Business Social Networking for New Zealand Businesses
The E-Myth in business in NZ
For those who haven't read Micheal Gerber's "The E-Myth Revisited" (or earlier without the revisited), it identifies three "personalities" needed to grow a business: entrepreneur, manager and technician.
While most business owners have technical skills in whatever their business does, it is almost impossible for an entrepreneur to excel as a manager - and vice versa. Their personality types are just not compatible.
I did say "almost". I once worked for a man who seemed to handle both worlds very well. We were bought by one of NZ's top companies, and he was made CEO. While he did have success, he also had his share of failures. (This also happened in the small company - but the issues were different.) By failures I don't mean the company ceased making profits (they did have some mixed fortunes at times). But not all of his team were aligned with his goals - to many the result was they just had a job.
It was my time with him - still the best boss I ever had - that convinced me to change direction. Now with more than a decade as a chartered accountant with an interest in helping smaller businesses grow, I've come to the conclusion that most small business are basically not-for-profit organisations. They don't aim at that - but they simply don't make enough directed effort. They don't have a market wage, market interest rates on capital involved and market director's fees to reward them for the businesses direction. And even if they have those - they don't then have a real profit. And to cap it all off, they often don't have a decent lifestyle.
Probably 90% or so of our smaller businesses either haven't heard of such basic issues - or just don't make then work for their business. In popular jargon, the owners are still working IN the business - not ON the business. Thus they basically have a self-employed job rather than a business. If they were off for a few weeks, the business would come crashing down. It's so rare to see things done "properly" that when I come across a real "business", I take my hat off and applaud what they have done.
So the question is, are you basically your business - or do you have a business that would survive and even flourish without you?
Tell me I'm wrong - I love to hear good news stories. But given most Kiwi business on this group are already doing something a little different, I still suspect that maybe 75 - 80% of us are just doing what we can to get by.
While most business owners have technical skills in whatever their business does, it is almost impossible for an entrepreneur to excel as a manager - and vice versa. Their personality types are just not compatible.
I did say "almost". I once worked for a man who seemed to handle both worlds very well. We were bought by one of NZ's top companies, and he was made CEO. While he did have success, he also had his share of failures. (This also happened in the small company - but the issues were different.) By failures I don't mean the company ceased making profits (they did have some mixed fortunes at times). But not all of his team were aligned with his goals - to many the result was they just had a job.
It was my time with him - still the best boss I ever had - that convinced me to change direction. Now with more than a decade as a chartered accountant with an interest in helping smaller businesses grow, I've come to the conclusion that most small business are basically not-for-profit organisations. They don't aim at that - but they simply don't make enough directed effort. They don't have a market wage, market interest rates on capital involved and market director's fees to reward them for the businesses direction. And even if they have those - they don't then have a real profit. And to cap it all off, they often don't have a decent lifestyle.
Probably 90% or so of our smaller businesses either haven't heard of such basic issues - or just don't make then work for their business. In popular jargon, the owners are still working IN the business - not ON the business. Thus they basically have a self-employed job rather than a business. If they were off for a few weeks, the business would come crashing down. It's so rare to see things done "properly" that when I come across a real "business", I take my hat off and applaud what they have done.
So the question is, are you basically your business - or do you have a business that would survive and even flourish without you?
Tell me I'm wrong - I love to hear good news stories. But given most Kiwi business on this group are already doing something a little different, I still suspect that maybe 75 - 80% of us are just doing what we can to get by.
Replies to This Discussion
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Permalink Reply by Lisa MacFarlane on -
Being new I definitely AM my business :-) I do agree with your conclusion "that most small business are basically not-for-profit organisations" too, albeit unfortunately! I think it takes a lot of work and learning to get a business to where it needs to be. Unless the idea is generated from a partnership, at some time in any business's start up phase there is only the one person.
I'd love to tell you you're wrong in my case but I am accepting of the fact that I am at that phase of development where things don't happen on their own. I know I could walk away and ask someone else to cover, but not walk away altogether.
I hope to share (with this comment) is that it's ok to be that one person for the period of time that a startup needs you. But perhaps I could add to value to your discussion by recommending that others include in their longer term vision and strategies an exit strategy for themselves whereby they can envisage and focus on how they will walk away from the hands on management to truely become Directors rather than Do-ers.
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Permalink Reply by Phil Astley on -
Yes - I can see I didn't make that bit clear. Many businesses start up with only one person - and it's especially hard - but no less important - during that stage to work "on" rather than "in" the business. The only way this works for many people is to be part of a larger group. Trouble is in my experience, many of these never really get anywhere. It's comforting to know other people are in the same boat - but that's where most groups stop.
Treating it as a business from the start means each decision is consistent with your long-term goals. The model we use as a business tool is a "rocket". One area of that is people - which many startups of course don't worry about.
We have a philosophy in our business - one that's been learned through the school of hard knocks. And that is that people must have been in business at least two years before they've learned enough to listen to others. Obviously there are exceptions - but most people in business are too full of too much enthusiasm and energy to waste it on learning from other people. And I'm speaking from personal experience here - looking back I can see myself in the same position.
The other aspect of being in startup mode is that even at the very start, you'll make more real progress if you start with the end in mind. Of course the end may change over time - as you grow, and as technology and the market changes - but too many startups chase every opportunity / fad - and don't have a clear picture of where they're going.
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Permalink Reply by Keith on -
Wahoo - thaz me... Grab_it... Lift - Point (somewhere) ???
& BANG.......!!!!!!!
Scattergun approach - Often hits nothing ... (but does work sometimes)
& As for working? IN, ON ? "under" or ON_TOP? Uh-um? No? - I don't actually.
I never have really, & THUS actually "set_it_up"... to fail ... (deliberately)
As I KNEW I was (going to be) totally incompetent in -any form of - MANAGEMENT.
So ???
Yes - it can easily "trickle_along" (as it has for 9yrs)
... running slightly under the IRD radar ...
& YES - I "do"
(or rather my very efficient ONLY REAL WORKER ? Accountancy Firm - "paid_outsiders" DO)
Legally claim GST "Returns" - (every time),
Also factored INTO the equation - BEFORE conception...
But- I must admit -that for some six years - I TRIED everything I could - to "GET someone- ANYONE... to do a MBI-MBO? thing?
I must have written to, visited, telephoned & or "Contacted" anywhere from 50 to 100 VC "companies" etc etc...
PLUS ... "COLD_CALLED" just about every engineering firm (in OTAGO, SOUTHLAND & some right across NZ & AUSTRALIA - (I had patents in both countries)
Everyone whom I considered as a GOOD logical "start_up_assistor"
NONE were of any assistance... NONE.
They all wanted a START_UP "business" WITH A LONG HISTORY of success AND "forward" contracts?
Eh?
How the F"""? is a NEW start_up - with NO capital & virtually NO_PRODUCT?
???
Ever going to HAVE that portfolio?
So - I decided - stuff-em?
I can continue quite EASILY - in this PLAY_WAY_NO_WAY mode - forever...
How? Easy baby ...!!!
I STARTED this from the U/E bnefit... migrated through the sickness benefit- Until AGE, Heart, back, broken HIP & finally major Bowel surgery...has ensured...I AM ON... a "permanent" Invalids Benefit...
& DO NOT NEED to even PAY myself a cent (never have -from Directors FEES... ?)
Plus... as IT DOES "sell" things, provide the ODD paid service.. as well as hundreds of FREE_BIES, sell an occasional product, do an install etc...
IT IS A FUNCTIONING COMPANY.
Just one - with NO EMPLOYEES...
Only the OWNER... voluntering assistance & IP knowledges...
Thus yes... I can & HAVE simply walked away - for weeks at a time...
Like?
It's been 18mths since I last seriously "WORKED" (physically)
But then.... ???
The Company also does (a lot of) very, very intensive R&D "researchings" via the internet, & in actual "audio testing" ... which I term a "pleasure" - not WORK...?
So - maybe I?
Am the exception - which proves YOUR_RULE?
As any simple GOOGLE "proves"?
http://tiny.cc/QUIX_NZ_on_the_WEB
&
http://tiny.cc/QUIX4U_on_the_WEB
These are just 2... of some ? I forget? (100 or so world wide)
& Yet- just these two?
Cover some FIVE or SIX results pages... before ANYONE ELSE gets a looksee into?
QUIX4U ?
Results of about 4,750 for QUIX4U. (0.27 seconds) = Good ?
&
QUIX - NZ ?
Results of about 685,000 for QUIX - NZ. (0.49 seconds) = Better ?
&
The total "tweets" on twitter (not counting about 2,000 "deleteds")
Between @QUIX_NZ & @QUIX4U
? = About 10,000 tweets ... ??? BEST OF ALL ?
Phil Astley said:Yes - I can see I didn't make that bit clear. Many businesses start up with only one person - and it's especially hard - but no less important - during that stage to work "on" rather than "in" the business. The only way this works for many people is to be part of a larger group. Trouble is in my experience, many of these never really get anywhere. It's comforting to know other people are in the same boat - but that's where most groups stop.
Treating it as a business from the start means each decision is consistent with your long-term goals. The model we use as a business tool is a "rocket". One area of that is people - which many startups of course don't worry about.
We have a philosophy in our business - one that's been learned through the school of hard knocks. And that is that people must have been in business at least two years before they've learned enough to listen to others. Obviously there are exceptions - but most people in business are too full of too much enthusiasm and energy to waste it on learning from other people. And I'm speaking from personal experience here - looking back I can see myself in the same position.
The other aspect of being in startup mode is that even at the very start, you'll make more real progress if you start with the end in mind. Of course the end may change over time - as you grow, and as technology and the market changes - but too many startups chase every opportunity / fad - and don't have a clear picture of where they're going.
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Permalink Reply by Keith on
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But... in so saying...
I still DO as much as I can - MY WAY... not just in TRYING desperately hard - at every chance ...?
To Plug, plug, P_L_U_G... "plug" - for my Trademarks, Market Recognition & also hopefully "even" with the end desire - to "attract" an efficient & (single_minded) HIGHLY ambitious " productivity_charged ? MBI "group" of management "staff" ... whom may "WANT" to come on-board - with EITHER (or BOTH) a buy-in &/or a BUY_OUT strategy in mind... (be that 5yrs, 7yrs or many YEARS).
A "thoroughly devoted & "focused" GROUP of specialists...
Whom?
(for the lack of the politically "CORRECT" ? choice words)
DO NOT "actually" have the of the REQUIRED entrepreneurial skills - to ever "FORMULATE" ? ANY ? idea (themselves)...
BUT "do" in their Marketing, accountancy, number crunching, full_on Marketing manners...
& with their University MBA's & other highly technical abilities...
CONTAIN - all of those (absolutely) "nescessary" qualities... which I KNEW - before starting my Company - that I would NEVER possess.
But - As for "ME" having those very "qualities" which I also - KNEW - to be paramount - to any likelyhood - of "success" for MY COMPANY?
Sorry - I never HAVE "aspired" - to (ever want to) SIMPLY_BE (a part of) MANAGEMENT.
&
HAH - It's NOT "my" that I speak of... but it's JUST - that as "_I_" am the only shareholder - I_MUST - by default - state MY_COMPANY?
Sure - I started this... and have invested (no not wasted)
MANY HUNDREDS OF THOUSANDS OF DOLLARS... over not just 10 yrs - but virtually ALL my life...
BUT?
Even I am not "that thick...
as MANAGEMENT?
I recognise my limitations...
It's just no-one ELSE... can SEE there is a HUGE benefit... to "keeping" the MAD_PROFFESSOR" locked IN - to the company.
I would prefer - to simply BE? Tucked away & IN_HIDING - somewhere in a darkened room - exploring audio accoustics & "lighting effects" (of audio) ... which is WHY - I set this "COMPANY" - in the manner I did... to DELIBERATELY FAIL... with - or without me.
Therefore - it SHALL continue to "succeed" - in doing exactly THAT (in perpetuity).
That is... until someone "SEES" that yes - there IS actually a rather BIG "goldmine" - hiding under that BIG pile of rubbish?
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Permalink Reply by Lisa MacFarlane on
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Hahaha that is so funny! I sat here thinking "is he for real???....and is that even legal?". I hope in all that wisdom I learn something but I must admit I struggled to comprehend the point in its entirety - the stitch in my side from laughter was too distracting. I must say I understand completely the "BUT "do" in their Marketing, accountancy, number crunching, full_on Marketing manners... & with their University MBA's & other highly technical abilities... CONTAIN - all of those (absolutely) "nescessary" qualities... which I KNEW - before starting my Company - that I would NEVER possess" statement. I am very accepting that I have my own weakenesses, and thankful I am aware of 99% of them. Thanks for the post!
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Permalink Reply by Keith on
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Is that even "LEGAL"?
Ah.? Yes- it is actually.
One of the leading (senior) accountants of the Ex-Alexandra "Inland_Revenue_Office" ...
(when it was closed & disbanded) became a "partner" in a wellknown "LOCAL" Alexandra Accountancvy firm.
As the IRD "had" thus closed it's Alexandra Office (it was around 1998 ? -1999),
& I had a "NZ & International Patent - in Progress"...
i was advised by the the Govt Grants Board... to utilise both a Business Consultancy firm & an Accountant.
It was that accountancy firm (& ex Senior IRD accountant) whom discussed all the various Accountancy, Taxation & Other LEGALITIES - for the IRD's requirements..
For & because of my pending Intenational & National "Patents" & thoroughly advised on the BEST BUSINESS PRACTICES - which I could utilise ... for ensuring the LONG TERM sustainability of those Patents & their processes, to be of value to & with me...
And whom actually strongly suggested I OPERATE AS A COMPANY - (in which manner I have LEGALLY DONE for nearly 10 yrs now) to act "predominantly" as that IRD & GOVT COMPLIANCE - LEGAL_PAPER_TRAIL
(for said Patents and any OTHER work, manufacturing, licencing etc., etc.. which should come of it).
As I was ON - a WINZ U/E benefit at that stage... I (also) spent MANY MANY HOURS, going through all their 'protocols, application processses" etc., etc , some of which - although of good basis - were actually DESIGNED to fail & thus of no value, until we discovered that EVEN those- designed to assist people INTO self employment, COULD NOT ASSIST AS ? (why?)
I was already, and thus HAD STARTED ... underaking the PATENT processes (even) on a personal front...
Such that THEY COULD ACTUALLY NOT HELP, except to state, that IF I refused ANY income stream, or Directors fees... I could retain my full WINZ benefits - wouthout ANY loss of benefit entitlement.
The ONLY stipulation - that I MUST adhere to... IS TO NEVER RECEIVE an income stream - from the company.
(If it DOES - however appear that the Company HAS become profitable "enough" to re_pay the thousands of $ of PERSONAL INPUTS (not regarded as income)... PLUS be able to START PAYING a living wage either via directors fees, or simple employment- THEN - I can apply to dissolve my entitlement to the Permanent Invalids benefit.
Thus? Either way - it either succeeds - or it doesn't...
But - in all honesty - I don't (even) realy need to care .?.
(My only sole problem is this... IF I become employed & FAIL - then I cannot reclaim the benefit ... which means I would actually be reather foolish - to attempt to succeed eh?)
That knowledge, & with the IMPUTATION CREDITS available via both GST returns forecasts, as well as the actual INCOME TAX CREDITS I can "build_up" (& thus I have aquired several hundred thusand $ of income tax credits already) ... EVENTUALLY decided me on this course of action- and we established this as a GOING concern in Oct 1999.
With the knowledge that there was a significant likely hood of it, ALWAYS having - ZERO employees, AND to never ever actually BREAK EVEN .. (nor let alone "run" above the red line?)
Sure- I have INPUTED hundreds of hours Voluntary labour, Intelectual knowledge, time effort & anxiety... as well as not only all of mine, but that my close relations financial resources, one of my children also inputted (his) funds, I've even had & paid for, some major LOANS & plus an odd Biusiness_Mentor (Govt Assistance) package, to (NOW) have this trickling along JUST NICELY thanks ... floating just "under" the surface- financially.
BUT AT ALL TIMES... 100% LEGAL.
(as originally outlined would occur- by that ex IRD senior member)
Since starting with a roar & a rush in 1993, (yes six years before the Company was officially formed) ... I have suffered several MAJOR health, physical accident & even a few Surgury_Related "PERMANENT" dissability_problems ... which (sadly) has seen most of the heavier aspects of an 'income' stream dissapear, such as my Electrical servicings, & contract labouring, or horticultural services, even the Gate Hinge (manufacturing) concern has had to "slip" by the wayside ...
But the AUDIO section is doing ... "REAL_FINE" ...
Check it out..
Audio Re-Mastering samples & an Educational_Video are on Xanga
http://tiny.cc/QUIX_Audio
&
http://tiny.ccQUIX_Video
Whilst at presentl, there are just these two:-
Educational_Videos (available) via- QUIX4U on You Tube.
http://tiny.cc/QUIX4U_Tube
Cheers Keith.
P.S... (simply) Google_Us:
QUIX - NZ
Lisa MacFarlane said:Hahaha that is so funny! I sat here thinking "is he for real???....and is that even legal?". I hope in all that wisdom I learn something but I must admit I struggled to comprehend the point in its entirety - the stitch in my side from laughter was too distracting. I must say I understand completely the "BUT "do" in their Marketing, accountancy, number crunching, full_on Marketing manners... & with their University MBA's & other highly technical abilities... CONTAIN - all of those (absolutely) "nescessary" qualities... which I KNEW - before starting my Company - that I would NEVER possess" statement. I am very accepting that I have my own weakenesses, and thankful I am aware of 99% of them. Thanks for the post!
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Permalink Reply by Keith on
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Please.
DO NOT MISS_UNDERSTAND ME
If there arrives into this (Fully Compliant) long established ... ? "Company_Structure"
A "special_group" (TEAM) of very efficient Senior Management Members - whom wish to enter under an MBI_MBO, or more prefferably - simply as a PERMANENT MBI ... (with NO exit in mind)
Hey... I would gladly TAKE- a very back seat "minor_role" in the NEW Company Structure ...
SO_LONG ... as this allows me - to be fully employed on a 'livable'"wage, AND- to ALSO to be permanently attached (to & thus REMAIN somewhere) "in" the Company ...
Even if that is just - probably in the ??? MAD_SCIENTISTS_CORNER - of the R&D Dept.
Then
BRING IT ON...
Until that happens..
(go away) - I'm PLAYING...
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