For every person who starts a business of their own, or has a small business, Michael E. Gerber’s book, “The E Myth Revisited” should be a required read. I’m going to post once a week on ideas from this book. For those who have never read it, I’ll boil it down for you, although you should get a copy anyway, I’m only going to talk about the lessons, yet there is much more. Gerber is a wonderful story-teller. For those who have read it, this will be a refresher of a wonderful business-self-help classic that stands the test of time, and it is one of those few books that you find yourself reading over and over…
This week lets see how the concept of a franchise started and how Gerber suggests adopting the ideas for your small business.
Franchising has been around for a very long time. Coca-Cola and General Motors have always franchised as a way to increase sales over a wider area. What they franchised was their name primarily and in the case of Coke, the right to combine their syrup with carbonated water and bottle and distribute the product. A different thing started in 1952 when Ray Kroc, a milkshake machine salesman, walked into the MacDonald’s brothers hamburger joint and became instantly enamored of the efficiency of the processes he saw. He struck a deal to franchise the entire business, right down to exactly how hamburgers were cooked, how the pickles were arranged. Ray, who was modestly successful as a milkshake machine salesman, became a huge success when he grasped the bigger picture and was able to share (and sell) his enthusiasm for the entire business format to others. Ray had the insight to see that he was selling the business, the way it operated, the way it looked, the way it made money. He wasen’t selling hamburgers! The business itself was the product, it was a money machine! He was selling money machines! Later he bought out the MacDonald brothers, changed the name to McDonalds and the rest is history. So, how does this apply to your little business? What Gerber prescribes is to treat your little business as if it were a prototype of a franchise, like a McDonalds. Not necessarily to actually franchise it, but to treat it like one. What it forces you to do is to look at your business differently. To look at it as the product you are selling. That’s the secret, it’s not the commodity your business sells that’s important, it’s the way it sells it! It’s the series of systems you are taught to establish that make up your business model.
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I’m his avid reader of Michael Gerber as I’ve bought quite a number of his books. In fact I’m still reading the E-Myth Mastery and trying to digest it. Have u finished reading that too? I’m sure you done so =)
Who would have thought that a milk shake salesman would be the person who would create one of the biggest franchises. I read the book and loved it. Originally it was just for a class but it rekindled my thoughts on starting a business.