The idea of running your own business is incredibly appealing: Be your own boss, work your own hours, do things on your own terms, make money doing what you love.
But the reality is that forty percent of businesses fail within the first year and eight percent fail within five years.
Why do so many businesses fail?
In Michael Gerber’s fantastic book The E-Myth, he explains that the reason why most businesses fail is because of the big myth – or fundamental misunderstanding – in what it takes to be successful as an entrepreneur.
The Big Myth:
The notion that skilful technical work and a good idea form a sufficient basis for business success.
You probably started your own business because you excel in a certain field, maybe graphic design, or personal training, coaching or counselling. Or you have a fantastic product that people need. We call the art of delivering your product or service the ‘technical work’ – and you’re the Technician who does this work. If you’re like most business owners, you’re incredibly passionate about making a positive difference using your technical craft.
But if you believe that this is enough, you’ve made the fatal assumption :
The Fatal Assumption: The mistaken belief that knowing how to do technical work means you know how to run a business
(From: The E-Myth, Michael Gerber, 2004)
The technical work is obviously essential, but it’s just one hat out of three that you need to wear as a business owner. And learning how to master these all three hats is the key to business success.
We’ll assume you’ve got this hat covered! It’s why you started your business, because you’re great at what you do. And you love it. You’re a technician, extremely gifted at your craft. This is all about delivering a great product or service.
Entrepreneurial skills are absolutely essential to business success, and if you’re lacking in this area, you’ll need to find ways to consistently grow and upskill in this area. Some people are natural entrepreneurs, while for others it’s a skill set that needs to be learned. You can test your entrepreneurial potential using tests like this one.
So what are the qualities of an entrepreneur?
The entrepreneur is the innovator who looks around and sees a world of opportunities. They’re dreamers and visionaries, forging strategic relationships and collaborations, leveraging their network and pivoting to new possibilities when required. They think like a CEO, focusing on ways they can grow, scale and generate more revenue. They’re public-facing and natural marketers. They love to get in front of the cameras to spread the good word about their business. They know how to make the most of publicity and to build their brand visibility and awareness. They know they’re great and they’re not afraid to tell everyone!
Here are just some of the things you need to do, wearing your Entrepreneur hat:
- Regularly attend networking events or meet with a business connection one-on-one at least once a week. Consistently grow your network.
- Find other businesses with a similar target market and create offerings that benefit your mutual customers and provide a win-win for your businesses (collaborations/joint ventures).
- Proactively grow your brand’s visibility in the market: Seek out public speaking opportunities, be a guest on podcasts or start your own, go live on social media regularly, find creative ways to grow your brand’s visibility.
- Market yourself effectively, generate leads, close sales.
- Take risks and invest in new opportunities with a good Return on Investment.
The Business Manager is the pragmatic one who craves order and structure. Rather than seeing opportunities, they see operational problems to fix. They love to get things organised and efficient. They want things to be streamlined and effective so that your business becomes a well-oiled machine.
Managers engage in forward planning, they set goals, measure progress, and track numbers. Consider them the manager of operations, always looking for ways to free up your time to focus on the technical work.
Here are just some of the things you need to do, wearing your Manager hat:
- Use an online platform to organise your business. Our favourite project management platform at Fempire is Trello – we run our entire business through Trello and couldn’t live without it!
- Get yourself set up with a professional bookkeeping and accounting software like Xero, MYOB or Quickbooks to manage your business finances.
- Actively track your monthly Profit and Loss statements and monitor your revenue against your goals.
- Set clear goals to drive your business efforts and measure your progress against them every quarter.
- Adopt systems, processes and automation to streamline your business operations and free up your time to focus on revenue-generating activities.
Where are You in the 6 Stages of Business Growth?
If you’re not familiar with the six different stages of business growth yet, I highly recommend you check out my article The 6 Stages of Business Growth – and Why You Need to Know Which One You’re In.
During the first four phases of business growth, unless you’re blessed with great start-up capital or angel investment funding, you’ll need to figure out how to wear all three hats – the technician, the entrepreneur, and the manager. You simply won’t have the cash flow to hire a business manager or marketer to get your products and services out to market and to cover all the activities required by the entrepreneur and the manager. Plus, you’ll need to know how to do things in your business yourself before outsourcing to someone else, otherwise you run the risk of getting over-charged by service providers who spot a naïve business owner.
It’s absolutely possible to learn how to be a great Entrepreneur and Manager, and this is precisely why we developed our programs Fempreneur and Female Entrepreneur Mastery – to teach you how to get your business from validate all the way through to profit as quickly as possible, through developing great entrepreneurial and managerial skills.
Once you hit profit, you’ll then be able to start outsourcing some of your key entrepreneur and manager tasks so that you can free up your time to work ‘on’ your business and not ‘in’ your business. Typically the first things to start outsourcing are your marketing and your business admin tasks. As you get comfortable with outsourcing, you can start to delegate more and more tasks to virtual assistants or contractors so that you can focus on doing the work you love.
Business heaven is where you have systems, structures and processes in place such that your business can run without you.
You can start working towards this ideal situation – right now – by establishing and documenting your business procedures and automating your processes wherever possible. That way, you can bring new people into the business and all they need to do is follow your clear procedures or use the systems you’ve set up. And the great thing about this is – not only can you go and take a holiday when you want to – you’re also creating a business that can be sold onto someone else, if this is what you desire.
Need help mastering the three hats required to run your business?
Reach out for a FREE discovery call and we can chat about how I can help you! Go here to book now.
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Are you starting or growing your own business?
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In service to your success,
Kate De Jong, Ph.D