March 6, 2017
Many of the small business owners choose to focus on their own technical skills ignoring working on their business, in his book The -E-myth Michael E. Gerber refers to three types of business owners;
a) The Technician.
b) The Manager.
c) The Entrepreneur.
Business owners will always need to change hats between all three types, because all of them are needed for the success of the business, The Technician is needed to deliver products and services, the manager is need to create systems, and the Entrepreneur to grow the business and to take risks.
Systems are essential to run businesses, a good accounting and record keeping system is important to measure the business health and to draw a map for future growth.
A medical doctor would request a blood test to screen certain ratios in the blood and based on the “numbers” he would address the issue, likewise if you can’t measure your outputs reliably, if you are not able to quantify the outcomes of your business, it would not be possible to prescribe the right medicine!
The focus should not only be on The Bottom Line but also all factors that may impact it. Without making profit small businesses will not be able to survive…
In their book “Small Business Big Opportunity” Rob Hartnett & Karina Keisler ask 3 very clever questions;
1- Q: Why are you in business?
A: To make profit!
2- Q: What business you are in?
A: The selling Business!
3- How much are you selling your life for right now?
A: Your income / your hours of work!
I really like that, I always need to resist the accountant me, who would always focus on accounting technicalities and would ignore “The Bottom Line”, the accountant who would like to work in the business rather than working on the business.
• Without profit you can’t survive for long, even charities would seek some profit!
• The technician will always do a great job, but will ignore creating systems to improve “The Bottom Line”
• Why should you pay yourself less than others would pay you doing the same job for them?!
• And finally, would you know your business and what measures you need to have in place