us department of commerce every year over 500,000 people start a business of some sort by the end...
TRANSCRIPT
US Department of Commerce
Every year over 500,000 people start a business of some sort
By the end of the first year, at least 40%of them will be out of business
Within 5 years, more than 80% of them—400,000people—will have failed!
4% Survival Rate
And, if your business has managed to survive for 5 years or more, don’t breathe a sigh of relief. More than 80% of the enterprises that survive the first 5 years will fail in the second 5 years.
Only 20,000 out of the original 500,000 survive! 4% …..96% FAIL
Where Was the Entrepreneur Who Had Started the Business?
The entrepreneur had only existed for a fleeting moment.
If the entrepreneur survived at all, it was only as a myth as who goes into business and why.
The E-Myth
The Fatal Assumption
If you understand the technical work of a business, you understand a business, a
business that does that technical work.
The Fatal Assumption
The reason it is fatal is that it isn’t true. But the technician who starts the
business does not see this. A business is not a business but a place
to go to work.
The Fatal Assumption
The Carpenter Becomes a CONTRACTOR
The Engineer Opens a SEMICONDUCTOR BUSINESS
The Musician Opens a MUSIC STORE
1
2
3
The EntrepreneurThe Manager and The Technician
“All who go into business are actually all three people in one” All three people want to be the boss. All three do not want to have a boss. They start a business together and the
conflict begins.
The Entrepreneur
Lives in the future, needs to control those around him in the present to concentrate on the future.
Creative, and innovator, what if, if then.
Given his need for change, creates havoc with those people around him.
The Manager
The Manager is predictable and craves order.
The Manager lives in the past. The Manager clings to the status
quo. Without the Manager there would be
no business, no society. Without the Entrepreneur there
would be no innovation.
The Technician
The technician is the doer “if you want it done right do it yourself.”
The Technician is happy just working but only one thing at a time.
The Entrepreneur lives in the future, the Manager in the past then the Technician lives in the present.
Infancy of a Business
Business, like people, grow and growth requires change This principal is not usually followed. Most businesses are run based on what
the owner wants instead of what the business needs.
He wants a place to go to work free to do what he wants, free from the constraints of a boss.
Infancy of a Business
JOE’S DINER
Mary’s Kitchen
Tom’s Joint
The owner and the business are the same
Infancy of a Business
If the owner leaves there is no business.
The owner becomes a master juggler.
At some point he starts dropping balls.
Adolescence of Business
You need the Manager in you. But the Technician in you won’t stop long enough to make that happen. You got to make it work. You have got to catch all the balls. You got to keep busy.
Adolescence of Business
The Technician in you has reached your limits
The Technician is at the limits of his comfort zone
Beyond the Comfort Zone
The Technician, in need of help turns it over to another Technician in the company abdicating his accountability.
But there is a need to know why he is doing what he is doing. What results and standards should be obtained. How that fits into the long term plan.
Beyond the Comfort Zone
The business grows beyond the owners comfort zone
It goes into a tail spin The business gets small again You fire everyone
You do not own a business anymore you own a job
Beyond and Comfort Zone
You have another option Go for broke Keep growing it faster until it self-
destructs under it’s own momentum (The high tech-phenomenon)
Beyond the Comfort Zone
The worst can happen, an adolescent business actually survives
You go to work strong-willed, determined and single minded you will not be beaten
You do whatever it takes to survive
Beyond the Comfort Zone
The business does not explode…you do.
Maturity
Maturity is not an inevitable results of the first two phases.
A mature business knows how it got to where it is, and what it must do to get to where it wants to go.
It’s the owners perspective that makes a difference.
His Entrepreneurial perspective.
The Entrepreneurial Perspective
How must the business work Instead of “What work must be done”
Sees the business as a system for producing results Instead of a place where people work to
produce income
The Entrepreneurial Perspective
An integrated vision with the world instead of a fragmented vision of the world.
Starts with picture of a well-defined future, and then comes back to the present to change it to fit the future instead of starting with the present, and looks forward to an uncertain future with the hope of keeping it much like the present.
The Entrepreneurial Perspective
Envisions the business in its entirety, from which is derived its parts instead of envisioning the business in parts, from which is constructed the whole.
The present day world is modeled after the vision Instead of the future is modeled after the present.
The Entrepreneurial Model
Business that fulfills the perceived needs of a specific segment of customers in an innovative way.
Look at business as if it were a product sitting on a shelf competing with similar businesses.
Where is the opportunity?
The Entrepreneurial Model
Less to do with what’s done in the business and more on how it’s done.
The product/service is not important, the way it’s delivered is.
How will my businesses look to the customers.
It starts with a picture of the customer.
The Entrepreneurial Model
The business model must take into consideration The Entrepreneur, The Manager and The Technician.
The Answer is The Turn-Key Revolution
The Franchise Prototype
80% of all businesses fail in the first five years
75% of all Business Format Franchises succeed.
The Model
Will provide consistent value to your customers, employees, suppliers, and lenders beyond what they expect
Can be operated by people with the lowest possible skill level necessary to fulfill the functions
Will stand out as a place of impeccable order
The Model
All work in the model will be documented in Operational Manuals
Provide a uniformly predicable service to the customers
Will utilize a uniform color, dress, logos, and facilities code
The Rule of Ordinary People
The blessing of ordinary people is that they make your job more difficult
Typical business owner prefers highly skilled people believing they will make his job easier
The business winds up people dependent, not system dependent
The Rule of Ordinary People
This system is management by abdication not management through delegation
It is impossible to produce consistent results that depends on extraordinary people
The Rule of Ordinary People
If you build a business around ordinary people you will be forced to leverage your ordinary people to produce extraordinary results
You are forced to invest in systems solutions to people problems
You are forced to build a business that works
The Rule of Ordinary People
You are forced to do the work of Business Development
It is your job to develop these tools and teach them to your people
It is your peoples job to use these tools and recommend improvement based on their experience with them
Work on Your Business
Go To Work On Your Business, Not In It!
How can I get my business to work without me?
How can I get my people to work, but without constant supervision?
How can I systematize my business in such a way it can be easily replicated?
How can I own my business, and still be free of it?
How can I spend my time doing work that I love rather than work I have to do?
Business Development
Innovation
Orchestration
Quantification
Business Development Innovation
Your business identifies itself in the minds of your customers and establishes individuality.
Does the company use the same colors and logos throughout the organization?
Is there a customer satisfaction policy in place?
Business Development Quantification
You must know statistical information about your company.
With numbers your business takes on a totally new meaning.
It will come alive with possibilities.
Business Development Orchestration
The elimination of discretion, or choice, at the operating level of your business.
If everyone is doing it “their way” you are creating chaos not order.
Discretion is the enemy of order, standardization and quality.
You must create manuals for everything.
Business Development Orchestration
The need for Orchestration is based on the absolutely quantifiable certainty that people will do only one thing predictable.
Business Development Orchestration
For your business to be predictable your people must be predictable.
Unless your unique way of doing business can be replicated every single time, your concept is lost.
Business Development Program
Your personal Formula for Success® Your vision & strategy for the
company An organizational structure Management strategy People power Your marketing strategy Your sales SYSTEM
Experience TAB and SBL
When you hear something, you forget it.
When you see something, you remember it.
But not until you do something, do you understand it.
Strategic Business LeadershipS B L
SBL is an ongoing process that moves your
leadership style from “idea of the week” to a style based on strategic thinking.
Strategic Business LeadershipS B L
.
VisionVision
PlanPlan
Making it Happen
Making it Happen
Turning the
Wheel
Turning the
Wheel
A Look in the Mirror
A Look in the Mirror
SBLSBL
1 2
3
4
5
Action Plans
Must meet SBL “SMART” criteria S - specific M - measurable (impact to goal) A - attainable R - responsible party and
realistic T - timeline
Making it Happen
Weekly review meeting, update and modification of company plans
Same time, same place Up to two hours Planning team meeting if you have a
planning team
Monthly TAB Board
Meeting
Monthly TAB Board
Meeting
Up to 8 business
ownermembers
Up to 8 business
ownermembers
Advice from peers:
those at the top
Advice from peers:
those at the top
Review, advise
critique and challenge
Review, advise
critique and challenge
Unbiased members
not beholden
Unbiased members
not beholden
Non-competing
fields
Non-competing
fields
Confiden-tiality
agreements
Confiden-tiality
agreements
Make It Happen
The Alternative Board
Hundreds of TAB Boards® meet monthly throughout USA, Canada and South America
Thousand of business owners are using SBL to move their companies to the next level