Business System Choices

09.20.10

Business System Choices

In starting a business, one of the greatest points of failure most entrepreneurs realize is in the development of a system.  Systems allow the innovator to own the business, rather than the business owning them.  Allow me to illustrate:

If I'm in the transportation industry and looking to start a company that transports people from the Lower Peninsula of Michigan to the Upper Peninsula of Michigan, I've probably got two primary options...

Option #1:  I could go out and purchase a ferry boat.  Upon purchase of this equipment, I'm instantly ready to open the doors to a service business!  The model?  I fill the boat with 100 people, and lug them back and forth from each side of the lake, all while charging a trip fee for each.  

Pros:  Instantly in business.  

Cons:  If a boat breaks down... I'm instantly out of business, until it gets fixed.  Also, the boat is dependent on me to drive passengers from one side to the other.  Lots of effort, tying up my time and radar...  Also, with winter months come ice.  And my boat doesn't like ice.

Option #2:  I could build a bridge from one side to the other.  Construction would require capital investment and substantial time.  The bridge could be a 4 lane bridge, even, allowing 2 lanes of incoming traffic and 2 lanes of outbound traffic.  I'd collect tolls to drive its economic engine.

Pros:  Once the bridge is built, I could collect nearly unlimited tolls with very little upkeep effort.   (Especially if I installed an automated toll booth)  Also, it is likely I could build more bridges like this in more locations, using a very similar model.  This system is duplicatable, through and through.  Plus, with a little salt, no snow or ice storm can stop a bridge from providing safe, reliable path for transporation!

Cons:  it takes time.  I'd need to be completely resolved that this was the direction I commit to.  Otherwise, my own fears and doubts might take over and I'd turn this system into an expensive mistake.  

The key point is this:  it is far wiser to develop a business from a platform that allows duplication and leverage of time.  By doing so, the business system can work for you... rather than requiring you working for the business!

And so the journey continues...