Building Businesses To Sell
My day started really early. I woke up at 2am today and couldn't get myself back to sleep. And so I decided to continue reading The E-Myth Revisited: Why Most Small Business Don't Work and What to do About It. That's when I encountered this idea of building your business so that you can actually sell it. It was an interesting read as I never thought of establishing my own business so I can just sell it. For me, and probably for most of us, going into business means keeping it running so that the money will keep coming as well. This book really changed the way I think about running businesses. If you want to learn more about building your business so you can sell it 'Continue Reading' this article.
Come to think of it, it was not my first time to encounter this idea. A few years back, my sister told me of a friend who was actually aiming to do this. She said that after her friend successfully established a business, her friend was able to sell it for millions! Now, her friend is putting up another one looking to sell it in the future as well. Giving it a deeper thought, this idea actually doesn't sound so bad. However, the question is, how do you establish your business to make it worth so much, how do you make it so that you can sell it for millions? Just like what my sister's friend did.
The Business as your Product
Michael Gerber, the author of the E-Myth books, provides us with a simple answer. He said that the key is for entrepreneurs to treat their business as the product itself and not think of the items they are selling or the services they are providing as their product. In treating the business as the product itself, the entrepreneur works on improving the business itself and as a consequence at the same time satisfying the needs of the customers as well.
He said that it is important to build a system that is independent of the capabilities of the person doing it so that the same process can be replicated else where. It is also important to build a system so that the customer is treated to the same experience every time he/she patronizes your business. This is what the author referred to as the Franchise Prototype. Particularly, the author is referring to Business Format Franchising where in a system is built to run the business and people are only needed to run the system. This, he says, gives the business a higher chance of success.
All along, the author was actually introducing to us the concept of franchising. He explained why developing the system to run our businesses is very important. This way we can open up branches of our businesses else where and give it a higher chance of success. He didn't really say that you have to sell your business but in case you want to sell it some time in the future then doing without a system on how to run things will definitely not benefit you. Furthermore, having a system is actually beneficial for the entrepreneur because it allows him to be not working in it but still earning from it. This way your business doesn't have to be your life.
It was truly an inspiring read. I must say that I agree with the author. Especially for small businesses, setting job descriptions, writing operations manuals, and other seemingly insignificant system processes are oftentimes skipped or totally ignored. Although the success of a business is also dependent on so many other factors, developing a business format will definitely increase its sustainability. This is why I think a lot of family businesses don't last through generations because the business format is not passed on properly from one generation to the next.
Get your free email updates. Subscribe here.
1 comments:
-
Thanks for this review. I will try to grab a copy one of these days. If you get the chance, feel free to visit my site for helpful finance tips.
Subscribe to:
Post Comments
(Atom)
