Welcome back, welcome back. Got your three key things down on your paper. Now, I want to jump out of the case and basically focus a little bit on each of these key four-piece and share with you what I learned in the research with growing entrepreneurial business. Alright? So, I'm going to give you some concepts, and then after each segment, after the planning segment, we don't stop and we go back to our normal short quiz. Purpose of the quiz, again, is for you, not for me, I don't grade them. They're to help you basically say, did I understand the concepts? One of the key things in thinking about and planning your business and planning your growth is visualizing what your company will look like and visualizing the infrastructure. And by that, what I mean by that is how much spac, what type of furniture, what type of supplies, what type of people? Alright? How you're going to do each business function? How you going to produce whatever you do? How you going to display it? How you going to deliver it? How you going to bill? How you going to collect? How you going to process your money? How you going to keep track of your money? Every little detail, because as you build your business, you'll be building processes which is the infastructure, the wiring, the plumbing of your house, your business. Because, without the right infrastructure, at some point in time, the building will crumble. Okay? Now, let's start with structure. What is structure of a business? Well, big companies call it an organization chart by job, by function, and what we know is that as a company grows and gets more employees it needs different structure because we also know that one person basically can manage seven to nine other people reasonably well. If you're an entrepreneur and you got 25 employees and no managers, I'm sorry, something's going wrong somewhere, because you cannot be in 25 different places at one time. If you've got 25 employees I would suggest to you, you've got some managers or team leaders or project leaders, people that are responsible for a group. And usually, as I say, usually organizations are built upon seven to nine people is the most someone can basically manage. If you build your business big like Dave did, 1500 employees, okay? The direct reports that Dave should have is no more than seven. I have worked with some entrepeneurs for example that had 12, 15 direct reports. And the first thing I said, you can't manage 'em. You need seven. Alright? And so, size impacts structure. Now, let's go. When Dave started his business. Yeah, Dave, he could manage a sales person, another sales person, he could have one installer, an installer's assistant, and then an admin and an accountant person. 'Kay? One, two, three, four, five. And if you go back to case, that's how Dave started out. That's a simple start-up structure. But Dave grew his business, and Dave ended up in his inflection point number two of I've got a sales manager, an installation manager, an inventory parts manager, an accounting manager, a human resource assistant, and underneath them were salespeople and assistant. The in, installer manager had installers, and then they had assistants, and notice how these building blocks are put together. Alright? And then, that arrows are basically who you report to. It got more complex, but Dave was able to put it out in a chart and you should put it out in a chart as you grow and everyone should understand where they fit. Now, sometimes, yes, people can do more than one job, but there needs to be a basic sense of structure. And then, Dave got really big. Here is Dave. He's got a senior vice president of sales with a sales manager for Indiana, a sale manager for Michigan, a sales manager for Ohio. He's got a senior vice president installer. Installer manager for each state, Indiana, Michigan, Ohio, and the inventory manager and then installers in each state, then he had to have, if you will, an accounting function in each, if you will, each state with accounts and accounts receivable. And eventually, you say, well why didn't he basically centralize all of that? Well, he can, because you learn as you grow, but you basically, your structure is your building blocks. And it's by function usually, sales for Dave, installation, okay, accounting, HR, okay, could have in a company, a marketing department, could have a customer service department. It depends on the business, but you find the key things and you figure out, okay, at what point do I need to add people and what's the structure look like? Who's reporting to who? Reporting is important, because it's where you get accountability. Accountability is how you get standardization and 99% defect-free, high quality products and services, and that's how you get happy customers. Happy customers, because if you have happy customers, they become loyal customers and loyal customers are the most inexpensive customer to keep. All right. I'm growing bigger. What's my infrastructure? How much space do I need? How much furniture? How much equipment? What about my phones? What about my technology? What about my supplies? And you think through all this. You think through all this, because as one entrepreneur told me, he says, you know, I made a big mistake. I put in a very cheap phone system and when I got to 25 people, I had to rip it out and put in a phone system that would accommodate 50 people. He said it would have been far cheaper in the beginning to put in a phone system that was easily upgradable, instead had to be ripped out. I didn't think ahead. I didn't stub out my house, alright? And so this whole thing about planning and thinking, what's my end in mind? How do I maximize my flexibility in the future? Okay? Space, if I'm going to go rent space for an office space, okay? I'm not going to rent more space than I need, but maybe I take an option on the space next door in case I do grow, an option doesn't cost me any money. I'm not going to pay for it until I need it, but I've got the flexibility. I've got an option on an option. Okay? I've got the option to take it and it's next door to me, so I don't have to move because moving is disruption. Plan ahead, think ahead, then you get to the second question. Alright? The first one was structure, what I look like? The second one is, what do I need? The third is, what do I do myself versus what do I hire other people to do for me? Most entrepreneurs when they grow business, outsource, hire other people to do it for them. Payroll processing, accounting, doing the taxes, they outsource HR benefit processing. There's companies that do this. Some people outsource manufacturing. Okay? And we saw, that's what Julie did, but, she figured out how to manage quality control. In the beginning, Defender Direct outsourced the selling to the telemarketing company. They ended up selling and then the vendor just installed, that ultimately was brought in-house. You can outsource delivery. Okay? So the questions you got are, whats my structure look like, and what is it? How many people can I manage before I need managers? How do I basically put in place the flexibility, stub my house? And what do I do I do directly versus what I outsource? Alright. Quiz. Take a few minutes, take the quiz. I'm going to test you on these points. Very important. Again, think about what we're talking about. If you missed the question, go back and look at the slide, and then come back to me, because I'll be here waiting on you.
