A terminal diagnosis
systematize or die
KB #10: a terminal diagnosis
In the last 486 days, I've looked at 321 business listings, analyzed 86 of them, contacted 30 brokers, chatted with 17 sellers.
Result: I acquired 5 of them.
The Rub: Every single one I looked at had the same terminal diagnosis.
They all had horrible systems and processes.
When I started acquiring businesses, I'd thought that if a business was growing and was profitable, then they must have good operations.
Not by a long shot.
It was on one call with a seller that I had an epiphany.
When I asked the seller about where he stored the company SOP's, he smiled and pointed to his head, "Right in here."
BLUF: I didn't buy that company.
That's when it hit me.
If these companies just systematized their processes, their growth would take care of itself.
This stuff is not rocket science. I promise.
These businesses were already profitable and most of the time, the owners were spending 75% of their time trying to put out fires that should never have happened in the first place.
The symptoms were plain as day:
Broken employee onboarding processes
Broken employee retention processes
Broken sales process (the owner does all the sales)
Broken fulfillment processes (redundancies and supply chain vulnerabilities)
Broken customer service processes (high churn and customer headaches)
You get it. Not one aspect of their business was optimized and systematized which meant constant fires and stress for management.
So I put my money where my mouth was and systematized the businesses I acquired.
Results: An average of 3x in revenue and 25% decrease in hours worked.
How did I do it? It's really not that hard.
Step 1: Systematization
I used a no-code project management tool called ClickUp to map out every workflow in the business. Bar none, the best tool around.
More to come on how this one tool can save you thousands a year in expenses.
Step 2: Accountability
Every role is measured and tracked. Every person has measurable KPI's and is tracked weekly, if not daily. Accountability is baked into the system.
Step 3: Focus
Map out EXACTLY what you wanted to accomplish and focus daily on it.
Get granular. Paint the picture of what your pot of gold at the end of the rainbow looks like and be consistent in your efforts to achieve it. Follow the steps and processes you've set up.
Step 4: Reverse Engineer
Start from the desired result and work backward
Ex: Productized service that is $2k per sale. Your goal is $1M in revenue.
$1M in revenue -> $83k/month ->21k/week ->4k/day ->2 sales/day
Mission: Hyper focus on closing 2/day and the result ($1M) will take care of itself.
Step 5: Clarity
Communicate Daily...simple
The roadmap was built, all I had to do was follow it.
The key to accomplishing goals is building the framework and then be ruthlessly committed to it. If you do then:
- Results will follow.
- Peace will follow.
- Growth will follow.
- Profit will follow.
So, remember:
1. Systematize
2. Accountability
3. Focus
4. Reverse Engineer
5. Clarity
In my next letter I am going to be showing you a sneak peak on how we systematize businesses, so don't miss it.
Onward,
Ben
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