There’s a fatal flaw in how many small business owners take my idea of working “on” their business and turn that into challenges they never thought about. Simply put, they download the principles that I put forth in The E-Myth Revisited and replace their obsessive behavior as Technicians with manic behavior as Managers.
Wrong, wrong, wrong!
Because these same small business owners have never stopped to ask themselves one thing: “Is this business actually worth saving?”
My experience tells me that it isn’t.
The facts – that nearly 90% of all small businesses will close in less than five years – tell me the same thing.
No amount of systemization, processes, standards, and procedures can make a bad business idea flourish – and that’s why you need to ask yourself if the company is even viable.
When you quit your job as an employee, did you jump into ownership of a business that did the same technical work you had been doing? Again, forty years of working with small business owners tells me that is exactly what you did, and now, as you try to raise the bar – and your income level, you’re floundering.
You’re dumping money into marketing and social media, you’re writing manuals and systems, and all the while, your business model – the dream you once had for entrepreneurship – has fatal flaws.
You opened a tractor dealership where there are no farmers.
A restaurant on a dirt road outside a small town.
You’re selling software no one buys.
I want you to stop, today, and actually think about your small business: how big can it actually get? Quit making phone calls, quit cleaning the windows, and actually think about what success looks like to you – is it $100,000 in sales? $250,000?
The number isn’t important, but today – right now, in fact – you need to determine how much your business model can actually produce. Realistically. Honestly.
Is this business worth continuing to build?
Those are tough words, but the facts are still the facts: small businesses fail because the owner never understood what they were doing when they opened the doors – they were, as I’ve said many times, really just “Technicians suffering from an Entrepreneurial Seizure.”
So, run the numbers. Do the math. Make the decision.
Why continue to push a rock up the hill, only to have it roll over you?
There is a better way, and that better way is to understand that what you tried to build wasn’t what you needed to build.
Now, if you ran those numbers and the business actually could produce positive results and cash flow, the next question you need to answer is just as simple as the first one, “do I want to do this anymore?”
Harsh? Yes. But again, no one is asking that. We’ve come to think of entrepreneurs as some larger-than-life egocentric Superman who, by sheer force of will, can make new businesses flourish through simple Hard Work and Sticking With It and nothing could be farther from the truth.
Entrepreneurship is a learned skill and a process and small businesses fail because small business owners don’t know and don’t follow that process. Think I’m lying? Think again.
Your “superman” entrepreneur – Steve Jobs, Bill Gates, Ray Kroc, Jeff Bezos – they didn’t succeed because they were especially gifted business people, they succeeded because they devoutly believed in what they were doing and that devotion to their dreams allowed them to find and interface with the people who could further those dreams.
How many people does it take to make an iPhone?
A Quarter Pounder?
To ship your purchase from China to your home?
Take stock of your business, take heed of its shortcomings, and realize that maybe – just maybe – you’ve forgotten what it was that made you want to own your own company in the first place.
Sound pessimistic? Not at all! In fact, right now, I’m more optimistic than I’ve been in years. Why? You’ll find out in the next column.