A great business structure is one that gives you peace of mind that your business will not go the wrong way with the wrong people. Today, Anthony Frischknecht teaches us the importance of creating a system that works for your business. He highlights the importance of finding the right partner, if necessary, and creating a corporate structure. He believes that a good system is when you can delegate who’s doing what and what they’re responsible for. Anthony notes that you must be able to run your company according to how you like it.
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Creating Your Business Structure
I am happy to be joining you wherever you are. I’m about to share some stuff that probably isn’t the most fun, but it is crucial for your company. When you’re starting off on your own, you think small. You’ve got to work on this, put this together, make the product so you can sell the customer and you wear many hats. You’re the customer service, accountant and the payroll guy. You are the buyer’s agent, a marketing person and the VP and president all in one. As a sole owner, you have to think about this carefully and think about where you want to see yourself. If you want to see yourself in a massively successful company, which I know a lot of you out there do, it’s going to take some foresight and planning to get there. Anybody doing anything big, it definitely takes more than yourself to pull it off.
How do you create that company or mindset that allows you to grow? I’ve been involved in several companies and I’ve forgotten to do a lot of these steps. It caused a lot of problems. There is a lot of confusion and arguments that happened for simply the cases that I didn’t work on any of them. Part of the reason was I was just ignorant of what they were, how they work together and how to work on your business and not in your business. The whole idea of an entrepreneur is to grow something great and fantastic. You can’t do that if you’re writing the payroll checks and if you’re paying taxes. Somebody has to do it now, no doubt and that somebody is probably going to be you. Take that, understand that and swallow it, but know that you’re there to build a company. You’re not there to build a product.
I’m not sure of the story about Ray Kroc. He took somebody else’s idea and made it better. The two brothers that started up McDonald’s, they did an amazing job on creating a system that worked like clockwork, spit out burgers as fast as they could and turned customers through quick. He saw that, took advantage of that relationship and ended up taking it way further than the brothers ever did. When they split up, they kept their McDonald’s and Ray Kroc never paid them some money that he had promised them. He was working on the company in creating it to be bigger. He wasn’t finding all these smart people. He was working on these different systems for his business.
In accounting, as the owner for now, you’re going to be making payroll, paying the taxes and make sure you have enough money in your account. You’re going to be paying the bills and writing more checks. To systemize these things and create a program for the next person to follow is what you’re trying to do as you’re building your business. You learn it, you build a program and you find somebody to put in there that can follow your program and then you move to the next task, marketing. You work through that and then you move to the next task. I’m getting ahead of myself here because you should sit down and figure out all the hats in your company. Especially more so if you have a business partner. You guys can delegate who’s doing what and what they’re responsible for. The responsibility of this business is both of yours, but there can be a lot of finger-pointing and blaming others if you don’t build somewhat of a corporate structure. That corporate structure sets it up to where you are a shareholder.The whole idea of an entrepreneur is to grow something great and fantastic. Click To Tweet
If you bring in outside money, they understand the system you’re creating. It makes you a lot more attractive to either outside investors or the company’s looking at buying you because many entrepreneurs rely on their company to feed them. They forget about the big pictures. You’re in business to grow it, build it and a lot of the time, sell it. We forget about it because we fall in love with what we do and we think, “We can start this business and run the show. I’m good at making these products. Nobody else can do it.” That’s BS guys. There’s a lot of other people that can do what you’re doing out there. What a lot of people forget to do is create a system around it.
The taking and breaking down of your company in creating the organizational chart is a good first step. I would probably invest as much time or more in this as you would on your business plan because you need to break down what are the main departments. You got to make subcategories in those departments. Each thing is going to have to be followed and you’re going to have to document each step. I’ve heard it and I feel like I’ve been a little ignorant to the fact, but many people say, “I’ll just find somebody smarter than me.” This is the case sometimes, but the problem with that is if you find somebody who’s smarter than you in running your company, they’re going to run it how they were taught.
If they have bad habits, they’ll bring those right into your company. You want to create a system that can be made for anybody that has somewhat some skills in that field. They can come in there and follow your system to a tee. That way, you’ll know that there’s nothing missed. For God’s sake, it’s your company. You want to run the way you want it. It also keeps you from having to micromanage this stuff because nobody wants a micromanager. It’s not a fun job to be always looking over somebody’s shoulder. I see it and it’s a bad habit that a lot of people have. You’ve got to make sure everything’s perfect and everything’s not always perfect. The best thing you can do is document it.
There are many different ways of documentation. I know this is a quick blip of the information that you’re going to have to collect, but I want to get you thinking about this and hopefully, if you’re in the starting stage of this, you’re like, “I’m going to put that as one of my big to-dos.” Besides the business plan, it should be a big focus for where you’re going to hit and how you can build a company that’s not reliant on you. It’s such a big mistake and I’m guilty of it myself, but now that I know, I’m not doing it again. Why would I make that again? I have to work harder in the beginning and it’s hard to work for nothing because that’s what you’re doing to your friend or your neighbor down the street. You’re working all these hours and you’re not making any money. It’s part of being a business owner. You got to plant some seeds and start building this thing or you’ll never see any money.You don't have to be the brightest guy out there, but you must work hard. Click To Tweet
I get frustrated when I see business owners and people that they should be making money right out of the gate. I’m going off on a tangent here, but it frustrates me because I didn’t see a paycheck for three years before I saw a paycheck. I was working on my second job the entire time to feed myself. Even when I got that paycheck, I was only making $36,000 a year. Most of you out there that are in your jobs are probably making well over that. Some of you are in the six-digit realm. I hope that I can help you learn from some of my mistakes and take this part of your business seriously because it’s going to save you a lot of headaches in the long run and you’re going to be able to enjoy yourself more, too.
Let’s get these things done for you so that you can keep building your business and finding the next person to put in the position to take your spot, train them, teach them and go. That’s what your job as an entrepreneur is. Don’t get caught up in making the product or making the widget. It’s great that you have that knowledge and you understand that, but you’re not going to grow your business there. You’re going to create yourself potentially a good job but as a business owner, you don’t want a job. Maybe some of you do and I could be wrong, but as a business owner, I don’t want a job. I work for myself and I work the hours that I want to work. Hopefully, I’ll get to that point someday. I am currently in my situation, but it wasn’t always that way. It took a long time, over a decade to get there. Some of you guys might do it faster. I’m slow in that setting, but I’ve learned to work hard. It’s taught me how to work hard in everything I do.
There might be guys that are out there that are smarter than me or quicker than me, but in the long run, I will beat him every time. The reason I’ll beat them every time is because I don’t give up easily. I’m relentless when it comes to getting this stuff, overcoming obstacles and succeeding when nobody else does. That’s what I do. There’s a lot of you out there that know you can do it, too. If you get that mindset, you don’t have to be the brightest guy out there, but you have to work hard. When I say work hard, that doesn’t mean you’re working physically hard with your hands. You got to be smart when you’re working hard, too. You don’t want to be making the same mistakes, but you have to learn the same mistake a couple of times and that’s your own fault. You need to realize that, learn from it and not do it again. That’s what kills most people’s spirits as they keep making the same mistake over and over again.
I hope I said some helpful stuff in there for you. I’m always grateful for my readers out there. You are awesome. I look forward to bringing you guys some good stuff. Please let me know if there are any subjects that you guys want to talk about. You can reach me on Facebook, Twitter and on my website, BlackMarketBook.com. You can do a request in there and ask me questions through that. I will also be having someplace for requesting on the podcast as well. Thanks for reading. I appreciate you. Bye for now.