Tuesday, September 30, 2008

95% of Businesses Fail- Why and What to Do About It

Last year I read the E-Myth by Michael Gerber and I am now re-reading the book to catch additional points I may have missed.

Funny how this happens, I received an email from David Riklan of SelfGrowth.com and his review and salient points about the book. His thoughts and comments are below.

"Many of our SelfGrowth.com members run small to mid-size companies and are frequently looking for suggestions on how to grow their business.
Many of us have a full time job and a website that we are trying to expand. Others are just struggling to balance our career, our health, our family, our friends and our finances.
I recently read “E-Myth Revisited, Why Small Businesses Don’t Work and What to Do About It” by Michael Gerber, and I believe it provides some valuable insights that can help anyone with a small to mid-size business.
The term “E-Myth” refers to the Entrepreneurial Myth - a belief that many businesses fail because the founders are technicians that were inspired to start a business without knowledge of how to run a successful business.
The assumption that many people make is that because they are experts regarding technical details of a product or service, they will also be an expert at running that sort of business. If you are a great personal coach, you should be great at running a coaching business. If you are a great career counselor, you should be able to run a career counseling business. It’s a bad assumption.
The book initially provided me with some basic ideas about being an Entrepreneur, but in the end gave me some insights that helped me refocus my time and my energy. Here are some of the lessons that I learned:
1) Don’t only work in your business; make sure you also work on your business.
In the earlier years of my business, I handled every single technical detail (Worked in my business) and was often consumed by them. Later on, I learned that I needed to invest time on developing a long term plan and vision (Worked on my business) instead of focusing completely on the day-to-day activities of the company.
2) Develop systems and business procedures to ensure the success of your company.
In the earlier years of my business, I kept everything in my head. Later on, I learned that I would need to create formal systems and write out formal procedures. This is a critical component of growth.
3) Be aware of the 3 hats you wear in a small business: Entrepreneur, Manager and Technician.
I gained an understanding that I would actually need to wear 3 different hats while growing my internet company. The Entrepreneur was the visionary, the Technician was the technical expert, and The Manager wore the pragmatic hat. In order for your company to be successful, you’ll need to develop these 3 skills or hire somebody to play each of these roles.
4) The E-Myth also provided me with several insightful questions. Make sure to ask and answer these questions for yourself.
• How can I get my business to work, but without me?
• What’s the best way to delegate my responsibilities?
• What procedures should I implement to make the business run and grow itself?
• How can I spend my time doing the work I love to do rather than the work I have to do?
I hope some of these ideas are helpful in giving you insights that you can use to strengthen, grow and expand your businesses. Interested in reading the book yourself? Click here to order from Amazon.com.
Thanks again for being a part of http://www.SelfGrowth.com

David Riklan


Unknown said...

Nice post. I want to run my own business soon, so I'll remember this one. I know it'll be challenging, so I can use all the help and advice I can get. I've been thinking about buying a business lately instead of starting one from scratch. Maybe a franchise? I don't know. Do you have any suggestions or advice? Thanks!

Unknown said...

@Gail - If you're thinking about buying a business, there are bunch of websites that offer the service. I know there's BizTrader.com, which is this online global marketplace where you can buy and sell a business. It has excellent tips and advice, and you can also use it to find a lender, broker, etc. I also highly suggest checking out any small business groups in your area. They can be very helpful, and it's always good to network. Good luck!

Mark's I Just Read This Blog said...

Also, look for companies shutting down, you can purchase their data bases for nothing down and percentage sales the data base generates.