Chapter 9

Constraints

Before we get started, it is important to realise that your Long term Business is a system that takes time to build and refine. 

Conventional thinking says that that system is linear. 

Meaning, that, for instance…

If you optimise your landing page for conversions and increase the number of subscribers, you will automatically improve  results downstream… net result you will turn more leads into paying customers.

Whereas the theory of constraints tells us that is not the case because the most important limiting factor (i.e. constraint) may be elsewhere in the system. 

The bottleneck may be your inability to show up on a sales call and guide your lead to a point where they are ready to buy from you.

This is closer to the truth…

The first principle, however, is that the most important piece of your LTB system is that 6 inches of space between your ears.

If you are self-sabotaging sales calls, it’s odds on that there are other instances of the same behaviour.

To take that a step further, if you optimise your ability to show up as you truly are in your business then every part of the system will be affected.

Which means that your business system is not linear but circular. 

Here’s an example of how introducing a new constraint into a system changes almost everything else in that system.

How wolves change rivers: https://youtu.be/ysa5OBhXz-Q

And then give this a thought…

Say you wanted to build the best car you possibly could.

Logic would say that the best way of doing that would be to go out and find the best engine, the best drivetrain, the best braking system and so on until you had the best of everything waiting to be assembled.

Only then would you discover that none of these parts were made to fit together.

You would have the best of everything yet still have nothing.

The first principle is your Long Term Business system is circular and a unit in and of itself of which you yourself are a major source of constraint.

Change your approach to your business and you change everything.

In the last chapter, we discussed… 

The core principles that guide every business decision you make going forward.

These were 

functionalThe ultimate outcome you deliver
Emotional How you want people to feel when they think of you. And PhilosophicalWhy you are in business.

To which we have added the first principle that your Long Term Business system is circular.

Now, we need to agree that optimising your business to produce happy customers must also be a first principle.

Why?

By its very nature a Long Term Business is an empathy driven, story based business that views its customers (whether there has been an exchange of money or not) as its most important asset.

If you care about your customers and they know it, they are more likely to care about you.

If you focus on producing happy customers, you will create a Referral Engine at the same time. That is a network of people who are happy to point their friends and contacts in your directions as often as they can.

Added to which they will be happy to buy from you over and over again as well as help you identify and then create the new products and services your business needs to grow and prosper.

This twofold effect has a much more prosaic outcome. 

The most expensive thing you will ever do is acquire a new customer. 

The fact that these customers are happy to buy from you multiple times increases their Lifetime Value (LTV) to your LTB.

And maximises your Return On Ad Spend (ROAS)

All of which means you can afford to spend more on acquiring a new customer than your competitors… 

The business able to outspend competitors in this way is able to acquire the lion’s share of quality customers.

That is the longer term  prosaic reason why optimising your business to produce happy customers is a first principle.

A subsidiary being that the more happy customers you have out there, the more they speak about you, the more others will listen to what you have to say.

The less it costs you to acquire new customers.

So… Lowest cost of acquisition coupled with maximum Lifetime Value of each customer is truly a virtuous circle.

And all because you optimise your business for happy customers.

Which takes back to where we started…

#1: Deciding on the first principles that govern your Long Term Business is going to have a profound impact on its success. 

#2: Your business is a circular system of which the most important constraint is the 6 inches between your ears. 

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