to adapt to new challenges or opportunities.

Businesses that don't have a structure chart and clear roles and responsibilities can still get by and many do just that.. 'Muddle through' as I said in the opening paragraph. They do tend to stay small however and business life can be uncertain and a little chaotic.

So if your business doesn't have a clear structure, do give this some thought.

I came across this quote from a chap called Henry Cloud which kind of sums it up, 'Boundaries are basically about providing structure and structure is essential in anything that thrives'

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What's on your 'To do' list?

For a typical business owner it will be a wide range of things.

From the strategic to the tactical. From the long term to the shorter term and the downright urgent!

It strikes me that the contents of your 'To do' list can tell you a lot about how you are managing the business.

If the items on your 'To do' list are leaning more towards the tactical/short term/urgent, you are probably still at the 'Technician' phase of managing your business described by business guru Michael Gerber. You are still very hands on 'doing' and delivering the product or service to your customers. Strategy? Whats that? I haven't got time to breathe never mind think about being strategic!

If your 'To do' list content is more long term/strategic - recruiting a new senior employee, negotiating terms with a prospective new customer, looking at a new IT system to improve effectiveness etc you are probably in the Manager/Entrepreneur phase. You are thinking in the longer term and perhaps engineering how your business can continue without your day to day input. That is a much better place to be for a business owner.

Well that's all well and good but an urgent list is an urgent list and this stuff needs to get done! 

That is true. When I get into overwhelm mode - it happens to us all from time to time, I review the list and set priorities. Is there anything on the list that can be delegated or deferred? With some tinkering, planning and thought the list can be made more manageable.

That sorts things out for the immediate future but what about the longer term? 

If 'overwhelm mode' is the normal state of affairs for a business owner, some time needs to spent on thinking how things might be made more manageable over time. That might need some time out from the business to think things through and work out a plan. An external facilitator can help here to help you look at things afresh and bring new ideas.

So do think about this if you feel trapped by your jobs list. We all need plans and 'To do' lists. They are what move us forward. For business owners, your list should be motivational and moving you towards a longer term goal.

If that's not the case with your list, it's time for action.

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And it all started so well...

When broken down to its main processes - operations, marketing and finance,  running a business seems pretty straightforward - right?

Operations is making the product or delivering the service,  marketing is promoting and selling it and finance is sending the bills and collecting the money. No problems so far.

So why does it sometimes go wrong? Well of course it's a journey. At the start the business owner probably needs to wear all the hats and do everything. Many people are content with that and the business stays small.

If the business grows the owner needs to transition from being the 'Technician' to being a manager and then the entrepreneur, developing and growing the business. Michael Gerber describes these 3 roles - Technician, Manager and Entrepreneur in his brilliant book, 'The E Myth Revisited'. The E Myth or 'Entrepreneur Myth' is that business owners are entrepreneurs. In truth, we are mostly technicians building a business around our core skills and experience. Gerber argues that to be really successful and grow, business owners need to move on from being solely a technician and ensure they wear the manager and entrepreneur hats too.

If I reflect on the many businesses I have worked with and am still working with, surprisingly few are what I would call real 'entrepreneurial' businesses. By this I mean the owners are focussed, to the point of obsession, on building something big and valuable and they relentlessly pursue this goal. I have worked with a few - some of whom have had successful exits with a pot of money and some where it all went wrong and the businesses failed.

So to go back to the original point. If business is simple - operations, marketing and finance, why did these smart and driven people end up failing?  In almost every instance I can think of, failure came down to a lack of balance. One or more of these key processes was not done well enough. I've seen brilliant marketeers and sales people who sell stuff but don't deliver it, businesses that expand without having finance in place, people who make great stuff but can't sell it and so on.

Those that don't give sufficient attention to any one of operations, finance or marketing are unlikely to stay the course.

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