I rarely recommend that certain books are a "must" because different people have different taste, and I wouldn't presume to think that just because I like it everyone else will. But the E-Myth by Michael Gerber is different because it revolutionised the way people think about business. In my book (ah c'mon, it's been awhile since I threw in a bad pun), it actually is a must for business owners.
The crux of Gerber's E-Myth theory is that very few people are "born" entrepreneurs, instead what he suggests happens is that we have an entrepreneurial seizure. One day we decide we don't want to work for anyone and we just have to be our own boss.
Naturally, most people that go into business are really good at what they do - so a good technician - but not necessarily good at running a business.
So then it's up to us to develop entrepreneurial skills to GROW our business. Gerber was the one who coined the phrase that you need to work "ON" your business, not just "IN" it.
Now to truly be an entrepreneur and grow your business, it's critical that you "begin with the end in mind", which is a concept invented by another business brain, Steven Covey. He said, and I love this, "If your ladder is not leaning against the right wall, every step you take gets you to the wrong place faster."
When we start out in business we expect to be in it for the long-term right? We have goals. Some of them loftier than others. One important goal that's often neglected is how we want it to end.
If you're planning a trip you need to know where you're going before you can plan the route yeah?
In order to achieve any goal you need to set it, visualise it, and plan for it. This includes ultimately exiting your business.
As business owners we take significant risks on board, in anticipation that we'll be duly rewarded in the future. For most of us, we expect the prize to come in retirement (with some lifestyle rewards along the way of course), but it doesn't just magically happen. We plan for it.
Do you want to sell your business for a profit? Are you hoping to cease the physical work, but remain a shareholder with a regular income? Will you simply wind down the business? Do you want a family member or staff member to succeed you?
Starting with the end in mind helps you build not only the type of business you want, but also the business you need to reach your ultimate goals. And that's what it's all about - achieving goals you've set for yourself and your family.
One of the most important roles of a Business Adviser is to help their clients achieve those goals, and this means regularly measuring how you're tracking towards them.
Note you'll often hear me harping on about how important it is to review your business and I think most business-owners realise this and even agree with it (even if they don't always do it), but not a lot of business owners think about valuing their business to determine how they're tracking towards their goals. In fact, most business owners don't consider doing this unless they're about to sell.
If you missed Michael Moschetti's article "Why value your business?" in our latest "4 Ways Bulletin" click here because it may give you some interesting food for thought.
If you'd like to hear more of what I have to say on the matter, click here for a recording of my most recent "You & Your Business" radio segment on 98.1FM Radio Eastern.