I recently finished reading The E-Myth Revisited – Why Most Small Businesses Don’t Work and What to Do About It – by Michael E. Gerber.
The book revolves around a central idea, that there exists a myth (“E-Myth”) which states: “Small businesses are started by entrepreneurs risking capital to make a profit. This is simply not so. The real reasons people start businesses have little to do with entrepreneurship. In fact, this belief in the Entrepreneurial Myth is the most important factor in the devastating rate of small business failure today. Understanding the E-Myth, and applying that understanding to creation and development of a small business, can be the secret to any business’s success.”
To overcome this myth and it’s accompanying challenges, the author argues for the deployment of a Franchise Prototype model. It begins with the owner realizing that “your business is not your life…the primary purpose of your business is to serve your life, you can then go to work on your business, rather than in it”.
One might then ask him/herself, how do I convert my existing business into this new operational model? This is where the Business Development Program, comes into play. The program introduced by GERBER in this book is based on the execution of the following seven steps:
1- Your Primary Aim: ” What do I value the most? What kind of life do I want? What do I want my life to look like, to feel like? Who do I wish to be? Your primary aim is the answer to all these questions.”
2- Your Strategic Objective: “A very clear statement of what your business has to ultimately do for you to achieve your primary aim.”
3- Your Organizational Strategy: Structure the way the business is going to work, in other words creating the organizational chart – roles and responsibilities.
4- Your Management Strategy: “A system designed into your prototype to produce a marketing result.”
5- Your People Strategy: The way the “game” (vision/aim) is communicated to the team at the outset. This includes everything from the position contracts (organization chart), to operations manuals, to the standards for performance and accountability.
6- Your Marketing Strategy: Knowing who your customer is (demographics) and why they buy (psychographics)
7- Your Systems Strategy: The “set of things, actions, ideas and information that interact with each other, and in so doing, alter other systems.”
What sets this book apart is the analysis that the author performs, through a sample business, of issues small business owners encounter. This includes the different personas the owner takes on, as well as the evolution of the business through the maturity cycle. This analysis is what allows the readers to appreciate and embrace the proposed prototype framework that the author then introduces as key to success. A must read in the area of entrepreneurship and small business.