Listen or watch this episode at catherinelangman.com/episode-126
Well hello there! Catherine Langman here with you on the Productpreneur Success Podcast! Welcome to the show if you’re a new listener, and welcome back if you’re a long-time listener!
Before we get started today, I want to apologise in advance for the likely event that I might cough in your ear. I finally succumbed to covid over the last couple of weeks and I’m feeling a lot better today but this blasted congestion and cough just won’t go away. I think it might be here for a while!
While in my sick bed, though, I was a little bit inspired to create today’s episode. Because even though I took a week off work to recover, my business kept going and all the work got done, and that’s because I’ve got my business all set up to run without me needing to do all the work.
And this is the sort of setup in business we all need to have if we want to either scale and grow, or if we want to sell.
I’ve actually seen a lot of businesses come up for sale this year so far, and I would say that most of them are being sold off very cheaply because the business owner has just run out of puff. They’re super burnt out and just over it.
Statistically, this actually happens a lot around the 5-6 year mark in businesses where the founder has not managed to systemise themselves out of having to do all the work.
I’ve been through burnout myself – it’s the reason I sold out of my first business actually, and it literally took me 3 months of doing basically nothing to recover from that.
Now I’m not going to sit here and try to unpack the psychology of why so many entrepreneurs don’t progress their business in a way that enables them to grow with a team and systems to operate without themselves needing to do all the work. I think that would be a great topic though – to really understand the mindsets required to go for it in your business like that.
Instead, today’s episode is going to be about what you really need to have in place in your business in order to scale and grow sustainably – and by sustainably I mean both in terms of financially viable and profitable, but also in terms of your own physical exertion so that you don’t burn out or drive yourself into the ground.
And the same things need to be in place in order to sell your business for a really good price as well.
You might decide by the time you have all this in place that your business is enjoyable and manageable and you don’t want to sell it anymore! Or, you might find that the price you could sell it for is too good to pass up. So really – it’s a win win.
The first thing we all need to have in place is documented data.
I sometimes feel like I bang on about this to the point where your eyes are probably starting to glaze over and you want to tune out. And I get it, documenting data and performance metrics is really boring for a lot of people.
But looking at your analytics is just not enough.
You need to document it on a weekly basis so that you can see the trends and hopefully the improvements over time. This gives you the data you need to draw insights from your work as well.
I’m not sure if you’ve heard me tell the story about flying?
Imagine you’re on an international flight to some gorgeous holiday destination. (I love imagining this because I won’t be going on that kind of flight in reality for quite a while yet, so I just live in my imagination!)
Anyway, so you’re flying over the ocean somewhere en route, and the pilot comes onto the PA to make an announcement.
She says, ‘I have some good news and some bad news. The bad news is, we’ve lost all our instruments. So we don’t have any idea how fast we’re going, what direction we’re travelling in, how high up we are, or how much fuel we have left. But the good news is – we’re making great progress!’
Obviously this is a pretty far-fetched situation and none of us would ever want to hear a pilot make that kind of an announcement!
But, this is the definition of flying by the seat of your pants, and it is exactly what so many entrepreneurs do in their business.
Just like the story about flying, you would never drive from Melbourne to Darwin without using a map and your car dashboard to tell you if you’re heading in the right direction and have enough fuel and so on. You would be looking at that car dashboard multiple times a day in fact to make sure you get to your destination.
I’ll give you another example, from the world of elite competitive swimming. As most of you listeners know, my teenage sons Aidan and Hamish spend about 25 hours in the pool each week. And the thing about competitive swimming is that they spend all this time working towards cutting even just a few hundredths of a second off their race times depending what events they’re racing.
And there are so many components that come into that, from diving to stroke rate to kick rate to tumble turns to the touch at the end and many other factors and techniques in between.
Their training sessions are geared towards working on all these different elements, along with strength and flexibility, and hopefully without injuring themselves in the process.
So they need to keep track of what they’re doing in training to make sure they are improving and that they’re not at risk of hurting themselves by putting too much load on one part of the body, for example.
We need to be doing this monitoring and documenting and analysis in business as well.
By documenting all your key performance metrics on a weekly basis, this acts as your navigation dashboard for your business. That weekly checkin and analysis of your efforts and results and progress gives you 52 times a year where you can alter your course or put your foot on the gas or breaks – or whatever is the appropriate response based on your data at hand.
What I find is – by doing this, it takes your eye off wishing your ultimate goal result would happen overnight, and puts your focus instead on the incremental improvements you’re making on your progress journey.
And eyeballing, or noticing those incremental improvements is what keeps our moods positive and our motivation up so that we have the energy to keep pushing forwards. Rather than just feeling like a loser because we haven’t made a million dollars yet and don’t know why that result hasn’t happened.
I’ll give you another critical reason why you need to be documenting your performance metrics each week, not just looking at them.
When you document your metrics weekly, you start to learn what marketing efforts are consistently driving the traffic and revenue in your business.
Which probably sounds like a ‘dah’ moment…
But here’s the thing – if you want to sell your business, or a portion of your business to bring investment in, then you need to show evidence that you can control and influence traffic and sales.
Investors and buyers want to know that they are buying a money-making asset. They want to see the data that shows them ‘here is the tap to turn on to get more traffic and sales’.
For this reason – the business owner doing all the hustle is not an attractive prospect at all.
No buyer or investor will want to buy a business that only generates sales when the owner is personally getting on live TV or is creating all the Reels or Tiktoks with themselves as the model.
None of that is replicable or scalable.
So if you do want to try and sell your business, you’ll need to put yourselves in the potential buyers’ shoes and think about what would be an attractive proposition for them.
They want to buy a business that makes money predictably and consistently and has the potential to grow, right?
For that, you need data.
Now, if you have no idea what data you should be recording or how to go about this, then there are a few ways you can get help with this.
Number one, this is what we teach our students and implement on behalf of our clients in our agency. So you can always get help from our coaching programs and done for you services.
Or number two, you can start to learn the ropes by signing up for our free eCommerce Growth Pack. To get your copy, just head to https://www.catherinelangman.com/ecommerce-growth-pack and I’ll send you a copy for free.
Number two, you need systems and processes in place.
This is an easy enough concept to grasp but can be difficult to execute, especially if you’ve ever been through an experience where a team member or a contractor has not done thins the way you want them done and you’ve felt like ‘it’s just quicker and more accurate if I just do it myself’ or ‘it’ll take longer to explain it so I’ll just do it myself’.
Unfortunately, that approach leads the business owner to becoming the bottleneck in the business. We only have a finite amount of time at our disposal, and we can’t make more time – it is what it is. So the only way our business can produce bigger and better results is to become more efficient in the way we do things, to automate what we can, and to get more hands on deck so we can delegate or outsource.
I always like to remind myself and others – you would never see the likes of Jeff Bezos packing orders at Amazon, right?
So, how do you systemise your business?
Firstly, I like to start with an exercise that my own mentor likes to call the Time Sucking Monster exercise.
This one is pretty basic, and probably anyone who has worked in a professional desk job has had to do it…
What you need to do is to literally write down the tasks you do each day and the time you spend doing them.
IE keep timesheets.
Yay – how’s that for a fun exercise!
You want to do this for at minimum a whole week, but preferably a month so that you can get a really accurate picture of everything you’re doing and how long it’s taking you.
My own mentor actually includes tasks in your home or personal life in this exercise too, because a lot of us are spending a lot of time doing really low value tasks that could be outsourced to free up time that would then convert to more money if you had that time to devote to your work.
Anyway – once you’ve completed the time sucking monster exercise, you then need to break down all the tasks you do into the main functional areas of your business (and life). So it might be Marketing as a headline area and within that you might spend time creating content, schedule or engaging on social media, writing and sending emails, updating your website, setting up or managing advertising campaigns, attending an expo or trade show, making phone calls to stockists, and so on.
Operationally, you might spend time picking and packing orders, responding to customer service enquiries, placing orders for inventory, dealing with suppliers or logistics providers and so on.
So get the full list documented and work out how much time you’re spending doing each task in your business.
Then you need to think about the potential value those tasks has for your business. By this, I mean – if you do this work, what potential does it have to grow your revenue? If you spend time putting together a new promotional campaign, or creating a new product to launch, then these activities are likely to have a really big potential impact on your revenue.
Then there would be tasks like picking and packing orders, responding to customer service emails, scheduling content on social media and the likes, that are all really necessary to the ongoing success of your business, but they just need to get done. They’re not as likely to have a really big impact on your growth if you do these tasks yourself.
What you want to end up with is a list of really time sucking tasks that you’re doing yourself but that aren’t really likely to have a great impact on your growth potential, and that by continuing to do these tasks yourself you are literally robbing yourself of the chance to grow because that time is not being spent on high-growth activities.
The opportunity cost of you spending all your time on busy but low impact activities is huge.
I still do this exercise every now and then, and I’ve been in business for 15 years now. Anytime I notice myself becoming a bottleneck in the business, I do it again to help me work out where the opportunities exist to get more leverage into my time and make sure I’m spending my time on the highest impact work.
The last time I did this exercise I realised that I was literally spending more than 3 hours every day driving my kids too and from the pool. So now my eldest son has the Uber app on his phone and they catch an Uber from school to the pool and then hubby picks them up after he finishes work. The kids are happy and I get my afternoons back, which has been brilliant!
OK, so when you’ve done the time sucking monster exercise and worked out what you really need to spend your time on and what you need to delegate, then you need to make sure you’re getting other people to do that work for you in the way that you want it done.
Part of this comes down to choosing the right people to do that work, but that’s not it entirely. You also need to be able to train others to do things how you want them done.
My daughter, who is 11 and in year 6 at school now, is currently doing an assignment in health where she has to observe me or her Dad making a family meal, write down the ingredients and the method, and then have a think about how she could improve the meal to be more healthy and nutritious. Then she has to write down her own recipe and cooking method, plus she has to prepare and cook it herself and document herself doing it as part of the assignment.
In a nutshell – this is exactly the same as documenting a system in your business.
Obviously there’s more to it than that. For example when it comes to cooking, you can’t just assume that the person cooking the recipe knows how to cut or prepare food or use the stove or oven and so on. I remember years ago, my boyfriend at the time decided to bake a cake and after reading the recipe that instructed him to ‘cream the butter and sugar’ he proceeded to melt the butter and stir in the sugar. I thought it was hilarious at the time, but he had never baked a cake and didn’t know what it meant.
So hopefully it’s obvious that there are two stages to getting staff to follow your systems and processes:
- Document it in a clear, linear fashion, making sure to identify and explain each step so that it’s logical and also efficient. And
- Train them how to do the whole process.
It’s generally the best practice to work out your system or process step by step yourself and document that in both written steps and with accompanying video – using a tool like Loom can help with that.
And then, get your team member to go through the process – firstly give them the opportunity to ask you questions if they are unclear on anything, and then get them to implement the process themselves and document how they go with it.
Then you review their work together and give them constructive feedback so that they have the opportunity to improve their work.
We use a combination of Google Drive and Asana, which is a project management tool, to document all our systems and processes, plus we have regular team meetings to make sure everything stays on track.
I know other people use Google Sites, which is like an intranet, or Trello, so there are plenty of different tools you can use depending on what works best for you.
Now, it might feel like a whole lot of extra work to document these things, on top of actually doing the work, but it really doesn’t need to be like that.
Basically, every time you go to do a task that has not been documented yet, you open up a Google Doc and have Loom switched on so you can record yourself doing the task and document it as you go. It might add like 5 or 10 extra minutes to the task, but if it sets you up to then train someone else on how to do it, you’re going to ultimately buy back a lot of your future time.
There are so many benefits for documenting your systems and processes.
Number one is of course being able to delegate some of your tasks to other people, whether you hire team members or outsource to contractors or service providers.
But number two is even more important – because this adds even more value to your business when the time comes to sell it.
Just like I was saying earlier in regards to documenting your performance metrics – a potential investor or buyer will want to see that a business has systems and processes in place, so that all the functions and tasks in the business are executed in an efficient and repeatable manner. And that the business owner does not have it all up in their head.
This has recently been a problem actually in my kids’ swimming club, because the head coach was absolutely hopeless at communicating with anyone or delegating anything to anyone. Nothing was documented or delegated – it was all in his head.
He’s a great coach in terms of the results he gets with the swimmers, but he didn’t cultivate the rest of the coaching team or communicate with the management committee or have all the runnings of the club documented in anyway.
And about a month or so ago, he got poached by a bigger club willing to pay him a truckload more money.
Our club has thankfully been able to replace him with someone equally talented but who also understands operations, so we’ll be OK moving forwards. But it was concerning and a bit stressful there for a bit because of that key person reliance.
For you in your business – you’ll also have peace of mind if things happen and get done regardless of whether you are sick or want to take time off for a holiday.
This is when entrepreneurs will often decide that maybe they don’t want to sell anymore, because the business is a lot more fun and manageable and less stressful, and they’re making money without having to do all the things and wear all the hats!
So – that’s it for this episode – I hope you’ve found this helpful and hopefully gives you a bit of inspiration and motivation!
If you’ve enjoyed this episode, I’d like to ask you a quick favour: would you share it with one or two of your business besties? Especially if you know they’re looking to either scale and grow, or sell their eCommerce business this year. It’s super easy to share – just click on the icon next to the podcast on whichever platform you listen to it on, copy the share link and then send it in a message to your friends.
If you want to get your hands on a free copy of the eCommerce Growth Pack I mentioned, we’ll link to it in the shownotes at catherinelangman.com/episode-126, or you can head to https://www.catherinelangman.com/ecommerce-growth-pack to access a free copy for yourself.
Lastly, if you’re keen for some more in-depth help and support with this stuff, please just give us a shout! We offer courses, coaching and done-for-you-services to suit every stage in business, whether you need help to learn and implement these things or you’d like to outsource to our team. Just head over to productpreneurmarketing.com and you can book in for a free strategy session.