The E-Myth Revisited

My favorite commercial right now is the Verizon small business spot with the little girl who starts her own lemonade stand and grows it into an empire.  The tag line: The Small Business with the Best Technology Rules.  I have to wonder if that little girl might have read 'The E-myth'.

See YouTube Video:   http://www.youtube.com/watch?v=MUcpCB7Wls8

Staggering Failure Rate

My brother in law, a successful small business owner, recommended that I read the book 'The E-Myth'.  In our conversation my first "a ha" moment came when he told me about the staggering statistics for the failure rate of small businesses: 40% fail in 1 year. Of those who survive 1year, 80% fail in 5 years, and of those who survive 5 years, another 80% fail.  Now compare those dismal stats to those of franchises where at 5 years 75% are a success, and you begin to appreciate one of the main principles of 'The E-Myth' - discovering how to turn your business into a system.

Turning Your Business into a System

The author argues that one of the best ways to turn your small business into a system, is to create operating manuals that describe each function of the business.  I did not choose to take it that far with my own business, but it gave me a whole new perspective on breaking down each part of my business and developing it into the most efficient and streamlined system possible.  I began to look at every task or job within my business and started asking the questions: is there a better way to do this?  how can I make this easier?  what can I do to simplify this process? 

Technicians, Entrepreneurs and Managers

Another key point discussed by the author was that most small businesses are started by 'Technicians' or people who are skilled at one job, i.e. a pie maker and decide to branch out on there own.  While these 'Technicians' are great at the specific skill and job that had them start the new business in the first place, they tend to forget to put on those entrepreneurial and management hats that help to steer the business in the right direction and keep the finances and operations on track.  Another important point by the author is that as the business matures, the owner will need to start stepping back from the 'Technician' and management roles and focus more on delegating.

In striving to make the most of your business and finding that perfect balance between work and your personal life, I encourage you to read 'The E-myth Revisited'.  Your small business will never be the same.