Transcript:
Building a Replicable Business
The best model for building a successful business is to view your operation as the prototype which a large number of franchise or turn-key operations will later duplicate. The challenge then becomes to maximize the amount of time you spend working on your business rather than in your business.
A key note here is that I've gone through periods of time where I really took the E-Myth to heart - the whole working "on" vs "in." It got to the point where I forgot to sell homes. It sounds stupid, but I was working on really fun things.
I love what I do now because I'm a business owner. Back then, I still loved being a business owner, even though I had nobody else that could produce at the level I could. The key here is to maximize the amount of time working on the business, but you still need to bring in sales. We cover that in the first model where I cautioned everyone to not forget to sell homes during this process.
Your model must deliver value that consistently exceeds the expectations of customers, employees, suppliers and lenders. Unless close attention is paid to the creation of added value and regularly exceeding expectations, it is unlikely there will be any long-term business to build.
So, if your gift is serving buyers and sellers, as you build out these three levels of your business, from infancy to expansion to maturity, that raving fan culture has to stay in your business.
The E-Myth Mentality
Your model must be capable of being operated successfully by people who have very low skill levels.
This is excerpted from a summary of E-Myth. There are no members of my team that have very low skill levels. However, our business is entirely system driven. For a large manufacturing operation, this is a good model. He uses the McDonald's example because it is ran by people with very low skill levels.
That's not to say that my business can be operated without anyone in my business. If we have a key person leave the business, my business doesn't suffer for very long. Other people in the business can assume their production or responsibility. It has to be systems driven.
Only if systems can be put in place so that people without specialist skills can be put in place so people without specialist skills can become involved will the model ever become replicable. Or to put it another way -- if each franchise requires a clone of yourself to succeed, you've got a definitive expansion limitation built in.
Obviously, the point I'm at where I'm not involved in the business and it's still growing, I've achieved what they're talking about. However, if you're growth is dependent on you being cloned, you're definitely not going to be able to scale your business.
This requires you to build a franchise model that is systems-dependent rather than personality- or expert-dependent. You have to build a system where ordinary people can produce extraordinary results.
A good example: recently, my listing specialist left our team. I appreciated her so much because of what she was able to do for our team. The point is that even after losing our top producer, we'll still hit our numbers this year. She was about a third of the way through her goal of 75 sides, but we will still hit our numbers this year without those 50 additional sides.
We're able to service all of her current listings without any of them canceling on us, and close out all the files because our business closes out our files because we have a listing client coordinator. We didn't miss a beat. It was a sad loss, but we were fine because we're really systems driven.
You need to build a system where ordinary people can produce extraordinary results. "Ordinary" seems like a harsh word, but she can't produce the results she had on our team anywhere but our team. Let's end this off with words from the wise, Michael Gerber:
"Most entrepreneurs are merely technicians with an entrepreneurial seizure. Most entrepreneurs fail because you are working IN your business rather than ON your business."
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