Semester 1- Class 2Intro to Emyth (Organization of Your Business)Copyright 2007Duane Hoversten InstructorSouth Central College

Do You like your Business Now??Does it Give you what you want in Life??..MoneyTimeSatisfaction

E-myth Revisited by Michael Gerber ..Insight into Small Business

Observations on Small Business Owners1. Work too hard for the money they make2. Business Owners are doing the Wrong work in the business3. 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 AssumptionIf I understand the technical work of a business, I understand the business that does technical work.

The FactsSBA 80% of Small Businesses fail within 5 years (50% in 18 months)Franchises have a 95% Success Rate in 1st YearFranchises have a 75% Success Rate for Business Format Franchises in 5 Year Period

The E MythSmall 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 BusinessHave 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

GoalsSet GoalsAccountability on ProgressMentoring

Turn Key BusinessYour Business should run by itself if you are gone a monthYour Business becomes saleable when you have a Turn Key BusinessYou have time to Work on Your Business

Doing (the Owner) the Right Work in your business

Do Not Run to the Post Office DailyYou are worth $50/hr - $1000/ hrDo the work that the Owner should be DoingSet the Culture in Your Company

Right People in your BusinessGood People do Not make Good BookkeepersGood 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 companyWhen there is a problem, look at the system before blaming peopleWe do not have to reinvent the wheel all the timeEliminates going to the Owner for Everything

Goals WrittenMeasurableRealisticCreate a Movement in You or Your Company

E Myth (Small Business) Personalities3 Distinct Job TypesEntrepreneurManagerTechnician3 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 cant do two things at onceLikes to control flow of workThinking isnt work. And is unproductive

The Entrepreneur (Leader-Visionary)Turns trivial conditions into opportunitiesThe Dreamer and Catalyst for ChangeNeeds controlLives in the world of what if and if whenCreates Havoc because of need for changePeople are problems that get in the way of his dream

The ManagerPragmaticCraves orderClings to status quoSees problems not opportunitiesCreates neat rows of widgets that entrepreneur createsCleans up Entrepreneurs Mess

Stages of BusinessInfancyAdolescentMatureWell Talk about each Stage

A Real Business APL LandscapeBusiness we are going to Talk about is Wayne.

Landscape SolutionsStaff 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 WayneReal 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 BusinessTechnician 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 StageStage where business has to get helpThey hire people but do not have directionWayne had 8-10 workersMissing the Manager HatWorking Harder and making less money

Three Choices in AdolescenceGet smaller - one employee and eventually close doorsAdd more employees and go bustedContinue as IS and maybe Survive but get BURNED OUTWAYNE SURVIVED FOR 17 YEARS AND WAS READY TO QUIT

The Comfort ZoneMost businesses get outside their comfort zoneBusiness or Job??The Business no longer shinesMost businesses focus on the product or Service not how the company does businessOsborne 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 technicianWont work!!!

Company is growing or ShrinkingEither you do the job of the owner or???Cannot abdicate your role in a true companyBusiness or Job???

Maturity StageCompanies 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 whats 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 PerspectiveHow 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 ViewsFuture 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 IdeaThe Franchise PhenomenaMcDonalds - The most successful small Business in the world.

FranchisesTrade Name FranchisesCoca Cola - CadillacBusiness Format FranchiseAn entire system of doing businessTRUE PRODUCT OF THE BUSINESS IS THE BUSINESS ITSELF..THE HAMBURGER WASNT THE PRODUCT - THE BUSINESS WAS..

Business Format Franchises95% Success Rate in 1st Year75% Success Rate for Business Format Franchises in 5 Year PeriodMcDonalds: cleanliness - satisfy the customers every time Learned at Hamburger U

Business Format FranchiseProprietary 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 WayneCreated 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 2Next Meeting October 6 at 8 am

Reach Chap 7-9 in Emyth RevisitedA. Create an Organizational Chart??B. Who is/are your manager/s?C. Who are your technicians??What do you do in the company??

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