The Entrepreneur Myth

Are all small business owners entrepreneurs?

The E-Myth by Michael E Gerber, is not a new book. But it still has great relevance.  The basic message is that setting up a business is not so straightforward and success is not automatic just because you’re good at a trade.For example, somebody who loves making cakes, and is told by friends and family “you should go into business”, might find themselves struggling if they set up a cake shop and spend all their time making cakes.

Running a business is so much more than producing the cakes.  Time has to be found for bookkeeping, marketing, customer contact, invoicing etc  If the owner spends their time in the kitchen, making cakes, it becomes stressful if they are “interrupted” by phone calls.  Even if those callers are potential customers.  If they spend long hours making the cakes, where will they find time to handle enquiries, write quotes, serve customers, do some marketing…. The cakes that they loved making become less and less appealing and life becomes more and more stressful.

The E-myth author, argues that when you set up in business, you must see it as a business and not a hobby.  Set it up from the beginning as if you are going to be a big business – plan staffing requirements, job descriptions, handbooks about how everything is done.  In other words, create a business that is not so dependent on you being there.  Make it a formula that can be handed to anyone.  That way, if it becomes busy, you won’t find yourself doing everything and finding you have to turn down work as you don’t have the time to actually create the produce as you are too busy “firefighting” calls and problems.

Starting a business is a challenge.  It can be immensely rewarding – but hugely disappointing if it doesn’t work out.  Make sure you have thought through what it will be like in 5 years time. What is your ideal scenario? Why are you doing it? How many hours per week will you be working once it’s all up and running? Do you want to take holidays? When you price your produce, have you factored in VAT, rent, all the bills that you will face in 5 years time. Even though costs may be low at the beginning, it’s hard to increase prices later on.

When you get excited about your new business, write a business plan.  Be realistic, explore all avenues.  Look at the finances.  Get advice – whether paid for or from friends and family or mentors. Then get someone who you trust to be honest with you – usually not a family member or friend as they often will tell you what they think you want to hear.  Ask for honest feedback.  It might hurt but that’s better than setting up blind and facing bigger problems later on.

Setting up in business is the beginning of exciting times.  To ensure your success, make sure you do the research at the beginning.  And  read the E myth and any other business books you can get your hands on.  The more you know, the better!

Give me a ring if you’d like me to work with you on your business.

07785 996917