A Complete Business Development Machine
April 5, 2023
My Reason for Scribbling
I’m compiling these notes first to organize my thoughts and document them, second to create a repeatable system that will make the process of business development straightforward and manageable for small business owners who wish to grow their business and increase value.
The Purpose of the Scribbling
These notes are about asking the owner of a small (less than 50-employee business) that serves other businesses to consider making the business itself a valuable asset to sell for an amount that permits them to “do the next thing.” This “next thing” may be:
- invest in another business,
- continue to work,
- give money to children or other family members,
- some combination of all the above,
- or something else entirely, like building a leadership team that can take the business into the future, far into the future, and benefit everyone it touches.
In a sense, developing a business is very much like designing and building a product, only from this perspective, the business is the product (A). This is not meant to distract you from the love of your product or service (B), but to try to encourage you to consider keeping both thoughts in mind at once. Over time you may find that (B) naturally subordinates itself to (A). The better job you do with (B), the more successful (A) is.
The more exceptional your business is, the more valuable it tends to be. It all turns out to be quite complementary.
It does require work, but it may not be as difficult as you think.
“Let’s get busy and make it the best product it can be!”
Oh, and by the way: “Enjoy the process!”
It is not possible for me to recognize and thank all those who have contributed to this effort. Hundreds of customers over the past 35 years have been my teachers and mentors, as well as their accountants, bankers, attorneys, and employees. There are, however, several who stand out: Rudy and Alma Puissegur, my father and mother, who were not only my parents, but my employers for the first four years of my career in the Business Systems World. Ralph Rust, my first accounting professor, who became one of my closest friends; Fred Cubberly, my first and primary instructor in the former American Production and Inventory Society (APICS), now, The Association for Supply Chain Management (ASCM), Robert Chapman, who convincingly demonstrated, after I had been in sales for 20 years, that even sales were improved when done Systematically; and more recently, Michael Obrzut, a colleague who taught me, among other things, the meaning, importance, and use of Core Values in life as well as in business. It is Mike who arranged the material for chapters six through eleven, and it is his topical depictions that are used to outline it.
Now, I cannot end this section without calling attention to and thanking Shane Daily of Shanora, LLC. Without his knowledge, guidance, and hard work in creating this website (which is the platform for organizing my thoughts as well as do some scribbling), I would never have begun. Shane balances the doing and the teaching. He did all the things I did not want to do or could not do. He taught me, and is still teaching me, everything I have the desire and ability to learn. If this sounds like a commercial for Shane, it is only because it is.
It must be stated that none of the scribbling is actually my own; one hundred percent of it I have learned from others; but still, I believe the arrangement and presentation of the topics may be different from what you have seen, and therefore I hope valuable.
Finally, at the bottom of this list (because underneath things we find the foundation supporting all that is above) is a gift from the Lord Himself, my wife of ’50 plus’ years, Coleen, from whom I have learned some orders of magnitude more than all the others combined.
What this compilation is about
It’s about getting you, the owner(s) of a small business (less than 50 employees), to see your business as a machine that, when it is running at its best, should:
- Satisfy employees and customers
- Earn a profit
- Increase in value
All at the same time.
What it is not about
Something these thoughts do not do are make an engineer a better engineer, a machinist a better machinist, an architect a better architect, etc. It assumes that the owner knows their trade or profession and is proficient, even in the top 20% of their peer group.
What the understanding and acceptance of the ideas will accomplish
- Familiarize you with, and possibly teach you, some things about business that you may not have realized.
- Bring some things back to the conscious level of your mind that you may have forgotten, and present them in a way that encourages you to consider them from an entirely different perspective.
- Demonstrate how to see your business from 10,000 feet (strategically), while at the same time consider each individual interaction, event, and transaction that is within your reach, and act on that (tactical) thing with the strategic perspective as a guide.
The method used is the systematic construction and continuous refinement of a Complete Business Development Machine. This machine is used to assist and encourage you, the owner, to consider each everyday problem (tactical hurdle) within the context of your overall business plan (strategy), and solve it with your overall plan in mind. This method consistently applied is like the phrase “eating an elephant in small bites.”
How to get the most from all this
- Read it from start to finish. However, if you find yourself stumped on a particular issue, you may seek help in the chapter that covers that issue.
- Keep it handy and use the sections as your “everyday problems” (tactical hurdles) confront you.
- Keep the overall plan in mind.
The concepts considered here are not new; however, I hope their arrangement and application will make them seem so. I have found that results are best when they are understood as a system consisting of subsystems. There must be a single person responsible for the development, maintenance, and improvement of the system and each of its subsystems. This person must be primarily interested in the growth of the organization and the increase of its value, and therefore they are working primarily “on” the business, rather than “in” it. The process is most effective when guided by clear communication with accountability for each member of the organization.
For my clients, I may assist them to fill this role for owners/CEOs who are frequently drawn into the day-to-day tactical aspects of their businesses. If you find that you lack the time to direct this process in a manner that you wish to see done, and you have no one internally capable of doing the job properly, you may consider looking outside. My clients are generally business owners, and we meet two to four hours per week to ensure that progress is steady. The key word here is steady (not rapid). An attempt to move too rapidly will generally prove destructive. It is imperative for you, as the owner, to be involved. A great many tactical things can and should be delegated, but the Vision, Mission, Core Values, and Strategy must be yours.
Chapters One, Two, and Three are an overview, providing a context in which we place the system along with its subsystems.
Chapters Four and Five address the role of Marketing and Sales for a small (1 to 50 employees) business that services other businesses.
Chapters Six through Eleven address the subsystems (the relationship of the rules to the principles) and are, to a degree, self-contained. However, taken as a whole, each chapter increases in value as the others are understood and applied. You will find the effect has a cumulative impact in and on your organization as this continuous, iterative process creates a “critical mass” of knowledge in your mind, as well as the minds of your team.
Many of the ideas discussed in the following pages that are intended for CEOs/owners and complement or mirror what began as “Lean Manufacturing.” I adopted some of the vocabulary used by the “Lean” community. This was done intentionally to provide some additional ease of communication on both sides of that ever present “wall” that separates Administration and Operations. Through the use of certain Principles, Rules, and Tools, I’ve laid out our system in what I believe to be an orderly fashion. I hope you find it helpful.
An Important Question: “Do you want to grow your business?”
I rarely get no as an answer to this question. However, growing a business is a process that, due to its rigor on the one hand, and general lack of understanding of the requirements on the other, can be difficult to enact. It is rare to find someone who is committed to making the changes and doing what is necessary to successfully achieve growth and increase the value of their organization. A colleague of mine used to occasionally remind me that growth requires a good deal of effort, as does maintenance; declination and degradation require very little or none. “We are either growing our business or managing its decline.”
Finally, a thought
In the end, this is simply a system. There are three points about it that will prove valuable:
First, it is not a formula to be blindly followed without thought. It is a framework upon which a creative, intelligent and DETERMINED person may build something strong and good that is their own.
Second, it, like any other system, will not perform as well as it could, or will even fail completely, if it is not used consistently and properly.
Third, used as intended, it will be powerful.