The Method Episode #8
Finding Your Limiting Factor
Take the emotion out of your craft for a second. You can look at your business as a machine.
You have inputs, throughput, and outputs. Feed something into the machine, and the machine will spit something out the other side.
Ask business owners where they need help, and marketing, sales, mentors, and money are common responses. They want to know how to grow their business.
Here’s a reliable way to do that.
The theory of constraints is a fancy way to say that every machine (your business) has a bottleneck. If you can find and remove this bottleneck, then the output of your machine will grow.
Unsurprisingly your bottleneck is rarely money or mentors – it’s much more specific.
To find yours, think about your business as three separate areas.
• Distribution (marketing & sales)
• Management (hr & planning)
• Operations (producing & delivering value)
Now identify what area of your business is stopping you from achieving your goals.
Do you need more customers? Are you constantly putting out fires? Do you keep running out of products?
Once you think you’ve found your problem area, you need to dig a little deeper with reverse engineering.
For example, ‘I keep running out of stock’ well, why is that happening? I’m selling out before the next order arrives -> So, I’m either not ordering enough stock -> Or I don’t have enough money to order more stock -> Well, I guess I could order more frequently -> But to order more often I need a better stock management system -> I need to create a better stock management system.
See ‘running out of stock’ has many possible contributing factors and solutions. In the case above the bottleneck is the stock management system.
Finding and solving bottlenecks is not a complex exercise. It just takes a little dedicated thought and purposeful action. The best part is you can almost guarantee that your effort will be worth the reward.
If you want more growth, just rinse and repeat.
Worth Your Attention
Nothing to see here – I’ve been lazy this week 🙁
From the Best
Becoming The World’s Best Youtuber
Mr. Beast (Jimmy) is a 23-year-old kid from Wichita, Kansas, and is the world’s biggest YouTuber.
He just produced the most-watched video of 2021 ‘squid games in real life with 170 million views and counting.
Mr. Beast is another one of those overnight success stories ten years in the making. He started making Youtube videos at 13, has produced 1000’s since and now works with a team of 100+ people spending millions of dollars on every video.
What’s interesting is why and how Jimmy got to this scale. Hundreds of thousands of YouTubers are all trying to do what Jimmy has done. But they don’t come close to his 85 million subscribers and millions of views on every video.
He started recording, editing, and publishing videos on his phone. It took him months to get a microphone; it took him almost two years to get a computer; it took him nearly six years before he hired his first employee (an editor).
He reinvests every cent he earns back into his content – i.e. his product.
No money on ads, no nice clothes or cars, no staff just to do the jobs he couldn’t be bothered doing, living off the very minimum he could. All the cash he has made has gone back into producing the best product he can create.
There are two reasons Jimmy can do this and achieve his goal of becoming the best.
1. He’s playing long-term games. He wants to do this for the rest of his life and doesn’t need to make a profit or build to sell. There’s nothing else he’d rather be doing.
2. Being the best is his status signal. As a young kid making $30+ million per year, you’d think he’d own nice cars, a house and all the other status signals we get caught up in. But that stuff doesn’t matter to him; being the best is what matters.
“There are two kinds of people, those who do the work and those who take the credit. Try to be in the first group; there is less competition there.”
~ Indira Gandhi
Thinking Out Loud
Choosing The Right Hill To Climb
I bought a gym. But I didn’t know I was buying a long ride to nowhere.
The problem with my gym is after close to 5 years of time, money and energy invested, I haven’t built myself much more than a standard deviation above-average paying job. The income is nothing to be sneezed at, I appreciate it, but it hasn’t been worth the effort for the investment I’ve made.
About two years into this thing, I knew I’d taken a wrong turn, but I trapped myself. I fell foul of this hidden human tendency to always need to make our next step upwards. I couldn’t face taking a step backwards, i.e. selling the gym.
I should have jumped ship long ago, but unfortunately, with COVID causing chaos, the time to sell isn’t now; I’m stuck. However, I need to climb down and start again at some stage. I chose the wrong hill.
So, where did I go wrong?
We/me find it incredibly difficult to put long-term rewards ahead of short-term ones. I’ve stood on this gym hill for five years because I couldn’t stomach a couple of months of short-term pain (selling) for the long-term rewards of climbing a different one.
Going back a step further. I didn’t take enough time to consider whether the gym would take me to where I wanted to go.
It’s like I choose a career in banking instead of going to med school to become an open-heart surgeon.
Don’t be like me. Take some time to consider if the path you’ve taken is leading you in the right direction. Will it give you the rewards and fulfilment you’re looking for?