Small Business Consulting “The E Myth” understand and consult with small businesses.

Small Business Consulting
Using “The E Myth” by Michael Gerber to
understand and consult with small
businesses.
The E-Myth
Who is Michael Gerber?
Why did he write this book?
http://www.premierespeakers.com/2356/index.cfm
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
“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 Else is Inside You?

Entrepreneur
 Manager
 Technician
What about your client?
10%
20%
70%
E Reality
 What
type of person generally starts a
business? Entrepreneur, Manager, or
Technician?
 Why do Most people start a business?
Small Businesses
The Problem:
 The business runs you.
The GOAL:
 Work on your business
-- not in it
Businesses Need




The vision
The goal
The management
The technicians
Entrepreneurial Stages
 Exhilaration
 Terror
 Exhaustion
 Despair
A Successful Business


1.
2.
3.
4.
Finds and keeps customers
Follows rules and standards
Use the people with the lowest level of skills
necessary to operate the system
Must stand out as a place of impeccable order
Documents all work in the system
Uniform color, dress, and facility code
Franchising
Trade Name franchise
 Owner capitalizes on the name.
Business Format franchise
 Owner capitalizes on the name and
PROCESSES.
Solution:
The Franchising Model
Franchising Model
1.
2.
3.
4.
5.
6.
Provides consistent value to all stakeholders
beyond expectations.
Systematized for people with the lowest possible
level of skill.
Stands out as having impeccable order.
Model is documented in an operations manual.
Provides predictable value to the customer.
Standardizes the appearance of the employees &
facilities.
Maturity Stage-Minded
Questions

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 Revisited
by Michael Gerber
Part II: How to fix what’s wrong!
Business Development
Process



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.
Innovation
Can be:
 a better product
 a better package
 a better production system
 a better business system
 a better marketing system
 a better financing system
Quantification

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
Orchestration

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
Development Process
7 Steps
1.
2.
3.
4.
5.
6.
7.
Your Primary Aim
Your Strategic Objective
Your Organizational Strategy
Your Management Strategy
Your People Strategy
Your Marketing Strategy
Your Systems Strategy
Your 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 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 Objectives
A list of standards
1. Money Standard
2. 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 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 Strategy
(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 Strategy
Explain WHY.
 Teach your employees.
 Create a “Game” with:
- Clearly defined structure (rules)
- Structure through which employees can test
themselves.

Your Marketing Strategy

WHAT DOES YOUR
CUSTOMER WANT?
Don’t presume that you know what the
customer wants.
Learn your customer demographics

Psychographics
Your 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 Up


Your business is a tool.
Use your business to create the life you
want.
Wrapping 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 Up






Does every business do this?
No!
Do all successful businesses do this?
No!
Should all businesses do this?
Yes!
Wrapping 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…



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!