In this episode, I have shared the 3 golden lessons I learned from one of the most influential business books The E-Myth Revisited: the entrepreneurial myth – the myth that most people who start small businesses are entrepreneurs.
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3 Golden Lessons I Learned From the Book E-Myth Revisited
One of the books that had a huge impact on my career and changed the way I perceive my business is the book called e-myth revisited by Michael Gerber.
When you are not prepared before starting a business then chances are that you will be among those people that learn everything the hard way.
When you are inexperienced as a business owner, then you are going to face challenges that the universities, schools and institutions didn’t warn you about.
The problem arises soon after a business owner falls into a real-world pit; entrepreneurs are forced to realize the tricky business of success and its harmful external influences.
Fortunately Michael Gerber, the author of “The E-Myth Revisited,” provides us with a well-written tutorial;
He explained in his book things that are an integral part of business plans, business growth, and human resource management.
So if you haven’t read the E-myth revisited then I highly recommend this particular book doesn’t matter if you’re thinking of starting a business or you’re already running a business. This book is a must-read.
Let’s discuss the key lessons from the book:
E-Myth Revisited Lesson Number 1 – Being a Technician Is Not Enough
40% of small businesses close down within a year.
Within five years, more than 80% will have failed And 80% of that business that survive the first five years, fail in the second five years. That means only 4% of the businesses survive the first 10 years.
To challenge those odds you need to understand what a business really IS…. and what it takes to make it work.
People think that small businesses are started by entrepreneurs, when, in most cases are not. People who think they are entrepreneur are mostly technicians, people who are specialists in their field.
Perhaps you are a lawyer, so you start a law firm or a teacher and started a coaching institute. Or you are a barber, so you open a salon.
The problem is that a technician does not know anything about running a business. You may give the best haircut in the world, but that is not enough to succeed.
There are 3 types of people in the business:
The entrepreneur turns every trivial question into a great business opportunity. They are the dreamers and they focus on the future.
Managers are practical thinkers and they bring order and put the systems in place.
Finally, technicians like to do things and live in the present. They are hardworking individuals who like results and hate interruptions.
The typical personality of a new business owner is 10% entrepreneurial, 20% managerial; and 70% technical.
Instead, a business owner must take on an Entrepreneurial Perspective, coz it is all about the way you approach your business, and ultimately this can be the difference between success and failure.
The main problem with the technician is because of the past conditioning they treat the business like a job. They work IN the business instead of ON the business.
Let me explain, most small businesses start with only an employee, which is the owner of the business. And guess what, the owner is the one that is responsible for everything in the business:
Managing the business, picking up calls, inventory management, product or service delivery, marketing, sales, etc.
In other words, the owner becomes the technician, the manager and the entrepreneur all at the same time.
And because most people never have the knowledge and skills to strategize or think about how to work ON their business, they stuck into the day to day work and start working IN the business instead. They become an employee by creating a “new” job for themselves.
This is why most small businesses find it hard to grow and to survive. And only 4% of the businesses make it to the 10 years mark.
That’s why! A business owner should have a 33% entrepreneurial profile, 33% managerial and 33% technical profile. Knowing how to combine these three skills is crucial for entrepreneurs looking to be successful in business.
E-Myth Revisited Lesson number 2 –Don’t Just Build Business, but Build Business Systems
Your business must be a systems-dependent business, not a people-dependent business.
A system is a defined process that can be duplicated in another business site whenever required. Business systems are the DNA of franchising.
Your business should not depend on your presence. That is not why you started a business. You started a business to have more freedom, to have more fulfilment, and yes, maybe even to make more money. But none of this is possible if your business relies on you. In fact, you will probably have less freedom, less fulfilment and less money.
So ask yourself these questions that most business owners ignore:
- How can I get my business to work, but without me?
- How can I get my people to work, but without my constant interference?
- How can I systematize my business in such a way that it could be replicated 5,000 times, so the 5,000th unit would run as smoothly as the first?
- How can I own my business, and still be free of it?
So, how do you create a business system? By working on your business, not in it.
The point is: your business is not your life – they are two totally separate things.
E-Myth Revisited Lesson number 3 – Take a More Active Role in Your Own Life
The major difference between great people and everyone else is that great people create their lives actively, while everyone else is created by their lives, passively waiting to see what’s gonna happen next.
They take the initiative of improving themselves and their circumstances to make progress and reach the goals which they have.
In other words, they take the time to create their success.
On the other hand, average people wait for life to happen to them. They make only a moderate effort towards their lives. They live their life by accident.
As an entrepreneur, you should always try your best to take the initiative and live your life intentionally.
Lastly, an entrepreneur must embrace the change – Change is good. All businesses must change in order to grow, particularly those which are not currently realizing their maximum potential.
When you are unwilling to change, your business will never be capable of giving you what you want.
So, keep analyzing your business and consider whether you have the necessary organization, structure and systems in place to maximize the full potential of your business. If not, change is a must.
That’s it, guys.
I hope you liked this one. I must say if you are running a business or thinking of starting a business please consider reading E-myth revisited or you can listen to it on Audible. It’s a great book to help you understand thinks most businesses do wrong and ultimately fail to grow.
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