"If your business depends on you, you don't own a business - you have a job," says Michael Gerber.
Entrepreneurship has been painted as the golden ticket to the boss-less life. A path most people believe involves being your own boss and calling the shots. However, Michael Gerber dispels that myth in his bestseller The E-Myth: Why Most Small Businesses Don't Work and What to Do About It. Being on LinkedIn, it seems like everyone has opened a business and that the entrepreneur life is the way to go.Several connections have inquired as to why I don't open my own and the answer has been, I'm not ready at the moment.
It is tempting to go out on my own but after reading E-Myth, I'm glad I haven't yet. As Gerber says, "Most people who go into business don't have a model of a business that works, but of work itself." The common reality is that most people approach work as what he calls, The Technician. You want to do all the work and thus get consumed into doing every single aspect of the business.
Instead, you want the business to run itself.
Run Your Business Like a McDonald's
McDonald's get a bad wrap.
The dominant fast-food chain is seen by many as the epidemy of what they don't want their business to be like, especially if you're in the food industry. However, Gerber believes otherwise. He's a firm believer that small business should emulate McDonald's blueprint. Businesses should aim to be like McDonald's and franchise.
When franchised, the business will run without the business owner's every single input (you can finally take sick days off and not be worried about whether something was turned off) and run like a well-oiled machine because ultimately you want to sell it.
According to Gerber, your goal as a business owner is to sell your business (yes, go ahead and gasp...alright, back to the program). In order for you to sell your business, you must be able to prove to the buyer that it is an easy business to run.
As such, you need standard operating procedure manuals, consistency in branding (e.g. logos and uniforms), and to dial in the administrative duties. Everything needs to be written and documented for others, including job descriptions and responsibilities. This will keep everything as a standard to live by and maintain everything in check.
Business vs Your Life
One of the biggest eye openers of the book is this golden bit,
“Your business is not your life. Your business and your life are two separate things.”
Gerber provides a very compelling equation to break down the typical business owner who to him is only 10% Entrepreneur, 20% Manager, and 70% The Technician. Many entrepreneurs proclaim their stress and headaches with their business because they're doing all the work; their business is 70% them (they are The Technicians). When that happens, they can't separate their life from the business and when that happens, family, hobbies, and social life gets distorted which creates a very gloomy/unhappy life.
In order for the business to work efficiently, all three personalities need to be balanced. They need to be given "the opportunity, the freedom, and nourishment" to grow. Small business owners need to separate the business from their life because, in order to be sane, those distinctions need to be drawn with a thick marker.
Focus on Product and Customers
For those that are already business owners, Gerber hopes you measure your success. Obviously, success is a subjective term and depends on your business but what he means by that is that you must have metrics. Marketing is a huge part of business and to be successful in both, you must know your numbers.
As a business owner, collect information about your consumers, competitors, your pricing, what's your best seller, what time do most customers come to your business, what colors work best on your walls, etc. If you don't measure, how else will you know whether you're growing or not?
In terms of your product, how are you positioning it in your marketing? Remember, "nobody's interested in the commodity, people buy feelings." For example, with Revlon their commodity is cosmetics, the product is hope. Know your product!
There are countless thought-provoking points in The E-Myth: Why Most Small Businesses Don't Work and What to Do About It. However, one of my biggest takeaways is a question Michael Gerber poses towards the ends. Before you go into business ask yourself,
Does the business I have in mind alleviate a frustration by a large enough group of consumers to make it worthwhile?
Does it? Crunch the numbers, look at the data, and read the book. It provides a wealth of knowledge for entrepreneurs and small business owners.