If you own a small business, Michael E. Gerber believes you rely too heavily on remaining small.
Instead, Gerber says that the natural progression of a successful business is to grow it big enough to sell it.
As a leading small business guru for 40 years, Gerber has been transforming the state of small businesses worldwide through his transformative books, coaching, and programs.
He published his latest book, Beyond the E-Myth (2016), at age 80. In it he explains how to grow your business from “a company of one to an enterprise of 1,000.”
“Comfort zone living is death,” he says in a Small Business, Big Marketing podcast. “It’s implicit upon every one of us to grow.” Move beyond where you are and “search and seek out” things not yet discovered. Otherwise, “living in your comfort zone means you’ve stopped climbing.”
First, focus on the three parts or personalities to running a business. You need all three to make a business work:
- Technician—the skills you have that make a difference
- Entrepreneur—the dreamer with a fresh idea who reaches for the stars
- Manager—the organizer who takes care of the details of the business
Use a Franchise Prototype to Set You Up for Success
Next, develop a franchise prototype or a system that sets up the business to operate and thrive even when you’re not there 24/7. Gerber believes that a business that is dependent on the founder is not truly a business, but just a job that stops when you stop.
Gerber uses the franchise prototype of McDonalds to show how a well-functioning small business can expand and grow. Franchise prototypes use manuals describing in minute detail how to run the business so that customers will have the same experience the world over. Use this same strategy to put in place a well-documented system for running and growing your own business.
Your business model’s goal is to provide customers with consistently high service. Make it easy for everyone to follow the same model. Provide structure by following previously agreed upon guidelines.
Practice Innovation, Quantification, Orchestration
Innovation means “providing a product or service in a more efficient, higher quality, or more profitable way. You need to be continuously innovating to improve your business.”
Quantification combined with innovation determines what process works. Gather information and measure what’s working and what needs to change.
Orchestration is the standardization of what works. Once you’ve tried and measured an innovation, it becomes part of “standard operating procedure.” Everyone learns and implements it; this ensures consistent quality for your customers.
Create Aims, Objectives, and Opportunities
- Establish a “Primary Aim” for your life. Then create a “Strategic Objective” for your business that will fulfill your primary aim. The strategic aim usually focuses on money, such as how much you’d like to make in five years or how much you’d like to sell your business for in 10 years.
- Decide if an opportunity is worth pursuing. Will it meet your financial needs? Does this business idea solve a frustration for a large group of consumers?
Implement Successful Strategies
Organization – Figure out what roles your company needs and who will fill them. “Replace yourself with a system,” Gerber advises in The E-Myth Revisited. Each of the 12 positions Gerber identifies should have a “position contract” with a list of responsibilities that employees sign.
Management – Have an overall management strategy in place that allows your systems to work effectively.
People – Gerber suggests approaching your “people strategy” as a game in which employees want to take part in.
- Make the game fun and something “you’d be happy to do yourself; otherwise other people won’t want to participate either.”
- Allow for rewards and victories, but don’t make it so that people can reach the ‘end’ of the game.
- Be open to changing the game parameters as needed.
Marketing – Your marketing should persuade people’s unconscious minds. Learn about your key customer demographics. How do they think? What problems do they need solved? What appeals to them about your products and services? How do they regard the world around them? Notice how other businesses market to similar demographics.
Systems – Understand and adopt the systems that are important for your business:
- Hard or physical systems, such as software or a website platform, solve problems, help you concentrate on providing value for your customers, and make your company more successful.
- Soft systems give people a framework for doing their job well and providing high quality work.
- Information systems gather information and data about the business and its operations. Learn how others respond to your products and services by studying analytics, such as website visits and page clicks.
Are you ready to grow big? Share your successes in the comments below.