More than two decades ago, Michael Gerber launched his cornerstone book, the E-Myth, short for the entrepreneurial myth. The piece focuses on the idea that most people who want to start a business think that it is enough to know how to make a specific product or provide a particular service. These entrepreneurs usually learn the hard way, through bankruptcy, that they are only covering about 30% of what is necessary to have a successful business.
Lately, technology has facilitated some of the hardest parts of creating a business, including marketing, supply chain management, and even remote team management, so is the e-myth still relevant in the digital age?
Understanding the E-Myth
The primary assumption of Gerber’s work is that any successful business owner has three distinct skills:
- Technician- to be able to create high-quality products;
- Manager — to attend to the daily requirements of a business and take care of tedious details such as accounting, supplies, and payroll;
- Entrepreneur- to dream big and grow the business.
Failing to grow in any of these directions means struggling with your business or just stagnating.
Gerber advises that a business should not start out of revenge or negative feelings such as underappreciation, but as a result of a carefully thought out plan, including the three dimensions. The most significant mistake as a future business owner is to try and do everything by yourself. Your role is to create the framework, to build a system and to engage other people in it. Working in your business, instead of on your business only results in frustration, anger, and burnout. Start with the end in mind and design a strategic objective to define your success.
Entrepreneurship in the digital age
The internet has brought down numerous barriers. Million dollar empires like Facebook started in a dorm room with no capital, just some work, and a crazy idea. Drop shipping allows anyone to have access to hundreds of Chinese warehouses without ever leaving their living room. Social media advertising gives newbies the opportunity to target specific groups with excellent accuracy. Banking transactions are automated, and robot advisors are telling you how to invest and to save. Are these not enough to help any new business owner the inherent obstacles?
Unfortunately, the short answer is no. Of course, the tech tools can help, but only as part of a defined strategy. They will not help you create a killer business plan, or motivate your staff. Also, no app can substitute the visionary thinking of a leader, although a mindmap can help others see what they mean.
One of the things that got more accessible through technology is getting the money to start a business. Also, since a lot of the traditional costs of starting a business like renting a headquarters, buying stock or hiring a fleet are no longer necessary, you can just start with a minimal capital. The good news is that you don’t even need savings, just pop over to these guys and get a personal loan if you believe in your idea.
However, before you quit your day job and start working on your dream business, it would be a good idea to start with a business plan draft. Don’t just assume you will manage and learn as you go. Make sure you follow Gerber’s advice and create a system for your business, setting aside enough time for strategy and development.
The best companies could be transformed into franchises with no additional bother. Think big and imagine how you should design a business if you would not have one work point, but 100. Create business manuals and rules to simplify or eliminate decision making completely.
Originally published at The Daily MBA.