“On” Versus “In”

By Tim Thoelecke Jr., Member, Executive Leadership Alliance International

Michael Gerber is one business writer who “gets” entrepreneurs. My dog-eared, highlighted copy of The E-Myth Revisited is barely intact. In fact, I have given countless copies of the book to other business owners who are looking for a better way.

The “E” is for “entrepreneur.” The book’s premise is that most small businesses do not work because owners work too much “in” the business, when they ought to be working “on” it.

Gerber uses the idea of a well-structured franchise as the model. For example, if you go to a McDonald’s anywhere on the planet, you will have roughly the same experience. Why is that? Many in big businesses know all about processes and procedures and all the things that seem to get in the way of getting work done. But all businesses—even small ones -need it.

In many small businesses, the owner is the bottleneck. All decisions go through him or her, including office supplies purchases, call screening, even production. Businesses that grow cannot depend on the owner to do those things. Ideally, it does not depend on the owner to do ANYTHING.

Gerber’s protégé, Sarah, owner of “All About Pies,” faces many of the problems all small business owners face, and readers experience several epiphanies as solutions are revealed.

As the owner of a number of small businesses, I can testify that Gerber’s methods work. Here are some key takeaways that have served me well:

Draw up your organizational chart for the future: What will it look like in 2 years, 5 years and 10 years? Think BIG! Many of the boxes will be filled with the same name: Yours! This helps you keep an eye on the big picture. As you define each role, you develop a job description, and then describe the processes and procedures needed to perform that job. Document them.

Document every process that anyone in the business performs, including what you do. You know what you do. Each team member knows what he or she does. Write it down. Not only does that help define the process, but it also forces you to think about whether you are doing the right things.

Here’s an example: What happens when a potential client calls on the phone? How is the phone answered? How are leads screened? How are meetings scheduled? How are phone messages/transfers to voice mail handled? How do you qualify leads? By establishing a script and the guardrails for decision making, you empower the person who answers the phone. If you know the boundaries of your job, you can perform it with confidence. Also, in a very small business where more than one person may pick up the phone, everyone handles calls the same way, thus providing roughly the same experience for each caller.

How do you go about the sales process? How do you set appointments and meetings? What sales techniques have proven most successful for your product and your target client? Write it down. How do you open and close the office every day? Write it down. What font is used in all company communications? Write it down.

Marketing, Sales, Administration, Production, Client Communication, Financial Processes. Everything and anything that an employee needs to know in order to perform his or her job functions ought to be documented. Write it all down.

This becomes your Operations Manual. It becomes your Employee Orientation Manual. It becomes the blueprint for your business. If you are going to clone it, you can theoretically hand this document to the “new guy” and he can use it to build a business exactly like the original. You can hand the Sales Operations Manual to the new sales person or sales manager.

And what if you don’t intend to clone the business? Do it anyway. The intent of this is to build a business that does not rely on a single individual. It is an entity separate from the owner. It creates a scalable business. It allows an entrepreneur to be a “business owner” versus being “self-employed.” Self-employment is a job. An owner plays golf.

That is the meat of what the “E-Myth” is all about: Working ON the business rather than working IN it. Of course, there is much more to being successful in business, but for entrepreneurial types like me, building the structure has to come first.

This entry was posted in Entrepreneur, Leadership, Management Style, Organizational Structure, Strategy and tagged , , , , , , . Bookmark the permalink.

2 Responses to “On” Versus “In”

  1. Bill Grundy says:

    Good prospective for anyone in a business.

  2. Mark Kardon says:

    Having worked in both large and small businesses, a common thread is some form of structure. As Tim points out, this helps everyone understand their responsibilities and is an integral part in keeping the business running smoothly. The owner can feel more comfortable working on the business instead of in the business knowing there are processes ensuring daily activities and issues are handled appropriately.

Leave a Reply