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designates my notes. / designates important. / designates very important.

Thoughts

Stats on failure. Why? He then goes on and on. The real reason I bet most go under? Taxes. You have to make such large profits since Uncle Sam steals probably 50%. That is the real reason. Take taxes out of the picture and you can make anything work.

Around chapter 6 I started thinking: “this is the best business book I have ever read.”

The technician vs entrepreneur comparison is very enlightening.

Franchise prototype as the proprietary operating system for the business.

Exceptional Quotes

That Fatal Assumption is: if you understand the technical work of a business, you understand a business that does that technical work

It is the tension between The Entrepreneur’s vision and The Manager’s pragmatism that creates the synthesis from which all great works are born.

If you want to work in a business, get a job in somebody else’s business! But don’t go to work in your own. Because while you’re working, while you’re answering the telephone, while you’re baking pies, while you’re cleaning the windows and the floors, while you’re doing it, doing it, doing it, there’s something much more important that isn’t getting done. And it’s the work you’re not doing, the strategic work, the entrepreneurial work, that will lead your business forward, that will give you the life you’ve not yet known.

The Entrepreneurial Perspective asks the question: “How must the business work?” The Technician’s Perspective asks: “What work has to be done?”

The Entrepreneurial Perspective starts with a picture of a well-defined future, and then comes back to the present with the intention of changing it to match the vision. The Technician’s Perspective starts with the present, and then looks forward to an uncertain future with the hope of keeping it much like the present.

To The Entrepreneur, the present-day world is modeled after his vision. To The Technician, the future is modeled after the present-day world.

the Entrepreneurial Model has less to do with what’s done in a business and more to do with how it’s done. The commodity isn’t what’s important—the way it’s delivered is.

the Entrepreneurial Model does not start with a picture of the business to be created but of the customer for whom the business is to be created.

To The Entrepreneur, the business is the product.

To The Technician, the product is what he delivers

How can I create a business whose results are systems-dependent rather than people- dependent? Systems-dependent rather than expert-dependent.

I believe it’s true that the difference between great people and everyone else is that great people create their lives actively, while everyone else is created by their lives, passively waiting to see where life takes them next.

Table of Contents

• Forward
• Introduction

Part 1: The E-Myth and American Small Business

• 01: The Entrepreneurial Myth
• 02: The Entrepreneur, the Manager, and the Technician
• 03: Infancy: The Technician’s Phase
• 04: Adolescence: Getting Some Help
• 05: Beyond the Comfort Zone
• 06: Maturity and the Entrepreneurial Perspective

Part 2: The Turn-Key Revolution: A New View of Business

• 07: The Turn-Key Revolution
• 08: The Franchise Prototype
• 09: Working ON Your Business, not IN it

Part 3 - Building a Small Business That Works!

• 10: The Business Development Process
• 11: Your Business Development Program
• 12: Your Primary Aim
• 13: Your Strategic Objective
• 14: Your Organizational Strategy
• 15: Your Management Strategy
• 16: Your People Strategy
• 17: Your Marketing Strategy
• 18: Your Systems Strategy
• 19: A Letter to Sarah
• Epilogue - Bringing the Dream Back to American Small Business

· Forward

page 9:

• if it’s true what Don Juan said in Tales of Power, that “The basic difference between an ordinary man and a warrior is that a warrior takes everything as a challenge while an ordinary man takes everything either as a blessing or a curse,”

page 15:

• A wise person once said, “Know thyself.”

· Introduction

page 21:

• If your thinking is sloppy, your business will be sloppy.

• If you are disorganized, your business will be disorganized.

• If you are greedy, your employees will be greedy, giving you less and less of themselves and always asking for more.

Part 1: The E-Myth and American Small Business

· Chapter 1 - The Entrepreneurial Myth

page 29:

• That Fatal Assumption is: if you understand the technical work of a business, you understand a business that does that technical work

page 36:

• The technician suffering from an Entrepreneurial Seizure takes the work he loves to do and turns it into a job. The work that was born out of love becomes a chore, among a welter of other less familiar and less pleasant chores.

· Chapter 2 - The Entrepreneur, the Manager, and the Technician

page 38:

• The problem is that everybody who goes into business is actually three-people-in-one: The Entrepreneur, The Manager, and The Technician.

• I learned this as a business needs three roles: someone to make it, someone to sell it, and someone to collect the money. This roughly maps as: make it => technician, sell it => entrepreneur, collect money => manager.

page 48:

• It is the tension between The Entrepreneur’s vision and The Manager’s pragmatism that creates the synthesis from which all great works are born.

· Chapter 3 - Infancy: The Technician’s Phase

page 65:

• If you want to work in a business, get a job in somebody else’s business! But don’t go to work in your own. Because while you’re working, while you’re answering the telephone, while you’re baking pies, while you’re cleaning the windows and the floors, while you’re doing it, doing it, doing it, there’s something much more important that isn’t getting done. And it’s the work you’re not doing, the strategic work, the entrepreneurial work, that will lead your business forward, that will give you the life you’ve not yet known.

· Chapter 4 - Adolescence: Getting Some Help

• You hire a bookkeeper and when things get busier have him hire more people. You don’t even know who is working for you, they don’t really care about the business (simply a job to them), and things start to fall apart. Again.

· Chapter 5 - Beyond the Comfort Zone

page 85:

• The Technician’s boundary is determined by how much he can do himself.

• The Manager’s is defined by how many technicians he can supervise effectively or how many subordinate managers he can organize into a productive effort.

• The Entrepreneur’s boundary is a function of how many managers he can engage in pursuit of his vision.

· Chapter 6 - Maturity and the Entrepreneurial Perspective

page 113:

• The Entrepreneurial Perspective asks the question: “How must the business work?” The Technician’s Perspective asks: “What work has to be done?”

• The Entrepreneurial Perspective sees the business as a system for producing outside results—for the customer—resulting in profits. The Technician’s Perspective sees the business as a place in which people work to produce inside results—for The Technician—producing income.

• The Entrepreneurial Perspective starts with a picture of a well-defined future, and then comes back to the present with the intention of changing it to match the vision. The Technician’s Perspective starts with the present, and then looks forward to an uncertain future with the hope of keeping it much like the present.

page 114:

• To The Entrepreneur, the present-day world is modeled after his vision. To The Technician, the future is modeled after the present-day world.

page 116:

• the Entrepreneurial Model has less to do with what’s done in a business and more to do with how it’s done. The commodity isn’t what’s important—the way it’s delivered is.

page 117:

• the Entrepreneurial Model does not start with a picture of the business to be created but of the customer for whom the business is to be created.

• To The Entrepreneur, the business is the product.

• To The Technician, the product is what he delivers

Part 2: The Turn-Key Revolution: A New View of Business

· Chapter 7 - The Turn-Key Revolution

· Chapter 8 - The Franchise Prototype

page 145:

• The Franchise Prototype is the answer to the perpetual question: “How do I give my customer what he wants while maintaining control of the business that’s giving it to him?”

• To The Entrepreneur, the Franchise Prototype is the medium through which his vision takes form in the real world.

• To The Manager, the Franchise Prototype provides the order, the predictability, the system so important to his life.

• To The Technician, the Prototype is a place in which he is free to do the things he loves to do—technical work.

• And to the small business owner, the Franchise Prototype provides the means through which he can finally feed his three personalities in a balanced way while creating a business that works.

page 146:

• a Proprietary Operating System at the heart of every extraordinary business around you

· Chapter 9 - Working ON Your Business, not IN it

page 150:

• Pretend that the business you own—or want to own—is the prototype, or will be the prototype, for 5,000 more just like it.

• (Note: I said pretend. I’m not saying that you should. That isn’t the point here—unless, of course, you want it to be.)

page 151:

1. The model will provide consistent value to your customers, employees, suppliers, and lenders, beyond what they expect.

2. The model will be operated by people with the lowest possible level of skill.

3. The model will stand out as a place of impeccable order.

4. All work in the model will be documented in Operations Manuals.

5. The model will provide a uniformly predictable service to the customer.

6. The model will utilize a uniform color, dress, and facilities code.

page 153:

• How can I create a business whose results are systems-dependent rather than people- dependent? Systems-dependent rather than expert-dependent.

page 158:

• Again from Toffler: “…for many people, a job is crucial psychologically, over and above the paycheck. By making clear demands on their time and energy, it provides an element of structure around which the rest of their lives can be organized.”2

page 159:

• The Operations Manual—the repository of the documentation— is therefore best described as a company’s How-to-Do-It Guide.

Part 3 - Building a Small Business That Works!

· Chapter 10 - The Business Development Process

page 181:

• quantification

• For example, how would you know that by changing the words you use to greet an incoming customer you produced a 16-percent increase in sales unless you quantified it by (1) determining how many people came in the door before the Innovation was put into effect; (2) determining how many people bought products and what the dollar value of those products were before you changed the words and what you said to produce those sales; (3) counting the number of people who came in the door after you changed the words; (4) counting the number of people who purchased something; (5) determining the average unit value of a sale; and (6) determining what the improvement was as a result of your Innovation? These numbers enable you to determine the precise value of your Innovation.

page 182:

• Examples of things to quantify:
  • How many customers do you see in person each day?
  • How many in the morning?
  • In the afternoon?
  • How many people call your business each day?
  • How many call to ask for a price?
  • How many want to purchase something?
  • How many of product X are sold each day?
  • At what time of the day are they sold?
  • How many are sold each week?
  • Which days are busiest? How busy?

· Chapter 11 - Your Business Development Program

page 199:

• Franchise Prototype. The Program is composed of seven distinct steps:
  1. Your Primary Aim
  2. Your Strategic Objective
  3. Your Organizational Strategy
  4. Your Management Strategy
  5. Your People Strategy
  6. Your Marketing Strategy
  7. Your Systems Strategy

· Chapter 12 - Your Primary Aim

page 205:

• I believe it’s true that the difference between great people and everyone else is that great people create their lives actively, while everyone else is created by their lives, passively waiting to see where life takes them next.

· Chapter 13 - Your Strategic Objective

8.4.1. 318:

• Once you have a picture of how you want your life to be, and you come to the realization that it’s more than just things to have and things to do, once you realize that what you and I really want is to have the room, the openness, to expand, to grow, to be more of ourselves, whatever that means, and to find out what that means is what’s most important to us, once you see that, you can then turn to the business that’s going to help you get there; you can then turn to the development of your Strategic Objective.

page 226:

• What’s your product? What feeling will your customer walk away with? Peace of mind? Order? Power? Love? What is he really buying when he buys from you?

• The truth is, nobody’s interested in the commodity.

• People buy feelings.

· Chapter 14 - Your Organizational Strategy

page 251:

• Jack and Murray agree that their Organization Chart will require the following positions:

  • President and Chief Operating Officer (COO), accountable for the overall achievement of the Strategic Objective and reporting to the SHAREHOLDERS who include, on an equal basis, Jack and Murray.

  • Vice-President/Marketing, accountable for finding customers and finding new ways to provide customers with the satisfactions they derive from widgets, at lower cost, and with greater ease, and reporting to the COO.

  • Vice-President/Operations, accountable for keeping customers by delivering to them what is promised by Marketing, and for discovering new ways of assembling widgets, at lower cost, and with greater efficiency so as to provide the customer with better service, reporting to the COO.

  • Vice-President/Finance, accountable for supporting both Marketing and Operations in the fulfillment of their accountabilities by achieving the company’s profitability standards, and by securing capital whenever it’s needed, and at the best rates, also reporting to the COO.

  • Reporting to the Vice-President/Marketing are two positions: Sales Manager and Advertising/Research Manager.

  • Reporting to the Vice-President/Operations are three positions: Production Manager, Service Manager, and Facilities Manager.

  • Reporting to the Vice-President/Finance are two positions: Accounts Receivable Manager and Accounts Payable Manager.

page 253:

• Jack and Murray realize that there’s no difference between the Widget Makers of today and the Widget Makers of tomorrow; the work is the same; only the faces will change.

• The next job jack and Murray take on is writing a Position Contract for each position on their Organization Chart.

• A Position Contract (as we call it at E-Myth Worldwide) is a summary of the results to be achieved by each position in the company, the work the occupant of that position is accountable for, a list of standards by which the results are to be evaluated, and a line for the signature of the person who agrees to fulfill those accountabilities.

• Jack and Murray know that a Position Contract is not a job description.

• It is a contract, rather than just a description, between the company and an employee, a summary of the rules of the company’s game.

page 260:

• If Jack and Murray’s business is going to thrive, they have to find other people to do the Tactical Work so as to free Jack and Murray to do the Strategic Work.

page 262:

• Before long, the Sales Operations Manual contains the exact scripts for handling incoming calls, outgoing calls, meeting the customer at the door. The exact responses to customer inquiries, complaints, concerns. The system by which an order is entered, returns are transacted, new product requests are acted upon, inventory is secured.

page 263:

• Only when the Sales Operations Manual is complete does Murray run an ad for a salesperson.

• But not for someone with sales experience.

• Not a Master Technician. But a novice. A beginner. An Apprentice.

• Someone eager to learn how to do it right.

• Someone willing to learn what Murray has spent so much time and energy discovering.

page 265:

• That your Organization Chart flows down from your Strategic Objective, which in turn flows down from your Primary Aim.

· Chapter 15 - Your Management Strategy

• Use an operations manual, full of checklists and how-to guides, to outline every aspect, however little, of your business.

· Chapter 16 - Your People Strategy

page 291:

• we give everyone who comes to work at the hotel an opportunity to make a choice. Not after they’ve done the work, but before. “And we do that by making sure they understand the idea behind the work they’re being asked to do.

page 292:

• “He wasn’t looking for employees so much as for players in his game. He was looking for people who wanted something more than just a job.”

page 295:

• Make sure there are specific ways of winning the game without ending it. The game can never end because the end will take the life right out of your business. But unless there are victories in the process, your people will grow weary. Hence, the value of victories now and then. They keep people in the game and make the game appealing, even when it’s not.

page 296:

• Never expect the game to be self-sustaining. People need to be reminded of it constantly. At least once a week, create a special meeting about the game. At least once a day, make some kind of issue about an exception to the way the game has been played—and make certain that everyone knows about it.

page 312:

• “The System produces the results; your people manage the system.

• “And there is a Hierarchy of Systems in your business.

  • “The first is, How We Do It Here.
  • “The second is, How We Recruit, Hire, and Train People to Do It Here.
  • “The Third is, How We Manage It Here.
  • “The Fourth is, How We Change It Here.

· Chapter 17 - Your Marketing Strategy

page 321:

• If you know who your customer is—demographics—you can then determine why he buys—psychographics.

page 325:

• So the famous dictum that says, “Find a need and fill it,” is inaccurate.

• It should say, “Find a perceived need and fill it.”i

page 335:

• “In some companies that process is called Lead Generation, Lead Conversion, Client Fulfillment.

• “In your business, Sarah, it’s called Marketing, Sales, and Operations.

· Chapter 18 - Your Systems Strategy

page 345:

• What is a selling system? It’s a fully orchestrated interaction between you and your customer that follows six primary steps:

  1. Identification of the specific Benchmarks—or consumer decision points—in your selling process.
  2. The literal scripting of the words that will get you to each one successfully (yes, written down like the script for a play!).
  3. The creation of the various materials to be used with each script.
  4. The memorization of each Benchmark’s script.
  5. The delivery of each script by your salespeople in identical fashion.
  6. Leaving your people to communicate more effectively, by articulating, watching, listening, hearing, acknowledging, understanding, and engaging each and every prospect as fully as he needs to be.

• AKA the Power Point Selling System

page 347:

• The Power Point Selling System is composed of two parts: Structure and Substance. Structure is what you do. Substance is how you do it.

page 348:

• These scripts (or Benchmarks) are:

  1. The Appointment Presentation
  2. The Needs Analysis Presentation
  3. The Solutions Presentation

• THE APPOINTMENT PRESENTATION Most salespeople fail at the outset of the selling process because they don’t realize the purpose of an Appointment Presentation.

• Most believe that the purpose of an Appointment Presentation is to qualify the customer and ascertain whether or not he is a viable prospect. It’s not.

• The purpose of an Appointment Presentation is one thing and one thing only: to make an appointment.

• The Appointment Presentation moves the prospect from where he is to the second Benchmark in the process, the Needs Analysis Presentation.

• It is a series of words, delivered on the telephone or in person, that engage the prospect’s unconscious (remember?) by speaking primarily about the product you have to sell rather than the commodity.

page 349:

• For example: “Hi, Mr. Jackson. I’m Johnny Jones with Walter Mitty Company. Have you seen the remarkable new things that are being done to control money these days?”

  “What new things?”

  “Well, that’s exactly why I called. May I have a moment of your time?”

• The product? Financial control. Control is the key. The presentation tells Mr. Jackson that there are things going on in the world—“remarkable new things”—that he doesn’t know about (he’s out of control), but he can now become familiar with them (gain control!) by just spending a few moments with Johnny Jones.

page 350:

• THE NEEDS ANALYSIS PRESENTATION The first thing you do in a Needs Analysis Presentation is repeat what you said in the Appointment Presentation to reestablish the emotional commitment: “Remember, Mr. Jackson, when we first talked I mentioned that some remarkable new things were going on in the world to control money?”

• The second thing you do is tell the prospect how you would like to proceed to fulfill your promise to him: “Well, what I’d like to do is to tell you about those things. At the same time, I’d like to show you some incredibly effective ways my firm, Walter Mitty Company, has developed to help you to control money here in your business Okay?”

• The third thing you do is to establish your credibility in the prospect’s mind by communicating two things. First, your company’s expertise is such matters: “We are Money-Controlling Specialists” (we, at E-Myth Worldwide, call that a Positioning Statement). And second, your personal willingness to do whatever is necessary to utilize that expertise on his behalf: “Let me tell you why we created our company, Mr. Jackson. We’ve found that people like yourself are continually frustrated by not being able to get the most out of their money. Frustrated by paying higher interest rates than they have to. By working with financial experts who don’t seem to know what they’re doing. By banking with a bank that doesn’t seem to have their best interest at heart” And so on.

page 351:

• “Do these things ever frustrate you. Mr Jackson? Of course they do And that’s why Walter Mitty Company has created a Money- Controlling System that makes it possible for you to get the most preferential treatment in the financial arena while paying the least for it. Now I know that sounds too good to be true. But let me explain how we propose to go about doing that for you….”

• Here Johnny Jones is communicating that he understands what frustrates Mr. Jackson, and that he has the expertise to alleviate those frustrations—not personally but systematically—through the use of the Walter Mitty Company’s Money-Controlling System.

page 352:

• The fourth thing you do in a Needs Analysis Presentation is describe the Walter Mitty Company’s Money-Controlling System and why it works so well. Not what it does but the impact it will have on the prospect:

  “The Walter Mitty Company’s Money-Controlling System is designed to do three things, Mr. Jackson.

  “First, it enables us to know what specifically bothers you about controlling your money. Because we know that controlling money must be personally tailored to each and every one of our clients. In order to do that we’ve created what we call at Walter Mitty Company a Money Management Questionnaire. By asking you these particular questions, we’re well on our way to helping you get what you want. Before I leave today, I’ll review the Questionnaire with you.

  “Once the Questionnaire is completed, we return it to our Financial Systems Group. This is a group of financial specialists who review your Questionnaire to make certain that it has been completed accurately.

  “If it has, they enter the information into our Money-Controlling System that has been designed to analyze this information and compare it with the broad spectrum of data we’ve assembled over the years. Once having analyzed the information, the System will then create personally tailored solutions just for you, Mr. Jackson. Ways to secure the kind of preferential treatment we talked about earlier, but at the lowest possible cost. Ways of controlling your money and using it to your advantage, not someone else’s. “These solutions will then be prepared in the form of a Financial

  Report that I’ll deliver to you personally and review with you at that time.

  “Should any of our solutions make sense to you, we’ll be more than happy to help you implement them. If not, then at least we’ll have started the process of becoming better acquainted so that we may be of assistance to you some other time.

  “In any case, the Financial Report is yours—at absolutely no cost whatsoever. It’s our way of saying we’re serious about what we do, and would be happy to work with you, whether now or in the future.

  “So let’s review the Questionnaire together, and when we’re done I’ll provide you with a summary of some of the remarkable new things that are happening in the world to control money. And then I’ll take your information back so we can prepare your Financial Report. Okay?”

page 353:

• The fifth thing Johnny Jones does in the Needs Analysis Presentation is complete the Money Management Questionnaire.

• The sixth thing Johnny Jones does is provide the prospective customer with the information he promised and show him how relevant it is to the Financial Report he will be preparing for him. (He could have done this at the outset of their meeting, during the Needs Analysis questioning process, or now, at the end.)

page 354:

• The seventh thing Johnny Jones does in the Needs Analysis Presentation is make an appointment with the prospective customer to return with the Financial Report, reminding him that Johnny Jones will have some valuable solutions for him— at no cost!—and that Johnny will take whatever time is necessary to help the prospective customer understand those solutions, whether he decides to implement them or not!

• Upon completion of the Needs Analysis Presentation, Johnny Jones will have made an appointment that will bring him to the third Benchmark in the Power Point Selling Process, the Solutions Presentation.

• THE SOLUTIONS PRESENTATION The Solutions Presentation is the easiest component of the Power Point Selling Process. Because if Johnny Jones has done his job effectively up to this point, the sale is already made.

page 355:

• Most salespeople think that selling is “closing.” It isn’t. Selling is opening. That’s what the Needs Analysis Presentation does. It opens up the prospective customer to a deeper experience of his frustration and to the opportunities available to him by going through the questioning process with you.

• You now have something to give him.

page 358:

• INFORMATION BENCHMARK
  • How many calls were made? 1
  • How many prospects were reached? 2
  • How many appointments were scheduled? 3
  • How many appointments were confirmed? 4
  • How many appointments were held? 5
  • How many Needs Analysis Presentations were scheduled? 6
  • How many Needs Analyses were confirmed? 7
  • How many Needs Analyses were completed? 8
  • How many Solutions Presentations were scheduled? 9
  • How many Solutions Presentations were confirmed? 10
  • How many Solutions Presentations were completed? 11
  • How many solutions were sold? 12
  • What was the average dollar value? 13

· Chapter 19 - A Letter to Sarah

page 373:

• Comfort makes cowards of us all.

· Epilogue - Bringing the Dream Back to American Small Business