E-Myth Blog

This week we're dipping into the Ask E-Myth mailbag to have an E-Myth Business Coach answer a few of your questions. Thanks to everybody who submitted questions, and keep them coming. We love to hear from you.

Q: I'm ready to grow my business, but which comes first: new employees or more work?

It depends on your situation. If you decide to bring on employees first, make sure that you have at least three months in cash reserves to cover the new employee. If that's not possible, consider arranging for short-term contractors in advance.

An argument for going after the business first is that the more business you have, the better you look to a lender who might give you the short-term loan you need to cover the expenses of new employees or contractors.

Here's another tip about bringing on employees. Often when business is growing, there are multiple positions that could be filled. If you're not sure whether you need an executive or an administrative assistant for example, take a look at your budget and how the additional employee will impact revenues. The rule of thumb is that the new person should bring in more revenue than it costs to employ them; or they should free another person to do work that will cover their salary.

Q: How does a Realtor or mortgage broker apply the E-Myth to their business?

I've had the pleasure of working with a lot of Realtors and mortgage brokers over the years. And I can tell you unequivocally: you can apply E-Myth to your business. That's the beauty of the E-Myth business development model — it doesn't matter what industry, location or size of business — E-Myth universally applies. Remember, it's not about the business, it's about the system.

Many Realtors are sole proprietors and often, people who operate a one-person business think that the E-Myth approach just can't apply to them. Not true! In fact, it's critical for a sole-proprietor. When you do everything in the business — from setting the strategy to licking the stamps — your time becomes a precious commodity. Systematizing your daily activities can have a profound impact on your bottom line.

Start writing down the routine things you do-you know, the things that are basically done the same every time. Get those in writing (especially those tasks related to how paper work is filled out and handed off to a mortgage company) By documenting the processes you go through, your routine tasks will become "no brainers" allowing you to focus your attention on the bigger picture, strategic direction that has to happen. It will also allow you to evaluate the tasks you regularly perform to decide if its worth it for you to continue doing them, or if it's time to get help.

Q: How do you get new managers (especially young ones) to do what needs to be done?

At E-Myth we talk a lot about the benefits of creating a systems-dependent not people-dependent organization. With the proper systems in place, all of your employees — from the CEO to an entry-level assistant — will have defined roles to play in your business.

Set Expectations Early – Getting the best out of new employees begins before you hire them. You must define expectations in your hiring and recruiting process. Let prospective employees know upfront what systems are in place and look for people with a willingness to learn. Like I tell my clients, in a world full of students and teachers, you're looking for students. When you create a culture of "this is how we do it here," your new hires will understand what is expected of them because you've made it very clear right from the start.

The First 90 Days are Critical – Built into your hiring process should be a documented 90-day training and orientation plan. When a new business coach joins the E-Myth team, they go through an extensive six-month training program and in the first 90 days everything is very structured. They know in advance what they are doing every day of every week and who they'll be working with. There's even time allotted for independent study! This process not only sets the right expectations for the employee, it provides a convenient way to measure their progress.

Rewards and Recognition – It's important to specify consequences up front so that if expectations aren't met, there's a clear course of corrections. And don't forget to recognize those who meet and exceed expectations. A pat on the back goes a long way!

Training and Follow Up – Keep in mind that employee development is an ongoing process. Like Michael Gerber wrote in Chapter 16 of The E-Myth Revisited: "Never expect the game to be self-sustaining. People need to be reminded of it constantly."

Q: We're an advertising agency; our product is a creative offering that is unique for each client and project. How do we go about systematizing creative work?

Good question! My experience with creative business owners is that you are happiest when you're actually creating. For a creative personality, systems can sometimes be scary. But when used correctly, systems can help you free your creative spirit by allowing you to focus on the creative aspect of your work rather than the day-to-day work of running the business.

Take a step back, and think about the processes that are similar to every project. For instance, I'd venture to guess that in these areas you can find routine components that can be systematized:

• The initial information gathering process
• The development of the concept
• The presentation of that idea to the customer
• The revision and approval process

If you can systematize the areas in your business that are common to every project, not only will you have more time to do the creative work you enjoy, but you'll also streamline your business and identify the areas that might be appropriate for somebody else to do.

Need some inspiration? Check out this video about how one of our clients (Animation Mentor) has put E-Myth to work in their creative business.