When I was thinking about starting Core Wrk one of the first things I did was reach out to my friends and family in the fitness and wellness industry to understand the operational challenges they’ve faced throughout their careers. These conversations usually began with a discussion about how the training to prepare practitioners to be great physical therapists or chiropractors does very little to educate them on how to start or run a business. This piece of feedback was one of the most common themes I encountered throughout all of those conversations (we’ll dive into more detail on the challenges of getting up and running in a later blog).
Typically, the conversation would then shift towards a reflection on how people thought about operations with respect to their day-to-day activities. In essence, discussing what the term “operations” means to them. Selfishly, I was looking for a golden nugget that would point me to a very specific part of their business where there were persistent pain-points. I was hoping to discover some “low hanging fruit” that was common throughout the industry which would have provided a clear opportunity to solve a systemic problem. However, more often than not, the conversations tended to stay rather broad as we would talk about any and all aspects of starting and running a business.
One moment that stuck out to me was when I was talking to my friend who used to own a gym north of Boston and now owns and operates a massage business in Burlington, VT. I asked him what he considers to be components of his operations. He paused for a bit and then, in a very matter of fact way, said: “I don’t know what to tell you, man. Pretty much everything.” I’ll admit that at that moment, it wasn’t the answer I was looking for. But it wound up being one of the most important parts of any conversation I had. It was a genuine and honest response that helped open our eyes to the reality that “operations” really does play a role in pretty much everything we do as a business. That was it, we had our starting point. It was vast, but at least we knew the topic at hand had very broad limits.
Next, as is usually the case, my engineering-oriented mind took over and I started to map out a diagram of how a typical business operates. I started at a very high level and gradually broke down the overall system into smaller and smaller components. This led me to the realization that at the highest level, an operating model can be broken down into two main components (or themes):
- Functional Operations - The things we need to do to support the creation of value and keep the business running
- Revenue Operations - The things we need to do to attract customers and generate income
It is my belief that both categories are sufficiently broad and comprehensive enough for all business functions to fit into at least one of the two.
With that as the starting point, I began assigning specific business functions to each of those categories. An example is provided in the image below with the top yellow rectangle containing the business functions that fall into “Functional Operations” and the bottom yellow rectangle containing the business functions that fall into “Revenue Operations” where each of the business functions is represented by a gray rectangle.
It is important to keep in mind that this example may not be exhaustive or apply to all types of businesses. However, it should provide a decent overview of the operating model for a typical business. Along with the high level categories and business functions, you’ll also see important entities denoted by the blue ovals. These entities play critical roles and act as inputs, drivers, and enablers to the business’s operations.
There may be some debate regarding into which category a particular business function belongs. For example, some may argue that the “Value Creation” business function should belong to the “Functional Operations” category rather than the “Revenue Operations” category. I’m sure a very valid case can be made, but allow me posit that if a business does not create value, do they have any hope in generating revenue? Probably not.
Similarly, each of the business functions that reside in either Functional or Revenue Operations can be further decomposed. For example, the “Marketing” business function can be broken down into digital campaigns (both social media or email), paid advertising (on Google, Facebook, Instagram, etc.), physical signage, or printed merchandise. Each of these components of marketing require their own skills and associated tools and technologies. We won’t get into “tooling” in this blog but we’ll dive into more details around why it’s important to take a holistic approach to selecting the proper tools for your business in a later blog.
So up to this point, we’ve discussed what aspects of a business “operations” touches. However, we haven’t delved into what operations actually IS. You can do your own search and find numerous definitions for “business operations.” But the one that I’ve found most helpful for clarifying business operations is the following:
“Strategic business operations is the practice of optimizing the people, processes, tools, and technology that are used to create repeatable, scalable, and sustainable business systems.”
This is a pretty dense definition so let’s unpack that sentence bit-by-bit. In order for your business to run smoothly, there needs to be a strategic element to how you design and implement your operating model. I liken it to creating a workout plan as you’re getting ready for an event. For example, let’s say you’re preparing for a 100-mile charity bike ride. Your workouts may include bike rides, strength training, and some flexibility work. When you create your weekly routine of which workouts you’re going to do on certain days, you’re likely not going to stack all of your bike rides on consecutive days and then all of your strength training on consecutive days. Instead, you’re going to intersperse days with rides and days with strength training to provide balance and ensure you’re not repeatedly overloading the same set of muscles. Similarly, you’re not going to go out and do the same type of bike ride every single day. You will have some shorter but more intense rises as well as longer easier rides with some recovery rides mixed in there too. Overall, there will be a strategy behind why you’re doing certain types of workouts on certain days. Your business operations is no different. There needs to be an overarching strategy when developing your operational plan so each component of your business can work seamlessly with one another.
Developing the operating model with a strategic and holistic perspective establishes the blueprint for your business operations. The next step is identifying and procuring the resources that bring that operating model to life. These resources typically take the form of the people, processes, tools, and technology required to execute the tasks that drive the business. If you’ve heard the expression “there’s more than one way to skin a cat” then I’m sure you can see where this is going. We are fortunate to be living and working at a time when we have a plethora of resources at our disposal. This is great in the sense that it provides us with freedom to create an operating model that is uniquely aligned to our needs. However, this routinely results in a two-part problem:
- Understanding all of the resources that are needed (and not needed) to accomplish your goals
- Sifting through all of the “noise” to identify the right resources for your business.
This is why optimization is critical for creating a repeatable, scalable, and sustainable business system. It takes a substantial amount of thought and analysis to understand how value is created and passed on to the customer as well as the customer’s experience when providing you with payment for your services. All of these business functions need to come together to create a seamless experience for you, your employees, and your clients.
The optimization of people, processes, tools, and technology means getting the most value out of your employees, reducing their overall workload, and minimizing the costs required to do the job efficiently. For example, you could hire a social media expert to do all of your marketing on Instagram. But you’d be paying for deep domain expertise and committing to only one channel. Alternatively, you could hire a marketing generalist that could create campaigns across a variety of channels. This would allow you to see which channels are most successful and decide to hone in on a more focused marketing strategy once you have some data to support that decision. Essentially, optimization is about getting the most “bang for your buck” and knowing how to make the right decisions about your operating model so you can get the maximum return on your investments
While the objective may be straightforward, the path to getting there is anything but. This is especially the case when you’re in the process of starting your own business and wondering where you should be focusing your own time and attention so you can get your business off the ground. When you partner with Core Wrk, we will guide you through the uncertainty and provide you with a clear and customized set of tasks that will get you to your grand opening sooner than if you had set out on your own. Contact us to see how Core Wrk can work for you and your business.