"IF YOUR business doesn't exist to make your life better, then it's there to take what life you have," said Michael Gerber, CEO, Business Development Corporation.
Gerber discussed business development strategies and seven steps to building a successful business.
"The one reason to go into business is to sell it," Gerber said. "Actively pursue the sale of your business, and you will make money."
Gerber said he sees small business failing consistently due to the same problems. Lack of management systems and lack of vision and purpose will lead to the quick demise of a small business. Gerber said characteristics of every extraordinary business are growth, and ability to operate without its owner.
"If owners are working in their business they are doing the wrong job," according to Gerber. "You should be working on your business, not in it. The business is the product, not the truck."
Most successful businesses are dependent on systems rather than people. "Focus on what you are doing, not how to do it," Gerber said. Problem-solving abilities are a business owner's greatest liability, not his or her greatest asset.
"Don't be immersed in your business at the ground level," Gerber said. "Seize opportunities. Don't solve problems. Too many business owners work long hours, doing menial tasks because this is what they were taught they must do."
Gerber promoted the idea of installing a turnkey system that allows all functions to be carried out the same way every time. He listed the founder of McDonalds as a near-perfect example of a person who applied this principle of independent revolution to business with success. Business owners must understand their business as a brand to sell it, according to Gerber.
"You must be able to say this is who we are because this is how we do business," Gerber said. "The business itself is the greatest asset. Every day it should get better for its eventual sale."
Business Value Businesses are only worth whatever someone will pay for them, according to Gerber.
"Buyers are interested in economic freedom, not the business itself," Gerber said. "The business is a mechanism through which all can get what they want."
Gerber warns against building businesses on what the consumer wants.
"Build your business on things they don't even know they need," he said. "Too many businesses are dragged down trying to figure out what their customers want. They miss what customers don't know they need."
All companies need to think of themselves as a franchise.
"All the components and the way they work together make the difference," Gerber said. "Create a turnkey system for producing a predictable result."
Gerber encouraged business owners to ask themselves what one impossible outcome would transform their business if it could be accomplished. Business owners must promise their customers service on time, every time, exactly as promised -- or the company will pay for it.
"Pay for it yourself a few times and you'll learn how to do it right," Gerber said. "Make the promise before you can keep it."
Seven Steps Seven steps are necessary in building a successful business, according to Gerber.
"It should only take about three years to build a business to be ready for sale," Gerber said. "Business owners must have a primary aim. This step involves knowing what you want as business owner and identifying a turnkey system to get there. See life as it will be and then make it true."
The next step is achieving a strategic objective, that is having a clear vision of the end result or "getting the product ready for sale," Gerber said. Business owners must be aware of several key figures in their business at this stage. Gross revenue, growth rate, gross profits, and industry margins must be calculated.
"Find your customer demographic, and know your pre- and post-tax earnings," Gerber said.
An organizational strategy is Gerber's third step to building a successful business. Organizational strategies carry out three key functions:
1.Lead generation - A system through which your promise will be delivered.
2.Lead conversion - This converts your customer to your style of business.
3.Client fulfillment - Delivers the promise to the customer.
A system-based management strategy is the fourth step.
"This will change the system of your business, not the people," Gerber said.
The system will capitalize on similarities between its workers through innovation, quantification, and orchestration.
A people strategy is the fifth step and focuses on getting people to use the system.
"Tell your company's story to people to see if they can be passionate about working for you," Gerber said. "Show potential employees the available opportunities."
Gerber's sixth step uses a marketing strategy that analyzes demographics and psychographics to determine a specific market.
Lastly, the seventh step is a systems strategy. The systems strategy employees hard, soft, and information systems. Information systems quantify the impact of the strategy as a whole.
"Upon completion of the seven steps, the process becomes a predictable way to produce results and vitality in any small business whose owner is willing to give it the time and attention it requires to flourish," Gerber said.