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Monday, August 9, 2010

Business classics: 'The E Myth'

Business bible

'The E Myth' by Michael E. Gerber is a life-changing classic. It gets brandished as a business bible at the front of just about every business class I have ever attended.

For those unfamiliar with the book, the main contention is that small business owners spend far too much time working IN their business rather than ON it. Most people start their own business because they are craftsmen who love their craft and think they are doing it better than others. However, they are NOT entrepreneurs.

So, what they are essentially doing is buying themselves a job and falling into the following cycle:

- Baker loves to bake
- Baker bakes far better that their fat boss, goddamit! That guy spends more time stuffing pies inside his mouth than stuffing the shelves...sheesh
- Baker can totally do better
- Baker can TOTALLY go alone...
- So baker does

- Now, baker has to get up at 2am instead of 3am so they go and set up shop
- Baker has no holidays or days off. They spend all their time working in their business
- Staff are unreliable and noone can ever cover for them. They do not trust their managers. They are totally tied to the job.
- Now, on top of baking pies, they also have to strap up legal contracts, accounting sheets and pay the rent
- Family time and, god forbid, dating are all out of the window as this means spending time away from the oven which is, by definition, NOT ALLOWED in any circumstances
- Baker is sick and exhausted, and spends their nights sleeping in a pile of their own mince pies

- Baker develops a smoking addiction and stress-related hairloss
- Baker is so time-poor they cannot remember the last time they saw their own feet
- Baker is losing money as they cannot sustain productivity as productivity means them working harder. They are already at their maximum capacity.
- Baker hates it, moans about it, complaints, curses, eats too many cookies and HATES IT HATES IT HATES IT
- Baker closes up shop and vows to spend every evening of their life from then on eating Ajisen Ramen takeaway.

The moral of the story is that every business ought to be set up like a franchise models with a turnkey operation. This means that systems and procedures should be set up so that anyone could operate them and the business starts with that precise intention that the owner sells it. That way, the owner keeps distance between themselves and their operations and builds the business as a sell-able, autonomous machine. Anyone could walk into the business at any time and simply 'turn the key'.

Technician turn boss?!

There is a common assumption amongst small business owners that having a business is a 'lifestyle' more than professional choice. They see themselves setting the whole thing up in a month, doing it better and brighter than anyone else (thanks to those long years of industry experience). There is nothing about the job they don't know, so stepping up to owning your own business seems as simple as taking on the title 'boss'.

If only it was that easy...

The reality is that most people are simply 'technicians' who are not versed in the legal, financial and entrepreneurial facets of owning a trading operation. They assume that being manager mainly revolves around telling their employees who do all the work the whats and hows of the job. WRONG!

Turn key book

This book is really illuminating and famously life-changing. It reveals some really earthy truths about running your own business and the realities of being your own boss. About the challenges of being self-motivated, with noone to chastise you for slacking. About the downs of having no one to celebrate your success with but yourself. About the loneliness of being the only one responsible for oversights and mistakes, And the sheer darn frustration of improving your business one way possible: by even more hard, hard work and grind.

So why run your own business?!

Answer: read the rest of the blog :-D
- Victoria A.

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