If you are in business, or have ever attempted operating your own venture, you’ll probably be very aware of the unique challenges that are faced by most small business owners. Running a business can sometimes be a lonely and laborious task, instead of the pleasing and profitable experience that many entrepreneurs dream of.

If you’re seeking a route to business success, one book that should be required reading is The E-Myth Revisited, by Michael E Gerber. This book reveals the secret lives of many struggling small business owners, as Gerber presents the realities that most of them would never dream of sharing, even with their close associates.

The truth is that many small operators are completely clueless about running a business.

They may be experts in their technical fields, but they have a difficult time carrying out basic business procedures such as managing people, controlling accounts, streamlining production, marketing effectively and delivering consistent customer service.

Last week, we looked at Gerber’s description of the infancy stage of a small business. Once a firm moves from infancy to adolescence, it will usually experience a challenging cycle that exposes the shortcomings of the business owner. “As a business grows, it invariably exceeds its owner’s ability to control it,” Gerber confirms.

Gerber points out that when faced with decisions that they don’t know how to make, many owners will abdicate their managerial role by passing on this responsibility to a new employee. Usually this person is left to flounder as the owners’ inability to share their business vision or create efficient procedures comes to light.

With increased production, other persons may be hired for new roles, but still the business struggles in the midst of chaos. Gerber explains there are three routes that owners may then take: reduce operations to suit their comfort zone; grow faster until the businesses implode; or fight for survival until the businesses consume their entire lives.

Technician vs entrepreneur

According to Gerber, the third phase of a firm’s growth is maturity, in which the business “knows how it got to be where it is, and what it must do to get where it wants to go.” However, maturity is not derived from passing through the challenging infancy and adolescence stages, he explains. Mature businesses start from the outset with a different perspective about growth.

Great businesses are born when the owners begin with an entrepreneurial perspective instead of a technical view on their ventures, Gerber asserts. Instead of the technician’s question, “What work has to be done?” the entrepreneur asks, “How must the business work?” An entrepreneur looks at a future vision and works backward to create a model that can achieve it.

Immature businesses struggle because the technically minded owners look inside themselves and think about how they can sell what they know how to do. The entrepreneurial outlook is customer-focused, Gerber reveals, and concentrates more on how a product or service is delivered instead of just what the product or service is.

A technician designs a business for personal satisfaction, while the entrepreneur creates a system to fill the customers’ needs. Gerber notes that customers are usually a problem to the technician, as they never seem to want what is offered at the price it’s being offered at. Entrepreneurs, on the other hand, are excited by customers’ changing needs and look for ways to make money satisfying them.

Developing a mature business

To create a successful business, it’s important to use a model that “sparks the entrepreneurial imagination” and allows the technician and managerial sides of the business owner to flourish, Gerber explains. Describing the ‘Turn-Key Revolution’, which spawned profitable businesses such as McDonalds, he advises that this franchise model is the key to mature growth.

It’s important to build a business system that “works predictably, effortlessly and profitably, each and every day,” Gerber declares. Creating a business franchise model is what is required for owners to have businesses that can work without them and give them true financial freedom. Until this model is developed, a business will control the life of its owner forever.

Business owners need to spend time working on their businesses instead of just in them, Gerber points out. He outlines some key questions that they should ask:

– How can I get my business to work, but without me;

– How can I get my people to work, but without my constant interference;

– How can I systemise my business;

– How can I own my business and still be free of it;

– How can I spend my time doing the work I love to do rather than the work I have to do?

Until business owners change their perspectives and start seeking the answers to these issues, they will always struggle to succeed in their ventures. Gerber goes into great detail about the business development process, which is required to create a system for success, so I highly recommend this book to aspiring and existing business persons.

Copyright © 2011 Cherryl Hanson Simpson. No reproduction without written consent.

Originally published in The Daily Observer, May 12, 2011

Read another article on Designing a Business:

Can There Be a Perfect Business?

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Cherryl is a financial consultant and coach, founder of Financially S.M.A.R.T. Services. See more of her work at www.financiallyfreenetwork.com and www.financiallysmartonline.com. Contact Cherryl