How is a business like a three-legged stool? Glad you asked!
All businesses, from the smallest one-person startup to the largest multi-national conglomerate requires the company is skilled at three tasks:
1. Getting the business
2. Doing the work
3. Managing the business
Each is equally important. Just as a three-legged stool needs each leg to do its job, a business needs all three legs to be a viable, successful business.
Imagine what would happen if one leg, the “getting the business” leg (sales and marketing) is amazingly successful. Orders are flowing in, customers are standing in line for your products and services. Yet one of the other legs, isn’t doing its job properly.
If the “doing the work” (production) leg is faltering, quality isn’t where it should be or production is slow or mistakes are made in the field. The results in unsatisfied customers who defect at an alarming rate.
If the “managing the business” (administration) leg isn’t up to the task, errors in bookkeeping, billing or payroll are being made and chaos ensues.
And, of course, the opposite is equally true. If production and administration are world-class and the sales/marketing leg isn’t attracting new customers then converting them into regular customers, there is too much capacity. Costs become higher then they should be and profits are lower or non-existent.
Just like that stool, each leg of a business needs to be strong and equally up to the task of carrying its share of the weight.
But in many small businesses, the owner is really good at one aspect of the business. The owner might have gone to school to learn how to do the work or is a great salesperson. Few are accomplished at all three skills. This results in the stool leaning heavily in one direction and, at some point, it can tip and eventually crash.
For a business to prosper and grow all skill areas need to be in balance, each contributing its strengths, each supporting each other or at some point, you won’t have a leg to stand on.