Saturday, April 18, 2015

The Ultimate Blueprint

The following is my summary of The Ultimate Blueprint for an Insanely Successful Business by Keith J. Cunningham.

“The goal of owning a business isn't just to be successful, it’s to be successful and stay that way.” - The Ultimate Blueprint, page 2

This book was recommended to me by a successful business owner, who qualified it as “very helpful”. The title certainly hooked me since I've always wanted to have a successful business and I love following proven processes, or blueprints. This is not a book filled with abstract theories but of proven principles. The reader who would benefit most from reading it is one who already owns or runs a business. Currently, that is not my case. However, I have gleaned important insights nonetheless and will attempt to summarize some key principles using some fictitious examples along the way to help illustrate some of the points offered in the book.

Candid and even blunt at times, Cunningham reveals his core business principles, including why great operators get tired and how great business owners get rich. The Ultimate Blueprint outlines critical skills, tools, and strategies required to drive profits and maximize cash flow for any business, regardless of the size or the industry. You cannot create and sustain business success without the appropriate business skills and tools. When you get the tools that work, you get the results that are possible.

Operator or Owner?

"The problem with being a great operator is that you don't get rich, you get tired.  Great business owners get rich." - The Ultimate Blueprint, page 2

In the first chapter of the book the author promises to answer some common questions that typical business owners ask. A few sample questions are:

  • How can I add more value and make fewer mistakes?
  • How can I rapidly find and plug the leaks that are costing me profits and cash flow?
  • How can I be more efficient with my business activities?

Cunningham compares learning and executing the skills taught in this book with going to the doctor for a physical.  The doctor giving the physical knows how to locate and correct the systemic problems with the physical body.  A business owner who understands and uses the principles in this book can locate and correct the systemic problems in a business.

Many business books have been authored by so called “experts”.  However, this one is written by someone who has actually lived the principles that are taught.  One of the common thoughts taught widely by the "experts" is to do what you love, and the money will follow.  This is questionable advice at best and is analogous to “eat what you love, and be skinny.”  This has been proven to not be the best advice, but for the uniformed it sure does sell.

Are You Measuring What Matters?

“What gets measured is what gets done. What gets measured is what gets managed.” - The Ultimate Blueprint, page 19

Have you realized that the person or business owner who does not want to measure probably does not want to be held accountable?  Without measuring how will you know if you are improving or getting worse, and what to do about it once you know?  The author proposes the following steps to creating the business results you desire:

  1. Measure to get clear on where you currently are.
  2. Decide where you want to go; make that your specific goal.
  3. Identify the root problem or cause that is blocking your progress.
  4. Fix the problem or remove the cause.
  5. Measure again to determine your progress toward your goal.

I challenge you to implement these steps in your business and see what results. Be the one who measures and improves, not the one who doesn't.

Revenues and Profits

"The Ultimate Blueprint is to acquire or employ assets that are highly effective at producing revenue and then efficiently convert those revenues into profits." - The Ultimate Blueprint, page 50

Profits are a theory, cash is a fact.  The equation that this book is based upon is "Assets (more effective) --> Revenue (more efficient) --> Profits (more productive) --> Cash Flow or Operating Cash.”
For example, in his successful lawn care business, my son focused on minimizing the monetary outlay for the equipment (assets) he needed to produce the maximum amount of revenue. Once he had revenue, he strove to minimize his expenses to maximize the business profits. Finally, he focused on maximizing the cash that his profits produced.

Here are some key formulas from the book for measuring the effectiveness, efficiency, and productivity of a business:

revenues / assets = effectiveness %
profits / revenue = efficiency %
operating cash flow / profits = productivity %

What is the effectiveness, efficiency, and the productivity of your business using these formulas?  How do your numbers compare with previous quarters or years?  Can you find ways to increase profitability by decreasing expenses in your business?  The bottom line is that for your business to be sustainable, it must produce positive cash flow from the operations of the business.

I think the purpose of this book is clear - to highlight and emphasize the strategies and techniques available for each business owner to optimize and maximize profits and cash flow.  Keith Cunningham does a good job of encouraging business owners to 1) invest in themselves - because that is the key to personal growth, 2) learn critical distinctions so better choices can be made - which is the key to a better life, and 3) do whatever it takes to create excellence, mastery, and contribution - which are keys to fulfillment in life and business.  How are you doing in these three areas?