Why Nearly Everyone Builds This Way

If the floor matters so much, why does nearly everyone build without it? The answer is not stupidity, as I said earlier this week. The answer is that the whole world around a business owner is arranged to reward the roof and ignore the floor, and most people, quite reasonably, do what gets rewarded.

Consider what gets praised. A good launch gets praised. A clever campaign gets praised. A new product gets praised, and so does a new hire, a new office, a new logo. Revenue growth gets praised more than anything else, because it is the number people understand and it is the number that sounds like winning. Nobody has ever been congratulated at an industry dinner for having a twelve-month cash flow model that they checked against actuals every month. Nobody posts a picture of their operating plan. The floor is invisible, so it earns no applause, so it gets no time.

Consider also who is selling to the owner. The advice industry around small and mid-sized businesses is overwhelmingly a roof industry. There are agencies for marketing, consultants for sales, coaches for confidence, designers for brand, developers for product. Every one of them is selling a better roof or a nicer first floor, and every one of them has an interest in the owner believing that the next level is on the other side of what they sell. Finance and operations are sold too, but they are sold as compliance, as the accountant who files the return and the bookkeeper who reconciles the bank. Neither of those is a floor. A floor is forward-looking. Compliance looks back.

And consider the owner's own instinct. Most people who start a business do so because they are good at the thing the business does. They are a brilliant designer, a gifted consultant, a cook, a coder. The product is where they feel competent and the floor is where they feel exposed. It is entirely human to spend your time where you are good and avoid the place where you are not, and the business will happily let you, right up until the month it cannot.

The response is to notice the incentives and then decline to follow them. This is harder than it sounds, because it means doing unpraised work in a world that is loud about praise.

Start by changing what you count as progress. For one month, do not count launches, posts, followers or revenue. Count whether the model exists, whether the number is written down, whether the month's actuals were compared to the plan. These are dull measures. They are also the only ones that tell you whether the business is getting better rather than just bigger.

Then change who you listen to. If every adviser around you is selling a roof, find one person who will look at the floor with you. I am aware that this sounds like a sales line, and it partly is one, but it is also a plain observation. It is a description of what was missing from the businesses I have seen struggle, and what was present in the ones that did not. The owners who had someone, anyone, who would look at the numbers with them every month and ask the uncomfortable questions did better than the ones who did not, and it had little to do with how good the adviser was and a great deal to do with the fact that the floor got looked at.

Finally, make peace with the fact that the floor will never be praised. Nobody will see it. Your clients will not know it is there. Your competitors will not understand why you can raise prices and they cannot, why you can hire ahead of them, why your December is calm while theirs is a scramble. The floor's reward is not applause. It is a business that pays you, and a year that goes the way you drew it rather than the way it drifted. Tomorrow we start building it, layer by layer.

Continue reading: The Floor Has Three Layers →

The session: The Nine Fears, and the floor underneath your business. Wednesday 2 December, 5pm UK, free →

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