Common SME Business Problems

Three Key Principles

There are three Key Principles adopted by successful businesses. These were first desribed in Michael Gerber’s book “The E-Myth Revisited” (Published by HarperCollins 1995 – ISBN 0-88730-728-0)

The Principle Of Strategy

This is the owner’s dream for the future, what the business will be like when it is “complete”. This is often called the Strategic Objective. This is the owner’s business philosophy. It’s necessary to keep in mind the long-term dream for the business, the strategic objective, while at the same time managing the company on a day-to-day basis.

The Principle Of Working On The Business And Not In It

Most businesses are started by people who are technically good at their work and therefore they think they understand how to run a business, but often they don’t. And that’s the reason most small businesses don’t last past their first year. The technical work of a business and running a business are two totally different things.

The business as a whole is the product, not the things or the services the business produces. If an owner concentrates on doing the technical work of the business, they don’t really have a business, they have a job.

The idea is to work on the business, not in it, and the basic approach is the franchise prototype. Successful business owners take the view that they are going to franchise the business and create the model for many more just like it. If a business owner thinks like they are going to franchise it, they will create a business that runs all on its own, without the business owner. Two things could happen. The business owner will be focused on creating a business, not just turning out a product or service, and they will have the freedom to work in the business or to be partly free from it.

The Principle Of Systemisation

A business isn’t just a group of employees doing work. It is, or it should be, a business system that is operated by those employees. The systems do the work, and employees operate the systems. The business should be systems dependent, not employee dependent.

With no systems in place, the business depends on the owners and on a few employees who run things for them. If the owner or employees disappear, even for a short time, the business could be thrown into chaos. But if they are the right systems in place, the systems run the business and nearly all employees can run the systems