By Michael E. Gerber
Every year in the US, over a million people start a business. By the end of the first year at least 40% fail. Within 5 years more than 80% will fail. Then of those that do survive, more than 80% that survive the first 5 years will fail in the second 5 years. So only 4% survive in 10 years horizon. 2
The E-Myth: Small business are started by entrepreneurs risking capital to make a profit. This is false. The real reason people start businesses has little to do with entrepreneurship. 3
Your business is a distinct reflection of who you are. If your thinking is sloppy, your business will be sloppy. If you are disorganized, your business will be disorganized. If you are greedy your employees will be greedy. 5
Entrepreneurial Seizure: The excitement of cutting the cord from your day job overcomes you. The thought of independence follows you around. 12
The Fatal Assumption: if you understand the technical work of a business, you understand a business that does technical work. As in, just because you understand the business, doesn’t mean you know how to RUN the business. 13
The typical small business owner is only 10% Entrepreneur, 20% Manager and 70% Technician. They should be evenly 33% balanced.
The Technician is used to “paying your dues.” The hours spent on the business during infancy are not spent grudgingly. There is work to be done. You are consumed by it. All your thoughts feelings revolve around the new business. You are totally invested in doing whatever it takes to stay alive. 35
It is easy to spot a business in Infancy. The owner and the business are ONE IN THE SAME. 35
At one point you realize you don’t own the business – you own a job!. It’s the worst job in the world because you can’t close it when you want to, because if you closed it you wouldn’t get paid. You can’t leave and you can’t sell it. The tyranny of routine. 54
McDonalds, Fedex and Disney did not END UP as mature companies…they started that way. 68
IBM’s Tom Watson had a clear picture of what the company would look like when it was finally done. A model in his mind, the vision. 69
Without a clear picture of the customer, no business can succeed. You cannot just look inwardly and define your skills and expertise. You have to be able to sell. 74
Create a business that you will be forced to sell eventually. No matter who buys it? It should be a systems-dependent business not a people dependent business. A business that could work without him. 85
The purpose of your life is not to serve your business but the primary purpose of your business is to serve your life. Then you can go on to work on your business rather than IN it, with a full understanding of why it is necessary for you to do so. 98
Hire people with the lowest possible level of skill (or automated it with computers). You want to be systems dependent not expert dependent. 100
Great businesses are not built by extraordinary people but by ordinary people doing extraordinary things. 101
Make sure your customers always get the consistent service every single time they come to you. 106
Creativity thinks up new things. Innovation DOES new things. – Professor Levitt 118
Great people have a vision in their lives that they practice emulating each and every day. They go to work on their lives, not just in their lives. Their lives are spent living out the vision they have of their future, in the present. They compare what they’ve done with that they intend to do. And when there is disparity between the two they don’t wait very long to make up the difference. 139
Great people create their lives actively, while everyone else is created by their lives, passively waiting to see where life takes them. 139
“The difference between a warrior and an ordinary man is that a warrior sees everything as a challenge, while an ordinary man sees everything as either a blessing or a curse.” – Don Juan in A Separate Reality 139
Ask yourself the following: 140
1. What do I wish my life to look like?
2. What would I like to be able to say I truly know in my life, about my life?
3. How would I like to be with other people in my life, family, and friends?
4. How would I like people to think of me?
5. What would I like to be doing 2 years, 10 years, 20 years from now, and when my life ends?
6. How much money will I need to do the things I wish to do? By when will I need it?
There is ultimately only one reason to create a business of your own, and that is to sell it. 153
Demographic and psychographics are the two essential pillars supporting a successful marketing program. If you know WHO your customer is (demographics) you can then determine WHY he buys (psychographics).
Research shows that the navy suit is the most powerful suit a person can wear in business. Instant impact. 224
Reality only exists in someone’s perceptions, attitudes, beliefs, and conclusions – whatever you wish to call those positions of mind from which all expectations arise – and nowhere else. 225
“Find a need and fill it” is an inaccurate saying. It should be “Find a perceived need and fill it”. If your customer doesn’t’ perceive he needs something, he doesn’t, even if he actually does. It is all about PERCEPTION. 225
“You should know now that a man of knowledge lives by acting, not by thinking about acting, nor by thinking about what he will think when he has finished acting. A man of knowledge chooses a path with heart and follows it.” – Carlos Castaneda -epilogue