Episode Transcript
[00:00:00] You. Hi, guys. This is Stephen Edwards from CTA profit First Accountants. So this is a new podcast that's a big part of my new book I'm launching, which is how to build a business that runs without you. In the first episode, I talked about my story pretty much ten years in the making to get to the point where I could take a month off and kind of not worry about work. I turned 40. It was a big milestone.
[00:00:28] It was ten years in the making. But there was a lot of thought that went into the process, specifically the twelve months up to taking a month off. So my book is really to being an accountant. I run an accountancy business. I see lots of business owners, and some people might be offended by this expression, but you might have heard the phrase a busy fool. And I mean that with the kindness of my heart, because people have the right intentions when they start a business. They typically want more freedom in terms of their time, and they typically want to earn more money. But actually, in my experience, they end up working more hours, chasing the extra money, hoping the freedom would come, and they get stuck in a new kind of rat race, which is being a business owner. 80% of business owners struggle, 80% of business owners are not killing it, they're not making an amazing living. If you sort of drill into those stats, I think 1% are the top of the top, 4% are making a really good, really smashing it. 15% have got a good living and lifestyle business, and then the rest of the 80%, at varying degrees, are either surviving or struggling in some way. So my drive, my passion is just to try and educate and help a lot of business owners I come across running an accounting business to show them a different way, to give them a different mindset, and hopefully to just kind of reprogram the SAP nav to give them a little bit of a compass shift in terms of where they're heading. So I'm going to keep this fairly short and sweet. So we will be expanding and exploring lots of tactical and strategic elements of building a business to run without you in the coming weeks. But I want to introduce my system today. And my system is the entrepreneurial freedom system. And it is the backbone of my book, how to build a business that runs without you, which has got to be launched by the end of March this year, 2024. So just want to talk about the nine steps, and there's also a kind of secret bonus step that underpins everything. I want to talk about the nine steps that I feel are fundamental to building a successful business and the challenge here is if you are the only person in your business, or you have a very small team, let's say you've got one person that works for you, but a lot of people just work themselves. You might think a lot of this is not relevant, but I can promise you it is extremely relevant, because you're not going to build a business that runs without you, without a lot of these core steps. Is this the only way to build a business? Do you have to follow the exact formula? I imagine not. Ray Dalio says there's lots of ways to be successful. You just need to find one that works. Well, here's one that works for me, and I'm just going to share the framework and the structure with you. And over the coming weeks, we're going to dive into the detail.
[00:03:42] So I've pretty much broke.
[00:03:46] So I'm looking at my system. It's a visual system, it's a pyramid. It's a little bit like Maslow's hierarchy of needs, where at the bottom of the pyramid, we've got our kind of core essential, the hygiene factors, the stuff we need. In Maslow's hierarchy of needs, it's food safety, security, roof over our head, being able to sleep at night, all those sort of things.
[00:04:12] And at the top of his hierarchy of needs, you've got self kind of fulfillment and self actualization, which has really been the best version of yourself you can be. And there's actually a lot of parallels in my business system. So that the bottom is. I call it your business plan. So, the bottom of the pyramid.
[00:04:34] I heard from someone once that you might as well have a business that fails on paper before it fails in real life. So the beauty with creating a plan is you can make these mistakes. And if you're. Don't get me wrong, I'm a practical. I'm actually on the Kobe index, which I won't go into detail now, I'm a nine out of ten quick start. So I am someone who does take risks, who does jump into new things, and a lot of business owners are. So I don't believe you need to live in your textbook and your notepad. However, the chances of you having a successful business by making sure it works on paper and it sounds.
[00:05:14] There's not really any downside. There's not really any downside to preparing yourself for business that way. A lot of business owners, they find that the numbers don't add up five years later, and they wonder why they're struggling. So the first section, and there's four kind of areas to this is your business plan, and I don't want to alienate people if you're like, oh, this is a bit corporate jargon, or it's not for me. We're talking about business plans. I've never done a business plan in my life. I started my business without one. But the fact is, if you started your business without one, you did actually have a business plan. It was in your head. You just didn't write it down. You probably explained it to friends and family. You said, this is what I'm going to do. People probably asked you questions. They said, how's that going to work? And like, wow, I'm just going to do this. I know how to do X, Y and Z. And then someone probably asked you how you got to fund it. Where's the money coming from? You probably had some kind of plan, some kind of answer, and some kind of hopes in terms of the finances. Normally the finances would have been based on your previous earnings because you need to cover your bills, your mortgage, et cetera. So when I talk about a business plan, it's nothing fancy, new and scary. We kind of do it as business owners, even if we think we're not doing it. But really, in my system, it's been a bit more intentional and making sure that plan delivers on what you need it to deliver for your vision and your dream and your goals for you and your family in your business. So there's four steps. So the first four of the nine main steps in the entrepreneurial freedom system, which are all part of the bottom foundation, which is your business plan, number one is your vision. So your vision is really what do you want the end thing to look like? Stephen Covey says, start with the end in mind. And that's exactly where this comes from. Lots of different business gurus and programs. They will start here. And it's not everyone's copying each other, it's because it makes sense. How can you plan to go on a journey not knowing what the end looks like, where you're going?
[00:07:14] And that's where a lot of people go wrong at the beginning. They don't really have a vision. And a vision can be as simple as I want to earn x amount of money, I want to work x amount of days a week, and a little bit of a why you want to do that? Just to kind of help with your own motivation, your own passion, because you need to buy into your own vision. It's YoUR vision. At the end of the day, I'm not GoInG to go into super detail on all of these steps because we'll be here a long time but I will be doing that in the weeks to come. And of course you can get a copy of the book. I will be giving away free copies of the book because I want it to be out there. I want people to benefit from the ideas and the concepts. Number one is a vision, number two fits very nicely is your numbers plan. So it's getting a bit more nitty gritty and a bit more specific on the numbers. And I'm not just saying this because I'm an accountant, I'm saying it because nearly any serious business group I've been in, they want you. They insist you need to be on top of your numbers and you do need to be on top of them when the business gets going. But you also need a plan to make sure it works.
[00:08:24] If you want to earn 40 grand a year and you only think you can have a 60 grand revenue business with a 10% profit margin, that's only going to give you 6000 pound profit. It's not going to give you 40 grand. So you need a plan that makes sense in terms of let's pretend you're buying and selling stuff. You got to buy it for a pound. Sorry, you're going to buy it for 50 p. You're going to sell it for a pound and then you want to make 50 p on every single sale you make. So you can kind of start doing the maths to get. It doesn't need to be scientific, it doesn't need to be overly complicated but you need some kind of plan. And also just to kind of reassure people. Listening to this, if you're thinking I don't know how to do all of this stuff, wow. That's the sort of thing I'm going to help with in the coming weeks. But also there's other people in the world who can help you. We don't need to do everything ourselves in think and grow rich by Napoleon Hill which was written in the early 19 hundreds released around 1920, 519, 30. It talks about Henry Ford started Ford Motors and it explains how he was in court and they were trying to belittle him and his character and his credentials because he didn't have an educated background. And they asked him all this random and to be honest I've had this view at the beginning I'm not a big fan of general knowledge. So I asked him all this random stuff about history and he said with all due respect, why do I need to know those answers off the top of my head, when I can get. Somebody can answer that question within the next five minutes. So I want people to start thinking, how can they do everything themselves? And just start thinking how other people, how a team. Because really, business is a team sport for most people. So I just wanted to get that out there. If any of this you struggle with, there will be people who can help you with any elements of scaling a business. So number two was the numbers plan. Number three are your values. This might seem a little bit wishy washy to people.
[00:10:24] It might seem.
[00:10:27] It doesn't make sense, or it might even. Actually, I've heard people in masterminds in my industry, which is quite interesting because accountants can have a bit of a closed mind, sometimes think that values are just for corporate businesses. Something you put on the wall. It's a corporate crap. It's not relevant for small businesses. But I can tell you categorically that is not true in my experience.
[00:10:52] Again, a bit like your business plan, just because you haven't written your values on the wall. It's not about writing it on the wall. It's about communicating them, believing in them, living and breathing, hiring and firing by those values. The whole purpose, the whole point of having values is you don't need to reinvent the wheel when you make a decision. If something comes up, I'll just make up a random example.
[00:11:19] Let's say you walk down the street and an old lady has dropped 20 pounds on the floor and she didn't realize, and she carries on walking. If you follow that person, you see that 20 pounds on the floor, you are not really going to make a decision there. And then to decide if you are going to give that 20 pounds back to that elderly woman. You have already decided what sort of person you are. You have already decided if I am the sort of person who does what is right, and I am going to hand that 20 pound back, or you've already decided that you're the sort of person that keeps that 20 pound. And that's a very extreme black and white kind of good and bad example. There's lots of grayer examples. But the point is, you don't have to keep on making new decisions. So values could be super important. I will expand on that in the future. Number four, which, once you've got your values and you've got an idea of the personalities and the profile and what's important for the sort of business or organization you want to build, you can then think of your team structure, which is number four. So if you're going to build a business to run without you. You are going to need people.
[00:12:29] I know there's AI, and I know I'm a bit of a tech geek. I'm not the most technical person in the world, but compared to Joe blogs up the road, I am on top of technology and I do follow most of the stuff that's going on, and AI is going to revolutionize the world. And they're saying AI is not going to replace humans, but humans using AI will replace humans. So you need to embrace AI. I get that. But you are still going to need a team. It's still going to be a team sport. Going back to my having people around you to help. You have the answers. You don't need all the answers yourself.
[00:13:07] You need an idea of. Let's use my business as an example. I had an idea that I needed eventually to get a kind of admin person who can start taking phone calls, who can start doing letters for me, can start replying to basic emails, can do some invoicing. And then the next step was I need an accountant who can start doing some of the work I'm doing.
[00:13:29] One of the mistakes I made, which is why I've got my book and why I'm sharing all of this, is I kind of just hired whoever initially, although actually in that example, that was a very good person who stayed with me from the very beginning. But a lot of people hire whoever is available, whatever their short term need is. They don't think about the puzzle, the bigger pieces of the puzzle. If you hire this person now, who are you going to need in three years time? One year's time? Five years time. You need to think of how everybody fits together. If you're a football team, you're not going to hire five strikers. Sorry. Cars buzing in the background, if you can hear that. So if you're a football team, you are not going to hire five strikers. You are going to need a striker, possibly, if you're big enough, a backup striker. You'll need a midfielder, a defender, a goalie. There's eleven players on the pitch and it's the same idea with your team. Number five. Number five is we're moving up a level now. We're moving to building your business. I've just covered the plan. Your plan is your vision, your numbers, your values, your team structure. Number five is your scorecard. So your scorecard is how do you know if you're following your plan, how do you know you're doing the right things? How do you know everything's? On track. How do you know what to change, what to do more of, what to do less of? How do you know if it's a good week? If you were to take a week off from your business, if you were to look at maybe three to three to ten metrics, kind of numbers, an easy example would be money in the bank, new customers, jobs delivered and completed, whatever it means to you. If you don't have a scorecard, you're not really keeping score. If the business is performing.
[00:15:17] Business is a bit like a sport, really. And if you don't keep score, you don't know if you're winning. And here's the thing, it's not winning to compete with other people. It's winning in your rules. It's your rules, it's your game, it's your vision. So you need a scorecard that fits into your vision and your game, your rules.
[00:15:37] Number six. So there's three in the build your business, which is the second step. So we've got scorecard number six is a marketing system. So at this point, and the thing is, you might be thinking, God, I'm not going to do all this before I launch a business. I launched my business, I didn't do any of this. Absolutely, that's true. Same with me. But in hindsight, this is what would have got me where I needed to be quicker by getting clearer in these areas of my business. So in reality, you are going to need, if you decide to start your business and you haven't done the first four steps I talked about, you will need some kind of marketing system because you won't be getting any customers, it might be word of mouth, it might be networking, it might be referrals, it might be your website, whatever that means. It might be social media. Yes, you will be doing a form of marketing anyway. However, we've done your business plan, we're now moving into building your business. So Scorecard is how you're going to track what success looks like. And now we're getting into the nitty gritty of two of the big engines that run your business, your marketing system. Number six, how are you going to get a constant flow of leads to grow your business? And that's the single biggest thing I see people struggle with, because if you haven't got enough opportunities and you haven't got enough leads, you're simply not going to grow your business unless you get lucky and a big customer comes from nowhere and you piggyback off their success. So you need a really solid marketing system and marketing. I'm an accountant, but actually I'm as much a marketeer as I am an accountant. And I can promise you it's probably the most important thing in your business. Number seven is your finance and your profitability.
[00:17:23] Some people might be wondering why.
[00:17:27] You might be thinking there's things missing. You might be thinking, how am I going to do the thing I'm doing the operations?
[00:17:33] What's the point in worrying about marketing if I don't know if my numbers add up? But we've already done a numbers plan in step two, so by the time we get to your marketing system, we need to get the customers in. And if we get the customers in, we can then worry about if it's profitable. We need a loose numbers plan at the beginning, but we don't want to spend too much time worrying and doing all these costings and forecasts. We don't want to go too detailed if we are not getting customers. We don't want to waste your energy in the wrong place in your business if you've got enough leads coming in. It's Daniel Priestley, who wrote several books, key person of influence, 24 assets and a few others. And he's more recently been on Stephen Bartlett's podcast, and he's got an app called Score app. He says that basically, getting enough leads in your business, everything is downstream from there. And that's why in my own system, it's the same. You've got to get enough leads in your business, and then you will build enough opportunities to crystallize your finance side, which is number seven, and your profitability, because that will evove, I promise you, what you charge on day one will not be what you charge five and ten years later. Because you would have evolved as a business, your services would have evolved, your knowledge would have increased, and you'd probably be working with different types of customers. So they're the three steps of the building your business stage. So we've got your numbers plan. Just as a recap, we got your vision, your numbers plan, your values, your team structure. That's the business plan. Four steps, three steps in building your business is your scorecard, your marketing system, and your finance system. So they're very, like I said, you might be thinking there's bits missing, but these are the three things that are going to give the opportunity to build a business. And obviously you need to deliver.
[00:19:30] For me, it goes without saying, it's kind of telling you how to suck eggs by saying you need to know how to do the thing you do. That's a given. That's just an absolute given. If you're starting a business, you need to know what you're doing. So that's a given. There might be some exceptions. There might be some exceptions where you're going to a completely new industry you have no knowledge about. And in my experience, that's quite the exception. That's not normal. So my model is not based on that. My model is based on my system. My process is based on you having knowledge, knowing how to deliver what you're delivering. So that's kind of a given with all of this. And now we're moving into the third and really the final main stage, which is how do you remove yourself as a bottleneck in your business? So this really is where I'm in, in my business in many ways. So step eight is hiring an operations manager. So this is where we get into the operational side a bit more if you're thinking that's missing so far.
[00:20:40] And also it's quite general and broad on purpose. So I'm talking about hiring operations manager. That might not be the case for you. That might be you're using AI to run your business. I'm not saying that's possible. I'm not saying it's not. But it's basically an operational engine in your business. So this could have easily be worded an operational engine. But the reason I talk about an operational manager, an ops manager, is having a focal point in terms of a human being is a bit of a game changer, because if you're building a team, everything's not going to go through you. When there's something wrong, you're channeling the communication, the flow of the kind of internal communication traffic in your business through the Ops manager. And that's a big process in itself. And I could easily talk about that for ten episodes because that's where I am in my business now. I'm nurturing an operations manager in my business. And then step nine. So sometimes you can have a foot in different steps. So step nine is how do you transform your role if you can free yourself up from the operations? So this stage, step eight and nine is removing yourself as a bottleneck. So firstly, you need to sort out your operations. Secondly, you need to transform your road. What are you going to do if you're going to free your time up, what are you going to do? And it might be that you do not want to work in your business completely. And that's why the book is called how to build a business that runs without you.
[00:22:16] Here's a secret. The book is not expecting you to want to be completely absent from your business and be sat on a beach all the time. Because in my experience, speaking to people that have built multimillion pound revenue businesses, they do that for a short amount of time, and then they go and start a new business, or they go back into their business because you could argue it's part of their identity, but they enjoy it. They enjoy the challenge, they enjoy the opportunities, meeting new people, adding value to customers lives. And really, that's what step nine is about, transforming your role. So for me, I'm becoming more of a writer, more of a creator, more of what we call a visionary in our business. So that's steps eight and nine. And finally, step ten, you don't need to do anything, but you have all the opportunity in the world. So step ten is the top of the pyramid sits on its own. And that's what I've called business and life freedom. Because you have the choice. You have the choice to do the things you want to do. You have the money, flexibility to do the things you want to do. You have the time, you spend it with the people you want to spend the time with. You can do things you're passionate about. So that's really what we're moving towards. And it's a very personal choice you might want to do.
[00:23:34] I don't do that much accounting in my business now, but there might be people that they want to do the accounting. They want to build a business that can run without them, but they still actually want to do the accounting. And in your business, that's whatever it means to you. If you're a builder, you might still want to lay bricks, or actually you can go and do something completely different. It's your choice. And that's the whole purpose of the book and the system. So I've probably talked a little bit longer than what I expected. Hopefully you find it useful. I've gave you a really broad overview of how to build a business that runs without you. And also the entrepreneurial freedom system, which is the nine steps that gets you to the business and life freedom that a lot of us are looking for, the roadmap. So in the coming weeks, I will be going into the steps in a little bit more detail. Feel free to reach out to me if you've got any questions. If you want an early copy of my book and you want a free copy, just reach out to me. It's Steven with Aphstephen at Chautnam, which is C-H-E-L-T-E-N for November. H-A-M for mother Chautenum taxacountants. Co. UK. You can go. On our website, we're actually called CTA profit first. But it's an old URL. I won't go into that now for SEO purposes. But if you Google CTA accountant, CTA profit first, you will find our contact details all over the Internet. Reach out to me through any other channels. I'm more than happy to send you a copy of my book. Thanks, guys, for listening. Speak to you soon.
[00:25:08] Bye.
