A recent email from Linkedin posed the question, “What is the most important asset of your business?” There were twenty-four responses elaborating on such things as the business owner, the customer list, the brand, the business model, the marketing strategy, and even less-tangible things like attitude and creativity. However, the number-one response was “people”—customers and employees.
Who among us would not agree that people and relationships are of tremendous importance to the success of our business?
However, I would disagree that people are the most important asset. Here’s why.
In the strictest sense, assets are tangible items on a balance sheet that can be bought, sold, and controlled. They include such things as cash, inventory, intellectual property, buildings, equipment, or even a client database.
However, people come and go, and you have no control when one of these valuable “assets” decides to say goodbye and walk out the door. It is a mistake to build a business that is dependent upon individual people, especially superstars!
Your Most Valuable Asset
In my opinion, your most important assets are the effective business systems and processes you have created that consistently produce desirable results. A system for catching fish is more valuable than any individual fisherman. A system for winning at sports is of greater value than any one player. A system to make money in business should transcend the value of any single customer or employee.
Think about it. If you were going to buy a business, and it had mature systems for marketing, hiring, customer care, and providing quality products and services—systems that get results day-in and day-out, and constantly generate a monthly profit—wouldn’t that be a strong incentive to make the purchase?
Michael Gerber—author of E-Myth Revisited—said, “Organize around business functions, not people. Build systems within each business function. Let systems run the business and people run the systems. People come and go but the systems remain constant.”
Yes, people are often the most important component within your business systems; however, the systems are your most indispensable long-term asset.
Valuable people are those who help you create or improve the business processes that make your company remarkable. While it is good that your sales manager can produce sales, it is crucial that he or she can create effective lead-generation and sales-conversion systems.
Invest in Business Systems
A business that succeeds primarily from the talents of its exceptional people is always one step away from losing its “assets.” On the other hand, a company with effective business systems and processes has assets that are secure regardless of what individual people choose to do.
If you don’t believe that successful business systems are your most important asset, just ask a franchise owner. Proven systems and processes are what they paid a lot of money for.
I hope you will consider Box Theory™ Software to manage and protect your greatest business assets, the systems, and processes that could become the foundation of YOUR “franchise prototype” (Michael Gerber).