You Cannot Start With the Roof

Nobody would build a house this way. You would not pour the roof first, hang it in the air, and then hope the walls arrive in time to hold it up. You would not fit the kitchen before the floor was level. And yet when I sit down with the owner of a business that has been going for five years or more, this is nearly always the order in which it was built. The roof went up first, because the roof is marketing and sales, and marketing and sales are what the business needed on day one to exist at all. Then the first floor went in, which is the product or the service, because that is what the customers were paying for. The floor underneath, the business model, the financial model and the operating plan, was going to be done later, when there was time.

There is never time. The roof needs constant attention because it is the part the weather hits. The product needs constant attention because it is the part the customers touch. So the floor stays as it was on day one, which is to say it does not exist, and the whole structure rests on the owner's memory, the owner's instinct and the owner's willingness to work late. For a while this holds. A good roof and a decent product will carry a business to a few hundred thousand pounds of revenue, sometimes to a million, on nothing but effort. Then it stops. Growth stalls, the owner cannot say why, and every attempt to fix it goes into the roof or the first floor again, because those are the only places anyone has ever worked.

I spent the first part of my career in rooms where the floor was the only thing anyone looked at. An analyst covering a company does not care how good the advertising is. He cares whether the model holds, whether the cash arrives when the plan says it will, and whether the people running it can tell him the number the business is measured to without looking it up. I then spent the second part running the finance of businesses that had been built roof-first, and watching what it cost them when the floor finally had to be put in underneath a structure that was already standing. It is possible. It is also expensive, slow and frightening, and almost all of the fear comes from the fact that nobody can see what is holding the building up.

The order I would build in is the one on the second slide of a session I am running next month, and it is not complicated. Business model first. Then the financial model. Then the operating plan. Then the product. Then the funnel. Read that again and notice that the two things most owners spend most of their time on come last.

A business model is one page that says what you sell, to whom, at what price, at what margin, and why they buy it again. A financial model is that page turned into twelve months of arithmetic: what comes in, what goes out, what is left, and when. An operating plan is the list of what gets measured, by whom, and how often, so the model is checked against the real world rather than left in a drawer. None of these needs a finance background. All of them need a few hours of honest attention and a willingness to write down numbers you would rather not look at.

Once that floor exists, something changes in how the product and the funnel get built. The product no longer has to be everything to everyone, because the model says what it has to earn and for whom. The funnel no longer has to shout, because the numbers say how many conversations a month the business needs and the price those conversations have to close at. The roof goes on last, and it goes on straight, because it has something to rest on.

Over the next thirty days I am going to walk through that order, one essay a day, from the house that gets built upside down to the two lines your business could be on by the end of 2027. If you have been running a business for a few years and have never written any of this down, you are in the majority, and the next month is for you.

Continue reading: What a Roof-First Business Looks Like →

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

Or start the diagnosis: Take the free 10-minute Entrepreneur Gap scan →

The book: The Science of Getting Rich and How to Apply It →