“Once you recognize that the purpose of your life is not to serve your business, but that the primary purpose of your business is to serve your life, you can then go to work on your business, rather than in it, with a full understanding of why it is absolutely necessary for you to do so.”
Michael Gerber, The E-Myth Revisited
If I had to summarize in only one phrase the advice of the entire classic entrepreneurship book, The E-myth Revisited, it would be this: work on your business, not in it. Author Michael Gerber says this is the distinction that so many business owners don’t get, and the result is at worst business failure and is at best a sub-par existence that sucks 100% of the business owner’s energy and time.
Your business is a separate entity, a creation by you, and not the master of your life. Because it is separate from you, it needs to have its own identity, its own rules, and its own purposes. Because it is separate from you, it should be something you objectively analyze using data. Because it is separate from you, it should be something you continually tinker with so that over time it does better and better without you.
Gerber says the business is like a separate organism, and this organism lives and dies according to how well it does its primary functions. I would describe a business’s primary functions as simultaneously doing the following:
- Finding customers and deliver a valuable service to them
- Supplying team members (contractors, employees, etc) a paycheck and a meaningful outlet for their talents
- Safeguarding principal of investors and paying them a reasonable rate of return
- Delivering a profit to you, the owner
So think of the business as a farm animal that you must train to help you do all of this heavy lifting. If you had an ox on your farm to pull the plow, would you be out there digging and plowing the fields by yourself 100% of the time? Of course not!
You must train your trusted ol’ ox; otherwise, he can’t do the work he’s meant to do. Once the ox starts to do more of the work, you can then be in your proper place as observer where you can use your greatest tool – YOUR BRAIN – to continue making improvements to the operation.
What does working IN your business look like? For me as a real estate entrepreneur it is marketing my business, talking to prospects, discussing deals with lenders, overseeing contractors, paying bills, completing tax returns, and doing other details that must get done. These are the regular internal activities that make my business succeed.
What does stepping back and working ON your business look like? For me it is studying how to improve my marketing. It’s thinking about the best processes for converting my prospects to customers. It’s creating systems and finding technology to handle many parts of my business. It’s recruiting, communicating with, encouraging, and training the people on my team to do their jobs better.
So, working on your business requires you to develop and perfect systems and processes and then delegate them to capable, trusted team members. Your team members drive the machine (your systems) that essentially “plow the fields” of your business landscape. Instead of you manically and feverishly working and never having time to think, you’ll now have systems and processes that you can observe and improve over time.
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A course by Coach Carson that teaches you how to run the numbers so that you can confidently analyze and buy profitable rental properties. It also includes Coach’s rental analysis spreadsheet. Get the CourseJust like tinkering with a car, the tweaking and optimizing of your business never ends, but by doing this work you will eventually own a well-oiled machine that does its ultimate purposes – including delivering profits to you.
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Great article Chad! I always struggle with trying to figure out what I need to be doing in my business and what I need to let others do for me. I often feel like if I was not involved in every part that the business would crumble. Having a contractor background and mindset, and now trying to switch to an Investor mindset, is one of the biggest challenges I face. I find myself always overlooking EVERY part of our contractors work to make sure its being done my way. I need to trust they are doing it correctly (thats why I hired them) and spend more time running my business, find more deals, and perfect my methods instead of trying to be involved in every part of Thier business.
Hey David,
I share your struggle, my friend! I have gone to either extreme – trusting too much and then micromanaging too much. I think the best comparison to this is sports. John Wooden, my favorite coach, was a detail guy like you. He made sure his players tied their shoes right on the first day of practice! But he also trusted his players and assistant coaches once they earned his trust. Maybe that’s the problem? We don’t always trust our contractors. The question is whether the contractors warrant our trust or not. If not, we probably need to lwt them go and recruit better contractors who will. That might mean paying a little higher rate, but if they are truly good we can then use our free time and energy to go make more money on the next project. I’m preaching at myself, too, by the way! So maybe we can both try it:)