Working on your business, not in it

Transcription

1 Working on your business, not in it The Entrepreneurial Myth The E-Myth, or Entrepreneurial Myth states that most businesses fail to achieve their potential because most business owners are not entrepreneurs; they are technicians suffering from an entrepreneurial seizure. Entrepreneur Manager Technician In order to create a truly successful business, you ve got to go to work on it, not just in it. That is the revolutionary idea and message that was first introduced in the best-selling business book: The E-Myth Revisited: Why Most Small Businesses Don t Work and What To Do About It, by Michael Gerber, author and founder of E-Myth Worldwide Marketing Generation Money ership Management Client Fulfillment The Seven Centers of Management Attention model will help you see your business as a high performance machine. And seeing your business as one system the product will dramatically change your perspective and your life as a small business owner. Conversion

2 Page 1 The E-Myth Point of View This is not a call to do battle. It is a call to learning. How to feel, think, and act differently and more productively, more humanly than our existing skills and understanding allow. Introduction Michael Gerber If you re like most small business owners, you re too busy running your business to truly enjoy the fruits of your labor. And if you can t safely leave your business for a couple of days or a week, then you haven t got a business, you ve got a job! In order to create a truly successful business, you ve got to go to work ON it, not just IN it. That is the revolutionary idea and message that was first introduced in the best-selling business book: The E-Myth Revisited: Why Most Small Businesses Don t Work and What To Do About It, by Michael Gerber, author and founder of E-Myth Worldwide. The E-Myth or Entrepreneurial Myth, states that most businesses fail to fulfill their potential because most small business owners are not entrepreneurs but rather technicians suffering from an entrepreneurial seizure. The Entrepreneurial Myth Most small business owners will tell you that one day they realized they didn t want to work for someone else, or they wanted to make more money or have more personal time, and thus decided to start their own business thinking it would provide those things. Many believed that since they understood the technical work of the business (like being an electrician, auto mechanic, dentist, or accountant), they would know how to build a business in their particular field of expertise. That is the fatal assumption that because you know how to do the work of the business, you know how to run the business! It explains why 40% of the small businesses started each year fail, and 80% of the remaining never make it to their 5th anniversary. Most business owners are too busy working in their business and not on it and eventually run the business and themselves into the ground. The Three Business Personalities Why do so many business owners fall into this trap? The answer lies within each of us. There are three primary ways of relating to work that are fairly universal. Think of them as three separate personalities, the Entrepreneur, the Manager and the Technician. Each personality has a purpose and vital role to play.

3 Page 2 Entrepreneur Manager Technician The Technician performs work that is direct and hands-on, such as building products, delivering service, doing the administrative or support work. The work is strictly tactical. The Technician s relationship to time is focused on effort and how much can be accomplished or produced within the time allotted. The Technician associates money with income, or how can I produce more so I can earn more? In other words, the Technician is focused on trading time for money. Notice that to the Technician, work is about what they can do personally. It is the Technician who is tempted to open his own business because he believes he can do it better and any way he pleases, free from the constraints of a boss. The Manager s work is both tactical and strategic, but is focused on getting results through others. The Manager is concerned with developing systems that consistently produce outstanding results. He invests in the training of his employees to operate and innovate those systems and asks, How can we be more productive? The focus is on the collective work of the team, unlike the Technician whose focus is on his own production. Efficient production and delivery of service are his key areas of interest, so for the Manager time equals money. To the Manager, money is about cost control and increasing profits. The work of the Entrepreneur is visionary, strategic, and shapes the business. Entrepreneurs are dreamers who focus on the future (time), and are impatient to achieve their vision. Money to the Entrepreneur is about building equity and getting a good return on his investment. The Entrepreneur is most concerned about the performance of it the business. Ultimately, the work of the Entrepreneur consists of these accountabilities: to develop the vision for the future of the business, and to communicate that vision with conviction and passion to all who need to hear it, including customers, employees, lenders, vendors, investors, and the community. Each of the three personalities within you thinks differently about the business. Can you see that how you think about business, is how you end up doing business? You may be an expert at the work you do, but if you think of yourself as a Technician if you function in your business as a Technician your thinking is shortsighted, and your prospects limited. Most small business owners find themselves spending very little time doing the work of the Manager or the Entrepreneur work that can be leveraged. Rather, their days are spent doing endless tasks like opening the office, answering the phone, ordering supplies, finding new customers, and doing the books. Sound familiar?

4 Page 3 The Franchise Prototype: Thinking Like an Entrepreneur So what is a Technician to do? Stop thinking about the technical work and start thinking about the company you are creating. Shift your relationship to the business to one that is healthier and more profitable by understanding that (1) the business is not your life (although it may feel that way much of the time); (2) the business is there to serve your life; and (3) to have a life, the business cannot be dependent on you. You have to get out of the way. You have to move to a different business model. One that makes sense. Doin it, doin it, doin it will never get you where you want to go. The most effective conceptual framework for building a successful business is to view your current operation as the prototype for a large number of franchises or turnkey operations just like it. Even if you never plan to open another location, this perspective will help you create a business that delivers a consistent, quality experience to your customer, time and time again. You need to develop a successful way to do business your company s way. You must develop systems that enable your employees to run the operations of the business. In other words, your company must be systems-dependent, not people-dependent. This requires that you see yourself as the leader of the business, not just the highest paid employee! When you begin to take on the mantle of leader, everything begins to change because you begin to change, not only leading others to a common goal, but also leading the creation of a world-class company. Let s explore what it means to lead. The Five Essential Skills As the leader of your company, you must take a good, hard look at yourself, assess your strengths and weaknesses, and be willing to develop the skills that will ensure your success. As a leader, you must be committed to learning, as well as changing personal patterns or unproductive habits that may be getting in your way of achieving The 5 Essential Skills results. Developing the following five skills are essential to becoming a powerful leader of your business Concentration Discrimination Organization Innovation Communication The first is concentration. The skill of concentration is the ability to focus your attention now, where you are. Without the skill of concentration, you can t even begin to do things in a determined, fundamentally focused manner. Concentration is focus. The second essential skill is discrimination. Once you ve begun to develop the ability to concentrate, you need to decide what you re going to focus on. Discrimination is how you choose between this and that, between the most strategic and the most tactical. The skill of discrimination needs to be practiced so that you begin to intentionally choose to do the most important things for the most important reasons. When you hone this skill, you can tap into more focused energy.

5 Page 4 The third skill is organization. Now that you can concentrate and discriminate, you need to create order and predictability so you can successfully grow the company without chaos. Simply put, organization is the skill of turning chaos into order. The fourth skill is innovation. Now that you ve begun to concentrate, discriminate and organize your world, you can begin to innovate. Innovation is the skill through which you turn wrong action into right action. Innovation involves creativity and a commitment to continuous improvement. Collectively innovation, quantification, and orchestration are known as the Business Development Cycle. And, finally, the fifth essential skill is communication. Without the ability to communicate with clarity, precision, passion and purpose, the building of a world-class company will be much more difficult than it needs to be. People want to be inspired. They want to be a part of something important, something significant and meaningful. As the leader of your company, it is your job to develop inspiring communication skills. As you progress through the Mastery Impact! program, your E-Myth Business Coach will guide you on the development of these skills. Seven Centers of Management Attention In order to work on your business, it is helpful to have an entrepreneurial model that provides a framework for your business development. The Seven Centers of Management Attention is the E-Myth model. If you look carefully at any business, you will notice that there are key functions that focus directly on interacting and serving customers. They are Generation, Conversion, and Client Fulfillment. There are also key functions that focus primarily on the care and development of the business itself. They are ership, Marketing, Money, and Management. Together these functions make up the Seven Centers of Management Attention model. Thinking of your business in the context of these key functions enables you to view it systemically. In other words, your business is one system with seven major subsystems. It is a powerful business Marketing Generation model that effectively demonstrates the integrative nature of all the primary systems in a business. Money ership Conversion Management Client Fulfillment This model is used to help you organize your thoughts around how to develop your business as you work through Mastery Impact! It provides an intelligent, logical, and effective starting point for planning and executing new strategies. The Seven Centers of Management Attention model will help you see your business as a high performance machine. And seeing your

6 Page 5 business as one system the product will dramatically change your perspective and your life as a small business owner. You re on the Right Path In a nutshell, the E-Myth Point of View is the perspective that your business should work for you, rather than you working for it. To achieve this perspective, you have to work ON your business, not just IN it. That requires leadership, and leadership requires that you practice concentration, discrimination, organization, innovation, and communication. The strategic view of building a franchise, using your business as the prototype and organized by the Seven Centers of Management Attention will help you gain the objectivity you need to work on your business. Built on systems, your business will create a consistent, predictable experience for your customers as well as a dynamic environment for your employees. Finally, remember that as an entrepreneur you are committed to building a business that is not only profitable, but also marketable. Your biggest payout won t come from your salary or dividends, but from the day you sell all or part of the business. Investors will pay a healthy premium for a business that produces consistent, predictable, and increasing profits because those profits will provide a predictable return on their investment. Most people think of this as sweat equity. But it s really intelligence equity the value you add to the business by finding faster, easier, and less costly ways to do the work. When taken to heart and practiced every day, the principles of The E-Myth Point of View will guide your work as an entrepreneur and help you achieve a new level of success and happiness in your business and your life. They will sustain you as you work through Mastery Impact! and beyond. Here s to more life and creating a business that works!