Michael Gerber's Business Development Process Foundation #3: Orchestration

Orchestration, in Gerber's words on p. 124, is

The elimination of discretion, or choice, at the operating level of your business.

This doesn't mean you don't give your employees any choice in what they do. It's just that you've tried out stuff. You've found what works. You've written it down in an operations manual, and everybody does the same thing the same way all the time.

If a composer has an idea for a symphony, he first devises the structure of it, writes out the melody, harmony, and rhythm. When he wants to have a symphony orchestra play it, he orchestrates it. This means he takes his idea, his vision for the orchestra, and writes it out so that every member of the orchestra plays the same thing the same way at the same time. Imagine if you had 30 violins in the 1st violin section all playing the same music differently. It wouldn't be music it would be cacophony.

If one of your employees sees a problem or thinks they have a better way, just as one of the players had a suggestion, the composer might change the music to reflect the suggestion, but all the players would then play it the same way.

Same way in business: if an employee has a good idea, you test it out, quantify it's impact on your business, and if it is indeed better, you change what you're doing and do it the new, better way.

And, in Gerber's words from p. 125,

If you haven't orchestrated it, you don't own it!

And if you don't own it, you can't depend upon it.

And if you can't depend on it, you haven't got a franchise.

And without a franchise no business can hope to succeed.

If, by a franchise, you understand that I'm talking about proprietary way of doing business that differentiates your business from everyone else's.

In short, the definition of a franchise is simply your unique way of doing business.

What do you think of this? The goal is to produce more skilled entrepreneurs. Does this help? Tell me. Post a comment. I'd like to know. And follow me on Twitter.com

Entrepreneurship informs all of my professional activities. Entrepreneurial ideas are their life's blood. For my ideas on entrepreneurial real estate go to www.yourstopforrealestate.com/blog and for my ideas on writing and publishing, go to www.kearneymusicschoolmurders.blogspot.com.

Michael Gerber's Business Development Process Foundation #2: Quantification

Quantification is the process of measurement by numbers. You quantify sales by representing it by a number. $3.5 million. If it goes up to $3.6 million over the year, you've had a $100,000 increase. You've quantified your sales increase.
Gerber, p. 122-4, says:

On its own, Innovation leads nowhere. To be at all effective, all Innovations need to be quantified. Without Quantification, how would you know whether the innovation worked?

By Quantification, I'm talking about the numbers related to the impact an Innovation makes...

Begin by quantifying everything related to how you do business.

I mean everything...

You'll become as familiar with your business's numbers as your doctor is with your blood pressure and pulse rates.

Because without the numbers you can't possibly know where you are, let alone where you're going. With the numbers, your business will take on a totally new meaning.

This is absolutely true. You have to measure everything. Look at everything you're doing. What's flowing from it? Do you see results?

Do experiments. Write down what you're going to do, the assumptions behind it, how it's going to be done. Then establish an evaluation period. I.e., "I'm going to do X for 18 months, then evaluate it. And do it, and keep records so you know whether it has worked or not.

And don't be afraid to try things. Don't be stupid, of course. I hired a woman once who was out of work because her employer had taken all his cash and gone to Atlantic City and gambled it all away and had to close the business. But do what seems sensible to you.

At the end of the 18 months, you may decide it's showing promise and keep doing it. You may decide that you don't have enough data yet and you want to let it go another year, then look at it again. Or you may determine it's a waste of time.

Of course if it's showing right away that what you've tried is a train wreck happening in slow motion, don't be afraid to stop right away.

So you're going to introduce a change, establish measurable objectives, then keep records and then quantify, at the end of the period, what it's accomplished.

What do you think of this? The goal is to produce more skilled entrepreneurs. Does this help? Tell me. Post a comment. I'd like to know. And follow me on Twitter.com

Entrepreneurship informs all of my professional activities. Entrepreneurial ideas are their life's blood. For my ideas on entrepreneurial real estate go to www.yourstopforrealestate.com/blog and for my ideas on writing and publishing, go to www.kearneymusicschoolmurders.blogspot.com.

Michael Gerber's Business Development Process Foundation #1: Innovation

On pp. 117-118 of The E-Myth Revisited (New York: Harper Collins, 1995), Gerber quotes Theodore Levitt, Marketing for Business Growth (New York: McGraw-Hill, 1974), p. 71:

The difference between creativity and innovation is the difference between thinking about getting things done in the world and getting things done.

He goes on to say, also on p. 118, "Where the business is the product, how the business interacts with the consumer is more important than what it sells."

This is important to say because we've all been disappointed by businesses. Do we remember the product that was sold? No, just the behavior of the business.

For Gerber the innovation is always doing what you're doing better. I reviewed a business plan for a couple of students designing a fast food business that would sell only fried food. They had a line item in their financials for "R&D" which amounted to finding out what batters were the most distinctive. This would be their marketing edge.

Sounded reasonable.

They had money in the item for the 1st year, but nothing in there for years 2 or 3. I asked them why. They said they had already found out how to make the batter. But, I said, aren't you going to continue to improve them or try out new ones? The stared at me for a minute, but when they revised their plan, I saw they had put in money for that. That's what Gerber calls innovation. Always improving how the business performs.

What do you think of this? The goal is to produce more skilled entrepreneurs. Does this help? Tell me. Post a comment. I'd like to know. And follow me on Twitter.com

Entrepreneurship informs all of my professional activities. Entrepreneurial ideas are their life's blood. For my ideas on entrepreneurial real estate go to www.yourstopforrealestate.com/blog and for my ideas on writing and publishing, go to www.kearneymusicschoolmurders.blogspot.com.

Michael Gerber's Business Development Model: Innovation, Orchestration, Quantification

Somebody once said, "Vision without execution is illusion." What that implies is, "Vision with execution equals $$$.

This is the gist of the last part of Gerber's The E-Myth Revisited, which he calls "The Business Development Model." I'm going to say a few things about it, then move on.

Gerber says, on p. 117

Building the prototype of your business is a continuous process, a Business Development Process. Its foundation is three distinct yet thoroughly integrated activities through which your business can pursue its natural evolution. They are Innovation, Quantification, and Orchestration."

It's about continuous improvement, about always figuring out how you can be better.

What do you think of this? The goal is to produce more skilled entrepreneurs. Does this help? Tell me. Post a comment. I'd like to know. And follow me on Twitter.com

Entrepreneurship informs all of my professional activities. Entrepreneurial ideas are their life's blood. For my ideas on entrepreneurial real estate go to www.yourstopforrealestate.com/blog and for my ideas on writing and publishing, go to www.kearneymusicschoolmurders.blogspot.com.

Michael Gerber's Franchise Prototype Rule to Win #6: Uniform Color, etc.

Michael Gerber's 6th and final rule, from p. 107, is:

6. The Model Will Utilize a Uniform Color, Dress, and Facilities Code.

It's all about communicating credibility, consistency, predictability, and value. As Gerber says, colors are important to people. Red signifies aggression. Blue is a confident color. Gray and Brown are neutral. And if you have clashing colors everywhere, what are your employees or customers to think.

And even if your business is web-based, you still have to have colors and shapes on your website and your collateral materials. And you're going to have some kind off office. How that's laid out and what it looks like will be a key element.

So, you cannot escape this.

Sorry.

And we're so much more a visual society than we were when Gerber originally wrote this.

What do you think of this? The goal is to produce more skilled entrepreneurs. Does this help? Tell me. Post a comment. I'd like to know.

Entrepreneurship informs all of my professional activities. Entrepreneurial ideas are their life's blood. For my ideas on entrepreneurial real estate go to www.yourstopforrealestate.com/blog and for my ideas on writing and publishing, go to www.kearneymusicschoolmurders.blogspot.com.

Michael Gerber's Franchise Prototype Rule to Win #5: Uniformly Predictable Service

Gerber's fifth rule, from p. 105:

The Model Will provide a Uniformly Predictable Service to the Customer.

Your customer has to know that your business will be the same tomorrow as it is today.

Otherwise he or she won't come back and they won't tell their friends about you, or they'll say you're out to lunch. And if you have a franchise, customers have to know that your product will be the same in Seattle as is in Saskatoon.

One of the things that draw customers to places like Howard Johnson's, or MacDonald's, Wal-Mart, or Starbucks, regardless of whatever you think of those places, is that people know what they're going to get. I know that Starbucks is always going to make a grande Americano the same way wherever I go.

If I go to a different caffeine den I don't know what the coffee's going to be like, what sizes they have, or how it will be made and I always have to ask them how they make it. I have enough on my mind without having to worry about how they're going to make my coffee. And the layout's pretty much the same. You know where you go to order, to pick up, and where to get the sweetener and cream. Other places, you have to search around unless you know it already.

What do you think of this? The goal is to produce more skilled entrepreneurs. Does this help? Tell me. Post a comment. I'd like to know.

Entrepreneurship informs all of my professional activities. Entrepreneurial ideas are their life's blood. For my ideas on entrepreneurial real estate go to www.yourstopforrealestate.com/blog and for my ideas on writing and publishing, go to www.kearneymusicschoolmurders.blogspot.com.

What is an Entrepreneur?

Someone asked me if I'm an entrepreneur. I was hardpressed to answer. What is an entrepreneur? I mean I have a nifty answer, as I've said here, but what is that really? And how do you differential real entrepreneurs from others that start businesses. And if an entrepreneur is someone who undertakes an enterprise in an atmosphere of uncertainty and risk, what about others who do things which have risk. Are they entrepreneurs, too?

Well, folks, I don't really care. The question is only interesting as a conversation starter. What's important is what you have in side you. If you want to go to work and only do what you're told or 9 hours a day, you're definitely NOT an entrepreneur. But if you strike out on your own, want to toil in your own garden rather than somebody else's, and if you don't toil in your own garden, you are toiling in somebody else's, you are an entrepreneur. Or you may not be. But it's what you want to do and what's driving you is what's important.

What do you think of this? The goal is to produce more skilled entrepreneurs. Does this help? Tell me. Post a comment. I'd like to know.

Entrepreneurship informs all of my professional activities. Entrepreneurial ideas are their life's blood. For my ideas on entrepreneurial real estate go to www.yourstopforrealestate.com/blog and for my ideas on writing and publishing, go to www.kearneymusicschoolmurders.blogspot.com.

Michael Gerber's Franchise Prototype Rule to Win #4: All Work in Operations Manuals

The fourth of Gerber's rules, from p. 104:

All Work in the Model Will Be Documented in Operations Manuals.

In Gerber's view, the operations manuals communicate the structure of your business. They tell people what's expected. What to do, what to expect, how to behave.

Gerber again invokes Alvin Toffler from The Third Wave, (New York: William Morrow and Company, Inc., 1980) p. 389:

For many people, a job is critical psychologically, over and above the paycheck. By making clear demands on their time and energy, it provides an element of structure around which the rest of their lives can be organized.

You're designing a world for employees to live in. The operations manual tells them how to move around in it. After all, employees crave order in a disorderly world as customers. Give it to them.

What do you think of this? The goal is to produce more skilled entrepreneurs. Does this help? Tell me. Post a comment. I'd like to know.

Entrepreneurship informs all of my professional activities. Entrepreneurial ideas are their life's blood. For my ideas on entrepreneurial real estate go to www.yourstopforrealestate.com/blog and for my ideas on writing and publishing, go to www.kearneymusicschoolmurders.blogspot.com.

Michael Gerber's Franchise Prototype Rule to Win #3: Place of Order

Michael Gerber gives his third rule on p. 102:

3. The model will Stand Out as a Place of Impeccable Order.

It's very simple, really. As he says, "at the core of Rule #3 is the irrepressible fact that in a world of chaos, most people crave order."

If the world was in chaos when he wrote this words, what about now? The pace of change doubles every for or five years. Your business, a world in itself, says to them, "Come on in and take off your shoes."

He quotes Alvin Toffler from The Third Wave, (New York: William Morrow and Company, Inc., 1980) pp. 389,390, that in a world of chaos, people need fixed points of reference. Starbucks provides this. MacDonald's provides this. Toffler says that in a world that is broken down, structure provides these fixed points of reference.

I remember a sales trip to Pittsburgh, PA, back in the 1980s. I couldn't figure my way around. The streets weren't marked. There was a gridlock of traffic. I couldn't orient myself. I knew where I wanted to go, but I couldn't get there from where I was. I was getting irritated and frustrated. Until I saw a McDonald's. I went in, got a soda, and chilled out. It provided what Toffler calls this fixed point of reference.

It's also about communicating credibility to customers in an unspoken way that's far more powerful than if you shouted it from the rooftops. It speaks credibility such that your customers come to their own conclusion, not hear something you said.

He goes on to say this in words better than mine on p. 103:

A business that looks orderly says to your customer that your people know what you're doing.

A business that looks orderly says that while the world may not work, some things can.

A business that looks orderly says to your customer that he can trust in the result delivered and assures your people that they can trust in their future with you.

A business that looks orderly says that the structure is in place.

What do you think of this? The goal is to produce more skilled entrepreneurs. Does this help? Tell me. Post a comment. I'd like to know.

Entrepreneurship informs all of my professional activities. Entrepreneurial ideas are their life's blood. For my ideas on entrepreneurial real estate go to www.yourstopforrealestate.com/blog and for my ideas on writing and publishing, go to www.kearneymusicschoolmurders.blogspot.com.

Michael Gerber: Management by Abdication

In the world of Michael Gerber [see pp. 101-2], the result of the business owner's failure to design the process of his or her business so that ordinary people can do extraordinary things, is what Gerber calls:

Management by Abdication: The typical owner of a small business prefers highly skilled people because he believes that they make his job easier--he can simply leave the work to them.

The business then depends on the whim of the people:

It is literally impossible to produce a consistent result in a business that depends on extraordinary people. No business can do it for long. And no extraordinary business tries to!

Gerber's solution, use his business development process as the solution. The last part of his book lays this out in excellent detail. I'm not going to do that part, I'll leave it to you to do it for yourself.

What do you think of this? The goal is to produce more skilled entrepreneurs. Does this help? Tell me. Post a comment. I'd like to know.

Entrepreneurship informs all of my professional activities. Entrepreneurial ideas are their life's blood. For my ideas on entrepreneurial real estate go to www.yourstopforrealestate.com/blog and for my ideas on writing and publishing, go to www.kearneymusicschoolmurders.blogspot.com

The Rule of Ordinary People

According to Michael Gerber, p. 101:

What I call the Rule of Ordinary People...says the blessing of ordinary people is that they make your job more difficult. This means that to get the results you want, you have trouble using ordinary people unless you do something extraordinary.

Ordinary people pave the route to the success of your business if you but only realize how that is true. It's the entrepreneur's job to develop the tools for them to use and for them "to recommend improvements based on their experience with them."

The system you devise becomes your way of allowing ordinary people to do extraordinary things, "to get the job done in the way it needs to get done, in order for your business to successfully differentiate yourselves from your competition."

What do you think of this? I'd like to know. Post comment

Entrepreneurship informs all of my professional activities. Entrepreneurial ideas are their life's blood. For my ideas on entrepreneurial real estate go to www.yourstopforrealestate.com/blog and for my ideas on writing and publishing, go to www.kearneymusicschoolmurders.blogspot.com

Michael Gerber's Franchise Prototype Rule to Win #2: People

Gerber, p. 100, says:

2. The model will be operated by people with the lowest possible level of skill.

At first reading, he seems to be saying hire only unskilled labor, an egregious assertion in an era when so many people are up in arms against undocumented aliens, illegal immigrants, whatever you want to call them.

But Gerber's not saying this. The key word in that sentence is "possible." You wouldn't want a heart transplant surgeon working at MacDonald's. "It's been said, and I believe it to be true, that great businesses are not built by extraordinary people but by ordinary people doing extraordinary things." (See p. 100)

But for this to happen, Gerber says,

A system--'a way of doing things'--is absolutely essential in order to compensate for the disparity between the skills your people have and the skills your business needs if it is produce consistent results. (p. 101)

Just think how much money this country spends for "job training." The assumption behind this expenditure is that people's skills aren't up to the challenges businesses require of them.

Then think how much money would be saved and how much better business would be if those who designed their businesses designed them in such away that the people we have could do them and produce what Gerber calls "exquisite results." I'm not saying job training isn't important. Having people trained to do what is needed is important. There are certainly a lot of people who aren't well trained. But, we would be better off if we paid heed to what Gerber is saying.

I will resist the impulse to quote more Gerber with the caveat that you will go to the book and read it.

What do you think of this? I'd like to know. Post comment

Entrepreneurship informs all of my professional activities. Entrepreneurial ideas are their life's blood. For my ideas on entrepreneurial real estate go to www.yourstopforrealestate.com/blog and for my ideas on writing and publishing, go to www.kearneymusicschoolmurders.blogspot.com

Michael Gerber's Franchise Prototype Model Rule to Win #1: Add Consistent Value

Gerber, p. 99, says:

1. The model will provide consistent value to your customers, employees, suppliers, and lenders, beyond what the expect.

I see at least two implications of this. First, with regard to customers, it's not clear what a customer is anymore. In the bad old days, you developed a product, pushed it out there, and people bought it (or not). Marketing was price, product, promotion, and the other "P" I can't remember right now.

Your business is really part of an extended enterprise which includes those other people and organizations Gerber includes in his list above. And one way you add value to your product is to include all these customers in the design of your product. Working together you develop "applications" which have added value and you can then charge for.

These days, people are only interested in paying for value. So you have to add value to your product if you're going to get people to pay for it. The process of getting paid for added value we call "monetizing," as in "Sounds like a great idea, but how are you going to monetize it?" This is particularly a problem with new, web-based businesses. You see all these businesses going under? I suspect a lot of them don't have a clue about this.

Second, you have to pay attention to the other people in your extended enterprise. Businesses aren't hierarchical, command-and-control type organizations. Well, many still are and many are in trouble. They're flatter, more interconnected, with more surface area. You have to add value for all of those folks if you're business is going to be all that it can be.

When Gerber wrote this, he didn't have on his radar screen all the social media and Internet tools we have today. But his words still ring as true as ever. That's because business hasn't really changed at all. Adding value to relationships is there today just as it was when LL Bean founded his company almost 100 years ago.

What do you think of this? I'd like to know. Post comment

Entrepreneurship informs all of my professional activities. Entrepreneurial ideas are their life's blood. For my ideas on entrepreneurial real estate go to www.yourstopforrealestate.com/blog and for my ideas on writing and publishing, go to www.kearneymusicschoolmurders.blogspot.com

Michael Gerber's Franchise Prototype Model

Michael Gerber discusses this model on pp. 98-113. Here's this from pp. 98-9. You should pay attention to it.

Pretend that the business you own--or want to own--is the prototype, or will be the prototype, for 5,000 more just like it.

That your business is going to serve as the model for 5,000 just like it.

Not almost like it, but just like it. Perfect replicates. Clones.

In other words, pretend that you are going to franchise your business. (Note: I said pretend. I'm not saying that you should. That isn't the point here--unless, of course, you want it to be.)

Further, not that you know what the game is--the franchise game--understand that there are rules to flow if you are to win.

1. The model will provide consistent value to your customers, employees, suppliers, and lenders, beyond what they expect.
2. The model will be operated by people with the lowest possible level of skill.
3. The model will stand out as a place of impeccable order.
4. All the work in the model will be documented in the Operations Manuals.
5. The model will provide a uniformly predicable service to the customer.
6. The model will utilize a uniform color, dress, and facilities code.

In future posts, I'm going to discuss each of these points a little bit. Each deserves a lot of attention because his words are golden. Pay attention to them.

What do you think of this? I'd like to know. Post comment

Entrepreneurship informs all of my professional activities. Entrepreneurial ideas are their life's blood. For my ideas on entrepreneurial real estate go to www.yourstopforrealestate.com/blog and for my ideas on writing and publishing, go to www.kearneymusicschoolmurders.blogspot.com

Working On Your Business Not In It

Michael Gerber says, on pp. 97-8:

At its best, your business is something apart from you, rather than a part of you, with its own roles and its own purposes. An organism, you might say, that will live or die according to how well it performs its sole function: to find and keep customers.

Once you recognize that the purpose of your life is not to serve your business, but that the primary purpose of your business is to serve your life, you can then go and work on your business not in it, with a full understanding of why it is absolutely necessary to do so.

This is where you can put the model of the Franchise Prototype to work for you.

Where working on your business rather than in your business will become the central theme of your daily activity, the prime catalyst for everything you do from this moment forward.

Remember this point if you remember nothing else. Remember that it isn't easy to do. You have so few role models to help you. Write those words down and put them by your desk where you can see them all the time.

What do you think? I'd like to know. Share your experiences. Post to this blog.

Entrepreneurship informs all of my professional activities. Entrepreneurial ideas are their life's blood. For my ideas on entrepreneurial real estate go to www.yourstopforrealestate.com/blog and for my ideas on writing and publishing, go to www.kearneymusicschoolmurders.blogspot.com

Michael Gerber on How Your Business is Not Your Life

Michael Gerber says, on pp. 97-8:

It is critical that you understand the point I'm about to make. For if you do, neither your business nor your life will ever be the same.The point is: your business is not your life.Your business and your life are two totally separate things.

Remember this point if you don't remember anything else. I think I've commented on this before. The thing to ask yourself is, "Would I work for me if I weren't me?"

What do you think? I'd like to know. Share your experiences. Post to this blog.

Entrepreneurship informs all of my professional activities. Entrepreneurial ideas are their life's blood. For my ideas on entrepreneurial real estate go to www.yourstopforrealestate.com/blog and for my ideas on writing and publishing, go to www.kearneymusicschoolmurders.blogspot.com

Business Format Franchise, the Prototype, and the Turn-Key Business

To Michael Gerber, in The E-Myth Revisited; Why Small Businesses Don't Work and What to Do About It. New York: Harper Business, 1995,p. 90, quotes some figures about business success of franchised businesses non-franchised businesses to show the rampant success of the former. "The reason for that success is the Franchise Prototype," he says.

He goes on on p. 92:

To the franchisor, the Prototype becomes the working model of the dream; it is the dream in microcosm. The Prototype becomes the incubator and the nursery for all creative thought, the station where creativity is nurse by pragmatism to grow into an innovation that works.

The Franchise Prototype is also the place were all assumptions are put to the test to see how well they work before becoming operational in the business.

Without it the franchise would be an impossible dream, as chaotic and undisciplined as any business.

The Prototype acts as a buffer between the hypothesis and action. Putting ideas to the test in the real world rather than the world of competing ideas. The only criterion of value becomes the answer to the ultimate question: 'Does it work?'

Once having completed his Prototype, the franchisor then turns to the francisee and says, 'Let me show you how it works.'

And work it does. The system runs the business. The people run the system.

What do you think? I'd like to know. Share your experiences. Post to this blog.

Entrepreneurship informs all of my professional activities. Entrepreneurial ideas are their life's blood. For my ideas on entrepreneurial real estate go to www.yourstopforrealestate.com/blog and for my ideas on writing and publishing, go to www.kearneymusicschoolmurders.blogspot.com

The Turn-Key Revolution

Michael Gerber, in The E-Myth Revisited; Why Small Businesses Don't Work and What to Do About It. New York: Harper Business, 1995, on pp. 79-80,points to the "turn-key revolution" as a "way of doing business that has the power to dramatically transform any small business--indeed, any business, no matter what it's size--from a condition of chaos and disease to a condition of order, excitement, and continual growth."

Gerber writes about Ray Kroc, who expanded McDonald's from one hamburger joint to an economic power house by not caring about selling hamburgers. He cared about selling businesses.

He touts what he calls the "Business Format Franchise," which goes beyond mere franchising. In franchising, "the franchisor licenses the right to small companies to market its nationally known products nationally. But the Business Format Franchise moves a step beyond the trade name franchise. The key he says, is this "provides the franchisee with an entire system of doing business." And in that difference lies the true significance of the Turn-Key Revolution and its phenomenal success. The Turn-Key Revolution and the Business Format Franchise were born of a belief that runs counter to what most business founders in this country believe. Most business founders believe that the success of a business resides in the success of the product that it sells...[Rather,] the true product of a business is the business itself. (See p. 83)"

If you want to read more about this, get the book and read pp. 83-90.

What do you think? I'd like to know. Share your experiences. Post to this blog.

Entrepreneurship informs all of my professional activities. Entrepreneurial ideas are their life's blood. For my ideas on entrepreneurial real estate go to www.yourstopforrealestate.com/blog and for my ideas on writing and publishing, go to www.kearneymusicschoolmurders.blogspot.com

The Entrepreneurial Model

Here's Gerber's definition of the entrepreneurial model, from p. 73:

It's a model of a business that fulfills the perceived needs of a specific segment of customers in an innovative way. The Entrepreneurial Model looks at a business as if it were a product, sitting on a shelf and competing for the customer's attention against a whole shelf of competing products [or businesses].

There you have it: "fulfills the perceived needs of a specific segment of customers in an innovative way."

See Michael Gerber, in The E-Myth Revisited; Why Small Businesses Don't Work and What to Do About It. New York: Harper Business, 1995.

What do you think? I'd like to know. Share your experiences. Post to this blog.

Entrepreneurship informs all of my professional activities. Entrepreneurial ideas are their life's blood. For my ideas on entrepreneurial real estate go to www.yourstopforrealestate.com/blog and for my ideas on writing and publishing, go to www.kearneymusicschoolmurders.blogspot.com

Three Stages of Growth

Gerber argues that most businesses go through three stages: infancy, adolescence, and maturity. See Michael Gerber, in The E-Myth Revisited; Why Small Businesses Don't Work and What to Do About It. New York: Harper Business, 1995, pp. 35-67.

Infancy

During infancy, you are the business. You're doing everything. You're working all the time, having a great time, "doing not only the work you know how to do, but work you don't know how to do. The technician is doing what he wants, not what the business wants. [p. 35].

I went to an entrepreneurship conference yesterday in which three "entrepreneurs" talked about their business. Each of them was in infancy. They didn't want to grow a business, they wanted to own the place they went to work.

Adolescence

Gerber says, "Adolescence begins at the point in the life or your business when the technician decides to get some help." [p. 44] Business has grown and the Technician can't do it all. But the Technician hires someone else like him, but he won't give up what he does, and he gives his new employee everything he doesn't like to do. But business grows and the Technician has all he can handle. Pretty soon the employee quits and the technician's left working for a maniac--himself.

I used to use a print shop here in Philadelphia. It was run by a rather obese women whose employees were standing around while she did everything. I watched for a while, and I saw that every time one of them tried to do something, she came over and did it for him. So, they went back to standing around. I bet if I went in there today, none of them would have been working there.

Maturity

When the Technician is passed out of his comfort zone, he has three options open to him: (1) Get rid of everybody and go back to being an infant; (2) "Going for broke", continuing to grow and grow until he self-destructs; or (3) adopting The Entrepreneurial Perspective.

"A Mature business knows how it got to be where it is, and what it must do to get where it wants to go." [p. 68] Pretty soon the business has grown out of the Technician's comfort Zone, "the boundary within which he feels secure in his ability to control his environment, and outside of which he begins to lose control. [p. 51] The technician's comfort zone is those things he knows how to do.

A friend of mine ran a strategic planning company who worked for hospitals. He did well and his business grew. But it exceeded his comfort zone, and he terminated everybody and went back to doing everything himself. That was probably the best decision for him.

We shouldn't be bamboozled into what we don't want to do. We shouldn't just do things because Michael Gerber says so. We need to filter his advice through our own experience, but where what he says rings true for us, we have to consider it.
Does this sound like you? What do you think? I'd like to know. Share your experiences. Post to this blog.

Entrepreneurship informs all of my professional activities. Entrepreneurial ideas are their life's blood. For my ideas on entrepreneurial real estate go to www.yourstopforrealestate.com/blog and for my ideas on writing and publishing, go to www.kearneymusicschoolmurders.blogspot.com

The Entrepreneur, The Manager, and The Technician

Michael Gerber, in The E-Myth Revisited; Why Small Businesses Don't Work and What to Do About It. New York: Harper Business, 1995, pp. 19-33 shows us how any kind of business requires three rolls: the Entrepreneur, the Manager, and The Technician.

The Entrepreneur:

The Entrepreneur has the vision. "The entrepreneurial personality turns the most trivial condition into an exceptional opportunity. The Entrepreneur is the visionary in us. The dreamer. The energy behind every human activity. The imagination that sparks the fire of the future. The catalyst for change." (pp. 23-4)

The Manager:

The manager implements the vision: "The managerial personality is pragmatic. Without the Manager there would be no planning, no order, no predictability."(p. 25)

The Technician:

The technician gets the things done that have to be done for the vision to be manifest: "The Technician is the doer. 'If you want it done right, do it yourself' is The Technician's credo." (p. 26)

Gerber says: the entrepreneur lives in the future. "The Entrepreneur builds a house and the instant it's done begins planning the next one. (p. 26). The manager lives in the past. He "creates neat, orderly rows of things. The Entrepreneur creates the things that the manager puts in the rows." (p. 26). The technician lives in the present. He "isn't interested in ideas; he's interested in how to get it done." (p. 27)

Gerber's insight here is that it takes all three roles for the business to be workable. And none of us is good at all three.

I was always better at the vision thing. I think, in retrospect I had an opportunity with my research business back in the 1980s when I was given an employee to work on a project with a utility. I didn't let go of the technical work. Maybe for that, I was put out in the desert of all other things. Sounds pretty Biblical, doesn't it? And then, maybe this is a rationalization, which may or may not be right. Still...

Does this sound like you? What do you think? I'd like to know. Share your experiences. Post to this blog.

Entrepreneurship informs all of my professional activities. Entrepreneurial ideas are their life's blood. For my ideas on entrepreneurial real estate go to www.yourstopforrealestate.com/blog and for my ideas on writing and publishing, go to www.kearneymusicschoolmurders.blogspot.com

The Entrepreneurial Seizure Revisited

Michael Gerber, on p. 17 of The E-Myth Revisited; Why Small Businesses Don't Work and What to Do About It. (New York: Harper Business, 1995)expands on what this does to the person who gets "afflicted" by an entrepreneurial seizure:

The technician suffering from an Entrepreneurial Seizure takes the work he loves to do and turns it into a job. The work that was born out of love becomes a chore, among a welter of other less familiar and less pleasant chores. Rather than maintaining its specialness, representing the unique skill the technician possesses and upon which he started the business, the work becomes trivialize, something to get through in order to make room for everything else that must be done.

I interviewed a representative of a small manufacturing firm south of Madison, Wisconsin, in 2003, in conjunction with a consulting firm I was designing. They said none of them was making any money. They had to pay ever higher wages to their employees. To conserve funds they were manning the phones and doing all the office chores. They were working longer and longer hours and not seeing any benefit.

[They were suffering from one of the worst things about business, devoting their lives to support the business rather than running a business that supported their lives.]

I was asking them about what price to charge, and they said the problem wasn't money it was time. It was just two difficult for any of them to take time away from what they absolutely had to do.

Does this sound like you? What do you think? I'd like to know. Share your experiences. Post to this blog.

Entrepreneurship informs all of my professional activities. Entrepreneurial ideas are their life's blood. For my ideas on entrepreneurial real estate go to www.yourstopforrealestate.com/blog and for my ideas on writing and publishing, go to www.kearneymusicschoolmurders.blogspot.com

The Fatal Assumption

Michael Gerber gives the fatal assumption as:

if you understand the technical work of a business, you can understand a business that does that technical work. [The E-Myth Revisited; Why Small Businesses Don't Work and What to Do About It. New York: Harper Business, 1995, p. 13.]

Gerber goes on to say,

And the reason it's fatal is that is just isn't true

In fact, it's the root cause of most small business failures!

The technical work of a business and a business that does that technical work are two totally different things!

But the technician who starts a business fails to see this.

This is key insight of Gerber's: Don't presume because you are great at putting on roofs that you'll be great running a company that installs roofs.

When I started my own business, I first just wanted to do what I knew I could do well and get paid for it. I succeeded at that. Then, later when I decided I wanted to run a business, I knew I didn't know what I was doing. So I learned my way out of it by reading books like this. And I think the next one I start will be a better one.

What do you think? I'd like to know. Share your experiences. Post to this blog.

Entrepreneurship informs all of my professional activities. Entrepreneurial ideas are their life's blood. For my ideas on entrepreneurial real estate go to www.yourstopforrealestate.com/blog and for my ideas on writing and publishing, go to www.kearneymusicschoolmurders.blogspot.com

The Entrepreneurial Seizure

Michael Gerber forcefully argues that the vast majority of businesses are not started by entrepreneurs, they're started by technicians who were stricken by an "entrepreneurial seizure." (The E-Myth Revisited; Why Small Businesses Don't Work and What to Do About It. New York: Harper Business, 1995, pp. 11-12.) Further on p. 12, he goes on to say, "Inside your mind it sounded something like this:

'What am I doing this for? Why am I working for this guy? Hell, I know as much about the business as he does. If it weren't for me, he wouldn't have a business. Any dummy can run a business. I'm working for one.' And the moment you paid attention to what you were saying and really took it to heart, your fate was sealed.

The thought of independence followed you everywhere.

The idea of being your own boss, doing your own thing, singing your own song, became obsessively irresistible.

Once you were stricken with an Entrepreneurial Seizure, there was no relief.

You couldn't get rid of it.

You had to start your own business.

This is right on. I have to go back to my programmer guy who had been working for somebody for 7 years with no raise. Then the boss hired somebody else at a higher salary. The guy said exactly what Gerber said he said, and went out on his own.

My first business I started not because I hated my boss. I didn't hate her, but I didn't like working for somebody who was a monster one day and your best pal the next. Still, I thought it was the best option for me.

Did you do the same? Were you ever tempted to tell your boss to shove it and go it alone? I'd like to know. Share your experiences.

Entrepreneurship informs all of my professional activities. Entrepreneurial ideas are their life's blood. For my ideas on entrepreneurial real estate go to www.yourstopforrealestate.com/blog and for my ideas on writing and publishing, go to www.kearneymusicschoolmurders.blogspot.com

Michael Gerber's "Profound Idea #4"

On page 4, Michael Gerber offers his fourth profound idea:

"The Business Development Process can be systematically applied by any small business owner in a step-by-step method that incorporates the lessons of the turn-Key Revolution in the the operation of the business. This process ten becomes a predictable way to produce results and vitality in any small business whose owner is willinng to give it the time and attention it requires to flourish. [See Michael Gerber, The E-Myth Revisited; Why Small Businesses Don't Work and What to Do About It. New York: Harper Business, 1995]

I am convinced that is this correct, and I wholeheartedly endorse it. But let's see what else he says that we can learn from.

Are you interested in this? I'd like to know. Post a comment.

Entrepreneurship informs all of my professional activities. Entrepreneurial ideas are their life's blood. For my ideas on entrepreneurial real estate go to www.yourstopforrealestate.com/blog and for my ideas on writing and publishing, go to www.kearneymusicschoolmurders.blogspot.com

Michael Gerber's "Profound Idea #3"

Michael Gerber unleashes his third idea on p. 3:

At the heart of the Turn-Key Revolution is a dynamic process we at the E-Myth Worldwide call the Business Development Process. When it is systematized and applied purposely by a small business owner, the business Development Process had the power to transform any small business into an incredibly effective organization. Our experience has shown us that when a small business incorporates this process into its every activity and uses it to control its destiny, that company stays young and thrives. When a small business ignores the the is process--as most unfortunately do--it commits itself to Management by Luck, stagnation, and, ultimately failure. The consequences are inevitable. [See Michael Gerber, The E-Myth Revisited; Why Small Businesses Don't Work and What to Do About It. New York: Harper Business, 1995]

I am convinced that is this correct, and I wholeheartedly endorse it. But everyone should appreciate what he says about turn-key business.

Are you interested in this? I'd like to know. Post a comment.

Entrepreneurship informs all of my professional activities. Entrepreneurial ideas are their life's blood. For my ideas on entrepreneurial real estate go to www.yourstopforrealestate.com/blog and for my ideas on writing and publishing, go to www.kearneymusicschoolmurders.blogspot.com

Michael Gerber's "Profound Idea #2

Michael Gerber's book is for me the bible on starting businesses. On p. 3 he offers the second of what he calls four profound ideas:

There's a revolution going on today in American small business. I all it the Turn-key Revolution. Not only is it changing the way we do business in this country and throughout the world but it is changing who goes into business, how they do it, and the likelihood of their survival.

I'm not sure whether this is true anymore or not. It certainly should be. The people I see coming into business today have never heard of Gerber's work, and the notion of turn-key businesses is foreign to them. I recommend the book to everyone, but I'm not there when they buy it, if they do. I certainly spread the word though whenever possible.

But everyone should appreciate what he says about turn-key business.

Are you interested in this? I'd like to know. Post a comment.

Entrepreneurship informs all of my professional activities. Entrepreneurial ideas are their life's blood. For my ideas on entrepreneurial real estate go to www.yourstopforrealestate.com/blog and for my ideas on writing and publishing, go to www.kearneymusicschoolmurders.blogspot.com