Hey Square Readers,
As we’re getting into reading The E-Myth Revisited by Michael E. Gerber, let’s get deeper into the material. Last week we talked about the first section of the book, covering the main roles and phases of a small business, and how they can lead to things going wrong.
Now, let’s dive into the second section of the book: The Turn-Key Revolution.
Defining the Turn-Key Revolution
The author describes the Turn-Key Revolution as a shift to building a business in a way that focuses on the business itself, rather than just on the products and services. Here the business is a well-oiled machine that can operate on its own from the start, and so efficient and profitable that the business itself becomes the product.
The author frames and exemplifies this as best seen in franchises, specifically the Business Format Franchise. None of this is to say that you have to franchise your business, or turn it into a franchise, in order for it to be successful. But rather, the franchise model can help you bring order and systems to your business to make it more turn-key, so you can focus on the entrepreneurial side of things.
The author writes, “Turn-Key Revolution is a way of doing business that has the power to dramatically transform any small business—indeed, any business, no matter what its size—from a condition of chaos and disease to a condition of order, excitement, and continuous growth. It is the Turn-Key Revolution that provides us with that illusive key to the development of an extraordinary business: the ultimately balanced model of a business that works… The Turn-Key Revolution and the Business Format Franchise were born of a belief that runs counter to what most business founders in this country believe. Most business founders believe that the success of a business resides in the success of the product it sells… The Business Format Franchise is built on the belief that the true product of a business is not what it sells but how it sells it. The true product of a business is the business itself.”
The Franchise Prototype
The author attributes the success of Business Format Franchises to the Franchise Prototype, the model of putting together all of these systems into place from the start, as if one was creating a franchise business. This can be extremely effective to essentially solve many of the business’s issues before they start, developing processes for everything for the business to follow. It sets up rules and order and takes a lot of inevitable questions out of things, which would otherwise lead to inconsistency, extra cost, and exhaustion.
The author writes, “the system becomes the solution to the problems that have beset all businesses and all human organizations since time immemorial. The system integrates all the elements required to make a business work. It transforms a business into a machine… driven by the integrity of its parts, all working in concert toward a realized objective… Once the franchisee learns the system, he is given the key to his own business… The business does the rest. And the franchisees love it! Because if the franchisor has designed the business well, every problem has been thought through. All that’s left for the franchisee to do is learn how to manage the system…
The Franchise Prototype is the model of a business that works. The balanced model that will satisfy The Entrepreneur, The Manager, and The Technician all at once.”
Working On (Not In) Your Business
For business owners, there is often no separation between their business and themselves. Their business can’t run without them, so in turn every element of their lives becomes thinking about and working in their business. Rather than acting as the Technician and working in your business, the author explains the shift to instead having the business run itself using the Franchise Prototype model, and instead working on your business. By this he means creating those systems and processes so you can focus on growth and maintenance, and pretending that it’s the first one of 5000.
How would you get there? The author presents these principles to help guide the creation of those processes and model:
The Six Principles of the Franchise Prototype Model
- The model will provide consistent value to your customers, employees, suppliers, and lenders, beyond what they expect.
- The model will be operated by people with the lowest possible level of skill.
- The model will stand out as a place of impeccable order.
- All work in the model will be documented in Operations Manuals.
- The model will provide a uniformly predictable service to the customer.
- The model will utilize a uniform color, dress, and facilities code.
Following these six principles can help you set up a model for your business that can function and operate without you doing the work everyday. It serves as a framework for you to create systems, rules, and procedures to make this a turn-key business, so you can focus on the high level entrepreneurial goals and vision. Just because it’s called the Franchise Prototype doesn’t mean that you have to turn it into a franchise, but it does make you think like a franchise and create a business that can run smoothly and at a high standard of quality and value to your customers, much like a franchise would.
By spending this time and effort working on creating a business like this, you can make sure your business does everything the same way every time, and you can take a step back, live your own life, and work on getting the business more successful.
The author writes, “Think of your business as something apart from yourself, as a world of its own, as a product of your efforts, as a machine designed to fulfill a very specific need, as a mechanism for giving you more life… as something created to satisfy your consumers’ deeply held perceived needs, as a place that acts distinctly different from all other places, as a solution to somebody else’s problem. Think of your business as anything but a job! Go to work on your business rather than in it, and ask yourself the following questions:
- How can I get my business to work, but without me?
- How can I get my people to work, but without my constant interference?
- How can I systematize my business in such a way that it could be replicated 5,000 times, so the 5,000th unit would run as smoothly as the first?
- How can I own my business, and still be free of it?
- How can I spend my time doing the work I love to do rather than the work I have to do?”
In our next two discussion threads, we’ll talk about Section 3: Building a Small Business That Works, where the author goes into the steps to actually achieve this, and reengineer your business in a more sustainable way.
We’d love to hear your answer in the comments:
- Does this Franchise Prototype model resonate with you? Do you want a business that could run without your constant labor?
- What are your initial thoughts of answers to the author’s questions? How can you get your business to work without you, to systematize the business, to get to work on it rather than in it, and to do the work you love and not have to do?
Feel free to share any other thoughts you have about this book. We can’t wait to hear your thoughts in the comments below!
Don’t forget to:
Happy reading,
Pesso
