Karlton Hoskins - December 17, 2018
How many of you are business consultants, coaches, or an expert who services clients that are predominantly business owners and entrepreneurs?
Awesome!
Then you are uniquely aware that local and national business communities are shaped and highly influenced by your professional services. This is a great honor to hold, knowing your clients are responsible for 99% of the US economy. And why not, you are all like doctors, to your clients. As service providers or as I like to say, business doctors, your skilled with the ability to offer advice, products, and other services to help your client patients build and maintain a healthy business. Does that sound about right?
And just like doctors, you have a specialty, as very few master all fields well enough to treat all patient issues. I want to make it very clear, the patient is the small business, not its owners. Think of the business owner as the parent of a child, the parent is the Guardian, but it is the child that is the patient, in this analogy anyway.
Now let’s look at the U.S. business patient statistics. According to the Department of Labor and Census Bureau, the following facts hold true:
there Over 28 million businesses in the US
with an Average of 400k new startups annually
Clearly this a fairly big community and as doctors, we all need patients to stay in business and patients need doctors to build sustainable businesses. Afterall, parents and guardians should have an interest in their child’s survival. In fact, it’s not uncommon to hear business owners refer to their business as their baby. Rightfully so!
The reality is over 26 million businesses desperately need the expertise of a business doctor. But not just any doctor, they need doctors who care about their business just as much as they do or even more. They definitely don’t need or prefer a business doctor whose only focus is a sale.
I remember meeting, Owen, a sharp dressed business consultant and entrepreneur at a networking event in Denton Tx. After the presentation that day, I introduce myself to Robert. Robert share with me that he is a business consultant and he has more business than he can handle. I’m thinking, WOW! He must have some secret process to manage all of those clients and help them build sustainable business. So I ask, how long does your clients stay with you on average? His response was, “I don’t know.” I was completely shocked.
I think we all have that one question we ask people to determine whether or not we want to engage with them any further. It’s like asking the guy who wants to date your teenage daughter, how old are you? So I asked, “Owen, do you know if your clients’ businesses are improving by using your services?” Without hesitation he looked dead at me and said, “clients come and go, that’s the nature of the business. The trick is, to keep getting new clients before the current ones walk away or fail.” This guy went on to brag how they are looking to expand into different states, and I should work with them.
Its apparent, that calling Owen a doctor would be inappropriate, he would be better compared with a street pharmacist or some unlicensed doctor practicing medicine in his basement on patients who don’t have any other choice. It reminds me of the movies when an outlaw gets shot and has to go to a veterinarian to remove a bullet because they can’t be seen in a hospital.
If you’re listening to this and your name is Owen, just know I’ve changed the name to protect your identity, so Owen, you’re safe.
There is an elephant in the room that business doctors often time don’t address. 84% of the over 28 million businesses in the US generate less than $250k in annual gross receipts, according to the US Census Bureau. It’s clear that any business in this revenue category are considered unsustainable and have a 50-50 chance of survival.
As business doctors, it should be your ethical responsibility to know if your patients are surviving your expert treatment? Did 20% of your patients sign up for your service treatment only to disappear within a year, if they survived that long? Is their business healthy and on the right development track? How do you know? What device and tools are you using to determine their life cycle stage, measure the performance of the 5 sustainability pillars, and assess their overall business development progress?
Research indicates that only 16% of businesses in the US generate more than $250k annually. Obviously, after taxes, expenses, depreciation, etc., the number of business generating $250k or more in owner’s discretionary earnings is far less than 4 million businesses. What business owners don’t understand, which is why they need your help, doctors, is that any amount less than $250k in owner’s discretionary earnings classifies the business simply as a job replacement for the owner, not a sustainable business.
Now, there are some business owners who only seek to replace their income and not build a sustainable business with legacy and exit strategies in mind. There is nothing wrong with that at all. This is the landscaper who cuts my neighbors yard, by himself, no employees, one simple pickup truck, and just enough clients to pay his bills, no more, no less. If this is what they set out to do and achieve it, great! However, we confidently believe that the 24 plus million businesses that have annual receipts less than $250k did not all start their business to simply replace their job, but rather to build a sustainable business. Wouldn’t you agree? When your clients walk into your office or call you on the phone, are they saying, no thanks Bill, I just want to make enough to pay my bills, not really interested in building a long-term business.
Business doctors have officially been around since 1890, when the first recognized management consulting firm was formed by a gentleman named, Arthur D. Little, initially specializing in technical research, later building a specialism in what became to be known as “management engineering”. Still, the birth and death rates for US based business haven’t changed since the early 90’s.
Unlike medical doctors, business doctors don’t have to:
Earn a Bachelor’s degree
take the Consultant College Admissions Test (no such thing)
earn a business degree
Complete a Residency Program
Obtain Licensure
Get Certified to Advance Career, none of that.
Even more, there is no malpractice suit if a business doctor provides the wrong advice to their business patient or performs the wrong service or offers a poor product. What this means is business doctors are free to provide services, products and performing surgery on their patients blindly and without any diagnosis or repercussion. Currently, a business patient walks into or logs online to a marketing doctor and says, “I need more traffic to my business,” and just like that (snap of the finger), the doctor sells the patient a marketing product or service. Maybe the doctor will perform some type of marketing evaluation, but that is the extent of any evaluation or diagnosis.
Let’s compare that same scenario with a family doctor, even just for a sprained ankle. My 13 year old son London sprained his ankle playing basketball, which is always expected. What do you think the process was when he arrived at his personal doctor? I’ll tell you. Complete the inpatient form asking questions about the injury, allergies, family medical history, etc. Next, weigh-in, height, and blood pressure. Then, we see a nurse who asks more questions. Next, we see the doctor who performs and examination, before ordering x-rays. All of this, before any diagnosis or solution is provided.
Now, some may call that overkill. But if it were your child, wouldn’t you want the same treatment, to make certain a doctor doesn’t wrongfully amputate your son’s leg because he needed to sell a higher service. Why would a medical doctor put their patient through all of these tests, exams, and evaluations? Is it because of the American Medical Associations (AMA) Code of Medical Ethics? Maybe a combination of reasons, but we hope the first and primary reason is to help their patients improve health, not simply sell a service.
As a business doctors, what can you do? One thing is, do absolutely nothing different than what we’ve been doing. Failure rate of businesses don’t matter, your patients business survival isn’t your concern, unless of course they don’t pay your invoice. In this scenario, 99% of the economy remains on the backs of the small businesses, so the economy won’t get better because businesses fail faster than they can start.
Or, you can be the business doctors who holds yourself to the same standards as a medical doctor. That doesn’t mean you have to get the same extensive education, but rather, live by a similar code of business ethics, which would read something like this; ”A business doctor shall continue to study, apply, and advance scientific knowledge, maintain a commitment to business education, make relevant information available to their business patients, colleagues, and the public, obtain consultation, and use the talents of other business professionals when indicated.”
If Robert was here, he would undoubtedly disagree and say, “Karl, I don’t have time for all that nonsense, show me the money.” How many here would agree with Robert?
Many would argue that there are no existing tools or technology to perform all those evaluations and checks, and their clients don’t care about all that stuff. My clients just want their business to grow and earn more money. That’s true!
My son didn’t care about all that stuff at the doctors either, he just wanted to get back to school and back to playing basketball. As a doctor you're responsible for the welfare of your patient, not your patients wants. If your patient decides this is too much for a simple solution, remind them, for the last 30 years businesses just like theirs have failed at a high rate by thinking that way.
So what are you going to do? Be a business doctor or street pharmacist. One last thing, if you don’t know what life cycle stage your patient is in and what business development steps they’ve neglected, then helping them becomes impossible.
The economy needs you, help improve it, by simply caring about your business patients. Thank you doctors.