Semester 1- Class 2 Intro to Emyth (Organization of Your Business) Copyright 2007 Duane Hoversten – Instructor South Central College.

Semester 1- Class 2Intro to Emyth (Organization of

Your Business)

Copyright 2007

Duane Hoversten – InstructorSouth Central College

Do You like your Business Now??

Does it Give you what you want in Life??..

•Money

•Time

•Satisfaction

E-myth Revisited by Michael Gerber ..

Insight into Small Business

Observations on Small Business Owners

1. Work too hard for the money they make

2. Business Owners are doing the Wrong work in the business

3. Result is - Chaos, Unpredictability, and Failure.

4. Information abounds - yet the business fails..

More Observations onYour Business. It is You..

If your thinking is sloppy - your business will be sloppy.

If you are disorganized, your business will be disorganized.

If you are greedy, your employees will be greedy.

If you lack direction on how to improve your company, your company will not improve and will lack direction.

Fatal Assumption

If I understand the technical work of a business, I understand the business that does technical work.

The Facts

SBA – 80% of Small Businesses fail within 5 years (50% in 18 months)

Franchises have a 95% Success Rate in 1st Year

Franchises have a 75% Success Rate for Business Format Franchises in 5 Year Period

The E Myth

Small Business should be started by Entrepreneurs risking capital to make a profit. (Fact is businesses are started for far different

reasons)How do we Overcome the E Myth?

A Turn-Key “Franchise” Business can be created by using a Systemized Process of installing Systems in Business. By Using the Ideas of a Turn Key Business with a Systemized Process, you create a vitality and sustainability in any company.

What do We Change in Your Business??

Your Business is a Reflection of You!!We need to:Change your Skills and Attitude Set Goals with Accountability

Create a Turn Key Business

Changes for Your Business

Have you Work On the Business Not in ItGetting you – the owner/manager doing the right things in your businessGetting the right people in your BusinessConcentrating on Systems

Goals

Set GoalsAccountability on

ProgressMentoring

Turn Key Business

Your Business should run by itself if you are gone a month

Your Business becomes saleable when you have a Turn Key Business

You have time to Work on Your Business

Doing (the Owner) the Right Work in your business

Do Not Run to the Post Office Daily

You are worth $50/hr - $1000/ hr

Do the work that the Owner should be Doing

Set the Culture in Your Company

Right People in your Business

Good People do Not make Good Bookkeepers

Good Bookkeepers make Good Bookkeepers and we would like them to fit into the culture of our Company

Systems

This is a base measurement of all that goes on in the company

When there is a problem, look at the system before blaming people

We do not have to reinvent the wheel all the time

Eliminates going to the Owner for Everything

Goals

WrittenMeasurableRealisticCreate a

Movement in You or Your Company

E Myth (Small Business) Personalities

3 Distinct Job Types Entrepreneur Manager Technician3 Way Battle on how to handle each

problem -

The best personality does not always surface and win.

IT IS BEST TO HAVE DIFFERENT PEOPLE FILL THESE SEPARATE JOBS.

The TechnicianIs a doerIf you want it done right,

do it yourselfHappiest when workingKnows you can’t do two

things at onceLikes to control flow of

workThinking isn’t work….

And is unproductive

The Entrepreneur (Leader-Visionary)

Turns trivial conditions into opportunities

The Dreamer and Catalyst for ChangeNeeds controlLives in the world of “what if” and

“if when”Creates Havoc because of need

for changePeople are problems that get in the

way of his dream

The Manager

PragmaticCraves orderClings to status quoSees problems not

opportunitiesCreates neat rows of

widgets that entrepreneur creates

Cleans up Entrepreneur’s Mess

Stages of Business

InfancyAdolescentMatureWe’ll Talk about each Stage

A Real Business APL Landscape

Business we are going to Talk about is Wayne.

Landscape Solutions

Staff ProfileWayne Anderson has been owner/manager of APL for 24 years. He is active in the sales and design process. Wayne has been involved in the green industry for 27 years starting out in lawn service and eventually focusing solely on landscape installations. Wayne was an active foreman until 2003. He earned his degree in business management at Ridgewater College and continues his involvement with the college by giving lectures to students. He is dedicated to continually growing APL, with emphasis on quality and innovative installations.

Introduce Wayne

Real PersonLandscaping Business – 17

yearsNot making much moneyTwo Years behind with Tax

ReturnsNo Records – Just a Shoe

BoxWore out from the GrindReady to Quit

Infancy stage of Business

Technician Stage of BusinessWork long hours every dayWork comes and is too much.Work each day on who screams loudest.Always behindNot enough time to bill - Vendors calling

for payHousehold has no money

Adolescence Stage

Stage where business has to get help

They hire people but do not have direction

Wayne had 8-10 workers

Missing the Manager Hat

Working Harder and making less money

Three Choices in Adolescence

Get smaller - one employee and eventually close doors

Add more employees and go busted

Continue as IS and maybe Survive but get BURNED OUT

WAYNE SURVIVED FOR 17 YEARS AND WAS READY TO QUIT

The Comfort Zone

Most businesses get outside their comfort zone

Business or Job??The “Business” no longer shinesMost businesses focus on the product

or Service not how the company does business

Osborne – Computerland – Circuit City

Going for Broke-Turn over ManagementDemand for Services is larger

than can be handledHiring someone to handle the

businessHiring an Employee to run the

business – be the owner so the owner can be a technician

Won’t work!!!

Company is growing or Shrinking

Either you do the job of the owner or???

Cannot abdicate your role in a true company

Business or Job???

Maturity Stage

Companies who know how it got where it is and know where it is going.

E Myth Entrepreneurial ModelHow did we get

Wayne to Maturity Stage??? Look at the business

itself as a product competing with other businesses.

NOT looking at what’s done in the business but HOW it is done.

We need to find a business model that satisfies all three of our personality needs.

Entrepreneurial Perspective

How must the business work?What work must be done?System for producing results for

customer and profit for ownerLooks at the future(Technician

looks at the present)

Entrepreneur vs Technician vs Manager Point of Views

Future vs PresentWhere we will be not where we areEntrepreneur visions and the

Technician only knows what he can touch and see

Mature Model has parts of Entrepreneur – Technician - Manager

Use the Turn Key Franchise Idea

The Franchise Phenomena

McDonalds - The most successful small Business in the world.

Franchises

Trade Name Franchises Coca Cola - Cadillac

Business Format Franchise An entire system of doing

business TRUE PRODUCT OF THE

BUSINESS IS THE BUSINESS ITSELF..

THE HAMBURGER WASN’T THE PRODUCT - THE BUSINESS WAS..

Business Format Franchises

95% Success Rate in 1st Year

75% Success Rate for Business Format Franchises in 5 Year Period

McDonalds: cleanliness - satisfy the customers every time

Learned at Hamburger U

Business Format Franchise

“Proprietary Way of Doing Business that differentiates every Extra-ordinary business from one of its competitors.”

•How do we build businesses to make that idea work for us?

•How do we make businesses that work predictably and profitably every day?

•How do we get business owners in control of their business rather than the businesses controlling the owner/manager???

MAJOR QUESTIONS ARE:

We Created a Turn key Business for Wayne

Created goalsCreated Organization Structure Hired a bookkeeperCreated scheduleDid last two years taxesCreated paperwork to track jobsCreated paperwork to track work on

jobs

Your Business in Not Your Life!!!

A Business Owner must understand that the primary purpose of a business is that it serve him/her not that he/she serves the business.

Work on the Business Not in the Business..

End Class 2

Next Meeting October 6 at 8 am

Reach Chap 7-9 in Emyth Revisited A. Create an Organizational Chart?? B. Who is/are your manager/s? C. Who are your technicians??

What do you do in the company??