Does Your Business Have the Systems to Succeed?
How to grow your business to the next level
The human body is a system of systems. The human body is made up of a circulatory system, respiratory system, digestive system, and so on. If one of these systems stops, there is a good chance the body will be crippled or die.
Likewise, a business is a complex system of interoperating systems. And like a body, if one of those systems fails, the whole business will either be crippled or die. The B-I Triangle visually represents many of these systems. They are all separate but also all linked together. It is difficult to separate the systems because they are interdependent, and it is also difficult to say that one is more important than the other.
How to make your business grow
For any business to grow, specific individuals must be accountable for each system, and a general overall director must be in charge of making sure all the systems operate at their highest capacity.
As the director of my companies, when I read a financial statement, I am like a pilot sitting in the cockpit, reading the gauges from all the operating systems. If one of the systems begins to go awry, I help make the necessary corrections.
Why many businesses fail
Many small, start-up businesses or S-quadrant businesses fail because the operator of the system has too many systems to monitor or take care of. When one system fails, such as when cash flow dries up, all the other systems begin to fail almost simultaneously. It is like when a person gets a cold and fails to take care of it. Pneumonia soon sets in and if it’s not treated, the person’s immune system begins to break down.
A good businessperson can manage multiple systems effectively without becoming part of the system. A true business system is much like a car. The car does not depend upon only one specific person to drive it. Anyone who knows how to drive it can do so. The same is true for a B-quadrant business, but not necessarily for an S-quadrant business. In most cases, the person in the S-quadrant is the system.
The types of businesses banks like
Rich dad taught me at an early age, “Always remember that B quadrant businesses gets more money from investors because investors invest in good systems and the people who can build those systems. Investors do not like to invest in businesses where the system goes home at night.”
Every business needs good systems to be successful. The better the system, the less dependent you become on others. Look at McDonald’s systems: “It’s the same everywhere in the world, and it’s run by teenagers.” This is possible because of the excellent systems in place. McDonald’s depends on its systems, not its people.
Getting better at managing systems
If you want to get better at building and managing systems, I believe real estate is a great place to start. A building on a piece of land is the business, the system for which a tenant pays you rent. Real estate is fairly stable and inert, so it gives the new businessperson more time to correct things if something begins to go wrong.
Learning to manage a property for a year or two teaches you excellent business-management skills.
In addition to hands-on experience, which is the best kind of experience, you should also read rich dad advisor Garrett Sutton’s books, Start Your Own Corporation and Run Your Own Corporation.
And while you’re at it, take a few moments to sign up for the free Rich Dad Community, where you’ll find a wealth of valuable resources.