semester 1- class 2 intro to emyth (organization of your business) copyright 2007 duane hoversten...
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Semester 1- Class 2Intro to Emyth (Organization of
Your Business)
Copyright 2007
Duane Hoversten – InstructorSouth Central College
Do You like your Business Now??
Does it Give you what you want in Life??..
•Money
•Time
•Satisfaction
E-myth Revisited by Michael Gerber ..
Insight into Small Business
Observations on Small Business Owners
1. Work too hard for the money they make
2. Business Owners are doing the Wrong work in the business
3. Result is - Chaos, Unpredictability, and Failure.
4. Information abounds - yet the business fails..
More Observations onYour Business. It is You..
If your thinking is sloppy - your business will be sloppy.
If you are disorganized, your business will be disorganized.
If you are greedy, your employees will be greedy.
If you lack direction on how to improve your company, your company will not improve and will lack direction.
Fatal Assumption
If I understand the technical work of a business, I understand the business that does technical work.
The Facts
SBA – 80% of Small Businesses fail within 5 years (50% in 18 months)
Franchises have a 95% Success Rate in 1st Year
Franchises have a 75% Success Rate for Business Format Franchises in 5 Year Period
The E Myth
Small Business should be started by Entrepreneurs risking capital to make a profit. (Fact is businesses are started for far different
reasons)How do we Overcome the E Myth?
A Turn-Key “Franchise” Business can be created by using a Systemized Process of installing Systems in Business. By Using the Ideas of a Turn Key Business with a Systemized Process, you create a vitality and sustainability in any company.
What do We Change in Your Business??
Your Business is a Reflection of You!!We need to:Change your Skills and Attitude Set Goals with Accountability
Create a Turn Key Business
Changes for Your Business
Have you Work On the Business Not in ItGetting you – the owner/manager doing the right things in your businessGetting the right people in your BusinessConcentrating on Systems
Goals
Set GoalsAccountability on
ProgressMentoring
Turn Key Business
Your Business should run by itself if you are gone a month
Your Business becomes saleable when you have a Turn Key Business
You have time to Work on Your Business
Doing (the Owner) the Right Work in your business
Do Not Run to the Post Office Daily
You are worth $50/hr - $1000/ hr
Do the work that the Owner should be Doing
Set the Culture in Your Company
Right People in your Business
Good People do Not make Good Bookkeepers
Good Bookkeepers make Good Bookkeepers and we would like them to fit into the culture of our Company
Systems
This is a base measurement of all that goes on in the company
When there is a problem, look at the system before blaming people
We do not have to reinvent the wheel all the time
Eliminates going to the Owner for Everything
Goals
WrittenMeasurableRealisticCreate a
Movement in You or Your Company
E Myth (Small Business) Personalities
3 Distinct Job Types Entrepreneur Manager Technician3 Way Battle on how to handle each
problem -
The best personality does not always surface and win.
IT IS BEST TO HAVE DIFFERENT PEOPLE FILL THESE SEPARATE JOBS.
The TechnicianIs a doerIf you want it done right,
do it yourselfHappiest when workingKnows you can’t do two
things at onceLikes to control flow of
workThinking isn’t work….
And is unproductive
The Entrepreneur (Leader-Visionary)
Turns trivial conditions into opportunities
The Dreamer and Catalyst for ChangeNeeds controlLives in the world of “what if” and
“if when”Creates Havoc because of need
for changePeople are problems that get in the
way of his dream
The Manager
PragmaticCraves orderClings to status quoSees problems not
opportunitiesCreates neat rows of
widgets that entrepreneur creates
Cleans up Entrepreneur’s Mess
Stages of Business
InfancyAdolescentMatureWe’ll Talk about each Stage
A Real Business APL Landscape
Business we are going to Talk about is Wayne.
Landscape Solutions
Staff ProfileWayne Anderson has been owner/manager of APL for 24 years. He is active in the sales and design process. Wayne has been involved in the green industry for 27 years starting out in lawn service and eventually focusing solely on landscape installations. Wayne was an active foreman until 2003. He earned his degree in business management at Ridgewater College and continues his involvement with the college by giving lectures to students. He is dedicated to continually growing APL, with emphasis on quality and innovative installations.
Introduce Wayne
Real PersonLandscaping Business – 17
yearsNot making much moneyTwo Years behind with Tax
ReturnsNo Records – Just a Shoe
BoxWore out from the GrindReady to Quit
Infancy stage of Business
Technician Stage of BusinessWork long hours every dayWork comes and is too much.Work each day on who screams loudest.Always behindNot enough time to bill - Vendors calling
for payHousehold has no money
Adolescence Stage
Stage where business has to get help
They hire people but do not have direction
Wayne had 8-10 workers
Missing the Manager Hat
Working Harder and making less money
Three Choices in Adolescence
Get smaller - one employee and eventually close doors
Add more employees and go busted
Continue as IS and maybe Survive but get BURNED OUT
WAYNE SURVIVED FOR 17 YEARS AND WAS READY TO QUIT
The Comfort Zone
Most businesses get outside their comfort zone
Business or Job??The “Business” no longer shinesMost businesses focus on the product
or Service not how the company does business
Osborne – Computerland – Circuit City
Going for Broke-Turn over ManagementDemand for Services is larger
than can be handledHiring someone to handle the
businessHiring an Employee to run the
business – be the owner so the owner can be a technician
Won’t work!!!
Company is growing or Shrinking
Either you do the job of the owner or???
Cannot abdicate your role in a true company
Business or Job???
Maturity Stage
Companies who know how it got where it is and know where it is going.
E Myth Entrepreneurial ModelHow did we get
Wayne to Maturity Stage??? Look at the business
itself as a product competing with other businesses.
NOT looking at what’s done in the business but HOW it is done.
We need to find a business model that satisfies all three of our personality needs.
Entrepreneurial Perspective
How must the business work?What work must be done?System for producing results for
customer and profit for ownerLooks at the future(Technician
looks at the present)
Entrepreneur vs Technician vs Manager Point of Views
Future vs PresentWhere we will be not where we areEntrepreneur visions and the
Technician only knows what he can touch and see
Mature Model has parts of Entrepreneur – Technician - Manager
Use the Turn Key Franchise Idea
The Franchise Phenomena
McDonalds - The most successful small Business in the world.
Franchises
Trade Name Franchises Coca Cola - Cadillac
Business Format Franchise An entire system of doing
business TRUE PRODUCT OF THE
BUSINESS IS THE BUSINESS ITSELF..
THE HAMBURGER WASN’T THE PRODUCT - THE BUSINESS WAS..
Business Format Franchises
95% Success Rate in 1st Year
75% Success Rate for Business Format Franchises in 5 Year Period
McDonalds: cleanliness - satisfy the customers every time
Learned at Hamburger U
Business Format Franchise
“Proprietary Way of Doing Business that differentiates every Extra-ordinary business from one of its competitors.”
•How do we build businesses to make that idea work for us?
•How do we make businesses that work predictably and profitably every day?
•How do we get business owners in control of their business rather than the businesses controlling the owner/manager???
MAJOR QUESTIONS ARE:
We Created a Turn key Business for Wayne
Created goalsCreated Organization Structure Hired a bookkeeperCreated scheduleDid last two years taxesCreated paperwork to track jobsCreated paperwork to track work on
jobs
Your Business in Not Your Life!!!
A Business Owner must understand that the primary purpose of a business is that it serve him/her not that he/she serves the business.
Work on the Business Not in the Business..
End Class 2
Next Meeting October 6 at 8 am
Reach Chap 7-9 in Emyth Revisited A. Create an Organizational Chart?? B. Who is/are your manager/s? C. Who are your technicians??
What do you do in the company??