Fix this Next
As a business owner, you’re likely juggling multiple priorities and goals simultaneously. From increasing sales to streamlining operations, the list of tasks can seem never-ending. However, attempting to tackle everything at once can lead to burnout and ineffective problem-solving. That’s where the “Fix This Next” methodology comes into play, helping you identify and prioritize the most critical need in your business.
The “Fix This Next” approach is based on Mike Michalowicz’s book of the same name, which draws inspiration from Maslow’s Hierarchy of Needs. Just as individuals have a hierarchy of physiological, safety, belongingness, esteem, and self-actualization needs, businesses too have a hierarchy of needs that must be satisfied in a specific order.
The Business Hierarchy of Needs
According to Michalowicz, the business hierarchy of needs consists of the following levels:
- Sales – The creation of cash
- Profit – The creation of stability
- Order – The creation of efficiency
- Impact – The creation of transformation
- Legacy – The creation of permanence
The golden rule is to always satisfy the most essential need, the lowest level, before addressing any need above it. Neglecting lower-level needs while trying to tackle higher-level goals is a recipe for chaos and frustration.
Identifying Your Lowest Level Need
To determine your business’s lowest level need, Michalowicz suggests a simple shortcut: answer one question for each level.
If the answer is “no,” then you have at least one need at that level.
Sales Level: Does your business have positive cash flow every month?
Profit Level: Does your business have more than three months of operating costs in savings?
Order Level: Can your business run without you?
If your answer to any of the questions is “no,” then you have a need at that level, however you must satisfy the lowest level need first.
Addressing Sales Level Needs
If you have a sales level need, which is the most common scenario for small and micro-businesses.
The sales level encompasses five key areas:
- Lifestyle Congruence: Does your business support your financial aspirations and personal needs?
- Attracting Customers: Do you have a lead generation system in place?
- Converting Customers: Do you know your conversion rate, and is it sufficient?
- Delivering on Commitments: Do you complete work on time and at the quoted price?
- Collecting on Commitments: Do customers pay you within 30 days?
Failure to address any of these areas can result in negative cash flow, hindering your ability to sustain and grow your business.
By focusing on these sales level needs first, you can build a solid foundation for future growth.
Moving Up the Hierarchy
Once you’ve addressed your sales level needs and achieved positive cash flow consistently, you can then shift your attention to the profit level. This level encompasses debt eradication, margin health, transaction frequency, leveraging profits, and building cash reserves.
After stabilizing your profits, you can move on to the order level, which focuses on minimizing wasted effort, aligning roles, delegating effectively, ensuring redundancy for key roles, and establishing a strong reputation in your locality.
The Power of Prioritisation
The “Fix This Next” methodology emphasizes the importance of prioritising and addressing the most critical needs first, rather than trying to tackle everything simultaneously. By concentrating your energy and resources on the lowest level need, you increase your chances of success and lay a solid foundation for subsequent growth.
Furthermore, this approach aligns with the Atomic Success Method’s hierarchy of needs, which prioritises physical and psychological safety above all else. By creating a safe and supportive environment for your team, you foster an environment where quality, reduced complexity, and speed can flourish organically.
In conclusion, the “Fix This Next” methodology provides a structured and practical approach to identifying and addressing the most pressing needs in your business. By prioritizing the lowest level need and systematically working your way up the hierarchy, you can build a solid foundation for long-term success and avoid the pitfalls of trying to tackle everything at once. Embrace this approach, and watch as your business thrives, one level at a time.