myth of the entrepreneur
Every year thousands of new people They enter the business with the absolute certainty that they will change their lives, their fortunes, that they will become economically independent and will be able to get rid of their bosses. Then they set up their company, and start working relentlessly on a crazy process against statistics.
If they really understood what it meant to go into business, to run a business, to own a small businessthey'd keep their money in the bank and keep their jobs.
In my opinion, says Michael Gerber, the reason we have a problem with companies is that the entrepreneurs who create them are not the kind of people we imagine. The 80% for start-ups closes its doors in the first 5 years.
What is the reason for this percentage of business failure?
The problem is that the people who create the companies are not entrepreneurs. They are actually technicians who suffer from an entrepreneurial impulse. When a carpenter becomes a contractor, an accountant becomes a consultant, a lawyer sets up a cabinet, a doctor opens a clinic, a graphic designer sets up a design company, in all these cases, are taking for granted that understanding how to do the technical work of a business means understanding how to run the business that does that technical work.
The technical work has nothing to do with what it takes to create a business that works. Believing that mastering technical work is enough is the fatal assumption behind the failure of almost every business.
Set up a business and say goodbye to the boss
All too often, the entrepreneur does not start his business to build a system through a company, but to get rid of his boss. They are good technicians who go to work every day, performing their job over and over again, with quality, with dedication. And at some point they wonder why they have to work for someone else who doesn't do the technical work, who wouldn't even know how to do it or would do it worse than them. Why am I doing this job for someone else if I could be doing it for myself?
And that is why many people undertake to create their own technical work. They don't create a company, they create a job. Most of the companies we visit as clients are not really companies, they are a job that the entrepreneur has created for himself. And it's the worst job in the world. Because he works 12 hours a day 7 days a week doing it for the most belligerent boss we may ever have who is ourselves. Small businesses imprison the person who creates them. The person does not own a company, it is the company that owns the entrepreneur. When a company is built on the personal skills of the entrepreneur, the person is the business.
The 99.9% perspective of small businesses is the problem. They work in the business and not for the business. It's not about doing the technical work in the business, but about developing the vision of what the business we work for should be like. This perspective allows us to separate ourselves from the business and see it as it should be seen from the outside. The entrepreneur should focus on creating a business that works, a predictable system that produces defined results.
The technician turned entrepreneur knows perfectly how the job has to be done. What you must learn is the whatWhat you need to design to make your business work without it.
The revolution in business came when the concept of franchising was developed. Ray Krock He was 52 when he found McDonald's. He went to sell them a dairy machine. When he met with the brothers he saw what changed his vision of what a business is: people making burgers in an absolutely uniform, predictable, systematized way. Ray Krock saw that McDonald's biggest customer group was its franchisees. And that McDonals' product was not their burgers, but their system for producing them.
The franchisee buys a system capable of producing income on a recurring basis. To train the employees of these franchisees, he created the Hamburger University. The idea is that the franchisee will buy a turnkey business: the products, the training, the brand image, the methodology, everything is already tested and works.
Below you can view statistics for McDonald's restaurants in Spain: Statista
The system is the solution.
Customers want CONTROL. They want to have control over their experience when they come to buy. They want control when they decide to repeat the purchase, that everything happens the same way.
Same times. Same quality. Same commitment. The same added services. The same atmosphere, the same colours. We have to be able to faithfully reproduce the same experience every time. Whether our client is the owner of a franchise or the consumer of the burger.
That the system is the solution is exactly the opposite of assuming that the company is based on the entrepreneur's personal skills.
Create expert systems
The main objective of an entrepreneur is create a system that can be repeated over time (that produces the same results day after day) and scalable in size (that allows growth by creating new stores, factories or service companies).
This system will allow new people begin to produce results as if they were experts, because they follow precise rules. The time that a burger must spend on the plate, the amount of salt, the ice in the drinks: everything will be measured and anyone who follows the instructions will produce a result with the expected quality.
The 4 levels of a turnkey system
If we are able to build a system that can be sold to another entrepreneur to implement it, we must provide him with everything he needs.
The turnkey systems are composed of 4 levels:
- Operational level: how we do things. The way the company does things allows it to differentiate itself from the competition.
- Training level: how we recruit and train the people who will do the operational tasks, how we will teach them to use the system
- Administration level: allows us to monitor the first 2 levels to discover errors and improvements. The companies that analyze what they do and look for ways to improve and differentiate themselves are the ones that get the best results
- Level of development: coordinated innovation to ensure that we produce improvements and that we do so not on a discretionary basis but on an operational level: not depending on people but on processes. People want to work in an environment that makes them progress in order to produce better and better results, and this can only be achieved through innovation.
Speaker: Michael Gerber
Michael E. Gerber is an American writer born in 1936. He is the founder of the Michael E. Gerber Companies, focused on business skills training based in Carlsbad, California.
He also runs a start-up accelerator known as The Dreaming Room with which he conducts his sessions personally in the United States, Canada and the United Kingdom.
See profile on Linkedin: Michael Gerber
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