WEBVTT
1
00:00:00.240 --> 00:00:02.480
The topics and opinions expressed in the following show are
2
00:00:02.520 --> 00:00:04.120
solely those of the hosts and their guests and not
3
00:00:04.200 --> 00:00:07.080
those of W FOURCY Radio. It's employees are affiliates. We
4
00:00:07.120 --> 00:00:10.199
make no recommendations or endorsements for radio show programs, services,
5
00:00:10.279 --> 00:00:12.599
or products mentioned on air or on our web. No
6
00:00:12.720 --> 00:00:15.880
liability explicitor implies shall be extended to W FOURCY Radio
7
00:00:15.919 --> 00:00:18.679
or its employees are affiliates. Any questions or comments should
8
00:00:18.679 --> 00:00:21.039
be directed to those show hosts. Thank you for choosing
9
00:00:21.160 --> 00:00:23.800
W FOURCY Radio.
10
00:00:27.519 --> 00:00:31.039
Welcome to Powerful Business Strategies, where you will find out
11
00:00:31.120 --> 00:00:34.439
that everything you have ever learned about growing your business
12
00:00:34.719 --> 00:00:38.520
is wrong. Finally, a show where you'll learn the right
13
00:00:38.560 --> 00:00:41.840
way to grow your business by learning business and financial
14
00:00:41.880 --> 00:00:46.520
strategies that your competition isn't doing. And now here is
15
00:00:46.600 --> 00:00:51.719
your host. Resident of Next Step CFO Michael Barbarita and
16
00:00:51.920 --> 00:00:55.880
joining Michael for today's show as an executive moderator is
17
00:00:56.119 --> 00:00:58.840
chooky obia.
18
00:01:00.960 --> 00:01:03.960
Yes, this is trueg In I believe that gratitude is
19
00:01:04.040 --> 00:01:07.280
undefeated and growth is about the next step. It is
20
00:01:07.319 --> 00:01:10.959
an honor for me to moderate today's discussion with my
21
00:01:11.040 --> 00:01:11.959
good friend Michael.
22
00:01:12.040 --> 00:01:15.400
Michael, how are you fantastic chok. Hope you're doing well.
23
00:01:15.840 --> 00:01:18.760
My name is Michael Babarita, President of Next Step CFO,
24
00:01:18.879 --> 00:01:21.879
and next Step CFO is a fractional CFO and strategic
25
00:01:21.920 --> 00:01:25.599
implementation firm, and business owners hire us to double and
26
00:01:25.640 --> 00:01:29.280
triple their profit using business and financial strategies that their
27
00:01:29.280 --> 00:01:32.840
competition isn't doing. And our vision is to ensure that
28
00:01:33.000 --> 00:01:37.640
overwhelmed business owners achieve consistent profits. That leads to the time,
29
00:01:37.719 --> 00:01:40.920
freedom to build a legacy, and the lifely desire. Our
30
00:01:40.959 --> 00:01:44.400
mission is dedicated to guiding small business owners to leveraging
31
00:01:44.439 --> 00:01:49.400
their time, exploding their profits, and building a meaningful legacy.
32
00:01:50.120 --> 00:01:52.760
The show Powerful Business Strategies in our book of the
33
00:01:52.799 --> 00:01:56.599
same name, is a step toward accomplishing that vision and mission.
34
00:01:56.640 --> 00:01:58.560
So with that, I'd like to hand it back to
35
00:01:58.560 --> 00:02:01.599
my co author and moderated show Chocky Obia.
36
00:02:01.879 --> 00:02:05.920
Michael, I've got to say I'm quite inspired by today's episode.
37
00:02:05.959 --> 00:02:08.759
I mean use one of my favorite words, blueprints. So
38
00:02:09.479 --> 00:02:12.800
the title for today's episode is the business owner's blueprint
39
00:02:13.479 --> 00:02:18.159
creating systems that scale without sacrificing quality. And just before
40
00:02:18.159 --> 00:02:20.840
we get started, folks, quick disclaimer, Michael and I are
41
00:02:20.840 --> 00:02:24.599
both affiliated with a number of different organizations. I currently
42
00:02:24.639 --> 00:02:28.000
serve as a managing director of business development for Vetterprice,
43
00:02:28.520 --> 00:02:31.560
a global business focused law firm. In addition to that,
44
00:02:31.599 --> 00:02:36.280
it's truly energizing to collaborate with Michael to moderate business
45
00:02:36.319 --> 00:02:41.199
roundtables coast to coast and then document the insights from
46
00:02:41.199 --> 00:02:44.280
these roundtables as part of our book, Powerful Business Strategies.
47
00:02:44.280 --> 00:02:48.159
But please note that the views expressed on this show
48
00:02:48.319 --> 00:02:53.360
are based on personal views from these very successful stories
49
00:02:53.400 --> 00:02:58.400
and experiences across different business owner conversations. Now look my
50
00:02:58.479 --> 00:03:01.280
mission as a fearless moderator to ask the right questions
51
00:03:01.319 --> 00:03:06.000
to help you, the listener, learn the best business strategies
52
00:03:06.039 --> 00:03:10.240
that the competition isn't doing. With that, back over to Michael.
53
00:03:10.439 --> 00:03:13.599
Thank you, Chicky. So before we dive in, I want
54
00:03:13.639 --> 00:03:15.960
to share something that's been quite frankly, it's been on
55
00:03:16.039 --> 00:03:19.280
my mind lately. As business owners, we often feel like
56
00:03:19.319 --> 00:03:22.879
we're climbing a mountain with no summit insight, that the
57
00:03:23.000 --> 00:03:26.560
daily demands feel endless, and sometimes we want to be
58
00:03:26.719 --> 00:03:29.400
if all this effort is really worth it. But let
59
00:03:29.400 --> 00:03:32.199
me tell you somebody, the businesses that truly change lives.
60
00:03:32.319 --> 00:03:37.280
I'm built on constant hustle. They're built on intelligent systems
61
00:03:37.319 --> 00:03:41.639
that multiply your impact. The most successful business owners I've
62
00:03:41.680 --> 00:03:46.039
worked with didn't just work harder, they created blueprints that
63
00:03:46.199 --> 00:03:50.599
allowed their vision to scale beyond their personal limitations. And
64
00:03:50.680 --> 00:03:53.719
today we're going to show you exactly how to do that.
65
00:03:53.919 --> 00:03:56.960
Because your business should be a vehicle for the life
66
00:03:57.000 --> 00:04:00.599
you want, not a prison that keeps you from living it.
67
00:04:01.400 --> 00:04:05.639
So today we're tackling a challenge that affects virtually every
68
00:04:05.719 --> 00:04:09.199
business owner I've ever worked with, and that is how
69
00:04:09.240 --> 00:04:13.240
to create systems that allow your business to scale without
70
00:04:13.280 --> 00:04:16.199
sacrificing the quality that makes your business special in the
71
00:04:16.240 --> 00:04:19.480
first place. So let me start with a question for
72
00:04:19.519 --> 00:04:25.720
everyone listening. Are you replaceable in your business? And I
73
00:04:25.759 --> 00:04:28.199
don't mean that as either a compliment or an insult.
74
00:04:28.240 --> 00:04:31.720
What I'm really asking is could your business function for
75
00:04:31.800 --> 00:04:36.399
a month without you being involved in daily operations. For
76
00:04:36.519 --> 00:04:40.120
most business owners, that honest answer is no. That's a
77
00:04:40.319 --> 00:04:44.240
dangerous place to be. And I see this pattern over
78
00:04:44.399 --> 00:04:48.800
and over again. A talented individual stat's a business based
79
00:04:48.800 --> 00:04:53.279
on their skills or expertise. They deliver exceptional results, The
80
00:04:53.319 --> 00:04:57.639
word spreads, the business grows, but there's a problem. Everything
81
00:04:57.759 --> 00:05:02.240
depends on the owner. The quality, the customer relationships, the
82
00:05:02.360 --> 00:05:05.759
problem solving it all runs to the one person, and
83
00:05:05.839 --> 00:05:10.120
that creates a ceiling on growth it's almost impossible to break.
84
00:05:17.120 --> 00:05:19.680
I think you're on mutube gate. I think you're unmute.
85
00:05:19.920 --> 00:05:22.639
Oh no, Michael, I was just gonna say, sorry, that's remarkable, right.
86
00:05:22.720 --> 00:05:25.519
I think a lot of business owners can relate to
87
00:05:25.519 --> 00:05:27.240
what you've just expressed. But I do have a key
88
00:05:27.319 --> 00:05:30.680
question for you, though. What's the mistake, the big mistake
89
00:05:30.720 --> 00:05:32.800
that business owners make that just kind of keeps them
90
00:05:32.839 --> 00:05:34.040
trapped in that situation.
91
00:05:35.639 --> 00:05:43.120
Well, the cheman sake. It's confusing standardization with the loss
92
00:05:43.240 --> 00:05:44.000
of quality.
93
00:05:44.439 --> 00:05:45.079
You see.
94
00:05:45.680 --> 00:05:49.360
Yeah, you know, most business owners believe their personal touch
95
00:05:50.160 --> 00:05:54.199
is what makes their product or service special. And there's
96
00:05:54.199 --> 00:05:57.319
some truth to that, especially in the early days, but
97
00:05:57.600 --> 00:06:01.920
they make the critical error of thinking, if I systematize this,
98
00:06:02.639 --> 00:06:07.600
it'll be generic and what makes it special, and that
99
00:06:07.680 --> 00:06:11.720
could be more wrong. The truth is that proper systems
100
00:06:11.759 --> 00:06:17.720
don't diminish quality. They guarantee it consistently. So think about it.
101
00:06:18.120 --> 00:06:21.839
The most renowned businesses in the world, from luxury hotels
102
00:06:21.879 --> 00:06:27.079
to find restaurants to premium car manufacturers, they all have
103
00:06:27.399 --> 00:06:32.560
exacting systems that ensure consistency, and those systems don't make
104
00:06:32.600 --> 00:06:39.079
the experience worse, they make it reliably excellent. Let me
105
00:06:39.079 --> 00:06:42.879
share an example. A high end custom cabinet manufacturing company.
106
00:06:42.959 --> 00:06:48.879
Business owner for years personally inspected every project before delivery,
107
00:06:49.519 --> 00:06:52.480
and when it was suggested to create a standardized quality
108
00:06:52.519 --> 00:06:56.920
control system that would allow other team mendors to handle inspections,
109
00:06:57.519 --> 00:07:01.160
it was pretty skeptical. He said, no one has my
110
00:07:01.319 --> 00:07:04.920
eye for detail, And after a lot of arm wrestling,
111
00:07:05.360 --> 00:07:10.439
they developed a comprehensive checklist system with detailed photographs showing
112
00:07:10.560 --> 00:07:16.240
acceptable versus unacceptable quality markers. Within three months, his quality
113
00:07:16.279 --> 00:07:19.079
control manager was catching issues that even the owner had
114
00:07:19.120 --> 00:07:23.480
occasionally missed, and the quality actually improved and the owner
115
00:07:23.560 --> 00:07:26.519
gained back fifteen hours per week.
116
00:07:28.279 --> 00:07:32.720
Wow, that is fascinating. And Michael, hopefully you can hear me, okay,
117
00:07:32.720 --> 00:07:36.240
correct I can't. Yeah, Okay, So I've got to ask, like,
118
00:07:36.319 --> 00:07:40.920
so are you saying, Michael, like like systematizing can actually
119
00:07:41.160 --> 00:07:45.279
improve quality and then free up and owner's time. That's
120
00:07:45.319 --> 00:07:46.519
what I hear you saying. But I do have a
121
00:07:46.600 --> 00:07:48.639
question related to this, So why do you think so
122
00:07:48.680 --> 00:07:50.439
many business owners resist this approach.
123
00:07:51.959 --> 00:07:56.680
Well, comes down to a couple of things, identity and fear.
124
00:07:56.879 --> 00:08:00.319
You know, most business owners wrap their identity into being
125
00:08:00.399 --> 00:08:04.439
the hero who solves all the problems. There's an ego
126
00:08:04.519 --> 00:08:09.439
boost in being the indispensable expert. And there's also legitimate
127
00:08:09.480 --> 00:08:13.800
fear fear that systems will make the business feel corporate
128
00:08:13.959 --> 00:08:17.600
or impersonal. Fear that customers will notice a difference, Fear
129
00:08:17.600 --> 00:08:22.040
that employees can't be trusted with crucial decisions. But here's
130
00:08:22.079 --> 00:08:25.680
the reality of the situation. Until you create systems that
131
00:08:25.759 --> 00:08:28.839
allow the business to function without your constant input, you
132
00:08:28.920 --> 00:08:32.440
don't have a scalable business model, and you have a job,
133
00:08:32.639 --> 00:08:37.320
and often one with horrific hours and overwhelming responsibilities. So
134
00:08:37.440 --> 00:08:39.600
today we're going to show you how to create what
135
00:08:39.639 --> 00:08:44.559
I call these systems blueprint, a framework for transferring your
136
00:08:44.720 --> 00:08:49.759
expertise into scalable systems without losing what makes your business special.
137
00:08:50.279 --> 00:08:53.759
And we'll dive into the first key component, identifying your
138
00:08:53.799 --> 00:09:00.799
business's critical functions and creating process documentation that actually gets used.
139
00:09:01.799 --> 00:09:04.159
So I'm going to introduce you to this concept, to
140
00:09:04.399 --> 00:09:08.639
the system's blueprint, our framework for creating scalable processes that
141
00:09:08.840 --> 00:09:12.759
don't sacrifice quality. The first step is what I call
142
00:09:13.440 --> 00:09:18.440
function mapping, which is systematically identifying every critical function in
143
00:09:18.480 --> 00:09:22.679
your business. See many business owners think they know all
144
00:09:22.720 --> 00:09:25.519
the functions they perform, but when we do this exercise,
145
00:09:25.559 --> 00:09:30.279
they're often shocked to discover dozens of invisible tasks that
146
00:09:30.360 --> 00:09:34.360
they handle automatically. So here's how to approach this. For
147
00:09:34.399 --> 00:09:37.639
two weeks, keep a detailed log of every decision you
148
00:09:37.720 --> 00:09:40.600
make and every task you perform. I know it's a pain,
149
00:09:40.720 --> 00:09:44.399
but it's really critical. As part of this process, be specific.
150
00:09:44.519 --> 00:09:49.120
Don't just write customer service, not exactly what it did,
151
00:09:49.240 --> 00:09:51.919
like responded to a complaint about a late delivery, or
152
00:09:51.960 --> 00:09:55.879
approved a discount for a loyal customer. And at the
153
00:09:55.960 --> 00:10:00.639
end of these two weeks, categorize these activity these into
154
00:10:00.679 --> 00:10:04.480
functional areas and you'll typically find they fall into categories
155
00:10:04.559 --> 00:10:11.559
like operations, finance, sales, customer service, quality control, marketing, product
156
00:10:11.639 --> 00:10:16.480
and service delivery. But here's where most businesses get it wrong.
157
00:10:17.039 --> 00:10:23.840
They try to systemize everything at once and quickly become overwhelmed. Instead,
158
00:10:24.000 --> 00:10:28.320
you need to prioritize by asking three critical questions about
159
00:10:28.399 --> 00:10:32.679
each function. How critical is this to customer satisfaction. That's
160
00:10:32.679 --> 00:10:36.360
the first question. Second is how much of my personal
161
00:10:36.399 --> 00:10:41.399
time does this consume? And third how specialized is the
162
00:10:41.480 --> 00:10:47.600
knowledge required? Functions that score high on these three become
163
00:10:47.639 --> 00:10:49.639
your priority targets for systemization.
164
00:10:50.159 --> 00:10:53.440
Yeah, that makes a lot of sense, Michael. But now,
165
00:10:53.480 --> 00:10:57.919
once you've identified these critical functions, how do you actually
166
00:10:58.080 --> 00:11:02.399
document processes? Then people will actually follow, right, I mean
167
00:11:02.440 --> 00:11:04.840
making this practical because as you and I know, I
168
00:11:04.840 --> 00:11:07.759
mean most business owners that we know, I mean, they've
169
00:11:07.799 --> 00:11:11.679
tried creating manuals, but they just collect dust, right, I mean,
170
00:11:12.120 --> 00:11:13.080
what are your thoughts there?
171
00:11:13.600 --> 00:11:19.600
Yeah, that's true. The traditional approach to documentation fails because
172
00:11:19.600 --> 00:11:24.799
it's too cumberssome and disconnected from how people actually learn
173
00:11:24.840 --> 00:11:28.799
and work. So the solution is what I call micro documentation,
174
00:11:28.919 --> 00:11:35.240
where you create bite sized process documents that are task specific, visual,
175
00:11:36.080 --> 00:11:39.000
and available at the point of need. And here's how
176
00:11:39.039 --> 00:11:43.399
that works. For each critical task, creating simple one page
177
00:11:43.440 --> 00:11:48.080
document with these five components. Number one are clear title
178
00:11:48.159 --> 00:11:53.600
describing the specific task. Secondly the described outcome and why
179
00:11:53.679 --> 00:11:59.000
it matters. Third, a visual flow chart showing decision points,
180
00:11:59.559 --> 00:12:04.519
four common problems and solutions. And fifth quality standards with
181
00:12:04.679 --> 00:12:11.639
visual examples wherever possible, then make these documents accessible exactly
182
00:12:11.679 --> 00:12:15.679
where the work happens, whether that's physically posted at workstations
183
00:12:15.759 --> 00:12:20.399
or digitally accessible through QR codes or a knowledge base. So,
184
00:12:20.440 --> 00:12:26.039
for example, a construction company completely changed their business with
185
00:12:26.080 --> 00:12:29.480
this approach. So instead of a two hundred page operations
186
00:12:29.480 --> 00:12:33.559
manual that no one reads, they created laminated one page
187
00:12:33.679 --> 00:12:38.159
process documents for each critical task, and site supervisors could
188
00:12:38.159 --> 00:12:41.519
pull these reference guides as needed and quality issues drop
189
00:12:41.559 --> 00:12:44.320
by sixty two percent in the first quarter after implementing it.
190
00:12:45.200 --> 00:12:49.279
But documentation alone isn't enough. You need to ensure the
191
00:12:49.360 --> 00:12:53.679
adoption meaning and that kind of brings me to the
192
00:12:53.720 --> 00:12:57.159
second component, which is creating accountability systems that ensure your
193
00:12:57.200 --> 00:13:02.440
processes are actually followed. Because many business owners create documentation
194
00:13:03.279 --> 00:13:06.399
but have no way to verify if processes up being
195
00:13:06.840 --> 00:13:10.559
followed correctly. And that's why you need simple audit mechanisms
196
00:13:10.919 --> 00:13:14.120
and regular check ins where you are a manager verified
197
00:13:14.159 --> 00:13:20.559
that the processes are being followed and producing the expected results. Yeah,
198
00:13:20.600 --> 00:13:26.759
for example, a restaurant implemented a simple process adherence scorecard
199
00:13:27.279 --> 00:13:31.360
where managers would conduct random checks on five critical processes
200
00:13:31.519 --> 00:13:36.600
each week. Teams that maintain ninety percent plus adherence receive bonuses,
201
00:13:37.200 --> 00:13:40.639
creating positive peer pressure to follow those systems.
202
00:13:41.799 --> 00:13:47.159
Ah So, Michael, look, I find this fascinating. Is quite interesting. Now,
203
00:13:47.399 --> 00:13:51.639
I imagine some business owners might worry that this level of
204
00:13:51.679 --> 00:13:56.639
system systematization right. How's that forward, This level of system
205
00:13:57.960 --> 00:14:01.399
might cycle creativity right or make the business feel like
206
00:14:01.559 --> 00:14:06.639
rigid or robotic or bureaucratic. How do you address that concern?
207
00:14:07.720 --> 00:14:10.279
Well, that's excellent. Yeah, and that's common too. By the way,
208
00:14:11.320 --> 00:14:16.879
the key is distinguishing between process activities and innovation activities.
209
00:14:17.039 --> 00:14:17.720
Let me explain.
210
00:14:18.639 --> 00:14:18.720
So.
211
00:14:19.399 --> 00:14:23.200
Process activities are task that should be performed consistently every
212
00:14:23.279 --> 00:14:27.919
time to maintain quality, like how you prepare an invoice,
213
00:14:28.039 --> 00:14:32.159
or clean equipment or even greed a customer. They should
214
00:14:32.240 --> 00:14:39.200
absolutely be standardized. Innovation activities where creativity matters, like developing
215
00:14:39.279 --> 00:14:43.559
new products or solving unique customer problems, or improving the systems,
216
00:14:44.080 --> 00:14:47.919
they shouldn't be rigidly prescribed, but rather guided by principles
217
00:14:48.240 --> 00:14:52.399
and even frameworks. A well designed system actually creates more
218
00:14:52.480 --> 00:14:56.120
space for meaningful creativity because it eliminates the chaos and
219
00:14:57.200 --> 00:15:02.279
firefighting that can consume so much mental energy. Unsystemized businesses
220
00:15:02.879 --> 00:15:05.320
and think about it this way, which you'd rather have
221
00:15:05.360 --> 00:15:08.720
a team, have your team members use their creativity to
222
00:15:08.799 --> 00:15:12.200
reinvent your building process every month, or to develop new
223
00:15:12.240 --> 00:15:15.320
products and services that actually delight your customers.
224
00:15:16.039 --> 00:15:16.159
You know.
225
00:15:16.320 --> 00:15:19.480
Marketing agency was initially worried that systemizing would kill their
226
00:15:19.519 --> 00:15:24.120
creative edge, but after implementing this approach, they found the opposite.
227
00:15:24.440 --> 00:15:30.559
By standardizing their project management, client onboarding, and quality control processes,
228
00:15:31.320 --> 00:15:33.960
they freed up thirty percent more time for creative work.
229
00:15:34.080 --> 00:15:39.799
Their creative output actually increased because they weren't constantly reinventing
230
00:15:39.919 --> 00:15:41.159
operational wheels.
231
00:15:42.480 --> 00:15:44.679
Michael, this might be a good junction to take some
232
00:15:44.799 --> 00:15:47.559
questions from listeners, right, I mean, I think this topic
233
00:15:47.600 --> 00:15:50.120
is really resonating. So here's one question from a listener.
234
00:15:50.440 --> 00:15:54.240
What's the key mistake Michael, that you think business owners
235
00:15:54.360 --> 00:15:56.600
make that traps them in this situation.
236
00:15:59.159 --> 00:16:04.639
Well, I think the key mistake is confusing standardization with
237
00:16:04.759 --> 00:16:08.720
a loss of quality. The most business owners believe their
238
00:16:08.759 --> 00:16:11.480
personal touch is what makes a product or service special,
239
00:16:11.559 --> 00:16:14.480
and there's some truth to that, especially in the early days,
240
00:16:15.000 --> 00:16:18.279
but they make the critical error of thinking, if I
241
00:16:18.399 --> 00:16:24.000
systemize this, it will become generic and lose what makes
242
00:16:24.039 --> 00:16:25.000
it special.
243
00:16:25.639 --> 00:16:29.600
Ah, So to wrop up the segments, what are the