One of the core problems with small business owners is that they work far more than they should for the return, they are getting and they are doing the wrong work. As a result, most of these companies end up in chaos and fail within five years.
Recently, I come across the book E-myth by Michael Gerber. This book helped me to learn 5 powerful business lessons along with a clear idea that why most businesses fail.
5 Powerful Business Lessons – Why Most Businesses Fail?
#1 Selling is Opening
Most salespeople think selling is closing it isn’t selling is opening. Most people don’t know how to communicate fewer people know how to sell almost no one knows how to close. Most salespeople think by talking to a lot of people by sending appointments and doing demos by talking about features and benefits that is closing. That is not closing it’s just opening.
Until you transact, until the prospect commits that is not closing. A lot of salespeople are afraid they’re intimidated to ask for the sale they’re intimidated to ask for money they’re intimidated they don’t know how to handle objections. They don’t know what to do. Selling is not closing. Closing is closing. Nothing happens until you actually, close the prospect until they sign and give you their credit card until say yes I want to do business with you. You can do 99% of the work if you don’t do that 1% you are not doing business.
#2 Working on your business not just in your business
Working on your business not just in your business. It simply means this you have to treat your business as the product. You need to make a plan. When is it going to be done? Think about it when is this going to be done what does it look like when the business is built? Yes, business is dynamic it changes all the time. But what is the end goal what is your exit plan? Even if you never plan on selling the business but what does it look like when it’s done?
What does the end product look like if you want your business to be more valuable? We have to build it to sell even though we never plan on selling it.
What does that mean it means that you’re working on the business you are getting stuff done but you’re working on systems and processes.
#3 A business requires 3 different hats
A business requires 3 different hats. We have the entrepreneur the innovator the visionary hat and then we have the manager hat that focuses on processes and systems. We also need a technician that focuses on how to do something better and how to do the technical work.
An Entrepreneur focuses on the future where we could go. A manager focuses on the past what needs to be done and what has worked in the past. A technician focuses on the present and what is to be done in day to day.
So to be successful in business requires us to wear all three hats. It means that for any business to get successful, you need entrepreneurs, managers, and technicians.
#4 Most entrepreneurs are not entrepreneurs
The book e-myth clearly states that most entrepreneurs are technicians suffering from an entrepreneurial seizure. They think that they are good at certain skills and they have a certain experience.
One day they think that I could do that better. I could build a better business and start a business. They do not have any experience they know only the work of a technician.
Think plumber starting a plumbing company. An accountant starting an accounting firm it is the same idea. They’re very good at technical work. They are technicians suffering from an entrepreneurial seizure. What they don’t realize is they are missing business skills. Some of the business skills like.
- The ability to lead
- The ability to market
- The ability to raise capital
- The ability to build a team
- The ability to negotiate
These are business skill sets that are not technical skills. Knowing how to do the job that doesn’t build a business that doesn’t mean that you know how to build the business.
Just like you know how to drive a car. You know how it works. You know how to turn on the engine, but it doesn’t mean you know how to build a car those are very very different skill sets.
#5 Build your business on systems not on people
You need to build a system. What does that mean people come and go you shouldn’t build the business around certain individuals. You want to build it around a certain role you want to build it on systems so people would come and go would still run the systems. In other words your focus is building the systems and bringing on the right people to run the systems.
Take McDonald’s as an example Gerber uses examples all the time in his book McDonald’s it is a machine. It’s a franchise prototype you walk into a McDonald’s in Chicago. If you walk into a McDonald’s in Vancouver or You walk into McDonald’s in Japan, you will get the same taste. Why?
It is because of the system, they have built a powerful system that is duplicatable and runs without them.
So ask yourself the question how could I build a business that works without me?
How do you build systems how do you build something scalable that is duplicatable?
Over to you
I hope 5 Powerful Business Lessons from the book e-myth will help you in your business. If you are finding any difficulties in running or growing your business you can get in touch with us at email@example.com.