The biggest challenge to scaling your business is to move away from the chaotic and towards the systematic.When we start our businesses, there are usually no business processes. Everything is new...everything is custom...and everything is often made up 'on the fly' Business is improv theatre or jazz. For some, these free wheeling forms are a means of expressing creativity and uniqueness. Just as many marketing entrepreneurs love customer acquisition, or hunting, many technically oriented entrepreneurs love the challenge of developing something new. For them, routine is boring!
In the previous blog, I talked about capability-- the different things a business can do with its existing resources. This week, I want to introduce a second term...capacity. Capacity represents how much your business is capable of producing or providing. In a service business, it may be represented by 'billable hours'. In a production business it is the number of units you can produce. A restaurant's capacity is limited by the seating. Growing a business inevitably means managing capacity growth. The wise entrepreneur knows how to get the most with what he or she has before hiring more people or purchasing additional assets. The starting point means developing a business process.
The business process takes the guesswork out of producing or providing products or services. It is the difference between playing off of a musical score, and jazz improvisation or the difference between adding a pinch of this or that until you like it and cooking from a receipt. Developing systems allow you to duplicate and scale your business. Michael Gerber's The E-Myth and Hammer & Champy's Reengineering the Corporation effectively address the issue business systems and documentation.