I came across an article I wrote nearly twenty years ago the other day. What’s interesting to me is that everything I wrote then is still true and just as useful!
I’m reposting it here with a note added to the end. Will this still be useful twenty years from now? My guess is yes!
Original Article
There aren’t many other books to recommend on basic small business issues. But this one is a must read.
Why? Because it teaches you the crucial difference between working in your business and working on your business.
What is the difference? The difference is your ability to grow, take a vacation, to earn a paycheck or less versus earning executive pay or more and the difference between really owning a business and just having a job with no boss.
The book is called the E-Myth Revisited. It is subtitled “Why most small businesses don’t work, and what to do about it.”
And it is the truth. Many, many small businesses are run by people who are good at what they do but have no idea how to actually run a business.
These are the people who do everything themselves, work sixty or more hour weeks and can’t imagine growing because they already have too much to do, and aren’t making any more money than if they just went to work for someone else. A few days off in a row is all they ever manage, and even that is a stretch.
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No one goes into business planning to be consumed by it. But running a business is more than just knowing how to do a particular job well. Running a successful business is a job in itself and knowing how to do THAT job is what this book is trying to teach you.
The best way to avoid this situation is to know about it ahead of time and start planning from the very beginning how to avoid the common traps that lead new business owners into what seems to become a trap with no escape.
The key points to being able to work on your business instead of in it require you to be able to:
· Watch your numbers at all times, and get and stay profitable
· Be able to cross train and delegate all jobs
· Stay organized, and create systems to track and monitor the business
· Don’t allow yourself to be the only one who can do things
If you follow these simple sounding but sometimes difficult to follow through on rules, and you really take to heart what the book is trying to tell you, then you will soon have a business that makes you a lot of money, allows you the freedom to take time away and which you work on instead of in as all smart entrepreneurs do.
Ignore these words of warning and you may very well find yourself sorry you started a business in the first place, which is a shame because owning a business can be one of the great joys in life. The choice is completely yours.
Update
The phrase “work on your business not in your business” has gained a lot of traction over the years largely as a result of this book and the author’s relentless use of this tagline. I am not surprised by that as it is in fact very good and succinct advice for how to manage a small business.
What I am more surprised by is how many people know the phrase and even claim to be an advocate of the idea but yet run their businesses in a way that suggests they’ve never heard of the idea.
My guess is that the concept seems solid to them but they aren’t sure where to start and the idea of reorganizing the whole business from where it is right now seems overwhelming. My advice to counter that problem is to just start really small.
Delegate one thing off your to do list to someone else in the business. It could be an employee but it could also be a VA or outsourced service provider.
Next document just one procedure that you do regularly that you’d want someone else to be able to do correctly without you having to be there to do it. Then do one more and one more and keep it going.
Some of these things will still be mostly or completely done by you most of the time, but if you needed help you’d be able to recruit someone who at least wouldn’t be seeing it for the first time. Keep going with cross training and delegating and building repeatable procedures for how your business works.
I guarantee most of what you do is the same stuff over and over so this isn’t nearly as hard you think. I know people like to say every day is different and every deal is different and so on, but it just isn’t true that every single day is completely different than the last or you’d always be on your first day in business.
So, document, train, measure and improve the main functions of the business. Then do the same for the secondary things and keep going until you have procedures for how to do everything and at least one other person who isn’t you who knows how to do it.
It may take a year (it could easily take less) but once you get there, or even most of the way there, then you will finally start to get a sense of the freedom running your own business can truly offer but never does for people who never bother to do the above.
As I said twenty years ago- the choice is completely yours!