The entrepreneurial myth was explained for the first time by Michael E. Gerber in 1988 in his book, The E-Myth. In The E-Myth, Gerber explains why most small businesses fail and what they need to do in order to thrive. Since we discovered this excellent book in 1995, we read it regularly, still amazed by the accuracy of its advice to business owners.
The problem with SMEs is not that their owners aren’t working enough/hard enough. We believe it’s actually quite the opposite; they work far too much for the profits they get! The problem is that they usually work on the wrong aspects of their businesses. Read our blog post Tips for SMEs: Managing Differently to Work Less to know why.
As an entrepreneur, your job is to build a successful SME. Your business in itself shouldn’t be your job. You should work ON your business rather than FOR your business.
We therefore present 7 steps you can take to work on your business and make sure it’s successful.
Here are 7 steps that will enable you to WORK ON your business and make it successful.
7 Steps to Build a Successful SME
STEP 1: Identify your personal goal
- What standard of living do you want to achieve and maintain?
- What do you want people to think of you?
- What do you want to do for the next 5 years? 10 years? 20 years?
- How much do you need to do these things?
- When will you need this amount?
STEP 2: Define your business vision
Your business should be a way for you to achieve your personal goals.
Define a SMART vision (Specific, Measurable, Achievable, Realistic and Timely) that will allow you to achieve your personal goals and ensure the durability of your business.
STEP 3: Develop your organizational structure
Most businesses are centred around personalities rather than processes.
The result is a chaotic organization chart where the performance of your company is based on the luck, the will, the personality and the good faith of your employees.
When everyone is somewhat responsible for everything, no one is really responsible for anything!
Develop an organization chart with these 6 essential functions:
- Presidency – Thinking and deploying your value creation model
- Marketing – Defining your ideal customer and choosing means to achieve it
- Finance – Establishing your financial strategy
- Management – Optimizing your performance
- Customer Service – Satisfying your customers
- Sales – Converting your prospects into customers
STEP 4: Establish your management strategy
If your performance depends on the performance of your employees, it may be unpredictable.
You can’t control what you don’t measure.
And you can’t measure what you haven’t defined.
You must define your processes. Processes operate your business while your employees operate your processes.
A bad process will necessarily create a variable and unpredictable performance. You must develop, test and standardize your processes before transferring them to your employees.
STEP 5: Manage your human resources effectively
If you want your employees to accept and follow your processes, you need to make sure they understand why they need to so. It is important to clearly communicate your vision and strategic goals.
Create an HR flow of value in order to:
- Attract the right people
- Develop your employees
- Engage and inspire your employees
STEP 6: Improve your marketing strategy
- Listen to the voices of your customers to define their basic and performance needs, as well as the conditions required for them to be delighted.
- Map the customer experience.
- Be flexible. Constantly review your marketing strategy!
STEP 7: Deploy an operational system
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