How To Ensure Your Business Is A Success And Not A Sad Statistic
The E-Myth Revisited by Michael Gerber is more than just a book about how to start a small business – it’s also a guide on how to succeed.
It reveals the secrets for small-business success through its insights into why 80 percent of small businesses fail within five years and how founders can use Ray Kroc’s strategy for McDonald’s as an example to follow.
You’ll learn that if your business relies too heavily on you, it will never reach its full potential and you will never achieve the success you want.
With The E-Myth Revisited, you get tips and strategies to make sure your business thrives, even past the five-year mark.
The E-Myth: Why So Many Small Businesses Fail Despite Having Great Ideas
We often hear the story of a heroic entrepreneur with a great idea, technical know-how, and is able to quickly succeed in business.
That’s the E-Myth – an entrepreneurial myth that is unfortunately mistaken.
Did you know that out of the 1 million businesses founded each year in America, 40% end up failing within their first year of operation, and 80% fail within the first five years? It’s highly likely that a large majority of these failures are due to this unhelpful false belief.
It’s only natural for skilled technicians like baristas, machinists or computer programmers to dream of running their own business as per their own ideas.
It’s this “entrepreneurial seizure” that leads many to start their own venture without realizing that technical mastery and having a good idea won’t be enough.
They assume they know how to run a business just because they know how to do technical work – two completely different things.
The barista who knows how to use coffee roasting, brewing and latte art will soon realize they must also understand how to hire employees and organize tasks if they truly want success.
Technical skills alone won’t cut it.
A heroic entrepreneur armed with technical know-how and great ideas succeeding quickly in business? That’s nothing more than an unrealistic myth!
Accepting Growth As A Necessary Step In The Development Of A Business
It’s a common fact that most businesses don’t make it past the adolescent stage.
The E-Myth Revisited Book Summary explains why.
It shows that when an entrepreneur becomes busy with their business, they may reach the infancy stage, where they do everything themselves and become overwhelmed by the amount of work.
When they reach this point, they have to hire employees and enter adolescence- meaning every part of growing their business is out of their control.
Unfortunately, this commonly leads to abdication instead of delegation, which means letting their tasks to others without supervision and ensuring things are done properly.
This can lead to a decline in quality, which makes customers dissatisfied.
Without proper planning from day one, an entrepreneur’s business usually won’t survive past adolescence.
To Launch A Successful Business, You Need To Have An Entrepreneurial Perspective And An Entrepreneurial Model
If you want your business to not just survive but thrive into adulthood, it needs to have developed in a certain way.
To reach that level of success and maturity, you need to plan ahead from the start.
This means much more than simply being prepared to push yourself outside of your comfort zone and getting ready to give up some control.
You must look past the very beginning of opening your business, and think about the future instead.
That could involve designing your business in such a way that it runs by itself with little involvement from you personally – this will come in handy if growth is on the cards.
What can make all of this possible is having an entrepreneurial perspective, meaning anticipating how things may develop and how best to move forward.
When starting out, ask yourself what sets you apart from competitors rather than focusing exclusively on the tasks needed to carry on running the business- this requires thinking beyond a day-to-day mindset.
Once you’ve established an entrepreneurial perspective, implement it through an interesting Entrepreneurial Model which addresses potential customer needs innovatively and provides them with what they are looking for.
The barista example helps us understand exactly how this works, where she identified her target market (eco-conscious students) then changed up what she offered (locally sourced milk and reading cubicles).
If you’re serious about nurturing a flourishing business that goes beyond infancy stage then planning ahead is essential – no matter how daunting it may seem!
The Secret Of Small Business Success In The Revolution Within Us: Balancing Our Inner Entrepreneur, Manager And Technician
The E-Myth Revisited explains that inside everyone, there are numerous business personalities which make up a successful entrepreneur.
Specifically, these include an innovator, manager and technician.
Each of these powerful personalities brings something unique to the table of a growing business: the innovator looks for new opportunities in the world around us; the manager is organized and arranges things into perfect order; and lastly, the technician enjoys tinkering and getting things done.
These three components need to be balanced in order to create a successful business.
The average small business owner will usually have 10% of their personality as an entrepreneur, 20% as a manager and 70% as a technician.
It’s this balance which gives entrepreneurs the upper hand when it comes to staying on top of the competition and avoiding becoming another failed statistic.
We Are In The Middle Of A Remarkable Revolution Called The Turn-Key Revolution That Is Changing Business Forever
We’re in the middle of a revolution that is changing how businesses create success.
It’s called the turn-key revolution, which basically means that any business can be designed and structured so that anyone can easily pick up the key, and just run the business successfully.
A business format franchise is a key component to participating in this turn-key revolution.
This includes the model you give to a potential franchisee who will run your business: all of the processes, organizations and systems necessary to operate it effectively.
The statistic alone speaks for itself – 80 percent of small businesses fail in the first five years but 75 percent of business format franchises succeed!
The whole idea is to make your business attractive to potential buyers, making sure everything works in the simplest and most efficient ways possible so that anyone can take over.
Ray Kroc kickstarted this concept back in 1952 when he focused on creating an exact replica of a hamburger for every customer – engineering all parts from flipping burgers at just the right time, even down to how much ingredients went into each burger.
He was able to sell his system (aka McDonalds) as a franchise thousands of times over.
All in all – there’s an ongoing revolution happening with small businesses that provides its participants with an excellent path towards success!
How To Build A Franchise Prototype That People Will Love And Want To Replicate
If you’re dreaming of taking your small business to the national level one day, then you need to start out by building the very first store.
A key factor for success is to design a franchise model that can be replicated and operated by anyone with ease.
You’ll want to give people value with reasonable prices and great customer service, while keeping things as simple as possible.
For example, let’s say you own a cafe; your value could come in the form of impeccable lattes served with free cookies.
Your delivery system has to be designed in such a way that it doesn’t rely on any experts or technical knowledge; this means it should have an efficient and simplified training program so anybody can learn how to make those delicious lattes!
Create an operations manual that documents every single process involved in your business – from creating a latte to training baristas – so it can successfully be replicated if needed.
Lastly, ensure consistency when delivering your product or service; customers will keep coming back returning customers rather than ones who are never quite sure what kind of product they will receive each time they visit.
With these tips in mind, you are well on your way towards making sure that your small business can one day become a national chain!
Know Your Primary Aim And Set Up A Strategic Objective To Achieve It Before Launching A Franchise
If you’re starting a business, it should be because you want something more than the typical 9-5 job.
Your main purpose should always be to get what you want out of life!
That’s why knowing your primary aim is the most important step in setting up your business.
Take some time to think about what you truly care about in life and ask yourself questions like, “What do I care about most? How much money do I want? What kind of lifestyle do I want to lead?” Having this clarity means that when you come to establish your business plan and design the franchise prototype, all these answers will be taken into account.
To go even further, create a strategic objective that sets measurable objectives that allow your business to help you reach your primary aim.
This could include financial projections such as how much money in gross revenue and profit you are expecting as well as outlining an opportunity worth pursuing – involving a big enough market for it to satisfy both your financial goals and personal aim.
Lastly, define what type of customer is ideal for the company.
Overall, if you’re looking start a business make sure it speaks directly back to satisfying that original personal aim that motivated you in the first place!
Creating A Clear Organizational Strategy Is Essential For Your Business To Succeed
Organizational charts are essential for any business to successfully grow and establish accountability.
Starting out, you may not need many employees as it might just be you in your one-person company.
However, it is integral that you plan ahead and consider exactly how many people you’ll need – what their jobs are, who they report to and what standards the work should meet.
For instance, if you own a cafe, then you may need 3 baristas and one baker per cafe, a manager to oversee them, a marketing manager, an accountant, as well as a general manager to run the show.
When beginning out ,you can be responsible for these various roles but as the business scales up, so must your organizational structure.
In addition to documenting employee responsibilities in an organizational chart or strategy – it’s also crucial that each position has its own manual clearly explaining duties and responsibilities of personnel employed at this job.
This way expectations from their work is outlined effectively.
Each employee should then sign the position contract which holds him/her accountable for accomplishing assigned tasks successfully .
As all positions begin fulfilling desired standards set by your organization – your business will inch closer towards achieving its strategic goals while also establishing accountability throughout all its employees.
The Secret To A Successful Management Strategy? Treat People As Your Marketing Tool
If you want to manage your employees efficiently, the most important thing to remember is that you shouldn’t rely solely on having great people.
Instead, you need to focus on developing a great people-management system that approaches management of people as a marketing tool.
Your goal should be to ensure your employees understand the meaning behind their work and that they are motivated towards helping the business reach its objectives.
Using an example of a barista managing a baker, one way she could do this would by putting him front and center and giving him the freedom to choose his own ingredients – thereby creating enthusiasm for his job which in turn would result in better customer experience.
It’s also crucial to test against the standards you set for each position – so that in our example, if achieving creativity is the business’ goal – then it’s important for the barista to measure how creative and unique each week’s cake schedule is.
With these strategies in place, your employees will be able to reach their full potential and your customers will be all the more satisfied!
How To Develop A Scientific Marketing Strategy For Your Business Based On Customer Demographics And Psychographics
When it comes to your marketing strategy, it’s essential to focus on the customer above all else.
That means, before you start doing anything else, forget about everything else and just think about the customer.
You’ll want to look into the demographics of your customer base first – things like age or geographical location – and then consider the reasons why the customers might be drawn to purchase from you.
A great way to do this is with a survey.
Ask each customer some questions that provide demographic and psychographic data – such as age, addresses, leisure activities, etc.
You can even reward them with a free cookie or something small if they complete your survey!
Once you’ve collected this data on your customers then use it to make your products more appealing based on their profiles.
For example, IBM did extensive research and found out that a certain shade of blue exuded dependability; so then they adopted “IBM Blue” as their company’s main color for all of its products and marketing materials.
When it comes down to running a franchise prototype that potential franchisees can trust in being predictable, scientifically-based strategies will work best – meaning research-backed changes are necessary when it comes time to update your tactics due to changing customer demographs or market trends (like perhaps shifting away from newspaper advertising and more toward digital ads).
A Franchise Prototype Is Made Up Of Interdependent Systems That Must Run Smoothly Together To Flourish
The E-Myth Revisited emphasizes the importance of having functional systems in order to ensure your business will succeed.
In the end, you’ll have a business made up of hard systems such as computers and colors; soft systems such as employee attitudes; and information systems that provide you data on what is working and when it’s time for change.
All these components must work together for your company to truly thrive.
At the barista’s cafe, for example, putting in a new espresso machine means considering how all the other components – from employee abilities to customer behavior – will react to the shift.
Ensuring all those pieces are compatible with one another is paramount if her goal is to have a well-oiled machine that runs without any hiccups!
With The E-Myth Revisited, you now know just how crucial it is to construct an effective, comprehensive system layout that holistically works with one another so that your business can flourish.
The Key To Small Business Success Is An Ongoing Process Of Innovation, Quantification And Orchestration
The E-Myth Revisited tells us that, in order to have a successful business, planning and implementation must never stop.
This is the concept of the business development process – it’s an ongoing cycle which involves constantly tweaking, testing and refining your prototype in order to ensure its running at its best.
At the heart of this process is innovating your business.
This isn’t limited to just innovating products; rather, it means asking yourself how you can do things better and more efficiently.
Take Ray Kroc for example; he didn’t innovate hamburgers but rather how they were made and sold.
The next step is quantification – measuring every aspect of your innovation so you know what works or doesn’t work for you.
And finally comes orchestration, implementing your innovation in practice which requires watching what happens when things come into play (e.g if wearing a blue suit increases sales).
These three steps also don’t necessarily happen one after another, but all together at once as part of an eternal process that keeps driving your small business towards success!
The E-Myth Revisited is an excellent read for anyone who is starting out in business.
The fundamental message of the book is that most small businesses fail, but if you build a franchise prototype from day one, you can increase your chances of success dramatically.
To do this, it’s important to go to work on your business – not just in it.
The actionable advice found in the book focuses on defining your primary aim before beginning a venture.
Ask yourself what kind of life you want and how much money and time you want to dedicate to the process.
Having clear goals will help structure your business to meet those needs.
If you’ve read The E-Myth Revisited or are considering reading it, the overall summary is simple: build your business as a franchise prototype right from the start and tailor it to help achieve your personal goals.
With dedication and hard work, you too can become a successful entrepreneur!