The 3 Key Roles for a Successful Business

Have you ever stopped to think what makes one business more successful than another?  Have you ever marveled over the entrepreneur that just seems to have the Midas Touch, turning every endeavor into a road paved with golden successes?

Read on as we explore the 3 essential roles required to build a successful business…

It is often said that history is the best teacher, so let’s first take a moment to reflect on some lessons learned from those around us.  Think of the last business you saw close. Matter of fact, think of all the businesses in your area that have gone bust. Did you consider those business owners entrepreneurs?

How about yourself? Looking internally, do you consider yourself an entrepreneur? Not in the dictionary sense of “takes risk, starts a business” but in the real sense of the word. Are you someone with a vision for a company that motivates other people to try and seize that idea and make it reality? No is an acceptable answer, and in fact a very common one when people are being honest – but this is why many businesses fail.


Fool Me Once…

There is a fatal misconception most of the American public has about small businesses and startups.  Contrary to popular belief, most are not run by entrepreneurial trailblazers burning their way through the woods to the next Apple or Microsoft. The majority of small businesses in American are created and operated by individuals that are really good at what they do, be that consulting or cooking or fixing cars. But, needless to say there is quite a bit more to running a successful business than just performing the revenue generating function.

And this misconception is why they fail.

This insight was documented by Michael Gerber in his book “The E-Myth” (E being entrepreneur) all the way back in 1988. Gerber writes about three types of personalities in business; entrepreneurs, managers, and technicians. While most people assume all business owners are entrepreneurs, more often than not they are actually technicians. These are people that have a valuable skill and decided to start offering that skill on their own instead of working for or through someone else. Typically, however, they lack the managerial and entrepreneurial skills necessary to build a sustainable business for the long term. This is not to say that they cannot learn these skills, just that with a background purely on the operational side of a business, technicians do not have the exposure to other critical functions such as sales, marketing, and human resources.


The Fork in the Road

A successful business also needs entrepreneurial energy, someone with passion, a vision, and drive plus the ability to communicate this. If a business is an energy source, the entrepreneur is the nuclear fission (fusion one day soon) at the core of it. Managers manage, and while they may not have the sheer power of will that draws others in, they are good at controlling the day to day operations. With the proper support in place, managers are also able to recognize and develop talent.

When a small business fails then it is usually due to one of two things. Sometimes the technician’s business never makes it out of infancy. The owner spends all of their time generating profit by performing whatever task their expertise allows and becomes too busy, resulting in a drop of either supply or quality for customers. This can either end with the technician finding equilibrium – and contentment – operating on their own with no plans for growth, but more likely the business implodes from the amount of work and pressure from customers. If the technician is able to successfully hire a few additional hands he typically finds himself stressed and struggling to deal with managerial issues. Some even fall into the trap of management by abdication where they allow others to deal with this headache at the expense of their high standards, often causing irreparable damage to the brand. Neither of these outcomes is desirable.

Unless they get very lucky, the technicians that escape this fate learn somewhere along the way how to play the other two roles – manager and entrepreneur. The value of the E-Myth idea is its recognition that this is in fact not what most people who start a business envisioned when they did so. As technicians, most business owners went in focused on autonomy and perhaps making significantly more by cutting out the middle man between them and those they serve. It takes a rare mix of all three elements to turn this into a sustainable, (comparatively) large organization.


Working ON the Business, not IN the Business

But growth is not the only goal of business. It’s safe to say most of us would like to retire at some point in our lives, or at least move on to something else. After going into detail about the three personalities in business, Gerber goes on to describe the ideal type of business as one that is dependent upon systems, rather than people. In a purely technician run business, everything is entirely dependent upon one person – the technician. Healthy, long term businesses are not dependent upon any people at all. They have systems and processes in place that will allow them to operate indefinitely. Some jobs may take specific skills, but any one person can be removed and replaced and no one should notice a difference.

This is the idea behind a franchise. Someone somewhere has so perfected these systems that they are able to be sold to people with little to no initial understanding of them and after some training and support that person is able to successfully operate that business. Franchises are the zenith of business-as-process, so much to the point that the business idea itself can be packaged and sold to someone.

When you think back to those businesses in your town that didn’t quite cut it, how many were franchises? Chances are a few, but there is a reason that franchises have a much higher success rate. Since most “entrepreneurs” are really technicians, franchises serve them well. The entrepreneurial aspect – and even some management – is provided by the parent company. By buying a known entity with a proven brand, franchisees are outsourcing their entrepreneurial side, dodging the pitfalls highlighted by the E-Myth.

Those that aren’t franchisees (which is most of BIG’s following) should take heed of the depressing failure rates of new ventures and take a minute to be introspective. If you are not an entrepreneur at heart for one reason or another – and most people aren’t – it is always a good idea to seek someone out who is or try to fill the deficiencies yourself. Either way, only by knowing your own blind spots can you seek to address them, otherwise your company could be the next lot with a “for rent” sign out front.

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