Are you working IN your business or ON your business?
Monday, August 17, 2009
This book is a classic for anyone thinking about starting a business or currently running a business.
Up to half of start ups fail the first year with 90% to 95% failing within ten years, often because of management mistakes. Most owners start as hands-on technicians and not as entrepreneurs, even though they think they are entrepreneurs. Gerber argues that more would survive if more owners grew from technician to entrepreneur.
Basic Concepts and Principles
Most new businesses are started by people who are skilled at what they do, whether they are a tool & die maker or a physician. Technicians understand their skill, but not necessarily how to run a business.
Gerber says building a business takes three skill sets in these proportions:
• Entrepreneur 33% - Supplies the vision.
• Manager 33% - Supplies order and systems.
• Technician 33% - Supplies the output.
Unfortunately, the typical business builder personality is:
• Entrepreneur 10%
• Manager 20%
• Technician 70%
Gerber argues the beginning technician is working IN the business and is not evolving to the entrepreneur level of working ON the business. He describes three phases of growth:
• Infancy: the technician is the business and tries to do everything alone. Infancy ends when the owner realizes the business cannot continue as it is in this stage.
• Adolescent: growing beyond the comfort zone. This stage challenges the owner to develop new skills, ask for outside help, or any other assistance to move the business forward.
Most small businesses in America today are in the Infancy and Adolescent stages, according to Gerber.
• Maturity: reached when the owner realizes how he/she got to their current business position and have an accurate understanding of what they must do to move forward.
The Franchise Perspective
Gerber stresses the need to develop a business that is systems-dependent rather than expert-dependent. This involves developing a formal, written Operations Manual detailing all factors in the business so it delivers uniform and predictable service time after time. McDonalds is an example of how a perfected operation can be repeated thousands of times worldwide.
The Business Development Process
Gerber then outlines the foundations of a dynamic and flexible organization. Three activities: Innovation, Quantification, and Orchestration, provide the power to make changes and move forward.
The Business Development Process involves the following seven steps:
• Primary Aim
• Strategic Objective
• Organization Strategy
• Management Strategy
• People Strategy
• Marketing Strategy
• Systems Strategy
This process and its detailed seven steps are the basic research activities that are required to develop an eventual business plan for the organization.
In the past, I have seen many businesses fail because of poor or non-existent planning. Research shows that most businesses today have no formal business plan. Planning takes time and it forces an owner to think and analyze all the steps through the process as well as developing personally. The E-Myth helps do that. One of our wise founding fathers once said “If you fail to plan, you plan to fail.” This book is a must read for every business owner!
by Jake Doll
President of Sandol & Associates
at 11:17 AM Link to this Article 0 Comments
Comments:
Up to half of start ups fail the first year with 90% to 95% failing within ten years, often because of management mistakes. Most owners start as hands-on technicians and not as entrepreneurs, even though they think they are entrepreneurs. Gerber argues that more would survive if more owners grew from technician to entrepreneur.
Basic Concepts and Principles
Most new businesses are started by people who are skilled at what they do, whether they are a tool & die maker or a physician. Technicians understand their skill, but not necessarily how to run a business.
Gerber says building a business takes three skill sets in these proportions:
• Entrepreneur 33% - Supplies the vision.
• Manager 33% - Supplies order and systems.
• Technician 33% - Supplies the output.
Unfortunately, the typical business builder personality is:
• Entrepreneur 10%
• Manager 20%
• Technician 70%
Gerber argues the beginning technician is working IN the business and is not evolving to the entrepreneur level of working ON the business. He describes three phases of growth:
• Infancy: the technician is the business and tries to do everything alone. Infancy ends when the owner realizes the business cannot continue as it is in this stage.
• Adolescent: growing beyond the comfort zone. This stage challenges the owner to develop new skills, ask for outside help, or any other assistance to move the business forward.
Most small businesses in America today are in the Infancy and Adolescent stages, according to Gerber.
• Maturity: reached when the owner realizes how he/she got to their current business position and have an accurate understanding of what they must do to move forward.
The Franchise Perspective
Gerber stresses the need to develop a business that is systems-dependent rather than expert-dependent. This involves developing a formal, written Operations Manual detailing all factors in the business so it delivers uniform and predictable service time after time. McDonalds is an example of how a perfected operation can be repeated thousands of times worldwide.
The Business Development Process
Gerber then outlines the foundations of a dynamic and flexible organization. Three activities: Innovation, Quantification, and Orchestration, provide the power to make changes and move forward.
The Business Development Process involves the following seven steps:
• Primary Aim
• Strategic Objective
• Organization Strategy
• Management Strategy
• People Strategy
• Marketing Strategy
• Systems Strategy
This process and its detailed seven steps are the basic research activities that are required to develop an eventual business plan for the organization.
In the past, I have seen many businesses fail because of poor or non-existent planning. Research shows that most businesses today have no formal business plan. Planning takes time and it forces an owner to think and analyze all the steps through the process as well as developing personally. The E-Myth helps do that. One of our wise founding fathers once said “If you fail to plan, you plan to fail.” This book is a must read for every business owner!
by Jake Doll
President of Sandol & Associates
at 11:17 AM Link to this Article
Comments:
###
Post a Comment