small business consulting using “the e myth” by michael gerber to understand and consult with...
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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!