The Next Wave loves to work with startups and young businesses. We highly recommend “The E Myth Revisited” by Michael Gerber to budding entrepreneurs because of its many insights into the new business process. I was assigned reading it as part of my account executive internship. Continuous learning is a big part of working here, from the moment you apply until the moment you leave.
The myth of the entrepreneur is one of a person working against all risks, all odds, all fears, to achieve the dream of starting one’s own business. When we see business success from afar we see a legend, someone who faced all the risk and made it.
That false legend status is the reason why over 40 percent of new businesses fail in the first year, 80 percent in the first 5 years. What causes such drastically high levels of failure? Barring major economic changes or socio-political shifts, the vast majority of business failure is due to one thing, the person who started it bought into the myth of the entrepreneur.
The vast majority of new business owners start from the same spot. You work a number of years and develop a mastery of a technical skill. This is usually followed by the idea that, “I can do this work, very well actually, why am I still doing it for someone else?”
This is “The Fatal Assumption,” as Gerber author of The E Myth, calls it. The myth, that if you understand the technical work of a business, you automatically understand the RUNNING of a business that does that technical work, yet what most entrepreneurs don’t know is, they are two completely different things.
Gerber says one must learn that once you start a business you are no longer working IN you business, but your focus should now be working ON your business. What does that mean? It means as a business owner you must now commit fully to constant and continuing education and improvement.
This holds especially true since your business is a direct reflection who you are as an owner personally. If you are disorganized, your business will be. If you are greedy, your employees will learn to be greedy too, if you are not educating yourself constantly, your business will wither and die. Gerber continues, “people who are exceptionally good in business aren’t so because of what they know, but because of their insatiable need to know more.”
An “ insatiable need to know more.” There is no secret to starting a successful business, one must learn the risks deeply, learn the market clearly, and be willing to accept all of that before the even think of writing a business plan. The greatest weapon against failure is knowledge, and as Gerber agrees, knowledge and success go hand in hand when it comes to business.
If you already are a business owner or should you be interested in starting a new business, the following 5 questions will help you come to a certain quick conclusion:
- Can my business work without me?
- How can my employees learn to work without my direct interference?
- Is my business systematized enough to be franchised nationally or even globally right now?
- As an owner, how can I also free myself of my business?
- How can I spend time doing the work I love instead of the work I have to do?
If after this exercise you realize that you DON’T know the answers to these questions, congratulations, you’re already on your way to having a stronger business because you now “know what you don’t know.”
Knowledge, is the foundation upon which your business will be successful. Seek out the questions, since you know now they will lead directly to the answers that drive success.
See Gerber’s “The E Myth” as well as many other incredible book resources for your business success on our booklist.