Small Business Consulting Using “The E Myth” by Michael Gerber to understand and consult with small businesses.

Small Business ConsultingSmall Business Consulting

Using “The E Myth” by Michael Gerber to understand and consult with small businesses.

The E-MythThe E-Myth

Who is Michael Gerber?

Why did he write this book?

http://www.premierespeakers.com/2356/index.cfm

What is the E Myth?What is the E Myth?

Entrepreneur: One who organizes, manages, and assumes the risks of a business or enterprise. (Merriam-Webster Online)

Gerber: the E-Myth is that Entrepreneurs are Herculean and Larger-than-Life.

Gerber: the truth is that most are tired and just hanging on.

What’s What’s “The Fatal Assumption”?“The Fatal Assumption”?

Gerber: “The Fatal Assumption is: if you understand the technical work of a business, you understand a business that does that technical work.”

Who Who ElseElse is Inside You? is Inside You?

Entrepreneur 10%Manager 20%Technician 70%

What about your client?

E RealityE Reality

What type of person generally starts a business? Entrepreneur, Manager, or Technician?

Why do Most people start a business?

Small BusinessesSmall Businesses

The Problem: The business runs you.

The GOAL: Work on your

business -- not in it

Businesses NeedBusinesses Need

The vision The goal The management The technicians

Entrepreneurial StagesEntrepreneurial Stages Exhilaration Terror Exhaustion Despair

A A SuccessfulSuccessful Business Business

Finds and keeps customers Follows rules and standards1. Use the people with the lowest level of skills

necessary to operate the system

2. Must stand out as a place of impeccable order

3. Documents all work in the system

4. Uniform color, dress, and facility code

FranchisingFranchising

Trade Name franchiseOwner capitalizes on the name.

Business Format franchiseOwner capitalizes on the name and

PROCESSES.

Solution:Solution:

The Franchising Model

Franchising ModelFranchising Model1. Provides consistent value to all stakeholders

beyond expectations.

2. Systematized for people with the lowest possible level of skill.

3. Stands out as having impeccable order.

4. Model is documented in an operations manual.

5. Provides predictable value to the customer.

6. Standardizes the appearance of the employees & facilities.

Maturity Stage-Minded Maturity Stage-Minded QuestionsQuestions

How can my business work without Me?How can my employees work without my

constant supervision?How can I be free from my business?How can I do work I love to do rather than

what I have to do?

The E Myth RevisitedThe E Myth Revisitedby Michael Gerberby Michael Gerber

Part II: How to fix what’s wrong!

Business Development Business Development ProcessProcess

Innovation – Implementing creative new ideas that help your business.

Quantification – Keeping track of the numbers.

Orchestration – Creating order and predictability for you and your customer.

InnovationInnovation

Can be: a better product a better package a better production system a better business system a better marketing system a better financing system

QuantificationQuantification

Gather data to determine the precise value of the innovation

Measure what you do so you know what works

Make only one change at a time

OrchestrationOrchestration The elimination of discretion or choice from the

operation level of your business Orchestration is integrity Orchestration is consistency Orchestration does not remove initiative of your

people let them introduce innovation try it quantify it measure results decide what to do

Gerber’s Business Gerber’s Business Development ProcessDevelopment Process

7 Steps1. Your Primary Aim2. Your Strategic Objective3. Your Organizational Strategy4. Your Management Strategy5. Your People Strategy6. Your Marketing Strategy7. Your Systems Strategy

Your Primary AimYour Primary Aim

What do I wish my life to look like? How do I wish my life to be on a day-to-

day basis? How would I like to be with other people in

my life-my family, my friends, my business associates, my customers, my employees, my community?

Your Primary AimYour Primary Aim

How would I like people to think of me? What would I like to be doing 2, 5, 10 years

from now? When my life comes to a close? How much money will I need to do the

things I wish to do? When will I need it?

Your Strategic ObjectivesYour Strategic Objectives

A list of standards1. Money Standard2. An Opportunity Worth Pursuing?3. When will prototype be ready?- Where is the business going to be - local, regional,

national, international?- How are you going to do business – Retail,

Wholesale, both?- What are your standards regarding: reporting,

cleanliness, clothing, etc.?

Your Organizational StrategyYour Organizational Strategy

Determine what has to be done…then decide who is going to do it.

You fill the roll until you can “franchise” that role for someone else to do just like you did it.

Your Management StrategyYour Management Strategy (is really a marketing tool!)(is really a marketing tool!)

Getting everyone in the same role to perform the same task at the same level time after time.

Increases predictability for you.Increases predictability for your customer.Allows measurability.

Your People StrategyYour People Strategy

Explain WHY.Teach your employees.Create a “Game” with:

- Clearly defined structure (rules)

- Structure through which employees can test themselves.

Your Marketing StrategyYour Marketing Strategy

WHAT DOES YOUR CUSTOMER WANT?

Don’t presume that you know what the customer wants.

Learn your customer demographics

Psychographics

Your Systems StrategyYour Systems Strategy

Develop a Selling System that focuses on customer needs and is the same every time.

Develop information systems that collect data to allow measurements against benchmarks.

Wrapping it UpWrapping it Up

Your business is a tool.Use your business to create the life you

want.

Wrapping it UpWrapping it Up

Systems are not bad. They create value for the customer. They provide structure for your employees. They let the business be the product rather

than you.By do those things, the business is more

valuable to you and most of all to a buyer!

Wrapping it UpWrapping it Up

Does every business do this?No!Do all successful businesses do this?No!Should all businesses do this?Yes!

Wrapping it UpWrapping it Up

Does it matter if the business is a start-up or a mature one or somewhere in between?

No!Is this like a business plan?Yes

Finally…Finally…

99% of small businesses suffer from some of the ailments in this book.

YOU ARE FOREWARNED!If you come across one that is suffering,

you probably can’t change everything at once…therefore, multiple engagements!