Monday, November 14, 2016

Four Small Business Stages (Tradecraft)

Over the years, the strategic focus of my business has changed dramatically. I started as a one man shop, with three days off my first year. I gradually hired employees so I could have a life. Eventually I expected employees to handle most of the business. Finally, I'm developing a way for the business to self perpetuate without me. Here are those stages:

Building the Basics
In the beginning, you decided how clean your store would be, what kinds of customers you wanted to attract, the products you would sell and the general attitude you would have towards your customers. You did it all, down to picking out what brand paper clips you would go with. A successful store owner spends years dialing in these variables in conjunction with customer feedback and help from peers.

You learn what works, what doesn't, and you watch the business grow and decide "more of that" is good. Many store owners are happy to stop here. Heck, I could envision a retirement store where it's just me, doing this, with the lights off when I go home for the evening. However, I needed more from my current business, so I had to move on from here.

Building Policies and Procedures
You learn fairly quickly you can't do this alone. You can't work 55-60 hours a week, year after year, without burn out. I did it for my first year, but I learned I needed to delegate to continue. Building policies and procedures is how you delegate. You built the basics, you know what needs to be done, now you need to streamline, document, and implement a plan for other people, rather than the seat of the pants method you used in the previous stage. Many owners can't delegate. Many owners can't develop processes and procedures and are only happy wheeling and dealing and making it up as they go along. Many owners can't develop the trust needed, which will almost always result in some element of betrayal through the years.

Building A Management Team
This level is an abstraction beyond Building Policies and Procedures. In this stage, you're empowering other people to manage both people and processes. You're giving up authority and control in hopes of maximizing your time elsewhere. Elsewhere may be a new business or second store, or it may be a real or metaphorical beach.

This is a difficult stage because although you may fully understand your policies and procedures, and be able to delegate tasks, you now have to manage managers who may have their own vision and ideas, some of which won't be yours. You have to be able to let go of many strongly held policies and procedures as they get re-interpreted and optimized by new managers. You have to be able to remove your ego from the process and not be the face of the store.

Your job is to remove obstacles in the way of your staff, to set the stage for new business, and to lead strategically into the future. Many people can't or don't want to get to this stage. There's nothing wrong with wanting to run your shop and see customers every day. I personally find customer interactions the most fulfilling part of the job. It's kind of a luxury though if you want to move forward.

Making Yourself Obsolete
Succession planning isn't just what would happen if you're hit by a bus, although that's important too. It includes plans to allow for your business to run smoothly by focusing on big picture goals. For example, I'm interested in developing a program where managers are prepared to train replacements in short order, making my need to re-train a manager unnecessary. Being obsolete also means my managers can handle hiring everyone, including a new management team, developing better policies and procedures on their own, and understanding the basics of the business as they evolve. The hardest part for me in this phase, is letting go of each of these components and accepting when good people come up with good ideas.

My job at this stage is understanding where my industry is headed, learning trends in the business world (it's bleak), dealing with financial planning for upcoming or recently completed capital expenditures, and mentoring my managers for their more autonomous role. That's what I want it to be, but I'm really not entirely up to speed in all these stages. I'm still the buyer. I'm still managing managers. I'm still developing processes and procedures and expressing my cleanliness goals to staff. I've got a long way to go, but I can dimly make out the way.

If you've got a better way of summarizing these stages, I would love to hear it. I'm sure I'm not saying anything ground breaking.

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