Transcript:

Your business is performing as it's been designed.

Building a business from scratch is terribly difficult. Unless you've got an unlimited supply of time and money, you'll constantly face challenges and roadblocks that feel impossibly large.

Whether you realize it or not, your business is built on a system. Your business is a system.

Hopefully, it's a good one that allows you to turn a product or service into cash.

Your system informs how you'll face challenges and roadblocks; the steps you'll take to conquer them. The process that you use to get unstuck.

If your system is effective, the difficulties that come your way can be faced without blinking. If your system is ineffective, your business crumbles.

The system you've built behaves the way it's designed.

[Intro music]

Welcome back to The Profit Plot, a podcast where we help small business owners unlock the story behind their profitable business by unpacking one complex financial topic at a time. I am your host, Jeremy Millar.

Today's topic is not easy to hear, but it's foundational to building a successful business: the system you've built behaves the way it's designed. Good or bad.

Put business aside for a moment and imagine you're an engineer building the world's first in-home peanut butter and jelly sandwich maker.

The steps to making a sandwich seem pretty straightforward, right?

Spread peanut butter on bread.
Spread jelly on bread.
Put the bread together.

You construct your machine, load it with materials, and then hit the start button to begin a preliminary test.

The machine lights up, plays its little jingle, and everything seems promising.

Then it squirts out the smallest bit of peanut butter you've ever seen on one piece of bread, a comparatively large amount of jelly on the other and smashes the horizontal bread slices together.

It confidently rolls out your sad-looking amalgamation of squished bread and jelly with a resounding "ding!"

What went wrong here?

You gave three simple commands that would seem straightforward to any average person. But the machine doesn't have any context for what makes a peanut butter and jelly sandwich; it did exactly what it was told to do.

It can't read between the lines; it can only give you an output.

Building a business is far more complex than making a peanut butter and jelly sandwich. We're not all inventors creating the next hot countertop appliance, either.

Business owners are regular people who often have skills that make them excellent at creating something - a product or service.

But our businesses and systems can't just be designed around making a great product or service - that's not enough. We have to market them, sell them, we have to create new ones, we have to hire, lead, and fire people.

There's so much more complexity here.

The problem is that business owners rarely take the time to design their systems with intention. We know the result we want to see, but we don't take the time to break down the steps that should allow us to get there.

We don't think about how to sell a product because we know it's so good and that it'll solve the problems of the people around us - they just need to get their hands on it!

We don't think about how to recruit and hire people consistently because we're constantly plugging holes and trying to manage day-to-day. We just need an extra set of helping hands.

We don't think about our finances because it's too confusing or scary to understand. We have so many other things that feel more important.

Instead, we kind of fire off our efforts, blindly hoping that our skills in another area will compensate for our lack of planning in all the rest. Sometimes, we end up with an egregiously sad PB&J because of it.

But our businesses are systems - the output that we see is directly because of our input. Whether it's how you've leveraged your network, your knowledge of Google Ads, your incredible ability to make hundreds of cold calls, or your frugality in spending, the results you see in your business are because of the system you've built.

This has massively powerful implications.

You can measure your results, adjust, and get completely different outcomes.

If you're constantly running out of cash, you can discover why by diving into your financial statements.

If you're only closing a fraction of the deals you should be, you can try tweaking your sales process or adjusting who you target with your marketing efforts.

If you're experiencing high turnover, you can dive into your recruiting practices, adjust your benefits packages, or generally try to understand what's affecting your company culture.

The fact that your business is a system means that there's an answer to the reason it's behaving the way that it is. If it's unsatisfactory or provides an unexpected result, it's because you've designed it that way, which means you can change it.

The system you've built behaves the way it's designed. What a wonderful problem to have.

So, how is your business designed? Is it serving your goals effectively?

If today's episode resonated with you, share it with a fellow entrepreneur or business owner struggling with their business.

Be sure to subscribe to The Profit Plot podcast on Spotify, Apple Podcasts, or wherever you tune into your favorite shows.

Join us again soon as we venture to unlock the financial story behind your profitable business. Looking forward to having you here with us next time, on The Profit Plot.