The Dangers Of The E-Myth
April 11, 2008
I don’t know if you’ve read the E-Myth Revisited. It’s a book about systemising your business, so that you can work on your business instead of in it. And it’s a pretty good book, but it can also be dangerous, depending on how you interpret it.
Why The Emyth Can Be Dangerous
Until I read the E-Myth, I’d been pretty good at focusing on my passions. But after reading it, I got the impression that it was best to start a business that you didn’t have a lot of interest in - that way, you’d never be tempted to be merely a technician, who found it impossible to delegate to others. So, I figured that so long as what you were doing wasn’t morally or legally wrong, it didn’t matter what type of business you started - they were all pretty much the same.
So Does It Matter What Type of Business You’re In?
Absolutely. And my idea that it didn’t matter was ridiculous. I’m really obsessed with customer service, so I figured that any business that allowed me to provide good customer service would be fine. But, it just isn’t enough. You have to be truly passionate about what you’re doing and 100% interested in learning about new developments in your industry.
I’m not saying you can’t make money in business if you’re not passionate about the industry you’re in. But life would be pretty empty if it was about business alone. And it’s a bit of a waste of your life if you don’t love what you’re doing.
The Wake Up Call
My wake up call came when I realised the things I was truly passionate about were no longer the things I was doing in life. They became things that I hoped to get round to when a huge part of my life was over. This is a foolish way to think, as the rest of your life may never come.
Don’t Cling To What You’ve Lost
Are you passionate what you’re doing right now? If not, it may be time to re-evaluate your life too. And when you’re doing so it may be tempting to think - stuff it, I’ll just carry on. After all, I’ve invested too much time or money to pack this thing in now.
The trouble is, when you think this way, you’re liable to become even more bored with what you’re doing and wind up wasting even more time and money.
The Emyth Is Still A Great Book
I still think the Emyth is a great book. It shows how you can free up your time by systemising your business, so you’re working on your business and not in it. However, further reading/learning is required after you’ve read the book, in order to do all this.
Are you enjoying what you do? Are you living life the way you want? Or are you just making do with what you have in the hope that one day, you’ll be able to aim for your goals?
If so, it may be time to re-evaluate your life.
Business Partnership - Is It Financial Suicide?
March 19, 2008
A business partnership doesn’t work for the majority of people. That’s not to say they never work at all. But there’s several things to consider before going into a partnership and there’s many pitfalls you should be aware of, including death.
Why Choose A Business Partnership?
First ask yourself why you would prefer to enter into a business partnership rather than go it alone. The fact that your potential partner is a good friend, or a husband or wife should be the last reason. Just because you enjoy hanging out with someone, it doesn’t mean you’d actually like working with them.
Will they bring capital, or skills or knowledge that you don’t have into the business? If the answer is no, then you seriously want to reconsider.
Why Not Test The Water First?
If it sounds like I have a downer on business partnerships I don’t. But I have been in a bad business partnership before and I would hate to see you get stung. So, if you’ve not already actually started the business you’re considering, why not test the water first? Check out the following pointers to help you decide.
Trust: Is your potential business partner trustworthy? If they’re not to be trusted in other aspects of life, they’re liable to be dishonest in business too and you should run a mile. And yes, some people do enter into business partnerships with people they don’t trust - I did.
Research: This is a good way to test the water. You’ll want to do a lot of research into your business before your start. Is your potential partner willing to put a lot of effort into this? Ask them and if they give one of the following responses you should run a mile: I just don’t have the time, I’d rather you did it, I don’t have the skill, or research isn’t really my thing. Or worst still: It’s difficult to get enthusiastic now, but I know I will once it’s a “real business”.
Vision and Goals: What is your potential partner’s vision for the business and what are their goals in life? Do ask them before you share yours because some folks are liable to go along with anything you say, even if they don’t really mean it. If you want to grow a multi-million pound empire and your potential partner just wants to make enough money to live comfortably, you will almost certainly encounter problems.
Their personal goals will also give away a lot about their intentions for the business. And, if their only goals are financial ones, you may want to reconsider.
Protect Yourself
If you decide you still want to go ahead with the partnership, carefully consider the legal structure. For example, you really want to try to avoid going into an actual partnership where you could both be personally liable for debts if the business fails - especially if you’re married.
1) Make sure you have a partnership agreement drawn up which clearly states how the business ownership is split.
2) Make sure both your names or on the bank account.
3) Agree on things such as salary and bonus and decide how purchases for the business will be made. You could set things up so that you both have to sign cheques, but this can be a pain. And if the other person is so untrustworthy that they’re liable to empty the account, you shouldn’t really be in business with them.
4) Put a plan in writing for what should happen if one of you dies. This may sound morbid but it’s definitely going to happen some day.
Potential Problems
There’s so many potential problems with business partnerships and here are just a few. If you begin to hit any of these problems and you’re unable to sort them out quickly, you may want to consider ending the partnership, before it ruins your business.
Marital problems - If you’re in a partnership and you have marital problems that can’t be resolved, they will affect your business.
Divorce - If your problems are so bad that they lead to divorce, don’t even consider trying to continue to run the business as a partnership. It just will not work.
Friendship Problems - If you go into a business partnership with a friend and you hit a point where you’re no longer friends, it may be time to end the partnership. I know two guys who were the very best of friends. Nowadays, they really don’t get along anymore. Business problems and personal problems that have taken a toll on the business has ruined their friendship and their business is suffering too.
Money - If one partner wants to spend every penny the business makes, whilst the other wants to reinvest it all in the business, you’re really heading for trouble.
Time - If you’ve been trading for a couple of years and one of you wants to devote all your time to growing the business, whilst the other wants to work a three day week, you’ve got problems.
Conflict of Interest - What happens if you want to concentrate all your efforts on growing your business and your business partner wants to invest time and money in additional businesses?
There’s many things that could go wrong too such as personal problems and illness and they could all affect your business.
So What Should You Do If Your Partnership Goes Wrong?
If your partnership goes wrong - you need to end it fast. And if you’re the one who is staying in the business and your partner is leaving, make sure you protect yourself.
1) Change the business bank account immediately so the other partner can no longer legally access it. I really can’t stress enough how important this is because I didn’t do it myself. When my ex-husband left our business partnership, I thought he no longer had access to the account, but he was able to draw significant amounts, for several months simply by taking ID into the bank.
2) Make sure they hand in anything to do with the business - eg keys, equipment, company credit cards and fuel cards. And don’t overlook anything because you think it will be ok. And don’t assume that garages won’t give fuel to people when they can’t see the registration number of the car. Tesco’s certainly do.
3) Do end the business partnership abruptly once you’ve decide it’s going to end. Don’t allow the leaving partner to take their time deciding and come into work only when they feel like it, whilst they decide what they want to do with their life. Replace them immediately, preferably with a new employee - not another business parter and don’t look back.
Have you been in a business partnership before? What were the benefits? What problems did you face? Would you do it again? Please share in the comments section.
This article is part of a series on business problems that can be overcome. If you enjoyed it, click here to subscribe in a feedreader and make sure you don’t miss the rest of the series.
Previous Articles From The Series
There’s No Business Problem That Can’t Be Solved
Risk and Money In Business - The Rules
How Radar Can Improve Your Business
February 29, 2008
This is a guest post by Barbara Swafford of Blogging Without a Blog.
Most businesses are started with one great idea. We go for it, and put all of our eggs into one basket.
In reality, this can work…for awhile.
But, what happens when the economy takes a turn, your products/services lose their demand, or you get bored? Do you have another income source?
If not, financial ruin could result.
That’s where diversification comes in.
Being a story teller, I’ll share a small snippet of what we learned.
Years ago we started an excavation business. Knowing we could be shut down in the winter months due to snow, we incorporated snow removal into our plan. We later added mainline testing and wood recycling. Often, when one phase of the business was slow, other parts were not. Diversification kept the cash flowing, the jobs coming, and provided constant work for our employees.
If you have a store front, think beyond the obvious reason customers are coming in.
A gift shop sells gifts. A customer is coming in to find a gift (dah). Most likely, they will take the gift home, wrap it, and attach a card.
Add cards, wrapping paper, ribbons, bows, scissors and tape to your gift shop inventory. Consider offering a wrapping service for a small fee. Offer free wrapping with a purchase over $xx.xx. Expand this service to include wrapping items not purchased in your store, charging more, of course. The holidays could bring in tons of business. The key is to have beautiful paper, ribbons and bows. Make a statement, so others will ask “Where did you get that from?”
Take a Starbucks store for example. When you think Starbucks, you think coffee. But if you go into one of their stores, they offer bakery items, cups, prepackaged coffee, thermos bottles, candy, gift packs, and special blends (beans or ground).
A store front IT business could sell a small assortment of office supplies, or if you have a favorite brand of printer, consider becoming a dealer/distributor. Expand your services by offering the installation of upgrades. Set up an account files to notify customers when a new product is introduced to the market. Become a “computer doctor” who does house calls - not just for businesses, but for individuals as well.
A plumbing repair service could offer a small selection of faucets, shower heads, and hoses. Catherine, who works from home, could have an online store to which she could refer her customers. Also, when her employees go out on a service call, they could stock a few classic pieces in their vans, and offer to install a new one, if the old one is beyond repair. This could eliminate return service calls, saving time and money.
By analyzing your current business, there are many ways to add on sales, and/or to offer additional services.
We need to think like a customer. Make your business a “one stop shop”.
Most people are pressed for time.
Be prepared to give them what they need, even before they know they need it.
Use your radar.
Do you have a business you are trying to diversify?
Need help?
Leave a comment and let’s brainstorm.
You can read more great articles by Barbara at Blogging Without A Blog .
The Pros and Cons of Outsourcing
February 26, 2008
Have you considered outsourcing some tasks in your business? Outsourcing has become popular, but like all great ideas, there’s some pros and cons. Check them out to decide whether outsourcing is right for your business.
The Pros Of Outsourcing
It Frees Up Your Time: Outsourcing mundane and routine tasks frees up your time, so you can concentrate on building your business.
You Save On Labour Costs: Outsourcing to countries where labour is cheaper means you cut costs.
No More Payroll: Payroll can be pain and outsourcing instead of employing people saves you having to do it.
Plug The Skills Gap: If there’s a lack of potential staff with particular skills in the area you live in, you can overcome the problem by outsourcing.
No More Costly Office Space: Outsourcing saves you having to spend a fortune on renting an expensive office.
You Won’t Be Left In The Lurch: If you use an agency that provides adequate cover, you won’t need to worry about covering holidays, sickness etc.
Lower Equipment Costs: You won’t need to worry about the costs of equipment, computers etc, or repairs and maintenance.
Convenience: If you outsource virtually everything, you can work from home, or anywhere else you choose.
The Cons of Outsourcing
Communication Problems: Language or cultural barriers can cause misunderstandings.
Time Difference: It’s more difficult to keep in touch with a Virtual Assistant if they’re from a different time zone. Also, they could wind up waking you up in the middle of the night if they forget (this once happened to me at 3am).
Lack of Team Spirit: It’s more difficult to build a successful team and create a feeling of belonging, if you outsource, instead of employing people.
Your Local Economy Won’t Benefit: Outsourcing everything prevents you from providing work to local people.
Security Issues: The security of your business may be at risk if VA has access to your computer system, business credit card etc.
I’ve outsourced some things before - such as call answering, site design and a bit of writing. And I must admit, I’m tempted to take on a VA on a regular basis if I can find a good one.
Have you outsourced any business tasks before? How did it work out? Would you be tempted to outsource and if so, what tasks would you outsource first? Or do you feel that the cons of outsourcing outweigh the pros?
