Why You Need Systems in Place to Scale Your Business

Summary

In this video, the speaker emphasizes the importance of building a business that operates independently of the owner. They discuss the 'owner paradox' where businesses are heavily reliant on the owner, hindering scalability and freedom. The speaker advocates for creating systems within the business to achieve growth and profitability, allowing the owner to step back and enjoy the benefits of their venture. They also touch on the psychological barriers that prevent business owners from implementing these systems and the need to shift from being the 'hero' of the business to building a team that can operate without them.

Takeaways

• 😀 Building a business that operates without the owner is crucial for achieving freedom and scalability.
• 🔧 The importance of having systems in place within a business is emphasized to ensure it can run smoothly in the owner's absence.
• 🤔 Business owners may be stuck in an 'owner paradox' where the business heavily depends on their daily involvement.
• 💡 The script challenges owners to consider if they are building an asset or just buying themselves a job, highlighting the need for business scalability.
• 🚀 Starting a business is often motivated by the desire for freedom, control, and a better lifestyle, which requires a scalable business model.
• 🏢 Successful companies are system-dependent, not person-dependent, as illustrated by the absence of founders in major franchises.
• 📚 Michael Gerber's 'The E-Myth' is referenced to stress that the business itself, not the product, is the entrepreneur's true product.
• 📈 Growth is essential for a business's survival and success; not expanding can lead to stagnation and eventual decline.
• 💼 The need for profitability to support a team and executive roles is highlighted, as these are necessary for business growth and the owner's freedom.
• 👥 The business should be a team sport, with the owner ideally transitioning from being a player to being the owner of the team, overseeing the success without direct involvement.
• 🛠️ The reluctance to write down processes and delegate can hinder business growth, as it prevents the business from scaling beyond the owner's capabilities.

Q & A

What is the 'owner paradox' mentioned in the script?

The 'owner paradox' refers to a situation where a business is so dependent on its owner that it cannot function without them. This dependency hinders the business's ability to scale and grow.

Why is it important for a business owner to create systems in their business?

Creating systems in a business is crucial because it allows the business to operate efficiently without the owner's constant involvement, which is essential for scalability and growth.

What are the three basic forms of systems that a business needs?

The script does not explicitly mention the three basic forms of systems, but it implies that they are essential for a business to run without the owner and to scale effectively.

What does the speaker suggest is the main motivation for starting a business?

The speaker suggests that the main motivations for starting a business include wanting freedom, controlling one's destiny, fulfilling a market need, having more choices in life, or providing a better lifestyle for oneself and one's family.

Why should a business owner focus on creating a replicable and scalable business model?

A business owner should focus on creating a replicable and scalable business model to ensure the business can grow and succeed independently of their direct involvement, allowing them to achieve financial freedom and personal goals.

What is the significance of the statement 'Your product is the business'?

The statement 'Your product is the business' emphasizes that the business itself, with its systems and processes, is the true product of an entrepreneur's efforts, rather than the goods or services the business sells.

What does the speaker mean by 'if you're not growing, you are dying'?

The speaker means that for a business to remain viable and competitive, it must continuously grow and expand. Failure to do so can lead to stagnation and eventual decline.

Why is it necessary for a business to generate enough profits to hire a team or executive staff?

A business needs to generate enough profits to hire a team or executive staff to manage and grow the business, allowing the owner to step back and achieve their personal and financial goals.

What is the 'Dragon 100' mentioned in the script, and how does it help business owners?

The 'Dragon 100' is an exclusive advisory board that provides proven systems and support to help business owners scale their businesses, operate more efficiently, and achieve their goals.

What is the speaker's view on the role of the business owner in relation to the business?

The speaker believes that the business owner should not be a slave to their business but rather a master who uses the business as a vehicle to achieve personal, financial, and professional goals.

Why is it beneficial for a business owner to delegate tasks and not be the 'hero' of the business?

Delegating tasks allows a business owner to focus on strategic planning and growth, rather than being bogged down by day-to-day operations. This enables the business to scale and become less dependent on the owner's direct involvement.

Outlines

00:00

🤔 The Paradox of Business Ownership

The speaker poses a critical question about the sustainability of a business without the owner's constant presence. They emphasize the importance of establishing systems within a business to ensure its autonomy and profitability. The speaker highlights the 'owner paradox,' where a business is heavily dependent on the owner, thus hindering scalability and the owner's freedom. The discussion points out that a business should be an asset, not just a job, and that the ultimate goal of any business owner should be to create a system-dependent enterprise that can grow and thrive without their direct involvement.

05:04

🚀 Scaling Beyond Personal Involvement

This paragraph discusses the necessity for business owners to move away from being the central figure in their operations. It addresses common misconceptions, such as the belief that writing down processes is time-consuming or that the owner must be the smartest person in the company. The speaker argues that a business should operate as a team sport, with the owner acting as the franchise owner rather than an active player. The focus is on creating a brand and team that can succeed independently of the owner, allowing for the business to scale and the owner to achieve personal and financial goals. The speaker also mentions Dragon 100, an advisory board that provides proven systems for business scaling.

Keywords

💡Business Systems

Business systems refer to the structured processes and procedures that a company implements to ensure smooth and efficient operations. In the video, the speaker emphasizes the importance of having systems in place so that a business can function without the owner's constant intervention, allowing for scalability and growth. The script mentions 'the three basic forms of systems that you need to have in your business,' indicating that these systems are foundational for creating a business that operates independently.

💡Owner Paradox

The owner paradox is a situation where a business is so dependent on its owner that it cannot function effectively without them. The term is used in the script to describe a common issue faced by business owners who are unable to delegate tasks or establish systems, thus hindering the business's ability to scale. The speaker uses the term to highlight the need for business owners to break free from this dependency and create a system-dependent business model.

💡Asset

In the context of the video, an asset is a valuable resource or property that is likely to generate income or provide other benefits. The speaker asks the audience to consider whether they are building an asset—a business that can operate and grow independently—or simply buying themselves a job. The script contrasts the idea of creating a valuable business with just being self-employed and earning a salary.

💡Scalability

Scalability refers to the ability of a business to grow and expand, often by increasing production or sales while maintaining or improving efficiency. The video discusses the importance of creating a business model that is scalable, meaning it can be replicated and expanded without the owner's direct involvement. The speaker uses the term to emphasize the need for business owners to think beyond their current operations and plan for future growth.

💡Marketplace

The marketplace in the video represents the economic environment where goods and services are bought and sold. The speaker mentions identifying a need in the marketplace and suggests that business owners should aim to serve these needs better than competitors. The term is used to illustrate the importance of understanding and responding to market demands as part of a successful business strategy.

💡Delegation

Delegation is the act of assigning tasks or responsibilities to other people, especially subordinates. In the script, the speaker points out that business owners who cannot delegate effectively are unable to scale their businesses. The concept is linked to the idea that successful business owners should be able to empower their teams to handle operations, allowing the owner to focus on strategic decisions and growth.

💡Profitability

Profitability is the ability of a business to generate profit. The video script discusses the need for a business to be profitable enough to support the hiring of a competent team, including executives like a CFO or COO. The speaker argues that a business must generate sufficient profits to afford a strong team, which is essential for growth and achieving the owner's personal and financial goals.

💡Growth

Growth in the video refers to the expansion of a business in terms of size, revenue, and market share. The speaker asserts that growth is essential for a business to survive and thrive, stating that 'if you're not growing, you are dying.' The term is used to convey the message that business owners should aim for continuous expansion to secure their financial future and achieve freedom from the day-to-day operations.

💡Personal Brand

A personal brand is the public image or identity that an individual projects, often associated with their professional reputation. In the script, the speaker distinguishes between his personal brand, Dan Lok, and the actual business operations, emphasizing that the brand is supported by a team and not solely dependent on him. The term is used to illustrate the difference between building a business around oneself versus creating a system that operates independently.

💡Freedom

Freedom in the context of the video represents the autonomy and flexibility that business owners seek by establishing a successful and independent business. The speaker mentions that many entrepreneurs start their businesses to gain control over their destiny and have more choices in life. The term is used to highlight the ultimate goal of creating a business that operates without the need for the owner's constant presence, allowing them to enjoy personal and professional freedom.

💡Dragon 100

Dragon 100 appears to be a program or service offered by the speaker to help business owners implement systems and strategies for growth. The script mentions that Dragon 100 provides 'proven systems on how to run your business,' allowing owners to 'plug and play' without having to create systems from scratch. The term is used to illustrate a resource that can assist business owners in overcoming the challenges discussed in the video.

Highlights

The importance of having systems in your business to ensure it can run without the owner's constant presence.

The concept of an 'owner paradox' where a business is heavily dependent on the owner, hindering growth.

The distinction between creating a business as an asset versus merely buying oneself a job.

The motivation behind starting a business, often driven by the desire for freedom and control.

Observing successful companies that operate without the founder's daily involvement, emphasizing scalability.

The profound understanding that the business itself, not the product, is the entrepreneur's true product.

The necessity for business growth to achieve freedom and create wealth, countering the idea of remaining small.

The need for profits to support a team and executive structure for business expansion.

The realization that business success is defined by its ability to operate without the owner, not because of the owner.

The common misconception that writing down systems takes time away from doing the work.

The psychological barrier of self-worth tied to business chaos and the need to be the 'hero'.

The idea that a business owner should aim to be the master, not the slave, of their business.

The vision of a business as a vehicle for achieving personal, financial, and professional goals.

The necessity for a business to be profitable enough to support a strong team and executive leadership.

The role of the business owner as the owner of a sports franchise, not just a player or coach.

Testimonials highlighting the impact of Dan Lok's teachings on business growth and personal development.

Transcripts

- Let me ask you a question.

What would happen if you took a week off

or a month off or even three months off,

away from your business,

what would happen?

Would you come back to find your business more profitable

or would you come back and say,

where's my business?

My business has gone, just complete chaos.

In my previous video,

I share with you how to build a business

that actually runs without you.

If you have not watched that video,

you could click here and go watch that.

I talked about the importance of having systems

in your business.

I also share with you the three basic forms

of systems that you need to have in your business.

So today I want to continue to have that conversation

with you and talk a little bit

about why most business owners don't have systems,

even though they may know that this

is important for them.

What are some of the things

they're going through psychologically, internally,

that it's preventing them from having systems

that will help them scale and grow,

even though it makes very logical sense.

So if you cannot step away from your business,

if your business cannot function without you,

if you are the main driver of the business,

chances are you are stuck

in what I call an owner paradox,

meaning that your business won't function without you.

Your day to day operation heavily depending on you.

So if your business is not system dependent,

guess what, it is dependent on you.

So one of the key questions that you have

to ask yourself is, are you creating an asset?

Are you building an asset

or are you simply buying yourself a job?

Being just self employed?

And there's nothing wrong with, hey,

if you just want to run a small business

and you pay yourself a little salary

and you make a decent living and you're happy with that,

that's perfectly fine.

But my guess is you got into business

because you want freedom.

In fact, common below.

Why did you start your business in the first place?

What was your motivation?

Did you start that business because you say to yourself,

you know what, I want to be in control of my own destiny.

That may be, you see a need in the marketplace

and you say to yourself, I could do something better.

I could serve the needs in the marketplace better,

or you just want more choices in life.

Or maybe you want to provide a better lifestyle for yourself

and for your family.

Whatever that reason might be, comment below.

And look at the most successful companies in the world,

in major cities or any towns,

you walk into a McDonald's,

you walk into a Burger King,

you walk into an Ikea,

you walk into an Apple store.

You don't see Ray Kroc working behind the counter

and flipping burgers.

You do not see Steve Jobs arranging the product shelf.

You don't see Howard fixing a coffee

behind the Starbucks counter,

you don't see that.

And you have to understand something very, very profound

as a business owner.

And this is something that Michael Gerber talks about

in "The E-Myth", in the book.

Your product is not a Grande latte, is not the Big Mac,

your product is the business, that's your product.

That's what you want to focus on.

How do you create a business model

that is replicatable and scalable?

That's what you need to focus on as a business owner,

not just doing the work.

So when I hear business owners say, well,

I don't want to expand,

I just want to have a small business.

I always reply, well, you do if you want freedom

and you actually want to create wealth as a business owner,

you need to expand because if you're not growing,

you are dying.

Remaining small means slow death.

Because when you remain small you cannot grow.

It means that you cannot grab market share,

it means that you're not making enough profits.

Maybe you make enough profits,

to just pay yourself a good wage,

but that's not enough to hire a team.

That's not enough to hire the CFO, the COO,

to run your business,

to have a team around you.

You need more profits to do that.

You need to grow your business to a certain size

so you could have a team,

so you could have an executive team.

So you could have people working with you together

to build that vision.

That's the only way you could get freedom,

that's the only way that you'll get your time back.

So by playing small, you are giving up your freedom.

You must grow, it doesn't mean you need to grow

this massive company with thousands

and thousands of employees.

But what it does mean is you need your business

to be successful enough, to be profitable enough,

that you could take some time off,

that you could have smart people around you

and smart people cost money.

They cost money to hire,

they cost money to maintain.

And the reality is you can't afford a COO

or a GM or a vice president or a CFO

if you're only making a few million bucks a year,

that is not enough.

One of them is six figure a year easily.

So your business needs to generate enough profits

so you could afford someone like that or multiple of them.

Here's something you have to understand.

Your business is only truly successful without you,

not because of you.

Although my organization is heavily reliant

on my personal brand, but my brand,

Dan Lok is not a person, Dan Lok is a brand

with a big team behind it.

It is not just me that's running the business.

My team is helping me to run the business.

Another thing that I hear from business owners, well,

I don't need to write things down,

I don't have time to write things down,

it's faster if I just do it myself.

Well, the problem with that is guess what?

Every single time a problem like that comes up,

you have to be the one that go solve the problem.

You cannot delegate effectively,

when you cannot delegate,

it means that you cannot scale.

You always have to be the hero of the business,

to save the day.

And I totally get it, I used to be like that as well.

Some business owners, they get their self worth

and self esteem from the business.

Meaning they thrive on chaos,

be honest, if that's you.

You want to see chaos subconsciously,

and you want to be the one that goes in a business,

hey, let me save the day,

let me get it done.

You want to be the smartest person in your company.

Well, if you're the smartest person in your company,

guess what your company can't grow,

because you're only one person,

you only have so many hours in a day.

You become the bottleneck of the business.

I don't believe that you should be a slave to your business,

that you should be a master of your business.

Your business should be a vehicle that helps you

to accomplish your personal, your financial,

your professional goals.

Your business should be working for you,

not against you.

Yes, we need to nurture it,

we need to build it, all of that.

We need to do in the beginning,

but someday you should be able to put yourself

in a position to exit, to cash out.

To retire comfortably, to enjoy life.

Yes, you're enjoy the process along the way,

that's great, but someday,

and that someday will come and say, you know what?

I've had enough, I've done enough,

I've accomplished enough that now I just want

to travel the world.

I want to do something else,

you want to be in that position.

And that's what we could help you with within Dragon 100.

We have proven systems on how to run your business,

different systems that you will need in order to scale,

you can just plug and play.

You don't need to create these systems from scratch.

To see if you qualify for Dragon 100,

our exclusive advisory board,

you could click the link below.

Always remember this, business is a team sports.

You don't want to be a player in the court,

just playing the game.

You don't even want to be the key player

that's winning those championships.

You want your people to be the team player.

You don't even want to be the coach,

coaching the team,

because then you are the manager.

Where you want to get to is to be the owner

of that sports franchise.

You want to be the owner of that sports team.

So the team is winning championship,

not because of you,

they're winning the championship without you.

(suspenseful music)

- Dan's a force of nature.

- He's improved arguably millions of lives,

where they can provide themselves more money.

His materials are great, excellent,

he's at the top of his game,

- Everything he says has a purpose

and everything he does is done with heart.

- What I've seen, from Sifu Dan Lok, I didn't see it

from anyone else.

He's done it, he's been there and he's still the winner.

- Because of Dan Lok, my revenue went 30% up.

- I actually get a clearer picture of how I run my business.

I can feel it that he really do want to help his students.

- Started taking hold and more advanced strategies

on building our brand, creating content,

leveling up our team.

- In an environment where I could actually be around people

that were going to support that,

encourage that and hold me to a higher standard.

- Dan is a great mentor to get you not only

in the right frame of mind,

but then to give you the knowhow, the tools,

the skills to get there.

- If you would just follow his advice, go step by step,

according to his blueprint,

you will achieve results,

more than you can imagine about.