Hey Square Readers,
We’re coming to the end of The E-Myth Revisited by Michael E. Gerber, and so far we’ve talked about the main roles and phases of a small business, and the principles behind designing a turnkey business, and how to test and implement better ways to do things. Now, let’s dive into the rest of Section 3 and finish the book!
Building your Business Development Program
So with all of the theory out of the way, let’s start to dive into the practical side. How do you actually start to design a better version of your business, with every detail thought and planned out?
The author lays out the 7 Steps of the Business Development Program for you to work through to create a business model:
- Primary Aim
- Strategic Objective
- Organization Strategy
- Management Strategy
- People Strategy
- Marketing Strategy
- Systems Strategy
Each step has several questions to think about and work through, so feel free to put your answers in the comments!
1. Primary Aim
The first step is to look inward and figure out your own personal values and what you want your life to look like. Your business is a big part of your life, and if it’s not helping you live the life you want, then it’s just getting in the way. Design not only a better business, but a better life for yourself.
The author proposes to ask yourself the following questions, which you can then use to guide your business, and measure against periodically to make sure you’re on track.
- What do I wish my life to look like?
- How do I wish my life to be on a day-to-day basis?
- What would I like to be able to say I truly know in my life, about my life?
- How would I like to be with other people in my life—my family, my friends, my business associates, my customers, my employees, my community?
- How would I like people to think about me?
- What would I like to be doing two years from now? Ten years from now? Twenty years from now? When my life comes to a close?
- What specifically would I like to learn during my life—spiritually, physically, financially, technically, intellectually? About relationships?
- How much money will I need to do the things I wish to do? By when will I need it?
2. Strategic Objective
“Your Strategic Objective is a very clear statement of what your business has to ultimately do for you to achieve your Primary Aim. It is the vision of the finished product that is and will be your business.”
The next step is to figure out how a business can help you achieve your life goals. It is coming up with standards that you can measure the success of your business idea against, and make sure that it can help you reach that life.
Some of the Standards the author suggests to work through are:
- Money: How much money do you need to live the life you want? How big is the company you’re planning on building? What profit levels do you need to get there?
- Opportunity Worth Pursuing: What kind of business can realistically get you success? Is there a large viable market of people who would actually pay you? What is the Why? What needs are you filling and what are you really selling? Who is your ideal customer?
- Business Model: When is your Prototype going to be completed and ready? Are you going to do business locally, regionally, nationally, or internationally? Are you going to do Retail or Wholesale? What standards are you going to insist upon regarding reporting, cleanliness, clothing, management, hiring, firing, training?
3. Organization Strategy
Next up is figuring out how you’ll organize the people and roles in your company, creating specific lists of responsibilities for each kind of job you’ll need to be done in your business. Having clear job descriptions, or Position Contracts, helps to make sure that everything gets done to a high standard, nothing slips through the cracks, and one person is always accountable and responsible. This should act as a vision for where you want the company to be in the future, and then start to work backwards to get there. And of course, just as before, this is all informed by the first two steps above, to ensure everything fits together.
Once the work of assigning responsibilities is set, the next step is to start to systematize and hire out what you can, ensuring that you can take yourself away from Technician work and instead focus on the Managerial and Entrepreneurial.
4. Management Strategy
The author frames the Management system as essentially a marketing tool. He says that by teaching and training future managers to use the system, it creates an effective and profitable business that finds and keeps customers coming back. This works by putting together everything systems that are proven to automatically entice, surprise, and delight your customers, every single time. This works as marketing because these customers become your ambassadors to shout from the rooftops all about how great your business is.
5. People Strategy
The people strategy is how you get them to follow the Management and operations systems. A lot of this comes down to mutual respect, drive, passion about the work. The work is a reflection of you as the owner, and then by proxy, the employees and managers.
As the owner, you set the tone of how your employees engage in the business, and it’s important to set a good environment that resonates with the kinds of employees you want. He frames this strategy around the rules of a game, which lays out:
- Never figure out what you want your people to do and then try to create a game out of it.
- Never create a game for your people you’re unwilling to play yourself.
- Make sure there are specific ways of winning the game without ending it. T
- Change the game from time to time—the tactics, not the strategy.
- Never expect the game to be self-sustaining. People need to be reminded of it constantly.
- The game has to make sense.
- The game needs to be fun from time to time.
- If you can’t think of a good game, steal one.
Even more than that, creating a rulebook for your employees should consist not just of the operations, but of relationship building and drive, with education, training activities, and corrections and positive reinforcement. Then find the people that want to play your game.
6. Marketing Strategy
Your marketing all comes down to your customer. Your marketing should appeal to their unconscious needs and expectations, and their irrational and split-second decision making process. Understanding your core customer base and building a marketing strategy around their needs is key. This requires constant thought, research, testing, and evolution.
The author writes, “Demographics and psychographics are the two essential pillars supporting a successful marketing program. If you know who your customer is—demographics—you can then determine why he buys—psychographics. And having done so, you can then begin to construct a Prototype to satisfy his unconscious needs, but scientifically rather than arbitrarily… Psychographics is the science of perceived marketplace reality. It tells you why certain demographic types buy for one reason while other demographic types buy for another.”
7. Systems Strategy
Your systems strategy brings it all together to create processes and implement each of these elements. Hard Systems are the infrastructure rules and tools you have in place. Soft Systems are the processes and steps in place for your team to do and follow. Information Systems interact across Hard and Soft Systems, and comprise of setting up and using analytics to monitor and improve.
Now it’s time for you to step out of your Comfort Zone, bring all of this together, and start to implement these frameworks and systems into your business to make things better. Learn, explore, test, and do!
We’d love to hear your answer in the comments:
- Does this model of the Business Development program resonate with? Why or why not?
- What’s your Business Development Program? Share the details of Aim, Objectives, and Strategies for each (or some) of #1-7 above.
Feel free to share any other thoughts you have about this book. We can’t wait to hear your thoughts in the comments below!
Don’t forget to:
Happy reading,
Pesso
