Monday, December 12, 2011

The Small Business Trap

Are you working on your business, or in your business? This was the provocative question that Michael Gerber posed in his classic best-selling book, The E-Myth.

He explained that many people were motivated to start up a small business because they were fed up working for someone else and believed that being good at their craft, they would make more money and have more independence working for themselves.

This is what Gerber termed the Myth of the Entrepreneur ....... because the reality was often very different. Many small business owners would find themselves working long hours - in the pursuit of profits that too often proved elusive.

In the more recent edition of the book, The E-Myth Revisited, Gerber explains that the small business owner must be capable of performing three different roles - the Technician, the Entrepreneur and the Manager.

Usually the owner is naturally a technician, but if he or she is going to grow the business, they need to become an entrepreneur and listen to their customers, assess their competition and recognise where the opportunity gaps in the market may be. In the role of manager, they need to establish efficient systems, procedures and processes that will enable the business to become less reliant upon the owner. This is what working on the business means, but to do so requires working less in the business.

Learning to let go of the technical work, gradually training others to be able to do this work and supporting them with adequate documented procedures - this is one of the keys to growing your business successfully. By systemising your business with documented procedures, Gerber says you help to ensure consistency in the delivery of your service or product. You also establish a framework that potentially lends your small business to a franchising structure - and an expansion of your revenue stream

You might also like to have a look at Common Small Business Pitfalls