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by
Bill Dueease
Copyright © 2004
This year, over 800,000 of the approximately
2,000,000 start up businesses will fail!
Nearly 1,000,000 of those remaining will
fail within 3 years. Why do so many businesses fail? Many studies show
that approximately 98% of all failures occur because of the owners. The
other 2% are a result of acts of God.
There are three different ways to use your energy, and your physical and
mental efforts to earn money. I call them the three
"Games of Work," and they
define the types of relationships between people and their work. The rules
that players have to follow to succeed for each "Game" are shown
below.
1. Bureaucrats,: Do what it takes to protect
or expand their position; Will divert responsibility whenever possible,
but will take credit for desirable results of others; The success of the
organization is secondary to kissing up to those who make decisions about
promotions, salaries and job security; Have virtually no control over
their job security; And are compensated for basically showing up.
2. Partial Entrepreneurs: Choose to be responsible
for work performed or results achieved in their specialized field, but
do not want responsibility for the total business. Have more control over
their job and its security; And are paid for the specific results they
produce. Examples of Partial Entrepreneurs include; commissioned salesmen,
multilevel marketing members, franchisees, and real estate agents.
3. Business Owners: Take full responsibility
for their business; Are in full control over their job and its security
(whether they know it or not); Have no one in the organization to kiss
up to; Learn to pass on as much credit as possible; Constantly focus on
the success of the business; And are compensated only from the profits
of the business.
As you can see, the rules of a Bureaucrat and a Business Owner are completely
opposites in all categories, and the Partial Entrepreneur is basically
in the middle. The mental effort it takes to convert from Bureaucrat or
Partial Entrepreneur to Business Owner is much greater than most people
realize. Many business owners never fully make the transition.
Action: Before becoming a business owner
in the first place, determine if you truly want and will operate under
the Business Owner "Game Rules." If you choose to, do so IMMEDIATELY,
and COMPLETELY! To survive, let alone succeed, you must commit to operate
under the Business Owner Rules 100%. Otherwise, you should seriously consider
playing one of the other "Games of Work" that best suits your
desires.
The success or failure of a business depends on the owner. As the head
goes, so goes the body. Running a business is completely different than
any other "Game of Work," but, believe it or not, the rules
are the same for all types of businesses. Far too many owners fail to
take the time and energy to improve their own ability to run their business.
This means that they need to grow as a person first and enrich themselves
and discover their true passions and priorities to be able to have the
maturity, drive, and energy to allow them to manage themselves and a business
simultaneously.
Action: You will greatly enhance your chances
for success by finding methods of self-improvement in all aspects of running
a business, and continue the process throughout your entire business-ownership
career. Obviously, as you become better at running your business, the
success of your business will also get better. Many resources are available
to you, including respected advisors, mentors, partners, "Godfathers,
" and coaches.
This is rarely true. The fundamentals of owning and operating a business
sometimes referred to as the "rules of the game," are rarely
taught in the U.S. school system. (See Global Entrepreneurship Monitor,
published by Babson College and Kauffman Center for Entrepreneurial Leadership,
July, 1999.)
We are led to believe that an education fully prepares us for running
a business. In truth, the U.S. school system only prepares us to get a
job, not create jobs. The fundamentals of successfully owning and operating
a business are very different from getting and keeping a job. Unfortunately,
most business owners are left to learn these fundamentals through the
age-old process of "Trial and Error" with an emphasis on error.
This "Trial and Error" dependence causes far too many serious
and fatal errors, and leads to stress, financial damage, and eventual
failure.
Action: Learn the rules of the game of business,
other than through the "Trial and Error" method. The very best
way is to find and use trusted mentors, advisors, and/or coaches to guide
you through the process of learning how to improve your capability to
run your business to avoid the many errors others make. Frankly, the rules
are simple, easy to learn, and are based upon common sense, and high integrity.
The three key functions a business must
have executed to succeed are:
The Technical function, which is the execution
of the actual service or product provided by the business. For example
the drafting action of a drafting company, the auto repair actions of
an auto repair company, the production of a boat of a boat building company.
The Managerial function, which is the organization,
coordination, and supervision of the people assets and activity of the
business on a day to day basis.
The Visionary function, which is the discovery,
setting and communication of the future goals and purposes of the entire
business. The leadership to get all parts of the business flowing towards
the long term goals established.
A business that has two of the functions executed in an excellent manner
and the other in a poorly manner will eventually level out no higher than
poor.
Yet, entrepreneurs (budding business owners) and business owners try to
personally perform all three functions themselves. One single person will
have an extremely difficult time performing all three functions at a high
enough level for the business to eventually succeed.
Michael Jordan, one of the best basketball players of all time, could
not translate his huge basketball skills into a successful baseball career.
He proved that the skills needed to succeed at the game of baseball are
much different from the skills needed to succeed at the game of basketball.
And when he returned to basketball, he had to work extra hard to re-sharpen
his basketball skills to his previous levels. Likewise, the skills of
owning and operating a business are specific and very different than the
other two "Games of Work."
Action: Get help from someone, a partner,
an employee or an outsourcing resource to perform at least one of the
two functions for the business. This way that function can be executed
at a very high level and will allow you to focus on executing no more
than the other two at a similar high level.
The three skills
necessary to win in the business game are: Technical
Skills of the business; Managerial Skills
to manage yourself, time, things, concepts, and people; and Visionary
Skills to set future goals and organize the business so that current
activities will contribute to them (See The E Myth Revisited by Michael
Gerber).
Normally entrepreneurs initiate businesses where they bring the technical
skills and motivation to the table. You probably bring Technical Skills
to the table, but to succeed, you will also want to master the Managerial
and Visionary Skills. You are not born with these skills; you learn them.
You are born with natural talents towards certain skills, but you have
to work to perfect them. Michael Jordan, and Tiger Woods were obviously
born with unbelievable talents, but they became successful only because
they worked very hard at developing the skills they needed to win. Likewise,
you will want to work to develop your Management and Visionary Skills
(from the Business Owners Perspective) and continue the process throughout
your business ownership career.
"No one can boss me around;"
Or; "I will create my own job;" "If he/she can be successful,
so can I;" "I will buy a business and enjoy the fruits of ownership;"
"I want to pursue my passion for serving others." And so on.
The stresses and problems resulting from running a business for the wrong
reasons can become overwhelming, especially when you generate little or
no profits.
"The only reason to have your
own business is to Make a Profit." Though this may sound cold and
greedy, you will realize rewards and compensation only from your business
profits. If your business doesn't make a profit, you get nothing. You
might even discover you have been working for nothing, or worse, working
to increase your debt.
This does not mean you have to avoid meaningful, and emotional reasons
for living. Not at all. The profits and personal time gained from the
business will provide you the resources to pursue your life goals. Even
religious institutions require profits and time to pursue their passion
of serving others.
Customers' perspective must be addressed so owners can entice enough customers
to buy their products or services at a price over their costs to produce
the desired profits. From the very beginning, owners should be focused
on enticing customers to buy. Owners who do not know, understand, or appreciate
their potential customers' perspectives will most likely see their business
fail.
Learn as much as possible about your
potential customers. Design and provide products or services, delivery
methods, pricing, and ways to communicate with them around their perspective.
This might require that you get help stepping out of your own perspective
and into someone else's.
The sole business owner has one of the loneliest positions in the world.
Many owners have difficulty confiding in their employees, vendors, customers,
lenders, or competitors, for fear that any one of them will take advantage
of revealed weaknesses. Most owners try to go it alone by working IN their
business, and not near enough time working ON the business. Consequently,
they are not aware of what they are doing, where they are going, or why!
(the "Trial and Error" method).
Find and use Advisors, Mentors, Coaches,
and/or Trusted Partners who have the knowledge and desire to educate and
guide you, with your best interests at heart. All professional athletes
have one, if not several, coaches, advisors, mentors, who help them become
much more successful than they ever could be on their own. Coaches evaluate
your ability to run your business. They will bring you outside the stress,
money, and time pressures you feel from working IN the business, to help
you make the changes to result in improving your profits and reducing
your pressures.
You will become much more successful with advisors. Asking for help is
not a sign of weakness, but a sign of your desire to improve. Learning
from the trials and errors of others is an enjoyable and profitable experience.
Once you find the right advisors, you learn to prevent and correct mistakes
you might otherwise make.
Provided as an educational service by Bill Dueease of The Coach Connection,
where connecting great people with great coaches is our goal.
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