One of my favourite ideas from the "E Myth Revisited" book by Michael Gerber is how you design your business to play its full role in your life with your primary aim and strategic objective.
First you have to start by taking a good look at what you personally want to achieve in your life and you do that in a process which Michael Gerber calls your Primary Aim and only then can you start to consider the role your business has in your life.
Many small business entrepreneurs get this the wrong way around and their business finishes up as the dominating force in their lives with the business owner unable to break free, even for a well earned holiday.
If you are going to live your life purposefully and when you think about it, how else do you want to live? There is little benefit in drifting and allowing yourself to be tossed around by the people and the events you encounter.
So what is your strategic objective for your business?
Michael Gerber defines your strategic objective as "a very clear statement of what your business has to ultimately do for you to achieve your Primary Aim."
This way you will see your business as the means to an end and a way to enrich your life rather than something that enslaves you into a life of service.
Michael Gerber has recently appeared to change his mind about the purpose of a business and in his latest book Awakening The Entrepreneur Within he talks about the need for entrepreneurs to create a great business of significance and size.
It's not a view I agree with and I much prefer this concept - the purpose of your business is to be whatever you want it to be.
There is no compunction to grow if you only want a lifestyle business. It doesn't stop you producing an extraordinary small business that delights its clients and everyone who comes into contact with it.
Your Strategic Objective and Money
There is no denying it. Money makes the world go around and is an important factor in our lives.
How much do you want to earn from your business?
How much cash do you need to extract to live the lifestyle you want for you and your family? It was probably a key factor in your Primary Aim and the business has to deliver if you are going to be successful?
If your business is going to serve you properly it must be designed to provide you with this money throughout its life and with the suitable exit value when or if you decide to sell it.
Your Strategic Objective And Customers
I believe your business is about much more than money which is why I emphasise the importance of being a customer focused entrepreneur.
What is the purpose of your business?
For you to earn your money objectives, your business has to provide great value to your customers and to do that I believe that you must passionately believe in what you are doing to solve customers' problems or to help them achieve their dreams.
That means rising above the commodity product level and seeing your business in terms of what it brings to your customers and how it changes their lives.
The E Myth book reminds me of the famous quote from Charles Revlon:
"In the factory Revlon manufactures cosmetics, but in the store Revlon sells hope."
So what are your customers really buying?
Your Strategic Objective: An Opportunity Worth Pursuing
When you bring your financial objectives together with the need to create great value for customers, you need to decide whether this is an opportunity worth pursuing.
Is the market opportunity big enough?
Can you capture a sufficient market share?
Why should customers buy from you in preference to other suppliers?
Clarifying Your Thoughts
Michael Gerber recommends that you answer a few basic questions as you prepare your strategic objective:
- When will you be finished? Is your business a 5 year project? 10 years? Until you are sixty?
- Where are you going to compete? Do you want your business to be local, national or international?
- Where does your business fit in the supply chain? Are you selling to consumers or other businesses?
- What standards are you going to set within your company?
A Game Worth Playing
I believe that you and your customers are the most important stakeholders in your business and whose interests have to come first.
Your business won't succeed if your customers don't benefit from it over and above dealing with your competitors.
And you are the boss, the controlling force. You set the rules so your views are critical and if your business isn't designed to make sure it meets the committed role in your Primary Aim, why bother?
But that also applies to other stakeholders which is why you have to make sure that your business is a game worth playing for your employees, for your suppliers and anyone else who contacts the business.
The E Myth Revisited
I believe that Michael Gerber's book "The E Myth Revisited" is a must buy for every small business entrepreneur and it is a book I like my clients to have read.
The writing style won't suit everybody. My edition has 268 pages and I could happily edit it down to about 140 pages but there are some profound messages in the book which can help liberate you from your business.