Small-business owners are doing the wrong work.
At least, that’s what New York Times best-selling author Michael Gerber says.
My take from years of interviewing small-business owners is that Gerber is partly right. Sure, I’ve observed the dreaded scenarios that the author and consultant builds a case upon in his book, “The E Myth Revisited” – where an entrepreneur heads down the slippery slope of acting on a dream, work overload, desperation, hiring surge, hope, disorganization, poor communication, disgruntled customers and, ultimately, failure. The end result, statistically, is a 50 percent failure rate within five years of startup, according to the U.S. Small Business Administration.
While I don’t commit to the idea that entrepreneurs are doing the wrong work, I have witnessed many doing extra work. Gerber gets to that point, too. The extra work, he says, is what gets them doing the wrong work. For instance, natural entrepreneurs are visionaries who structure the big picture, while many who go into small business, Gerber says, are technicians thriving on the detailed tasks or managers regularly steering those tasks to meet production demands. The personality types begin to clash as the demands of those roles don’t fit the individual wearing that hat. You can see how the veteran electrician turned owner struggles with the wide array of human resources, sales and accounting responsibilities suddenly on his shoulders.
During the June 21–23 Alliance of Area Business Publications conference in Nashville, Tenn., I had a rare opportunity to hear from an icon in the business-to-business media niche.
Rance Crain, the second-generation of the founding family of Advertising Age, Crain’s Chicago Business and the cluster of business journals in Detroit, New York and Cleveland, shared with the group his 10 Rules of a Successful Entrepreneur, gleaned from his family’s 100 years living it. Crain, currently president of Crain’s Communications Inc. and editor-in-chief of three publications, has spent 50 years in the publishing industry. With that track record, I obviously was tuned in, but my ears perked up because on the seven-hour drive to Nashville, Tenn., I started reading Gerber’s “E Myth.”
On one hand, here’s this seasoned entrepreneur sharing his success stories and how he got there following these key tenets. On the other hand, here’s this seasoned entrepreneur sharing the failures of small business observed in decades of consulting work.
I quickly learned the contradictions of the two complement each other.
In order for Crain’s rules to be put in place and effective, Gerber’s observation of American entrepreneurs should be understood. While true entrepreneurs are risk-takers who lay down capital to make a profit, Gerber says most people enter small-business ownership with a fleeting entrepreneurial dream and not much else.
Together, the pointers written into a business plan and carried out could be the protection against a 50 percent small-business failure rate.
First, Crain’s 10 Rules of a Successful Entrepreneur:
- Timing. Pick your spot; this involves thorough market research.
- Have a distinct point of view. Build your own niche; the products and services should stand out from the rest in order to make competition as irrelevant as possible.
- Enthusiasm. It’s contagious.
- Be lucky. Or at least think you’re lucky. You know the adage about making lemonade out of lemons.
- Be flexible.
- Be confident in your own ideas. Test them before you have to defend them in the market.
- Treat staff members with respect. After all, they are the ones making the money.
- Be opportunistic.
- Nice matters. Ensure the office is a nice place to work and hire nice people.
- Have fun.
Now, a few tips from Gerber’s “E Myth”:
• Don’t start a business just to get rid of the boss. You end up not owning a business but owning a job – and it’s a job you can’t quit.
• Approach the business more broadly and be prepared to change personally and professionally – a lot.
• Prepare yourself and the business for growth. “So that as your business grows, the business’ foundation and structure can carry the additional weight,” Gerber says.
• Understand and educate on key processes, objectives and position in the marketplace. “(It’s) about building a business that works not because of you but without you,” he says.
• Pretend you’re going to franchise your business and build a prototype that others could run successfully because of tested systems in place. This is one of Gerber’s key points to small businesses reversing the failure rates. He says because businesses don’t depend on the people but on the systems the people work, do what you do the same way, each time, so the customer experience is consistent.
• The primary purpose of the business is to serve your life, not the other way around.
That last point speaks volumes, I think – even for the worker bees in an organization or the budding entrepreneur.
Do you live to work or work to live?
Springfield Business Journal Editor Eric Olson can be reached at eolson@sbj.net.
