The E-Myth Revisited
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The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do about It Jonas Flesch [email protected]
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Transcript of The E-Myth Revisited
The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do about It
Jonas [email protected]
Source: http://www.ritholtz.com/blog/2012/01/small-business-successfailure-rates/
Source: http://www.ritholtz.com/blog/2012/01/small-business-successfailure-rates/
How do you imagine an entrepreneur?
The reality Most entrepreneurs are not like that
Who are the “entrepreneurs”? The barber opens up a barber shop. The hairdresser starts a beauty shop. The computer programmer opens a
software company.
The Fatal Assumption is: if you understand the technical work of a business you understand a business
that does that technical work.
You can be more than one person
The entrepreneur. The manager. The technician.
The entrepreneur Who decided to open a business Is the dreamer Turns the most trivial condition into an
exceptional opportunity Lives in the future Most people are problems that get in
the way of the dream
The manager Who organizes everything Lives in the past Where the entrepreneur sees the a
opportunity, the manager sees a problem
Runs after the entrepreneur and cleans the mess
The technician “If you want it done right, do it yourself” Lives in the present Tries to do as much work as possible Is a individualist “Two things can’t be done
simultaneously, only a fool would try”
The reality The typical small business owner is
10% entrepreneur 20% manager 70% technician
The race for power The entrepreneur wakes up with a vision The manager screams “Oh, no!” But they have no power, they together are only 30% So, who is in charge?
The technician is in charge!
Businesses phases
Infancy Adolescence Maturity
The infancy The technician phase You are the business! You start to have more work that you
can do You fill your day with “work” Avoids the challenge of learning how to
grow a business
The adolescence You decide to hire someone
Someone with experience Someone that will let you do want you
want to do – technical work Usually someone to take care of the
books To do what you don’t want to do
You will tell him your secret: that you don’t know what you’re doing!
The adolescence You use another management style:
Management by Abdication
Sooner or later things will start to go wrong You will ask “how did that happen?” You have three choices:
Getting smaller again Going for broke Adolescent Survival
The maturity Understand that you work is creating
the support that your business need to grow
Have an clear idea of where you want your company to be
Work every day to close the gap between what the company is and what you think it should be
The “turn-key revolution” The franchise phenomenon
"The Most successful Small Business in the World" - McDonald's
The franchise prototype Even if you will not franchise your
business
Defined processes
The model The model will provide consistent value
to your customers, employees, suppliers, and lenders, beyond what they expect
The model will be operated by people with the lowest possible level of skill
The model will stand out as a place of impeccable order.
Create a model of your business All work in the model will be
documented in Operations Manuals The model will provide a uniformly
predictable service to the customer The model will utilize a uniform color,
dress and facilities code.
Orchestration If everyone in your company is doing it
by their own discretion, their own choice, rather than creating order, you're creating chaos.
People should follow processes If you haven't orchestrated it, you don't
own it!
Quantification How many people entered in your store? What they bought? How many in the morning In the afternoon? How many people call your business
each day? How many call to ask for a price?
Process
Quantify
Analyze
Identify Improvements
Adapt your model
Do your business plan You already know that Mike and Bob were right: business plans
are important
THANK YOU!
Presentation analysis Please tell me what I need to improve! People liked my PowerPoint theme last
time, so I repeated it Point A: Who is the entrepreneur?/Data
about small businesses Point B: How to organize a small
business in a way it works
Presentation analysis WIIFY: Some day the entrepreneur inside
you will try to open a business! Also some tips here apply to businesses of all sizes, and even to technicians turned into managers inside a big company
Flow: Tried to go into the phases of a new business – pretty hard in 15 minutes
Jonas [email protected]
