The Entrepreneurial Myth and working 'on' not 'in' a business.
Michael E Gerber, in his book on the E-Myth, points out that there is a fundamental difference between
knowing a technical skill or trade (eg as a designer, mechanic, chef) and running a business based on that
skill (a design agency, a workshop or a restaraunt). Many would-be entrepreneurs who break away from paid
employment to set up their own businesses become trapped, not liberated. They end up working as a cog in a
machine of their own making, rather than setting up a money-making machine that they are in control of.
Many people have a dream of building up a business so that they can eventually sell it and secure a significant financial
reward, maybe for retirement or reinvestment. In order to be able to do this, however, the business must not be dependent
on the owner. Many businesses become virtually worthless once the owner retires and therefore
have no value to a potential buyer.
A true entrepreneur will work 'on' a business rather than 'in' it. In other words, will set up money-generating business,
based on systems, which ultimately can be run by other people and makes money for the owner
without his/her direct involvement.
Franchising is one model that a true entreprenuer can develop, ie a systematic business which can be licensed to other people
who then set up their own businesses and generate profits for themselves - and the franchisor.
In short, the 'acid-test' question is this: have you set up a business which can be sold as a machine/system that can
generate profits even without your direct involvement?
Note: This web page is not intended to provide comprehensive coverage of the subject, merely a brief introduction to provoke thought and to lead to a more in depth understanding and application of the topic, either through further reading - or from me as your management consultant, executive trainer or personal coach in a consultancy project, training course, workshop or seminar.
References and Further Reading
Gerber, Michael E. The E-Myth. Harper Business. 1993
Gerber, Michael E. The E-Myth Revisited. Harper Business. 1995