Entrepreneurs just have to get things done!
This is a key takeaway Pete and Nat have from the book "E-Myth Revisited."
This week's episode of the podcast focuses on ideas both guys found important from this book and how it mingles in the world of franchisees.
Take a listen and then pick-up a copy!
Nat: All right, so Pete tell me about this E-myth revisited book because I know you give this book to I think everybody you work with or everyone that invests in a franchise, right?
Pete: Yes.
Nat: Why do you do that?
Pete: E Myth revisited by Michael Gerber is a great book. It's one of my favorite books. And it's a book that you know me, Nat; I love giving people resources. I like teaching; I like giving resources.
So now one of the things that I do is when somebody invests in a franchise business, I give them a copy of the book e-myth revisited. And it's a very powerful book, and I look at it as a resource for them from that standpoint.
Nat: You know that was one of the first books I read about entrepreneurship many years ago. And it was actually super impactful, it's kind of like also that concept to like if you figure out what your time is worth hourly, so say it's worth $50 an hour, and then anything that's like less than that, try to have somebody else do it, right?
Pete: Yes.
Nat: People I've worked with over the years will be talking about franchising, and great clips, Supercuts, sport clips all those have obviously been great successes over the years. And say I would, for example, we were talking about that, and they'll be like, well Nat, I don't know how to cut hair.
So they're kind of freaked out because like if an employee called off sick, they wouldn't be able to go work or substitute, and I'm like, that's great. That's what we want; we don't want you to know how to do that.
Because then you're not even tempted to fill in for that person. Franchising is really focused on executive run businesses, so you're more at the higher level and not in the weeds doing the hourly work.
Pete: Yes. I thought you were using the hair cutting example because I'm bald, and I couldn't relate to that. So thank you for pointing that out there. But really it the reason I like the book too is that it kind of talks about this idea of working on the business, not in the business, right? And a lot of entrepreneurs fall into that case of working in the business to your point.
And they have a great case study in the book about this wonderful lady, and she loved baking, and she had all her grandma's recipes, and she decided she's going to open up a bakery. And she hires some people, and she basically gets to the point where she starts taking over all the roles.
So she literally is up at three in the morning baking, and then she opens up the shop, and when she gets done with the hourly, the shop being opened, she closes down, does the cleaning, goes home and does her books and gets her three hours of sleep and is exhausted, right?
And that's that whole idea of working in the business and not on the business. And so one of the things I tell people is that your point is that you want to leverage your time in the most efficient way possible, right? You don't want to be the person doing whatever it is; you want to be leading the business.
Nat: Yes. That's one thing I always appreciated about franchising too. You go to corporate for training, and they really teach you; number one, they have all the systems and everything organized already, and then number two, they teach you how to use it.
So you don't have to spend a lot of time figuring out what accounting system am I going to use, or now I have to make a website, like all that stuff's turnkey. So you can really focus on the people side of the business, which I think that's ultimately that a lot of the secret sauce of franchising is team building and finding good people to build a team with.
Pete: That's true of all business, right? Is finding the right people and having the right team. I had a guy that invested in a junk removal franchise; I've got a little bit of experience in that industry. And so a month into owning it, and then I call him I go what are you doing, right? And he goes well; I'm on the junk truck, I'm learning the business. I said I think that's awesome; congratulations.
I'm glad you're learning the business. So I called a month later; I said, what are you doing? He goes, I'm on the truck, I'm learning the business. I said, listen, man, get off the truck; you can pay somebody 12 bucks an hour to be on the truck. I want you to be out there setting up the strategic accounts, getting the big deals, driving the business. You could pay somebody 12 bucks to do that.
Nat: Exactly. Yes, I always say sales cares all, so you need to get out there and sell, right?
Pete: Yes. I worked with this one couple. They invested in a fitness concept; he was a finance guy, decided he was going to run the fitness concepts. She was going to keep her job.
And so we go out to dinner to celebrate the opening their first location, and we start talking, and the wife goes, you know what I do is, I do my job nine to five, and then I go to the club, the fitness facility and I clean it at night.
And I said, what are you doing? You guys want to end up divorced? Are you crazy? You can pay somebody 30 bucks a night to clean that; what are you doing, right? So we got to want to work on the business, not in the business.
Nat: Yes.
Pete: And E Myth revisited, I mean it kind of talks about this that a lot of entrepreneurs fall into that case of working into the business, right?
Nat: Yes, you don't want to just buy yourself a glorified job, life's too short for that.
Pete: Yes. I mean, if you are the business, if you have to be the business, then it's not a business, it's really kind of a job.
Nat: Yes.
Pete: That's that point. It's funny it talks in the book a little bit about this idea that all business owners, they have three components, right? They have an entrepreneur in them, they've got a manager, and they've got a technician in them, right? And his belief is that as a business owner, most people are about 10% entrepreneur, about 20% manager and about 70% technician.
And I think about you, Nat because I know you probably would be skewed a lot higher on the entrepreneur's side, right? That's kind of your deal. Would that be fair to say?
Nat: Yes, it's 100% like an entrepreneur, it's always like kind of creating something new. So it's rewarding and all that, but I think it can be like a little bit turbulent for those around us because we're always on to the next thing.
Pete: Yes, absolutely. And so they talk a little bit about in the book, that as an entrepreneur you're always looking forward, right? And as a manager, you're always looking in the past. And a technician is living for the day; they just want to do what they do, the one thing and be off with it, so I think that's interesting.
Nat: Well, and there's some; I think there's some positives about that too. I was talking to a gentleman that has owned a residential maid service for like the last, let's call it 15 years, and he's 70 years old now.
And, of course, he's had that executive position and all that. But now, what he really likes to do they have company cars, and he likes to go to the office and just kind of maintain the cars and stuff. So it's like that makes him happy, and he has good management in place. So he washes the cars, or oil changes and all that.
Pete: I would kind of like that, you know I love cars.
Nat: Yes, it's therapeutic, right?
Pete: Yes, absolutely. So I mean, so it's a great book. And I think for people that are looking to become an entrepreneur, it's a good guide to kind of make sure that you're going into the right way, the right focus, the attention. It has like a seven-point plan of how you go forward with the business; it's a great book.
Nat: Yes. What's some of the most innovative like things you hear people doing these days? Like outside the box? Like in the old days, they may be like training dogs, like running dogs around. Have you heard anything crazy?
Pete: Yes. I heard the other day somebody was telling me about a business where they sterilize facilities.
Nat: That I'm not surprised about, right?
Pete: You know I didn't think about that, but that's pretty cool. Is that they go in and they can sterilize, and it just is a part of normal, I thought oh, so you mean like I asked them, I said does that mean like when a school gets contaminated with COVID-19 you go in? They go no, it's on a regular basis, they go sterilize facilities, and I go wow. It's amazing how industries are developed.
Nat: Yes. I have a friend that owns some McDonald's, and their COVID policy or procedure is if like an employee gets COVID, his test passed it for COVID, they shut the store, and they sanitize the whole thing. So kind of like what you're saying, there probably is really a big opportunity doing that kind of stuff.
Pete: Yes, and even think about businesses that have pivoted. Like for example, the alcohol distillers, right? The alcohol companies. They're making hand sanitizer, right? If you ever thought that they would be selling less vodka and making hand sanitizer. But the idea behind it is it's crazy that things pivot like that.
Nat: Yes, I like that entrepreneurs just figure stuff out, right? Kind of like the marines.
Pete: Yes. You got to be a problem solver. I mean, one of the things I tell people is that as an entrepreneur, you have to work through, you're always going to have problems. And not everybody can solve them for you; you have to figure it out; you just got to do your workaround.
And I love that part; I like looking at a situation and trying to figure out, okay, how do I manage this? How do we get to where we want to be? That's one of my favorite things to do.
Nat: I think that's pretty powerful too with franchises because you have, like, an owner network, right? So you have, however many owners, 100 owners, a thousand owners. And they're all kind of working together to solve problems, or you get to benefit from kind of that brain trust that's out there.
A lot of franchises have weekly calls or monthly calls with the owners. And so there's just a lot of brainpower to innovate and solve problems, especially in this day and age.
Pete: Yes. Well, you saw that during the pandemic, right? Is that franchises were doing regular calls to help navigate their franchisees through it. And I just tell people, I mean the great thing about a franchise is that you get the support of the franchisor, right? The systems, all that kind of stuff, all that support.
But to your point, the network of franchisees is really valuable, right? And a lot of the franchises have accountability groups, right? Where they get eight franchisees together on a regular basis, maybe it's a call, and they talk through kind of what's working, what's not working. I think that's just awesome.
We did it in the car business; they were called dealer ten groups, where they would get together all over from different parts of the country and kind of share ideas and share their financials and all that good stuff.
Nat: Yes. I know you're not very competitive, Pete.
Pete: Not at all.
Nat: You probably never used those dealer ten groups to get everyone fighting for first place, did you?
Pete: Well, they didn't compete against each other, that's why they did it from different parts. So you weren't kind of in this group with your peers, in your neighboring market. But the idea was is that it's a great tool, it's a great mechanism to be in a place where you can learn and get advice from other business owners.
Nat: Yes, that's what too, like just thinking about the franchise owner group, right? It's kind of like a lot of times you have a territory, so it's kind of like a puzzle or what have you. So you're not really competing against your neighboring guys; you're more, uh, working together, it's like that rising tide raises all ships and all that.
Pete: So you've owned in-home care businesses both from a franchise standpoint as well as an independent, and so you know the difference between having that support and that infrastructure of all the franchisees, and also then be doing it on your own.
You think it would be if you didn't have that experience before of being a franchisee in that space, being independent? Do you think it would have been a lot harder?
Nat: Yes. It's very lonely to own like, basically your own independent business because you don't really; it's like open your books and have a lot of dialogue with your competitors. So if I hadn't had the benefit of learning everything from the franchise originally, I think it would have been next to impossible because I wouldn't really even know which way was up, to be honest.
Pete: Yes, absolutely. And from your standpoint, from a, you are very much an entrepreneur, and then not as much about the technician, like you like to come up with the idea and then hand it off to people and let them run, right?
Nat: Exactly.
Pete: I can clearly see that with you.
Nat: Yes.
Pete: I think from my standpoint, I have a little less entrepreneur than you, just because I spent so much time in the corporate world, right? And my job was to execute, manager. And I was certainly compensated on the past, [Inaudible 00:13:01.23] so there wasn't a lot of stuff.
But it was is interesting, like so when you kind of talk about innovation, when I was at Ford it was really hard to innovate stuff, right? It's just because we've done things forever the same way. And so I was part of the group that took all the incentives that we have, like customer cash and stuff like that, the way in which we communicated in the dealers.
We'd used to send them through a batch system, you put them in the computer, and then it would basically download to their computer system in the morning, right? So we took it, and we basically put all the incentives on a web page. And uploaded everything to the dealer, so they instantaneously got it. And it was very cool, but the fight to get that done because we always done it the one way from that standpoint.
So that's kind of the if you can have that innovative and do that. But it's a lot harder to be an entrepreneur in a corporate role, it's hard because it's so restrictive.
Nat: Yes, you're being paid to think, you're just being paid to execute, right?
Pete: Yes, absolutely. So that's good. So E Myth revisited, great book. If you're ever thinking about investing in a business or starting a business, it's a great resource.
Nat: Yes. All right, Pete, well, have a great weekend.
Pete: Let's rock and roll.
