The Systems Thinker Blog

Business Turnaround: 10 Threats that Can Kill Your Business!

Posted byRon Carroll

Many business owners wait too long before facing the brutal facts that their business is in trouble. Then they discover—like a bug in a flushed toilet—it’s nearly impossible to escape the downward spiral.

Downward Spiral

We begin our business filled with hope and optimism. Before long, forces start into motion to test our grit. Getting sufficient sales and good employees is harder than expected. We face government regulations, slumping economies, cost increases from vendors, customers who pay slow or not at all, cash flow headaches, burdensome paperwork, tax pressures, unproductive workers, stiff competition, obsolete inventory, and constant customer demand for new and better products. (It wears me about just thinking about it.)

However, this is the profession we chose; the above challenges come with the territory. So, we suck it up, we adapt, we improve, and we work diligently to overcome the unrelenting forces trying to put us out of business.

Furthermore, not all problems we encounter are equal. Some have the power to kill our business if we fail to remedy those threats without delay. Our survival depends upon it!

Below are ten business killers that, if not addressed, can bring about the big flush and send your business spinning out of control and down the proverbial drain.

Sales Killers

  • Killer #1 Low Market Demand  – Your business and revenue model break down quickly when people aren’t very interested in buying your products or services. Perhaps your offering doesn’t solve problems or reduce pain as well as expected. Maybe it is getting old or outdated—running out of steam. Your message could be unappealing and doesn’t attract interest. Customers may be staying away because you don’t have a great reputation for delivering on your promise. Whatever it is, without sufficient product demand, you really don’t have a business.

    I remember when Blockbuster Video closed their last store—demand for rented movies moved to Netflix and digital delivery.  Question: What is causing the lack of demand for your product or service, and can you fix it?
  • Killer #2 Hard to Reach Target Market – Are you having difficulty finding an easy and cost-effective way to get your message in front of your ideal customers? Maybe they don’t have obvious hangouts for you to find them, or there isn’t an effortless way for them to find you. Do you have a bad physical location? Are you not easily found on the Internet? Could too much competitive noise be drowning out your message?  Is your reach to prospective customers about as effective as a billboard in the desert? 

    Business philosopher Jim Rohn teaches how to be a master communicator: "First, have something good to say. Second, say it well. And third, say it often." I repeat: Do you have a clear and cost-effective channel to deliver your message often to large numbers of people in your target market? If not, can you fix it?
  • Killer #3 Superior Competition – Your potential customers are always looking for the best deal, not necessarily the lowest price. If your competitors are bigger, better located, have superior products or services, provide better customer care, shorter lead-times, more knowledgeable sales people, and so forth, you will lose business. It’s hard to get customers to beat down the door if you are second best, unless you do it like Avis Car Rental.

    “The phrase
    We Try Harder’ has gone down in advertising history as one of the longest-lasting and respected taglines (50 years). The origination of the slogan was not to create a cute, gimmick, but instead it was a business philosophy that every Avis employee adhered to. ‘We Try Harder’ helped Avis earn a reputation as one of the most admired businesses in the world.”

    You don’t have to be the biggest, but you must strive to make your business so good that people would be crazy to buy from anyone else. What can you do to inspire this kind of loyalty?
  • Killer #4 Undifferentiated Strategy – In this day and age, you have to stand out like “purple cow in a field of brown cows” (Seth Godin). You must constantly promote your unique selling proposition (USP)—your main selling advantage. Perhaps you can be better, faster or cheaper than your competition, or you can provide “killer customer care.” 

    What makes some of the big boys stand out: UPS (logistics), COSTCO (value), Amazon (convenience/ease), Coldstone Ice Cream (quality) or Wal-Mart (low price). What compels YOU to buy from specific stores in your area? Follow the successful strategies of others.

    You must have some way of doing business that makes the customer remember their experience, feel that
    WOW thing, and tell their friends. If you are like everybody else, then it is only luck that that determines your sales. What makes your business strategy —your game plan— a winner? Can you adjust your strategy to dominate a niche market?

Cash Flow and Profit Killers

  • Killer #5 Not Managing by the Numbers – If you aren’t sure how well your company is performing or why you are losing money, you have a serious problem.  It is critical that you understand your leading and lagging indicators, the numbers that tell you where to focus your business improvement efforts.  Maybe you are in denial about what the numbers reveal. Remember, the longer you wait to address the problem, the worse things get and the harder it is to recover. If necessary, find  someone to help you understand what the numbers on your financial statements are trying to tell you.

    In 1891, a British scientist named William Thompson, also known as Lord Kelvin, said, “When you can measure what you are speaking about, and express it in numbers, you know something about it. But when you cannot express it in numbers, your knowledge is of a meager and unsatisfactory kind.” 

    Are you aware of the 
    numerical clues that expose the problem areas of your business operation? When you find the under-performing systems or processes that are causing those numbers, can you fix them?
  • Killer #6 Inadequate Margins – There are very few problems in an established business that can’t be solved with good margins—gross margin, operating margin, and net profit margin.  Avoid the temptation to be the lowest price in town unless you have a legitimate cost advantage or operate on a very high-volume business model. Instead, focus on giving your customers the best overall value and buying experience.

    To improve margins, you have to raise your prices, reduce the cost of your products and services, and/or lower your overhead expenses. Which solution is best for you to increase operating margins? Without adequate margins, you’re just working hard
    for the fun of it.
  • Killer #7 Insufficient Working Capital – If not remedied, cash flow cancer is a deadly disease that will eventually kill any business. You have to have enough money to buy goods, cover payroll, and meet your monthly financial obligations. Borrowing money to do this is a bad idea if you have not resolved the underlying business killers discussed above. However, borrowing can be OK to support growth when you have good profit margins.  As you dig out of a cash hole, consider the tips in this article, “A Business System When the Wolf is At the Door.

    Beware of excessive inventory and accounts receivable that suck cash and make you feel poor even when you are earning a nice profit. Do you know where all your profit has gone? What can you do to move more of it into working capital? If you have little or no profit, you better focus on lack of sales and/or insufficient margins—PRONTO!

Business Operations Killers

  • Killer #8 Lack of Innovation – If you are not coming up with new ideas for improved products, services, and business processes, you will be left behind. Your company will become stale, undifferentiated in your target market, and ho-hum boring.  Competitors that are innovating will surge ahead. Innovation is essential to stay on top.

    Business expert, Peter Drucker teaches, “A business has two purposes: marketing and innovation.”

    What new things could you do to draw more attention, serve customers better, and create higher quality and more efficient business operations? You have endless opportunities. Make innovation a part of your daily routine.
  • Killer #9 Weak Business Systems – Without good business systems and processes, you have a disorganized, seat-of-the pants operation that is frequently in crisis mode (every crisis is a system breakdown). Putting out fires is your daily routine. There is never-ending frustration for customers and employees. It’s time to end the madness. What grade would you give your business systems?

    Good systems will increase sales, customer loyalty, advantage over competitors, and profit margins. They are essential to a smooth-running and prosperous enterprise. Every business turnaround I have been involved with required drilling down into the operations to find ineffective systems and processes with excessive
    mistakes, inefficiency and waste.

    In a mature company with adequate product demand, reducing waste is the key to rescuing the business. What core systems in your organization drive its economic engine? What improvements could you quickly make? 
    Where might you turn for help?

  • Killer #10 Uninformed or Ineffective Management – Poor management can drag your business down in a hurry. You have to “get the right people on the bus and the wrong people off the bus” (Jim Collins, “Good to Great”).

    You need people who are Systems Thinkers (a learned skill), results-oriented, and who can help you create a culture of excellence.

    Furthermore, managers must be in-the-know about the challenges your company is facing. Tap into their unique talents and insights. And remember: good managers get the best possible results with the least amount of resources.

    Finally, a frequent cause for business failure is that owners and managers do not create
    business systems and processes to effectively carry out the mission, strategy and goals of their organization. Do you currently have top-notch people? Are YOU an effective leader?

Turning Your Business Around

When an established business enters hard times, it has a lot more staying-power than might be expected. I have seen companies struggle for years before going out of business or turning themselves around. They are able to live off of the good-will they have earned with vendors, customers and employees. They find needed cash from shrinking inventories and accounts receivable. They get support and softened terms from banks and vendors.

Struggling business owners who exhibit high integrity, courage to face the truth about their challenges, and who forge ahead with pig-headed determination, are often able to swim upstream to safety. And everyone will be cheering them on!

However, you can’t just hope for a better day. You must have a game-plan to solve the killer problems we’ve talked about. You have to get real, and get going—AND THE FASTER THE BETTER!

In my experience, most attention should be focused on either of two things, getting more high-margin sales or eliminating inefficiency and waste. Simply put, you have to focus on the right things, drill down into the details of your business systems and processes, identify the weak links, bottlenecks, obstacles and problems, and fix them. (See some examples of this.)

Hiring the right turnaround consultant might be helpful, but it is usually expensive and not always the best solution. Paying out more money that you cannot afford also adds to your burden and risk.

You know your business better than anyone else. Maybe YOU can do it! Becoming a Systems Thinker and following correct principles is the key to success. If you do it yourself—with your team— you will be forever stronger from the experience. You will become the master of your own fate.


The Next Step...

Tags: General Business, Improvement, Business Leader, System Failure

Solve Problems and Prosper with Exceptional Business Systems

Posted byRon Carroll

The essential task of every business owner or entrepreneur is to overcome daily problems, obstacles and challenges in the quest to serve customers better and make a profit. I want to discuss some of the specific challenges faced by small-business owners, and then drill down to the underlying causes of those problems. This will also lay a foundation for understanding the solutions offered by the Box Theory™ methodology.

Solve Problems with Better Business Systems


The Small Business Challenge

The Small Business Administration reports that over 500,000 businesses are born every year and about the same number die. Of startups, 33% are no longer in business after two years, and 50% are gone by four years. (SBA Frequently Asked Questions).

The Box Theory™ Way can prevent you from becoming one of these dismal statistics, behind which are broken dreams and financial devastation.

As entrepreneurs, we all start with a similar vision. We want to be independent and earn more income than we might earn by working for others. We have an idea, talent or product we hope the marketplace will demand. Sometimes we borrow money from family, mortgage the house, or risk everything to “live the dream.” Then, like every other entrepreneur, we discover that owning a business requires all the intelligence, discipline and hard work we can muster. To start, grow and sustain a successful company is likely to be the most difficult thing we ever attempt.

From day one, unrelenting forces begin to work against us. We face slumping economies, cost increases from vendors, customers who pay slow or not at all, government regulations, increasing taxes, unproductive employees, stiff competition, insufficient sales, obsolete inventory, cash flow headaches, never-ending demand for new and better products, and many other challenges.

If you haven't had some of these brutal experiences yet, it's only a matter of time. They will come with changing market conditions, government leadership, and business cycles. So be prepared.

I believe it takes as much skill to be a business owner as it does to be a medical doctor. The difference is this: Doctors prepare for ten to twelve years before starting their medical practice. Most entrepreneurs learn on the fly, resulting in critical errors and frequent casualties. The requirements of continuous learning, self-discipline and long hours are no less for a budding entrepreneur than they are for a doctor. Are you willing to pay that kind of price?

Your Primary Purpose

A business enterprise is made up of people, products and processes organized to profitably find and keep customers. Companies are in trouble from the get-go when they face superior competition, low market demand, under-capitalization, difficulty reaching their target market, undifferentiated strategy, ineffective management, or a weak revenue model. Assuming those things are in order, the most likely reason for failure is that owners do not create business systems and processes that effectively carry out the mission, strategy and goals of their organization.

As an entrepreneur, your primary purpose is not to sell, make products or provide a service, but to be the chief architect of your entire business enterprise.

On a typical day, you design, develop, oversee, monitor and evaluate the systems and processes that make your organization run efficiently, create value for customers, and produce a healthy profit. If you want to be an artist, machine operator, sales agent or technician, you should get a steady nine-to-five job. Building a business is a different vocation altogether. If you don't have the personality, skill-set, or desire to do this, you should get a partner or hire someone who does.

Your primary role as a business owner is to get the best people you can on the team, create innovative products for your target market, and develop operational excellence (systems and processes) that will attract and keep customers. When you can do this profitably, you will have the foundation for a lasting company.

Customers buy from companies that serve them best. Without concern, they allow all others to fail. It is how the customer feels about your business as a whole that matters most. Everything about your operation—advertising, cleanliness, courtesy and knowledge of employees, return merchandise policy, product selection, location, delivery time, price, and so forth—is what they are choosing. As chief architect, your entire business is your product, and it must be exceptional throughout. When it is, YOU become the “best deal!” Creating effective business systems and processes will make your organization exceptional, and keep your customers coming back again and again!

Problem Solving

Let's dig a little deeper. Do you run a perfect business? If not, what problems would you like to eliminate? What parts of your organization need to improve? What obstacles must you overcome? What is eating away at your profit or preventing you for reaching your full potential?

Your business weaknesses and problems will surface from three primary sources:

  1. Customer or worker feedback/complaints   
  2. Financial reports and performance data/brutal facts
  3. Personal frustration/symptoms of deeper problems

You will experience frustration when there are recurring events over which you feel little or no control—problems that can often be eliminated by installing an effective system.

How many of the business problems, obstacles or frustrations below do you have?

Customer or Worker Dissatisfaction
    * Our customers complain about quality or timely delivery.
    * Our customer service is not as good as it could be.
    * We don’t have customer loyalty or get the re-orders we expect.
    * Our competitors are taking business from us.
    * Orders are processed incorrectly; too many returns.
    * We can’t seem to hire or keep good people.
    * Our people aren’t productive or motivated.

Financial Indicators
    * We don’t have accurate or timely financial information.
    * We don’t know our true costs.
    * Profit is lower than it should be.
    * Accounts receivable collections are too slow.
    * The company has missed filing deadlines or tax deposits.
    * Cash flow is poor, hard to manage, and stressful.
    * Labor costs are high.
    * We don't have enough working capital for needed people, equipment or inventory.

Other Frustrations
    * We don’t have enough sales.
    * Our advertising isn't working.
    * The business is unorganized and chaotic.
    * I'm the only one who can do some of the work.
    * There is too much waste and inefficiency.

Every day, these and other frustrating business problems take hard-earned money out of your pocket. Amazingly, they all reflect the same underlying problem—a problem that you can easily fix!

Start, Grow, Fix or Franchise

Each business is unique and at a different stage of development, with different goals. However, every business owner is either trying to start, grow, fix, or replicate their business. Effective business systems and processes play a major role in each of these endeavors. Box Theory™ methodology and software can also help you in the following ways.

When you start a new business, you build everything from the ground up. You create and organize all your business systems and processes to produce sales, deliver products and services, and accomplish your mission, strategy and goals. The Box Theory™ Way is a unique "system" to help you lay that critical foundation and get results that will impress customers right from the start.

If your company is growing, you face hazards of a different kind. Many organizations fail because they grow too fast. The primary problem is that existing systems and processes cannot meet the increasing demands. They begin to break down. Customers become unhappy. Cash flow dries up. Frustration begins to dominate daily life. An organization experiencing rapid growth can be at risk of collapse unless it re-orders itself to a higher level of performance. Box Theory™ enables you to elevate your systems and processes to accommodate the otherwise exciting increase in demand for your products or services.

The majority of business organizations have a great deal of hidden waste, most of which can be prevented. Half-baked business systems and processes rob business owners and stakeholders of thousands of dollars every year. Box Theory™ methods enable managers to fix broken or ineffective business systems, getting them to run smoothly and profitably.

Finally, if you have any ideas about franchising your business or replicating it in other markets, the most important thing you can do is systemize it like a McDonald's Restaurant. When you buy a franchise, you are primarily buying tested and proven business systems. Systemizing is the essential requirement to replicate any organization. Box Theory™ software will enable you to create a business model that can be used repeatedly to multiply your financial opportunities.

By now, I hope my point is crystal clear. Business owners frequently fail because they do not create effective systems and processes that profitably find and keep customers. Additionally, most do not realize the underlying waste of time and materials that seriously erode profit and prevent them from meeting the high expectations of their customers.

By understanding that effective business processes are the essential building blocks of a successful and profitable organization, you can now embark upon a journey of systematic improvement.

The Box Theory™ Way will enable you to eliminate the most common problems that small and mid-size business owners face:

  •  Weak sales and growth
  •  Customer dissatisfaction
  •  Waste and inefficiencies
  •  Underperformance and turnover of people
  •  Poor cash flow
  •  Low profit
  •  Over-dependence on owners

Systems Thinking is a concept that will change the way you run your business. Effective business systems are the logical and practical solutions to your daily problems, and they are just waiting to be discovered!

The Next Step...

Tags: Business Systems, General Business, Business Leader

10 Easy Steps to Grow the Perfect Business

Posted byRon Carroll

"10 Easy Steps to Grow the Perfect Business"

An Entrepreneur’s Guide

By Ron Carroll

Whether launching a business startup or running a mature company, every entrepreneur should become a student of business and continually strive to discover and apply proven principles for success. There are thousands of books written by business experts that can inform and inspire. This ebook is brief, but packed with many rock-solid principles derived from personal study and forty years of hands-on experience. If you take each chapter to heart and apply the principles discussed, you will become an exceptional business leader and grow a remarkable and prosperous organization!


                        Preface:                 Hats Off to the Entrepreneur

                        Step 1:                  Get Off the Treadmill and Into the “Zone”

                        Step 2:                  Blueprint Your Business

                        Step 3:                  Systemize Everything

                        Step 4:                  Manage by the Numbers

                        Step 5:                  Become an Obsessed Marketer

                        Step 6:                  Differentiate or Die

                        Step 7:                  Convert with “Killer Customer Care”

                        Step 8:                  Get the Right People

                        Step 9:                  Turn Your Business Into a Game and Keep Score

                        Step 10:                Pay the Price  (Plus a Recommended Step 11)

Optional Format: Download "10 Simple Steps to Grow the Perfect Business" as pdf file.
(Bookmarks to each chapter are available by clicking on "Bookmarks" icon in Adobe Reader.)

The Next Step...

Tags: Business Startup, General Business, Business Leader

Business Improvement: Get Off the Treadmill and Into the "Zone"!

Posted byRon Carroll

Your business will never give you what you want until you get off the phone, out of meetings, away from the office, and into a quiet "Zone" where illumination, inspiration, and imagination produce a panoramic view of new possibilities for innovation!

Work on your business in the Zone

When you get moving in the Zone, your business will progress at warp speed. You will begin to see your business as your "product." You will "work on the business, not just in the business" (Michael Gerber, E-Myth Revisited).  In doing so, you will create a remarkable company—one that will help you achieve your life goals.

For a little time each day or week, you must leave all administrative tasks and daily routine behind, and even take a time-out from income producing tasks. Instead, you will concentrate on the most important task of all—building permanent value into your business.

Miracles Will Happen

In the Zone, you will be at the highest state of human performance and productivity. Something almost miraculous happens with your mind and emotions. You become energized. You function on a higher plane of clarity, creativity, and competence. You are more sensitive, insightful, and intuitive. You better understand the people, relationships, and circumstances around you.

In the Zone, you will hunger for knowledge and read books written by business authorities, seeking all truth that can deepen your understanding and broaden your vision. You will think about your customers, employees, and business processes. You will "dream the impossible dream" and map out the path to its fulfillment. These essential activities are more than just good management practices. In the Zone, they become the catalyst for all business improvement and transformation.

Solutions Become Clear

In the Zone, you immediately come face to face with the brutal facts of why your organization isn't all it can be. You will see specific things you can do now to solve business problems, improve business processes, fuel growth, and plan for the future. You will discover how to leverage your passion to become the obvious best choice of your target customers.

In the Zone, you will be open to a flood of brilliant ideas. You will set priorities and concentrate single-mindedly on one thing at a time, producing an abundance of innovative solutions in a very short period. Your desire to take action on these new ideas will become urgent. Your energy will escalate as you achieve mission critical goals and objectives. You will thrill as things seem to fall into place like never before.  

In the Zone, you will be at the height of your effectiveness and value to the business. You will bring a revitalized spirit to your organization. Your employees will catch on fire. Your customers will take notice. The more time you spend in the Zone, the faster your company will reach optimum performance levels, and you will achieve a culture of excellence.

Get Started Today

Remember, your constant burn of physical and emotional energy at the business leaves little energy for the mental and creative tasks required to work on the business. Get away now. Find a quiet place, perhaps at home, with a computer, and behind a closed door. The best time to enter the Zone is early morning when all energy levels are up and when inspiration and creativity seem to flow. Spend two hours if you can. You will likely start with some time constraints. Don't worry. Your time in the Zone will increase as your business transforms. You will eventually want to spend at least 25% of your working-time in this magical place.

Begin by eliminating some of the personal constraints you bring to the business. Then identify one or two or your greatest business challenges or frustrations. Study any financial data or information you have. Write down what you want the desired results to be. Read a book or two from about marketing, customer service, employee motivation—whatever your challenge is. Ponder and brainstorm potential solutions. Talk to other experts or your valued employees.  

Once you identify a specific purpose, ideas will flow 24/7; get a notebook to write them down. Then begin to create a process, procedure or system that will eliminate the problem. When you get that system done, start on the next challenge (constraint). Keep going and you will be amazed at what happens. You and your business will go through a remarkable change.

I have been working in the Zone now for a number of years. It is where I do my best thinking; it is where the Box Theory™ Way emerged.

When my adult children call home, they often ask, "Dad, are you in the Zone?" If I say "Yes," they say, "OK, I'll talk to you later." I usually reply, "That's alright, go ahead." Of course, I love my children, and they are more important than anything I am doing, but I must admit, it takes a bit of effort to get my head back in the Zone again.  

Please trust me. The Zone is a special place where extraordinary things happen. The sooner you discover it, the sooner you will reap the innumerable benefits! And the best place to start is by creating your business blueprint.

Step 2: Blueprint Your Business!
Back to Table of Contents: 10 Easy Steps to Grow the Perfect Business

*Check out a few things you can do while working on your business "In The Zone".





The Next Step...

Tags: General Business, Innovation, Business Leader

Hats Off to Successful Entrepreneurs, and Those Who Dared to Try!

Posted byRon Carroll

Not long ago a friend of mine in the teaching profession said, “I think I am going to quit teaching and start a business.

“What kind of business,” I inquired.

“Oh, I’m not sure yet. I just want to make a lot of money and have more free time,” he responded.

“Yeah, right,” I thought.

I wish it were that easy!  Every day, I watch small-business owners (including myself) engage in entrepreneurial games in the most challenging vocational arena. It takes the heart of an Olympic champion, the courage of a Mount Everest climber, and the determination of Rocky Balboa to survive even a few rounds as a small-business owner.

Rocky Balboa

Photo by Canburack

Dream vs. Reality

We all start with a similar dream. We want to be independent and perhaps make more money than we could earn by working a job for someone else. We have some special talent or product that we think others will beat down our door to get. Against our spouse’s good judgment, we sometimes risk everything to “go for the gold.”

Eventually we discover—like those who have gone before—that owning a business is the ultimate “reality show.” We hope it will be Joe Millionaire, but it is often more like Fear Factor or Survivor, where we can fall or get booted out at any time.

The moment we begin our enterprise, unrelenting forces start into motion to drive us out of business. We face cost increases, customers who don’t pay their bills, government red tape, problem employees, competition, lack of sales, cash flow nightmares, constant demand for new and better products, and a myriad of other challenges.

I won’t even talk about that elusive thing called “profit.” When we do make some, it is often hard to know exactly where it is. Profit has a way of ending up as inventory collecting dust on a shelf, or in a growing accounts receivable balance, or as a new piece of equipment. If it does happen to be plentiful, Uncle Sam will be at our doorstep to collect about half of it. One thing is certain; profit has a hard time making it into the pockets of owners and stakeholders.

Now if this doesn’t describe your business, and things are going pretty well right now, just wait! Changing business cycles guarantee that you too will one day have these character-building experiences. And hopefully, you have set aside a little of that profit to get you through.

Sustaining a small business over the years requires great expertise and discipline. To use a few clichés, you must “wear many hats,” “juggle a lot of balls,” and “keep on smiling,” even when you feel like punching a hole in the wall. By the way, if you have a college education, it probably doesn’t help much because you likely didn’t graduate in accounting, marketing, human resource or computer technology. But now, you must be informed and competent in all of these areas. You’re amazing! See, your mother was right.

I will tell you this. Some of the greatest people I know perform miracles daily to deliver quality products and service to their customers. There are a lot of negative things said about business (and some are true) but from my point of view, you are heroes and your efforts help us all to have the best quality of life in the world. I take off my hat to you!

Lead with Passion and Humility

In the following articles, I wll be discussing, “10 Easy Steps to Grow the Perfect Business.” Effective and persistent leadership is required to carry out these steps. You are the person who must provide the vision and drive to make your business successful. You can do it! And these ten steps will get you firmly on the road to success.

In his book Good to Great, Jim Collins describes what makes good companies great. He says that the best leaders—what he calls level 5 leaders—have a “paradoxical mix of personal humility and professional will. They are ambitious, to be sure, but ambitious first and foremost for the company, not themselves. They are fanatically driven, infected with an incurable need to produce sustained results. They are resolved to do whatever it takes to make the company great, no matter how big or hard the decisions. They attribute success to factors other than themselves. However, when things go poorly, they look in the mirror and take full responsibility.”

The life-work you chose is to grow a remarkable and financially prosperous business! You can do it in 10 Easy Steps, so let’s get started.

Step 1: Get Off the Treadmill and Into the "Zone"!
Back to Table of Contents: 10 Easy Steps to Grow the Perfect Business





The Next Step...

Tags: General Business, Business Leader

Work ON the Business: 7 Tips to Do It Right!

Posted byRon Carroll

Years ago, I was struck by a statement that had a great impact on me. In fact, it changed my entire approach to business, and ultimately became one of the driving forces behind my current Box Theory™ methodology and software.

Michael Gerber, author of "E-Myth Revisited," said, “Business owners must spend time working on the business, not just in the business.”

 Running a business

Working on a business—or running a business—is an entirely different task than working a "job" within the business.

Shortly after hearing this profound statement, two young fellows walked into my office and wanted to teach me about time management. Among other things, they said the best use of my time as a business owner was creating value in my company. The second-best use of my time was building relationships and creating sales opportunities.

The epiphany: Working on the business to create value for stakeholders, customers, and employees is the most important and best use of a business owner’s time.

I soon devoted an hour a day to improving my company's operations. This eventually increased to four hours a day—and everything just got better. I got off the treadmill and became a “business engineer”—one who plans, constructs, or shrewdly manages an enterprise" (Online Dictionary).

I was transformed by this new thinking, and so was my company.

Running a Business

Here are a few things I’ve learned over the years about how to get the best results when working on the business.

  1. Get Clarity of Purpose: Make sure you and all employees understand your mission, vision, strategy and goals so that everyone is pushing in the same direction (easily accomplished with Box Theory™ Software). Working on the business means becoming clear about who you are, where you are going, and how you are going to get there.

  2. Find Time for Learning: Spend some time every day in The Zone reading and learning, becoming an industry expert, considering feedback from customers and employees, and pondering your key performance indicators (KPI's). “There is no substitute for knowledge” (W. Edwards Deming, Total Quality Management). Working on the business means pursuing the knowledge and skills that give you an edge and keep your company on top.

  3. Never Stop Improving: Continuous Improvement of business operations is the primary responsibility of business owners and managers. Hold a regular business improvement workshop that focuses on developing better people, products, processes, and policies. Tap into a wealth of employee ideas. Small improvements over time will produce significant financial benefits. Working on the business means creating a culture of learning and improvement—a culture of excellence—where people love coming to work and perform at their best, even when you’re not around.

  4. Increase Value to Customers: Innovate to make your products and services easier, better, faster, and cheaper than the competition. WOW your customers and turn them into evangelists for your company. “See how much you can give for a dollar, instead of how little he can give for a dollar” (Henry Ford). Working on the business means figuring out how to provide so much value that you become the obvious choice of your target customer.

  5. Elevate Your Employees: First, hire the right people. Then encourage learning and growth by asking them to take on new or greater responsibilities. Seek their help with important tasks and goals. Offer your people opportunities to acquire new skills—perhaps attend a paid seminar. Challenge them to stretch their performance levels. And be sure to recognize and reward achievement! Remember: If your business isn't learning, you'll fall behind, and a business learns as its people learn. Working on the business means lifting people and deriving the maximum value from their increasing talents and experience.

  6. Take Cost Out of Your Business: Profit is the life-blood of your enterprise. Find ways to reduce ever-rising costs and preserve your margins, while maintaining the value given to customers. The secret to lowering costs is to make your products, services, and business processes better, faster and cheaper. And keep in mind the important principle of sales equivalency. Working on the business means applying pig-headed determination to get rid of the waste and inefficiency that increase operational costs.

  7. Create High-Performance Business Systems and Processes: Your entire organization is made up of systems and processes. You can accomplish the six objectives above by creating good business systems that consistently get desired results. There is no other way. The primary purpose of those business systems is to differentiate your company in the marketplace, and to help you excel at finding and keeping customers. Working on the business means spending time designing, developing, overseeing, monitoring and evaluating all the systems and processes that make your organization run smoothly, create value, and generate profit.

Work On the Business More and In the Business Less

So, if you want to run a successful business, the above strategies will get you on the right track. As your company grows, you will spend more time working on your business and less time doing the pick and shovel labor in the business.

And that’s when it starts to get fun!

The mission and purpose of Box Theory™ is to help business owners and managers work on their business in an intelligent and systematic way. It replaces guess work with proven principles and methods that get results. With the Box Theory™ Way, you know every day exactly what you can do to improve. With each new successful business system or process, the task gets easier and your rate of progress accelerates.

I know the challenge small-business owners have in finding extra time to work on their business. Changing my work pattern to accommodate the process of business improvement was one of the hardest things I’ve had to do in my business career. Now, all I can say is, “I’M GLAD I DID IT”… AND YOU CAN DO IT TOO!


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Tags: Business Systems, General Business, Improvement, Business Leader

How to Become the "Best Deal" for Your Target Customer!

Posted byRon Carroll

Within our free-enterprise system, we are all looking for the same thing—the “best deal.” When we buy goods, services, and even when we hire employees, we want to get the greatest value we can for the time, effort and money spent.

It should be no surprise that our customers and employees are also looking for the best deal from us! However, the best deal may not be what you think.

Becoming the best deal

What is the Best Deal?

Many people equate the “best deal” with the “best price.” Business owners are often committed to having the “lowest price in town.” Many of these owners also struggle to survive because their operating profit margins are too low. What they fail to realize is that customers looking for the best deal are not necessarily insisting on the lowest price.

Customers reward companies that serve them best, and allow the others to fail. It is how the customer feels about your business as a whole that matters most. Everything about your business—advertising, cleanliness, return merchandise policy, courtesy and knowledge of employees, product selection, price, location, delivery time, and so forth—is what they are choosing. Your entire business is your product, and it must shine throughout. When it does, YOU become the “best deal!”

High Value is Better than Low Price

Sometimes pricing does play a role in helping companies become the best value to their customers. Legitimate price advantages do happen. I am acquainted with a landscaper who is the owner of a local rock quarry. He has a significant price advantage over other landscapers who must transport boulders a greater distance.

However, the cry, “We have the lowest price," is often a sign of weakness. Translated, it usually means the business has not invested in marketing, quality people, killer customer care, and other expenses incurred by well-run companies. Remember, everything about your company is what makes it the best deal—OR NOT.

When I grab a quick lunch during the day, I sometimes go to a sandwich shop that is close to my office. I can get in and out quickly. The prices are relatively low, and no tip is required. At that moment, the sandwich shop is the best deal for me.

On the weekend, I take my wife out to dinner at a steak-house restaurant. I will pay three or four times as much for a meal there as I did at the sandwich shop. This popular uptown restaurant has a nice ambiance, provides an unrushed full-course meal, and I am able to court the love of my life. At that moment, the steak-house restaurant is the best deal in town, not the low-end sandwich shop.

On our wedding anniversary, I took my wife to an exclusive restaurant in Salt Lake City. I paid an outrageous price, but it was a night she will never forget. Of the three restaurants, this one provided the greatest value of all: a lifetime memory.

So, the best deal in this case is not related to pricing. Instead, it is the highest perceived value based on my current need. At each restaurant, I wear the hat of a different customer with different expectations, and I have a different definition of what is the best deal.

Be the Best in Your Target Market

Since no business can serve everyone well, it is important to define your target customer and then provide real, quantifiable, and compelling reasons to buy from you. You want your target customers to see you as the best choice available to them. If you own the exclusive dinner restaurant, you don’t care about the guy who wants a cheap chicken sandwich. No other customer matters except your target customer!

Remember, if your competitors offer a greater value than you, customers will buy from them. And don’t think you can make up for the value deficit by trying to “out-sell, out-trick, out-technique, out-cold call, out-persist, and out-luck all your competitors” (Rick Harshaw, Monopolize Your Marketplace). Today’s consumers know value when they see it. You simply must be the best in your target market. Period!

Innovation Can Set You Apart

You become the best by constantly innovating. Innovation is the process of figuring out how to offer more value than your competitors. Innovation is not doing something cool that your competitors also do. It is not just giving your customers what they have come to expect as the norm, or offering a gee-whiz promotion from time-to-time.

Innovation is not necessarily a new invention or business concept. It may just be as simple as outrageous customer care (COSTCO), or delivery times that amaze (FedEx), or an exceptional warranty (Hyundai).

Your value may simply be the result of well-crafted business systems and processes—the distinct and remarkable way you do things from end-to-end. By the way, when your people, products and processes work together in a unique and memorable way to make you the best deal, you have a brand.

Ask yourself one simple question: If I were a customer of my business, what would compel me to buy from me instead of my competitors? If you don’t know the answer to this question, your business is probably under-performing. Get in the Zone today and figure out your unique selling advantage.

Become Remarkable

Because there is a cost to becoming the best, the customer actually pays a premium for the privilege of doing business with remarkable companies. However, customers must think this is OK because they keep coming back.

Remember, your business as a whole is what makes you the best choice. It’s the little things that count.

Be clean.
Be prompt.
Be consistent.
Be courteous.
Be knowledgeable.
Be dependable.
Be responsive.
Be innovative,
Be systemized.
Be remarkable.

And you will be the BEST DEAL!


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Tags: Business Systems, General Business, Innovation, Customer Retention

Business Plans: What Smart People Say About Business Planning

Posted byRon Carroll

It’s always a good time for business planning and setting goals. Some do it. Most don’t. Of those who do it, some follow their plan, but many eventually lose interest. Of those who do pursue their plan, some reach their goals; however, most plans don’t go as expected. So why have a plan?

Consider the wisdom of the Cheshire cat in the story of Alice in Wonderland:

"Would you tell me which way I ought to go from here?" asked Alice. "That depends a good deal on where you want to get," said the Cheshire Cat. "I really don't care where" replied Alice. "Then it doesn't much matter which way you go," said the Cat. (Lewis Carroll, “Alice's Adventures in Wonderland,” 1865).

 Business Planning - Cheshire Cat

More Brainy Quotes on Business Planning

  • He who fails to plan, plans to fail, so plan your work and work your plan” (unknown).

  • “Reduce your plan to writing. The moment you complete this, you will give concrete form to your intangible desire” (Napoleon Hill, author of "Think and Grow Rich").

  • “A good plan is like a road map: it shows the final destination and usually the best way to get there” (H. Stanley Judd, American author).

  • "Good plans shape good decisions. That's why good planning helps to make elusive dreams come true" (Lester R. Bittel, “The Nine Master Keys of Management”).

  • “Plans are only good intentions unless they immediately degenerate into hard work” (Peter F. Drucker, business author and coach).

  • “Proper preparation prevents poor performance” (Charlie Batch, football quarterback).

  • “Adventure is just bad planning” (Ronald Amundsen, Norwegian explorer of Polar Regions).

  • “If the ladder is not leaning against the right wall, every step we take just gets us to the wrong place faster” (Stephen Covey, business author and coach).

  • “Good fortune is what happens when opportunity meets with planning” (Thomas Edison).

  • “Planning is bringing the future into the present so that you can do something about it now” (Alan Lakein, author on personal time management).

  • “The man who is prepared has his battle half fought” (Miguel de Cervantes, author of “Don Quixote").

  • “Every minute that you spend planning your goals, your activities, and your time in advance saves ten minutes of work in the execution of those plans. Therefore, careful advanced planning gives you a return of ten times, or 1,000 percent, on your investment of mental, emotional, and physical energy.

    “It takes only about 10-12 minutes for you to make up a plan for your day. This investment of 10-12 minutes will save you time of approximately two hours per day, or a 25 percent increase in productivity and performance. The very act of planning forces you to think better and more accurately about everything you do. Perhaps, the most important rule of all is for you to 'think on paper!'

    “A clear vision, backed by definite plans, gives you a tremendous feeling of confidence and personal power” (Brian Tracy, business author and coach).

  • And my personal favorite:
    “Everyone has a plan—until they get punched in the face” (Mike Tyson, Boxer).

I’ve Got Just the Plan for You

The Box Theory™ Way includes planning with a purpose. You first create an Organization Blueprint so that your business systems and processes propel your company to achieve its mission, vision, strategy and goals.

Within Box Theory™ Software, you address ten important areas of business planning to complete your Organization Blueprint.

  1. Mission Statement (Why do you exist?)
  2. Values Statement (What are your core values?)
  3. Vision Statement (Where do you want to be in five years, and beyond?)
  4. Voice of the Customer (What do your customers expect from you?)
  5. Voice of the Employee (What must you do to retain your best employees?)
  6. SWOT Analysis (What are your organization strength, weaknesses, opportunities and threats?)
  7. Strategy (What is your unique game plan for success?)
  8. Balanced Scorecard (What are your specific measurable goals?)
  9. Organizational Structure (What business activities are you engaged in?)
  10. System Framework (What business systems and processes must you excel at?)

While the type of business plan required by venture capitalists may not be necessary for your company, planning is still essential. Throughout Box Theory™ Software, you create meaningful Action Plans that, when carried out, will enable you to produce a smooth-running, profitable, and even remarkable business operation. 

Make the year ahead your best ever with Box Theory™ Software. I believe this will be one of the most important business decisions you have ever made!


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Tags: Business Startup, General Business

Small Biz Owner: Do You Have a “Scarcity” or “Abundance” Mindset?

Posted byRon Carroll

During challenging economic times, it is important for most small-business owners to run a lean business operation—cost conscious and careful with financial resources. However, a mindset of “scarcity” can be harmful while a mindset of “abundance” may be just the ticket to more prosperous days. Let me explain.

Scarcity and Abundance Thinking

The Scarcity Mindset

If I have a scarcity mindset, I tend to see winners and losers. Look, there is only so much to go around, and if you get more, then I will naturally get less, right? It’s a dog-eat-dog world. By carefully holding on tight to everything I have, I will be more secure, prosperous and happy. It’s not about wishing ill-will on other people. It’s just a way of thinking to protect what I have worked so hard to earn and accumulate.

The Abundance Mindset

If I have an abundance mindset, I tend to see everything in terms of win-win. There are unlimited resources and I am genuinely happy for the success, well-being, achievements, recognition, and good fortune of other people. I love to contribute to and celebrate the accomplishments of my friends, associates, and even competitors. The better they do, the better I do. Success generates more success. In my way of thinking, there is plenty to go around. I win. You win. We all win!

The Scarcity Organization

It is very easy to get into a scarcity mindset when a business is struggling and every penny counts. The normal instinct of many owners and managers in financial stress is to cut costs to the bone. But like dieting, this can be unhealthy if taken too far. For example, cutting corners to marketing activities can create some immediate and short-term financial benefits. However, profit margins are eventually eroded by severe cuts to core business systems such as marketing, accounting, or even hiring and employee compensation.

The Abundance Organization

It is a misunderstood notion that when the rich get richer, the poor get poorer. The truth is that when the rich get richer, the poor generally get richer as well. We prosper most when we help others prosper, when everyone in our network is doing well. 

In a nearby community, a reputable fast-food restaurant stood alone with no competition. They “owned” the neighborhood. Unfortunately, the store went out of business. A mile down the road is a cluster of twelve fast-food restaurants competing side by side. The parking lots are always full, and even the weaker stores are thriving. That’s abundance thinking!

Zig Ziglar, the great motivator, taught, “You will get all you want in life if you help enough other people get what they want."

With a mindset of abundance, the business owner should always be looking for the best value he or she can get when purchasing goods and services. However, getting the most value from vendors or employees does not necessarily mean paying the lowest price, just as giving the most value to the customer does not always mean being the cheapest in the marketplace.

As my outlook matured over the years, I paid more money for fast service and superior quality rather than less money to a questionable vendor with a lower price. I paid employees above the market rate because they “made things happen” that created value in my business. I put more money into my business systems and processes because the payoff far exceeded the out-of-pocket expense.

In my former world of accounting, I often gave clients ideas that saved them thousands of dollars. I sent them new customers and even became one of their good customers myself, only to have them mumble about a few hundred dollars in accounting fees I charged. They did not put a value on the significant non-accounting elements of our relationship. They had a scarcity mindset.

Which Describes You?

Compare some characteristics of the scarcity mindset to those of an abundance mindset. How do you think about and relate to your vendors, employees, and customers?

Scarcity Abundance
Not enough resources to go around
More than enough resources to go around
I Need to win/succeed I Need to be fair/we all succeed
I have the answers We learn from each other
Relationships of suspicion/doubt Relationships of trust
Adversary Partner/Ally
Expense Investment with a return
Focus on costs/tasks Focus on results/systems and processes
Buy time/hours from people Buy desired outcomes from people
Expect minimum required performance Expect high performance
Micromanagement Stewardship
Low morale High morale
Worry/Stress/Frustration Confidence/Peace

The outcome of an abundance or value-oriented mindset is the maximum utilization and development of people. The outcome of the scarcity or cost-oriented mindset is the maximum control of people. Over the years, I have learned that I want to control business systems and processes, but I want to develop people as valuable partners.

According to Brian Tracy, business author and teacher, the Law of Abundance is this:

“We live in an abundant universe in which there is sufficient money for all who really want it and are willing to obey the laws governing its acquisition.”

Achieving the more productive mindset of abundance requires a leap of faith for many of us. It is a counter-intuitive principle. Come to think of it, isn’t this the great lesson learned by Ebenezer Scrooge? (Charles Dickens, "A Christmas Carol," 1843)


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Tags: General Business, Culture, Laws/Principles, Business Leader, Financial Systems

The WOW Factor: Six "More" Ways to Supercharge Your Business Systems!

Posted byRon Carroll

The primary purpose of the WOW Factor is to attract, convert, and retain customers. In my last article, we talked about applying this quality to the business systems that affect your external customers. In this article, we will talk about ways to WOW your internal customers—your employees.

Remember: Your business consists entirely of systems and processes. You can only produce a WOW Factor by enhancing a specific procedure or component in one of your business systems. There is no other way! You have to build your WOW idea into one or more of your business systems.

Business Systems that WOW

When customers—including employees—have an intensely positive reaction to something about your business, you’ve got a WOW Factor!

So, here are six more suggestions to get that WOW thing going with the valuable people that are helping you to create a remarkable company.

WOW Your Employees

  1. WOW Factor #1: Develop a World-Class Organization (no matter what your size) – When people love coming to work every day and are proud of your company’s mission, products, and standing in the community, you’ve got a WOW Factor. When your business is financially stable, growing, and offers employees opportunities for learning and development, you’ve got a WOW Factor! Every business system you create that delivers an excellent result will take you one step closer to becoming a world-class organization!

  2. WOW Factor #2: Fill Employee Buckets to Overflow – Let's face it, people are WOWED by better-than-average wages, incentives, and benefits. Paying at the higher end of the salary scale will help you get the “A” employees and retain them longer. The result will be stronger work-groups or teams, long-term stability, and top performance—EVEN WHEN YOU’RE NOT AROUND. (The money needed to offer better compensation than your competitors comes by cutting waste and inefficiency from your business processes.)  And don’t forget to fill those employee buckets with deserved respect, praise, and recognition. The more you generously give to others, the more you get in return—the Law of Reciprocity.

  3. WOW Factor #3: Create a Culture of Excellence – Use business systems, measurement, and continuous improvement methods to bring the best out of people—a disciplined work ethic, consistent results, and patterns of excellence. Your employees will experience no greater WOW than the thrill of personal accomplishment. (You can make this happen even with ordinary employees doing mundane tasks.) Your high-performance business culture will produce an abundance of WOW Factors for customers of all types.

  4. WOW Factor #4: Be the Golden-Rule Boss – No doubt, we are all WOWED by the company owner who is an amazing innovator, the coach who demands our best, or the visionary who inspires. However, the real WOW Factor for most employees is the everyday boss who listens, is supportive, rolls up his or her sleeves to help solve a problem, follows through on commitments, and is generous with giving out credit or praise. The Golden-Rule boss treats subordinates as they would want to be treated if roles were reversed. And when things go wrong, this wise leader first looks for problems in business systems before blaming people.

  5. WOW Factor #5: Elevate Your People – “WOW” can be used to describe a workplace that enables people to learn new skills, experience personal growth, and advance their careers. Many employees love work that is meaningful and where they can make a difference. They like challenging assignments, specialized training, or taking ownership of a business system. Some workers will become stars if included in a big idea, a big goal (BHAG), or put on a dream team. Others will stretch and even sacrifice to accomplish something extraordinary. Anything that enlightens, elevates, or energizes people is going to be a WOW Factor!

  6. WOW Factor #6: Focus on Individuals – Every employee has a unique personality their own feelings about what makes a WOW Factor. Get to know your employees like your other customers. Over the years, I have discovered a variety of little things that seem to WOW people. For example, some employees like flexible work hours, pizza Fridays, casual Fridays, Fridays off, or working from home. Others value a clean, organized and systemized workplace. Some like autonomy or control, while others flourish when given tasks that require creativity or innovation. Discover the unique interests and talents of your employees and make the most of them. The degree to which you magnify individual people, you will magnify your company.

Play to WOW!

In the T.V. series, “The Undercover Boss,” the business owner, working incognito along-side company employees, comes to know some of their hopes and dreams. At the end of the undercover week, the boss is revealed and often does something special to help a few employees achieve their personal goals (e.g., college tuition or a family vacation). Those helped are deeply grateful, and obviously feeling the WOW Factor!

WOW Factors usually don't require much money, and if done correctly, can pay big dividends. What they do require is a business owner or management team that understands the game of work, and plays to WOW!

Related Articles:
The WOW Factor: Six Ways to Supercharge Your Business Systems! (Part 1)
Turn Dust-Gathering Procedures into Business Systems that Wow!
Business Systems vs. the Misunderstood Operations Manual
Boost Your Business Profit by Adding the Fun Factor!
Does Your Business Have a Double McTwist 1260?


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Tags: Business Systems, General Business, People, Business Leader