Title - Most businesses don’t survive past adolesence Tags - businesssystems entrepreneurship
Businesses go through stages similar to those of a human life:
Infancy
The owner and business are one and the same.
The owner does all the work themselves.
Success = more customers and more production.
Eventually the work is too much to handle alone.
The owner becomes the boss she wanted to avoid.
Adolesence
Adolesence begins when the business owner hires someone to help.
It’s great to begin with as the owner doesn’t have to do everything alone.
Most enjoy it TOO MUCH and manage by abdication rather than delegation - assuming other people are handling critical tasks instead of making sure.
They might jump straight from doing to designing - and neglect to delegate (202205311902).
This leads to problems - e.g. in service quality - and customers start to notice.
There are three paths for the adolesent business owner:
- Fire employees and return to doing everything herself
- Expand rapidly until it gets out of control and quality declines
- Plan for controlled growth without the owner doing the work
Maturity
A mature business is one with a franchise/turnkey model which can operate successfully (and be sold) without the owner’s presence: 202206021338
[#gerber2001emyth]: Michael E. Gerber (2001): The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It, HarperBus.