Step by Step: Systemizing the Business

I have always been a Rich Dad fan and since coming here I have had my eyes opened... but it's been more than that... so should I say... popped out? MJ has made me realize some of the paths I was going down weren't the correct ones. I knew something was fishy in the back of my mind... I knew I was going down A path but I wasn't quite sure where it lead. I definitly have to give it up to him, and ALL of you to let me stand on your shoulders and look out at the horizon of what's to come. The future is so clear to me now. I can see the path that I'm on, but better yet I can see the future for many of the paths I see! Maybe this doesn't make sense to you guys, maybe I'm not explaining it right, but I can really say now that I see the light and since joining this forum a few months back I am well on my way to becoming greatly successful!

Anyways. One of the books I picked up recently at the recommendation of a couple of you is E-Myth. Which if anyone hasn't read it or done the audio like I normally do. DO IT. It has something for every type of business as I am about to explain.

I can already spell out some MAJOR differences in what has been happening in my business. I would like to continue to write on this thread as I continue to develop the business systems but I will start out with a major one that has sprouted some great success IMMEDIATELY!

Allow me to explain some quick background. Owning a Martial Arts school has always been a dream of mine. Since I was 8 years old I was ready for it! As the years went by I learned more and more about business from mentors, friends, and teachers. The problem is that this business is "UN-Systemizable!" There is NO WAY you can have systems in place to teach someone how to teach Martial Arts lessons in the way you have learned over the past 16 years! The business is based off of my character, my charisma, the business is based on ME! I am what's special, I am the entertainer, I am the great salesman, I am the best teacher in the Midwest, I am, I am, I am... The problem is that I have always tried to be THE BEST. I have competed in the Martial Arts for 16 years, nationally and internationally. I ended up my competition career with 2 U.S. National Titles. It took me a couple years to realize... well actually it took me a couple of months on this forum to realize that I was going down the S path... permanantly. I had to change my way of thinking. I was letting myself say a word I never normally allow myself to say! That dreaded C word... No, not cookie, I love cookies.

Can't! Except for this time is was a silent one for me. It snuck up on me like a ninja. Like I tell people as a joke, you really need to watch out for ninjas... they are everywhere! Well this word can't was a ninja trying to assassinate me. Not literally, not physically, but "future-successively" and financially!

I wouldn't say such a word outloud, but this this ninja was making me say it in my mind. It was all about my staff. "Why Can't she do this?" "Why can't he understand this?" "Why why why!?!?!" Then it hit me like a grand piano dropped from a 4th story window. While we have been massively successful (more successful than any school in our area has EVER been). We got hit hard. We missed 25 new sign ups. That 25 new sign ups equate to about $1,500 a piece. And if you did the math, we lost out on about $37,500 in less than a month! Now that may not seem like a lot to some businesses, but as a new business that would have paid my rent for the next 8 months!

Something had to be done. I couldn't understand it. I started looking for more competant employees. I have always been "smarter than the average bear". I have always had this undying hunger to be the best at EVERYTHING I do. Now it was time to find other people like me... so I looked... and I looked... While I did that I picked up a couple more books from the local Barnes & Nobles. One of them being E-Myth. And we have all heard it before. We all know the story of McDonalds. But something jumped out at me. Something that has always been said but not done. A thought in my head. I had made a post a while back talking about "bottling up my charisma and selling it"... Then it hit me. I never said can't before, why start now? "HOW do I create a system so any idiot can sound, act, look, talk, and be like me?" At the moment the business IS me. So how do I create more of ME? Then I started to realize... it wasn't ME I was selling. I needed to seperate ME from the equation!

So I started to work VERY excited about creating a system to get people to do what I can do. After all, anything one human being can do, another can! I started writing down things I said to students, clients, etc. I started mentally cataloguing different things throughout the day and writing them down. I knew what I had to do....

So after all of this allow me to share my recent success with systemizing my business. I do many different things to get leads for new students. Last week I had a stack of about 100 different leads from two different community events. The week before I had another stack of 50 some that ended up being a complete wash. We got little to none of any of them to return a phone call! This is part of the reason I was so frustrated! Why can I call these people and get them to 1. Return my phone call AND 2. come in to try a class!? And my staff can NOT!?

So I did a couple. Of course results were great, 3/4 calls I made answered and scheduled to come in for a free class. I left a message on the fourth one. 75% success rate, maybe 100%, I will have to check if that last one called back yet.

I wrote down WHAT I said, HOW I said it, and WHY I said certain things in a "How-to" sheet for what I called Registration Phone Calls. Lone behold, the calls were made, success has been off the charts, and my staff is happy, they are successful, and they feel GREAT. THIS is what I wanted!! THIS is what I needed!

What's even better was I split the 100 leads in to 2 seperate piles. 50 for one of my less than capable staff member and 50 to my extremely capable staff member. Results were great on BOTH ends!

I have moved this theory in to EVERY tiny little aspect of the school. And I have to say it is starting to run like a well oiled machine.

My next post I wil tell you what challenges and speed bumps I ran in to. The revisions I had to make. And the other successes I have had with it.

Thanks again everyone.

Congrats Steve that's awesome. I read the E Myth too and I enjoyed it. Before then I didn't really consider franchises to be profitable, but after I read the book I understand that it's a great way to start out if you have the money. The book also teaches to literally fill out the company ladder even while your the only employee. I never looked at things that way before.

Great job and good luck in the future!

Do you own any other business's other than martial arts?

I'm working on that

Two things I have in the works is an E-Biz for martial arts equipment distribution and sales.

The second one is a real estate investing business that has kind of been put on the back burner. My attention needs to be placed on my school at the moment. It still NEEDS me fairly drastically. But, the closer I get to systemizing the business the easier this will be.

Good post Steve! and excellent way to take action and not say you "can't" !! Remember once you have stabilized your business, there are things you can do to become fast lane while still teaching because you love to teach. Things like making stretching DVDs or certain martial arts based exercises (tae-bo? ). You could like you said was in the works, have a equipment distribution or formulate new products and sell them.... all while still teaching and becoming known (if you are not already)

When I was a kid, I studied Taekwondo at the ATA dojo in Sacramento, under Master Robinson -- who had a string of Dojo's under Master Lee who was over several thousand dojo's in the country. Lee had created his own brand, and was selling his particular flavor of martial arts throughout thousands of dojo's in the country through what appeared to me to be a pretty cool system. You might want to take a look at what he's done to get an idea of how martial arts can be systemized. As I recall, he had all of his forms for individual belts systemized, instructors were brought up and trained in each facility. I think one really creative thing they promoted was that there was usually 1 paid instructor, and the other black belts were all encouraged to come in and assist with training as part of their own training. You could only advance as a black belt if you were also willing to teach. All certificates and documentation came from a central source.

It was basically a franchise....

Best of luck,

- Hakrjak

__________________
"Don't let good enough be good enough" -- Coach Bill Parcells to Tony Romo upon leaving the Dallas Cowboys.

No one can argue with the over 7,000 schools the ATA has but in most martial arts circles they are kind of a joke. I don't mean to be negative but I happen to know some of their policies both business and martial arts wise, and I personally don't agree.

To respect some of my friends' privacy I rather not say their names on here. Let's just say that if you came and trained with me, you would know the difference

I'm sure there are big differences. You can't argue with a successful business model though!

McDonalds doesn't make the best hamburgers either....

Doesn't stop them from having the best business models though, right?

- Hakrjak

__________________
"Don't let good enough be good enough" -- Coach Bill Parcells to Tony Romo upon leaving the Dallas Cowboys.

Steve, Hak is trying to tell you you're not making hamburgers.

(. . . I mean, you're not teaching Kung Fu)

You're developing a system.

(Rep speed to Hakrjak for pointing this out!)

Three points about Mikkie D's:

1. Mc Donald's isn't in the hamburger business, as most of you know.

They're in the Real Estate business.

********

2. McDonald's has an amazing system for training low wage earners how to run a business (that's the system Hakrjak and Kung Fu Steve are alluding to).

*******

3. When McDonald's decides to go after a market, WATCH OUT.

Is there a connection between McD's offering higher end coffees and 6 months later, Starbucks closing 600 stores and eliminating another 1000 office jobs?

I think yes.

******

McD's uses these 3 things to make a powerhouse business model:

1. Buy high value RE, build on it.
2. Lease location to franchisee.
3. Teach franchisee how to run a profitable business w/low paid staff
4. Make lots of $$$ from franchisee

5. Return to step one, and repeat process.

-Russ H.

__________________
"Control everything. Own nothing." -John D. Rockefeller

"Don't confuse motion with action" -Ernest Hemingway

Yes. I never realized how important it was until I couldn't get the results I wanted other people to have.

Just like my teaching method, I have developed systems to get students to do proper technique. It's easy to correct one student and get them to near perfection, but it's a whole other thing trying to correct 10, 20, 30, 40 or more students at a time. Systems have to be in place to get the quality out there. I am all about quality. I picture my school as the Lamborghini of the Martial Arts World. Hopefully I will soon have the reputation to follow .

As far as the coffee thing I noticed that too! What about places like Taco Hell and Taco Johns when McDonalds started offering burritos and stuff? And what about delis what they started offering salads? "Adult Happy Meals?" As simple as these ideas are, they are genius. I think a better way to put it is that the genius is that it IS so simple.

Small hijack warning!

This is along the lines of systemizing your business. I was at the sign/graphics shop today getting some stickers for my scooter. The owner was the only one there and he was doing everything, invoices, answering the phone, taking orders, filling orders, etc. He was a nice guy but frazzled. He took my order and was making the stickers. A lady came in and asked for a single copy of 2 checks. He had to stop working on my order to go photocopy 1 sheet of items for $.50. This took him 5 minutes to accomplish. After she left I kindly told him that was an expensive copy for him. He had to stop working on several profitable projects to make $.25 profit. We talked a while about his business and systems. He told me he was working 12-14 hour days to do it all and he couldn't keep going. He said he has had employees but it didn't work out. It was just like seeing the E Myth played out in front of me. I recommended the book to him, maybe he'll read and apply it.

I am definitely taking more notice of how I do my business now more than ever since reading the book.

Rock on Steve!

you must have been in my shop today!! Unfortunatley the graphics business isnt fully systemizible (sp?) you still have to be hands on regardless of how many employees you have. But it sounds like he does need to take a step back, he will never be able t be hands off. thats just the nature of the business.

Is that the business you are in LightHouse? Didn't know. I love going in his shop. I could take a few of each thing in there. You really don't think you could systemize the business? I know there are franchises in the sign industry, correct? I assume that they are selling their sign system to others. What are they doing different?

One of yes, In fact its my main business. There are sign franchises, they are selling a name, the system is the same across the board. There are a fw innovatiing companies that make new processes but in manufacturing that means big money.

Because of the new age of computer equipment it makes the barriers lower for someone to get in the sign industry. Thus lowering pricing etc etc. There are ways to add value however.

There are ways to make the business or parts of it into systems but a general sign shop its nearly impossible because you are manufacturing. the only way he could step out is to get big enough to hire good people. Honestley he is at the point where he needs to do something different, like become a wrap specific shop. It sounds like he has no focus if hes copying paper and making signs and doing everythng else himself, he needs to focus on one thing and market it that way.

Lighthouse, are you interested in doing a thread on systematizing a sign biz?

We can cover the steps in E-Myth, and apply them to sign shops.

Biggest prob I see here is, we have lots of creative folks on these forums, but not so many sign shop owners or people w/sign shop experience.

But it might be worth the exercise.

Whatdya think?

-Russ H.

__________________
"Control everything. Own nothing." -John D. Rockefeller

"Don't confuse motion with action" -Ernest Hemingway

to grow a business it is very, very important to systematize the components of the business...

I'll share what I have found useful: I have my personnel create their own training manuals so as when someone new is hired, I use the peoples' manuals who are hands on and I am essentially "hands off"

there are 2 things that make this procedure effective:

1. the person creating the manual knows many of the basic procedures much better than me and they can communicate it better in writing than I ever could and the training process becomes much easier to the point anyone off the street can understand the system

2. I don't know and don't want to know everything about everyone's job ... I can focus on the bigger components of the business instead of the intricate dealings of training people on the basic parts of their jobs.

hope this helps - R

Maybe you didn't read my story .

I don't see why if a martial arts school can be systemized that a sign shop can't?

Maybe you can explain some of the things that are "un-systemizible" ?