Michael E Gerber: The E-Myth

episode 163

SHOW TRANSCRIPT

ms 163

Mike Parsons: [00:00:00] And welcome to the moonshots podcast. It's episode 163 I'm your co-host Mike Parsons. And then as always, I'm joined by the man with the plan. Mark Pearson Freeland. Good morning, mark. 

Mark Pearson Freeland: Hey, good morning, Mike. You're right. If I'm a man with a plan that plan right now is to learn as much as I can about entrepreneurship, because today we're a number two of our entrepreneurship series on.

I 

Mike Parsons: know this is pretty good stuff. And it feels like exactly what we should be talking about. The beginning of the new year, we should be talking about new ideas and how you get it done. And today we're going to learn from our Grandmaster are starting new businesses. 

Mark Pearson Freeland: Yeah, that's right today, listeners in show 163, we are getting into the grand master himself, Mr. Michael E Gerber. And the book that we're deep into today, Mike is the E-Myth (purchase on Amazon). And I think again, it's fair to say that the E-Myth and Michael Gerber is one of those absolute powerhouses. One of those classic books, that many entrepreneurs, many small businesses small as well as larger business.

I have been turning to for the past 10, 15, 20, 30 years in order to learn some lessons from Michael Gerber, who's spent the time to talk to entrepreneurs and look at profitable businesses and determine what mistakes there's entrepreneurs make. Right off the bat, mark of my unmarked right of the back mic of Darren Hardy last week, we learned some great lessons from Darren and now.

Dean to Michael Gerber. We're really getting the practical tips and tricks of entrepreneurship. Aren't we certainly, I think down Hottie, he was very. Clear in his advice to stop stuffing around with the product, get it live, launch it, and then go sell it to [00:02:00] customers because 80% of being an entrepreneur is selling what you have, which I think is really helpful for entrepreneurs, because we can run the risk of sitting there and not wanting to launch the product or the service, because it's not quite ready.

Mike Parsons: He's get out there and launch. And really getting you into that, to that marketing paradigm, that, that mindset today, Michael Gerber in his book, the E-Myth (Available on Amazon) takes us on another big insight, another big mindset that we need to be good entrepreneurs. And what he's going to do is talk about what he calls the E-Myth and that the myth is the fact that most people who start small businesses are entrepreneurs.

He said, That is a myth. And we're going to break that down and find out what that means. So if you've started something or you want to start something, it doesn't necessarily mean that you're an entrepreneur, but don't worry. He has the right [00:03:00] entrepreneurial thinking for us. And I think this is really critical.

This is an essential show because it helps us avoid the mistake of starting something without the right mindset. And then. The risk here is that we start something in the incorrect entrepreneurial way, and it's not a thriving business. It becomes entrapment. It becomes the new surrounding your neck, the ball and chain because you didn't approach.

In the right way with the right mindset. And I think that's what is ahead of us today? What do you think about Mac? 

Mark Pearson Freeland: Yeah, I think it's about breaking down some hard truths. Getting into those myths there's assumptions that maybe we all have about being an entrepreneur or what it takes to be an entrepreneur and similar to what Darren Hardy was doing last week.

We've got Michael Lee Gerber breaking things down for us in pretty clear, very practical, very. Straightforward ways, Mike, I think you and I, and our listeners, we've got another action packed [00:04:00] show with Gerber today, and he's a bit of a sharp shooter. So we're going to learn 

Mike Parsons: from who do you think, who do you think is sharper and more energetic?

 Do you think it's Michael Gerber or Darren Hardy? It's a very good question. I think the sharper more direct individual is actually Michael E Gerber's. Make sure to strap in listeners. If you thought last week with down Hardy was sharp, we are on the Razor's edge with Girma today. 

All right, everybody let's brace for impact.

As we dive into the world of the E-Myth and let's listen to some thoughts from the author himself, Mr. Michael Gerber. 

Michael E Gerber: Essentially, what I'm going to do is if you'll excuse the expression, piss you off. That's my job. Now I do my job really. I have pissed off more business owners in my life than anybody in the face of this earth.

 I know that [00:05:00] because they write me and they tell me that I really irritate people. Now you've got to understand it's not me. Yeah, it's my manner, but it's not about. What it's really about is because the vast majority of people who own our own and operate their own small company, whether it be in your industry or any other industry.

And we have touched every industry in the face of this earth, it's not about the business you own. It's about the way you do it. So you got to understand the reason I piss everybody off is because they take it personally. And the reality about people who own and operate their own small company is they take everything personally.

Hear me, not just you, I can absolutely guarantee you if we really get into this. If I were to [00:06:00] really address it personally, you'd really get even more pissed off. So I just wanted to prepare you for that. And you understand for every single person we've ever spoken. Now we have worked with over a hundred thousand owners, meaning a hundred thousand small companies, dentists, doctors, psychologists.

Graphic designers, meat, Packers. It doesn't really matter what kind of accompany it is. And I know when I even say that people in a professional business, as we think of ourselves in a professional business, really get up tight when I compare them to say McDonald's, but you understand you should get uptight when I compare you to McDonald's because Ray Kroc did the right thing.

And you're stuck here me and take this only in the way that I'm [00:07:00] saying it in the wrong thing. And I say doing it busy, making a living, producing income as opposed to equity. So what we're here to talk about is the difference between income and. We're here to talk about is the difference between working for a living and creating growth.

In fact, growth is key to transformation. I'm your wake-up call. You're either going to hear it. Are you going to go back and continue doing what you're doing? 

Mark Pearson Freeland: Some big lessons or some big advice, Mike, at least from Michael was straight off the bat. What a, what an energetic way to kick off today's show.

 Michael Lee Gerber, the E-Myth am I right? 

Mike Parsons: Yeah. He's really putting it in your [00:08:00] face. Are you just working or are you growing something? And it's almost like people are trapped in their small businesses or their entrepreneurial ideas. And he mentions Ray crock. The the man who took McDonald's from one store to feeding 1% of the world's population.

 And he's saying why can't you. Business product service, do the same thing. And it's just a question of mindset and he's really trying to help people get out of the trap. Isn't he? 

Mark Pearson Freeland: Yeah. And we were going to hear Michael break down that where the Ray Kroc secret, I suppose you could say the secret sauce of McDonald's later on in the show as well, but I think your own might, there's a great bit of advice that Michael Lee Gerber is really calling out.

Having worked with a hundred thousand businesses. As well as 

Mike Parsons: check, check this out, mark. His [00:09:00] book is taught in over a hundred universities. It's powerful for entrepreneurs to learn how to do it right. And avoid what is guaranteed almost. It's eight out of 10, nine out of 10. Small businesses will be that are started, will be dead within five years.

The chances of success are not high. So you may want to pay some heat to the work of Michael Lee Gerber and the E-Myth date. You think 

Mark Pearson Freeland: Mac? Yeah. He's the ultimate authority. Isn't he has broken down from case studies as well, or case studies such as McDonald's and Ray Kroc, as well as individual brands and businesses that he's worked with and compartmentalized it and broken it down into essentially systems.

And then we'll dig into those a little bit later in the show as well. But before we do, we've got one more little clip just to introduce us into the show today. And that's a great clip from productivity game, and I thought it'd be great for you as well as our listeners to really get a [00:10:00] sense and a taste of what the core message within Michael Gerber's book (available on Amazon).

The E-Myth is really about before we get into some practical stuff. So why don't we hear from productivity game and the core message of Michael's book on how not to build a business that relies on. 

Productivity Game: Should you get your boss and start a business. If you already know how to produce a product or service people pay for why not build a business around it?

Let's say you're an awesome graphic designer. And you work in a graphic design studio. People love your designs. So you decide to start your own graphic design company. You start with a few existing clients. They recommend a few more clients soon. You're busy and you don't have a boss anymore.

Life's great. You feel like a kid on the first day of summer after a long school? But soon you're putting in 14 hour days to do the design work and all the other little things you need to do to keep the business running. After a few weeks of work in these 14 hour days, you decide you need to hire an experienced administrative assistant to deal with all the administrative work you [00:11:00] don't want to do.

You also decide to hire an experienced marketer to do the marketing work. You don't have time to do you trust that these experienced people will know what they need to do because they've worked in similar positions. Now, you've got people doing the work you don't want to do, and you can focus on what you do best producing, beautiful graphic designs, but just when you think it's going well, your administrative assistant leaves and what's worse.

She's put all your financial data in a software program. You're not familiar with. It's a complete disaster. And on top of that, the marketing person you hired, isn't producing ads the way you want them, you decide to let them go and do the marketing. Now you need to put an 18 hour days to clean up the mess and do the backlog of design work.

Your project starts to suffer. Deadlines, get missed, quality drops and clients are getting pissed off. You thought when you started your business, you got rid of your boss, but now it feels like you have a boss again. And this boss doesn't give you a day off and barely gives you enough money to pay rent.

How did you get yourself into this [00:12:00] mess? You're in this mess because you built a business that relies on. In the book, the E-Myth revisited author, Michael Gerber says, if your business depends on you, you don't own a business, you have a job. And it's the worst job in the world. The top priority for a business owner is to create a business that produces a great product or service without them.

In other words, an entrepreneur doesn't produce a product or service. An entrepreneur creates a system that produces a great product or service and removes themselves from the. 

Mike Parsons: Create a system mark so that the business doesn't own you, but you own it. We are getting down to some serious entrepreneurial lessons here.

And as you hear this description of the worst case scenario in, in that example, the market has gone, the admin's gone and you're now working 18 hours a day. This is [00:13:00] not a life we choose for. This is not a life we want, but so many people, maybe even ourselves have found ourselves in these situations.

To me, it's so real. And this is a real chance to confront it with the work of Michael on the email. This is some pretty hardcore stuff, 

Mark Pearson Freeland: isn't it? Yeah. There are plenty of people that you and I will know, maybe like a, like you say, we've even experienced that ourselves. There'll be many of our listeners who are also going through similar things is productivity game.

And Michael Gerber had broken down for us already in today's show, which are these myths. As long as we are in the place of a co-founder or founder where therefore. Running our own business, but as it's just broken down in that clip, the truth is you've just got a job and that the boss might be you, but you're still doing these 18 hour days.

So yeah, we're starting to really break down these myths, these assumptions of what it [00:14:00] is to be an entrepreneur in order to. Create a better system and a one that does allow us to really focus on the work that we all like doing the strengths that you as an individual have and therefore go out and make a difference.

We're building that brand some good, hard truths from Gerber already. 

Mike Parsons: Yeah. It's. Big stuff here because the paradigm of creating a system, it's about defining process. It's about delegation, all of these things. We're going to learn from Michael Gerber in the coming clips on this show where we're digging into the E-Myth.

And I think that. The chance to do this will not only help you grow, but it will help the people around you grow. And that is exactly what we do here on the moonshot podcast. We love to learn out loud. We love the struggle to be the best version of ourselves. We love just being 1% better every day. And I really hope that this show helps us all be 1% better.[00:15:00] 

And I know for sure, mark, we've got some members who are all putting in the work to be. Percent better every single day. So why don't we do a tip of the hat and call out our fabulous members? 

Mark Pearson Freeland: Yes, much. Like I said, last week, the list is getting longer and longer, Mike, by every show. So I'm gradually going to have to start taking more and more breaths, but here we go.

I'll try and do it. I'll try and do it as quickly as possible. And thank you everybody for joining us as moonshot members and welcome Bob Niles, John Terry and Brighty. Nyland Sandy marshaling, Ken and Deb. Tom, Byron mark and Halena, Yanni of Marsha and Connor and Rodrigo, Yasmin spaceman, Daniella Liza said.

And Mr. Bolger, welcome moonshot members. I'm so pleased that we've got another couple of characters who have unusual names. I think Mike we've always attracted ratings reviews and members of individuals [00:16:00] who have pretty, pretty fun names. So I'm pleased that we can add a couple more into our moonshots.

Mike Parsons: Yeah, I think we would say bongs Euro to Mr. our latest, exactly. Welcome. Thank you for joining us, Mr. Bond, 

now, mark. Being a member is a big part of what we're doing here at the moonshots podcast. It gives you full and complete access to the master series, which is only available to members.

That's a 90 minute podcasts that we do together every month, where we go deep into one subject and pull a number of different experts, authors, and superstars together. And that's all available. To you, if you become a member. So it's literally the cost of a cup of coffee per month can make you a member of the moonshots podcast.

It gives you access to a whole new podcast, the master series, and you know what, man, it helps us pay some bills. Doesn't it for this show, it's not cheap putting out a podcast. [00:17:00] 

Mark Pearson Freeland: No, it does your support members. Not only it gives you access to these additional monthly shows, but you're right. Mike helps us pay off some of our bills.

Our hosting keeps us occasionally caffeinated and we, and it helps us bring not only the weekly show, but actually the. Exclusive show to you, our members and our moonshots family every single month. So please if you like what you're hearing and you're appreciating and learning something new each week, learning out loud with us every day, every week, then please go along to moonshots.io, become a member like Mike says it's super affordable, less than a cup of coffee every month and show us your support.

We really appreciate. 

Mike Parsons: Yeah. And w what you forgot Mike, was that you actually get lunar powered. Good karma. That's the thing. I become a member of the moonshots podcast. You get lunar powered. Good comment. Not just regular good [00:18:00] karma, but Luna powered. That's. That can make it, that can send you to the moon and back 

Mark Pearson Freeland: what a way to begin the year with some lunar good karma.

 This is exactly what we all want it 

Mike Parsons: totally. And I tell you what else we really want is to understand how to scale. Business an idea. And if you're thinking to yourself I've got an idea, but I wonder how I scale it you've come to the right place because here on the moonshots podcast, we are dissecting, we are decoding the E-Myth from Michael Lee Gerber, and now we can listen to him and his thoughts on how we prepare for scale.

Michael E Gerber: Ray Kroc didn't start McDonald's until he was 52 years of age. Ray Kroc went from 52 years of age without a pot to piss in

convince the McDonald brothers to give him the franchise rights to McDonald's [00:19:00] and they did. And he went back to this plans, Illinois borrowed the money to start his first. But here this cause it's really critical to the story. Ray Kroc did not go to work in 

Mike Parsons: McDonald's. 

Michael E Gerber: He didn't make hamburgers.

He didn't make French fries. He didn't make milkshakes. He didn't have an office in the store. He had an office down the street. It was the corporate headquarters. McDonald's they didn't make hamburgers there. They didn't make French fries there. They didn't make milkshakes there. What did they make there?

They made McDonald's please write that down. Ray Kroc went to work [00:20:00] on the hamburgers stand, not in the hamburger of Stan. To prepare it to scale. Please write that down. To prepare it to scale for sale. What does that mean? That means the company you own, the company you own today. How many of you own your own company?

Please raise your hands. The company you own today. Hear me. Is your franchise prototype. And our own for that franchise prototype to be replicated faithfully, you've got to prayer, prepare it to scale. That's the job of an entree. Mike this is quite a good, an original idea that we're hearing here from Michael Lee Gerber.

Mark Pearson Freeland: Isn't it? I The case study of McDonald's and Ray Kroc. Maybe we've seen the film, the founder, which I watched recently actually for the first time [00:21:00] telling a visual right. One, 

Mike Parsons: isn't it. But I actually, we should put a link in the show notes to that because it is a fabulous film. So we'll put a great idea in for those of you haven't.

Mark Pearson Freeland: Yeah, we'll put that in for sure. Cause if you haven't seen it listeners please do go check it out because it really brings to life. The enthusiastic story that Michael Lee Gerber is telling us in that clip because he's right. Ray Kroc did not go and borrow this money, convince the brothers, the McDonald brothers to give them a franchise rights and then go and work flipping the hamburgers.

 He didn't do any of that. Did he? Mike? He was running it from down the street and that's a big shift. 

Mike Parsons: Yeah the, for me mark, the big thing here is that he makes this very big distinction between working on the business and working in the business. And I cannot tell you how many times I work with.

Colleagues [00:22:00] founders executives who are stuck in and the business and never have a moment to think about the business from a distance to work on the business rather than inside of it. And what we heard there is Ray crock actually wasn't even in the McDonald's. When he started working on the business, he was down the road because he was thinking about systems and this key thing of systems leading to the ability to scale repeatability growth, all comes from building systems.

And the way you build the system is by working on the business, taking time to reflect and learn about what's happening rather than just running from day to day. Just getting stuff done, asking you. What did I learn? What I, what could I do better? How do I systematize it? This is the big thinking from Michael Lee Gerber.

And I think this is for sure that this is the ah-ha moment within the work of Michael [00:23:00] Lee and the E-Myth. What do you think, mark? 

Mark Pearson Freeland: Yeah it, it feels like the aha moment, because I think what is pretty common for all of us entrepreneurs is you work on the, what I call the short term vision. Who do I need to hire to do that job?

If I can't hire anybody, how do I deliver this project? How am I going to do it tomorrow? What space am I going to hire? So on and so forth, they're short to medium term. Considerations or business decisions, aren't they running a business. Whereas what I think Mike Lee gov is breaking down for us here with this big aha moment is just step away from the business entirely for a second.

Where do you see it in 5, 10, 15 years time? How can you delegate this part of the business to somebody else? And in essence, as he closes that clear. PR use it as a prototype for your own franchise, because that's where the success [00:24:00] of let's say McDonald's really comes through. Remember Mike with Darren Hardy last week, we learned from Darren that it's not really about the quality of the products.

That's so important. It's the marketing, it's the extension of communication in order to raise awareness for your business or your product. In part with what Michael Gerber's then building on the McDonald's case, stay for us here is if you can communicate it, but also create this system that's in place in order to allow it to grow and therefore benefit of the previous marketing that you might've done for that product or brand in the past, it has that compound effect.

Doesn't it gets more and more authority in this space. You're able to roll it out. Maybe borrow more money. In order to just keep on growing that business. And it feels as though in my mind, at least it's stepping away from that short, medium term working on the business or in the business, and then you elevate it to working on [00:25:00] or over that business.

Mike Parsons: Yeah, I totally agree. And I think finding ways to remove yourself from being in the business to having moments in the day or the week. Having just the opportunity to step back and work on the business. How do you think we can do that? So many people we know that are trying to build a new business, a new product, a new idea.

This is running around, and they're obsessed with the day to day the hustle and that's the exciting thrill about being an entrepreneur. How do you think we can develop this habit? Working a bit more on the business. 

Mark Pearson Freeland: I think it comes down to discipline. Yes, it's great to have a vision in mind a culture that's around your business.

I think my, what it would take for friends or colleagues of my own that are starting their own businesses is to [00:26:00] carve out the time. And religiously stick to it a little bit like Cal Newport would say with deep work first, spend some time or allocate some time during your week, or maybe even your day to reflect on the business and think, how can I step away from.

The the continual requirement to be on marketing calls or accounting calls or sales calls. How can I think about the business in a slightly different way? How can I reflect and bring in delegation? How can I create systems where I can get somebody else to do this job and allowing me to then go and focus on something else?

I think it comes down to prioritization or. Discipline over deep work. What do you 

Mike Parsons: think? I think scheduling it as is crucial. I think that's a great start. I think get out of your office, get out of your study or house or wherever you do the work, get out [00:27:00] and actually. Just physically create space, not only as well as the time, but then I think what's really important is Napoleon hill think and grow rich, which is a show that we did not too long ago.

He talks about having a mastermind about people that you can talk to who can help you answer some questions that would be on your mind. And this is the next step. I think if you're going to schedule the time. And you're going to reflect or discuss with those. The question is, what questions are you going to ask?

And I think it would be very good for all of us to ask ourselves where was the majority of my time, my effort, my energy spent and actually really look. And then say was that the best use of my time? What can I delegate if I was to delegate? What higher value goals and objectives could I work on? So I think there are some, I think there's an important thing here, which is like [00:28:00] the questions that you ask, because they're always, there's always something to do when you have a new business and new product to start up or an idea.

I think it comes down to. The things that went well and why, and the things that failed and why. I think some of these questions are crucial to ask of yourself that we'll get to the heart of inspiring you to take new actions. So you can work on the business rather than being stuck in the business.

Mark Pearson Freeland: I think that's a great idea. Really have that discipline of reflecting what you're spending your time on. Maybe reflecting on it once a month or more regularly, maybe once a year in order to. Really. Yeah, you're right. Check with yourself. Whether you have been focusing your time in those right places.

And then as you say, thinking about delegation, Tim Ferriss's book, the four hour work week, [00:29:00] we've done a series on Tim in the past. I think again, he really calls out the success or the potential success that you have if you're able to. Create again, kind of systems and processes in order to delegate some of your responsibilities in order to free up the time so that you can go and focus on the thing that you're really strong and good.

Mike Parsons: Yeah, totally agree. I totally agree. Now I think mark, before we continue this journey into scaling a business this journey into working on the business, instead of in the business, not taking it personally, but really trying to recreate the success of McDonald's and what Ray Kroc did. That's what Michael Gerber is pointing out to us.

This is a huge invitation to think and actually enjoy the success that Ray Kroc had before we do that. I tell you what? My it's been a long time since we asked our listeners to jump into their phones and to give us a rating or review, [00:30:00] but I feel we should extend that invitation now, don't you? Yes.

Mark Pearson Freeland: Listeners, you may all have noticed within your Spotify app quite recently, they've actually brought in the function functionality to leave. Reviews or ratings at least. So I think my cure right now would be at the beginning of the year. We're halfway through the entrepreneurship series. I think now listeners, it would be a great time to reinvite all of you to jump into your podcast app of choice, whether it's apple podcast, new Spotify.

Anchor and so on and let us know what you think of the show. Leave us a rating, leave and leave us a review that we can read just to let us know what you like and whether you appreciate the work that we're putting into it every week, whether it's the weekly show or the master series. I think that would be very interesting might to re kick off.

So get 

Mike Parsons: in there just to open up the app. If you're listening right now, jump in and give us a rating. Give us a [00:31:00] review. The reason this is so important to us is this is what helped us. When we started the show four years ago, it helped us reach out to a few dozen listeners. And today we enjoy over 50,000 listens because you share.

The story of moonshots, you helped us learn out loud to bring more people into this movement of people trying to be the best vision version of themselves. So go on there, give us a rating, give us a review because that helps us discover new lists. All around the world and that's what we want to do. We want to share with everyone how we're going about learning, how we're doing it, how we're trying to create those little habits that make us better so that we can go particularly today on those entrepreneurial journeys together.

Now, mark, we've heard from the productivity game previously in the show, I think you've actually found another clip from them. Do you want to set it up for us? 

Mark Pearson Freeland: Yeah. This is another extension of [00:32:00] Michael eager servers. Concept and focus of the systems that entrepreneurs should build into their practices of starting new businesses.

So we've got a great clip, like you say, Mike, from productivity game, who we heard at the beginning of the show, and he's really breaking down for us again, an extension of my colleague Gerber's work in the E-Myth and helping us understand this a little bit further. So now let's hear from productivity game and what he has to say about making a business that ultimately works for you.

Productivity Game: How do you build a business of systems and hire people to operate those systems without you? It all starts the moment you decide to start a business. You start by asking yourself what size do I see this business naturally growing to in the next five years? And what roles do I need to fill inside that business for each position on that org chart you identified the result.

That position is responsible. And the standards to which they must deliver it, then you and your business [00:33:00] partners decide which of your names will go into those positions. Your name might be in four different positions at this point, but that's normal. Your goal is to start from the lowest level position and build systems to replace yourself in each position.

If the lowest level of your company is a widget maker and you put yourself in the widget maker position, you need to develop a reliable and repeatable. That anyone who fills a position can execute and successfully produce a result to the standards. You've said only after you've built a reliable repeatable system.

Do you move yourself into a higher position? Like the widget maker manager and create a reliable system for that position? You replace yourself with a system by documenting everything you do to achieve the result that you want to the standards. You've said you document your process and an operations manual and operations manual contains checks.

Templates and scripts. You test your system by following your operations manual. Exactly. As you've written it, once you verify that your [00:34:00] system produces the results that position's responsible for to the standards, you've said it's time to hire someone, to execute your system, to hire someone, to execute your system.

Put the following ad on Craigslist or LinkedIn, looking for people who believe in our company's vision, who have an open mind and wants to learn new skills, no experience necessary. If you hire someone with experience, they won't fully buy into your system because they will have already developed the habits of someone else's system.

And if your business success relies on hiring experienced people who have their own way of doing things, then the business not only relies on you. It also relies on each of them. If they show up you succeed, if they don't, you're doomed, it's better to have the success of your company rely on the quality of the systems that you've built for the.

When a company with high quality systems loses a person, they can quickly be replaced by a wide variety of people who are eager to learn. When taking a systems approach to your business, think of yourself like a writer [00:35:00] director for a Broadway musical. You start by writing the script and the lines for each of the actors.

Then you pick up the costumes and design the sets. Then you hire enthusiastic actors who haven't played the roles before you hand them the script, AKA the operations manual, and you ask them to memorize their lines. These actors won't feel like they're part of a bureaucratic system because the actors know that by mastering the role, there'll be able to put on a performance with the other actors that will wow.

The audience. And once the actors master their roles, you foster an entrepreneurial spirit in your people. You encourage them to improve upon their roles. Eventually they come up with better lines. They help improve the set. Once everyone is in the roles that you designed and executing the script. You can go off to Paris or start writing your next musical because the musical you just wrote is being performed night after night, without you having to be in a theater, that musical is making you money.

And it continues to get rave reviews from its audiences. [00:36:00] So if you want to be a successful entrepreneur, it will require more than just knowing how to produce a product or service that people want to buy to be a successful entrepreneur. You need to know how to build systems inside of your business.

That can produce an extraordinary product without. And that way you no longer are trapped by your business because your business is working for you, 

Mike Parsons: mark. This is really the essence of repeatability, scalability and growth, which is a smooth. Well-defined system that's continuously being tweaked and engineered for performance.

Now what's really great is I think we have a chance right now. If we're going to work on the business we need to break this down a little bit and In his further writings, Michael Gerber actually breaks down what he thinks. The strategic at a sort of a strategic picture looks like of [00:37:00] the system.

And at the center of it is leadership. And then he has these six areas around it, marketing, finance, managing. Customer fulfillment, lead conversion, and lead generation. This is breaking down the business and to the six areas that each of these require a system, they need an operating manual set in really modern term.

You need a workflow from start to finish for how we generate a lead, how we convert it, how we fulfill our product and service to customers, how we manage our business, how we oversee the finances and operations and how we do marketing. That is leadership. That is the highest form of what the founders should be doing to create the system and in their business.

Holy hell mark, where do we start creating such a system? What do you [00:38:00] think? 

Mark Pearson Freeland: I know it's broken down in pretty practical terms there isn't it. So once you've got an understanding of all those different pieces of the pie of the leadership or entrepreneurial PI and building in time to not only reflect on what you're spending your time on as we were discussing earlier in the show, but also carving out time in order to develop.

What we have just heard about with operation manuals is so key. So once you've got time, maybe you're working with individuals that you've trusted, who have authority in those different spaces, such as marketing or finance or alternatively spending. Reflecting on how you would do the job and think about how you can make it better in order to delegate it to another individual.

That feels as though it's the way to begin what do you think, Mike? Where do you think it all starts from? I [00:39:00] think actually I think what we can do together right now is take these six core areas, which in fact, it's seven because the leadership's in the center.

Mike Parsons: And we can talk a little bit about some of the key things here. I mean that if we think about being in the center you've created the company. You are the founder, you're the entrepreneur. I think the key thing here around the area of leadership is asking yourself, do you know how to lead these people?

 And to do the work. The way you do it yourself. This is crucial because a lot of people say, don't worry, I'll just do it. It's easier. But this is the art of not only delegating, but it's the art of teaching. And I think that's a big part of leadership. So that's a good way to check in on leadership.

 Do you know how to lead people to do the work as good as you would have it done? I think that's a big one. 

Mark Pearson Freeland: Yeah. Yeah. And there's been plenty of times Mike and my career where I have been guilty of [00:40:00] just saying, oh, it's easier if I just do it, don't worry. I'm not going to delegate it. I won't explain it to you to help you learn.

I'll just do it myself because there's the illusion that it's just a little bit simpler. Isn't it? And that's a really big blocker, I think, for being a leader. And it's certainly something that I thought I've tried to work on and yeah I've been guilty of not doing that for sure. Let's go further around this this chart of seven key areas to build your system for your entrepreneurial idea, business startup.

Mike Parsons: It doesn't matter. The next one is what's the one thing that you want every single customer say about your company. And it's really interesting because this kind of forces you to say. What is the one consistent, not only message, but experience that every single one of our customers is going to have. And this is the way in which you can start a conversation around your marketing.

Are you. [00:41:00] Consistent do you have one single message. But it also then helps you go and check in all the different touch points. Are you reinforcing this before they purchase while they purchase and after they use your product or service, that's a big one for marketing. Let's talk about finance. He's got a couple of big questions here to ask of yourself when you're building systems.

What do you think of some of the, what do you want, what do you like about some of the finance system design questions? I think the thing to remember about finances, not only is it that movement of money through the business, but it's actually the way of. Working and improving the business in order to achieve that ultimate objective or vision or goal.

Mark Pearson Freeland: Isn't it. So it's not just about going out and buying your car. It's about putting it back into the business and improving it. And I think some of the key questions that my colleague. Ask us with regards to finance is do you use your financial reporting to make strategic and day-to-day decisions about the business?

Do you reflect on that report [00:42:00] before you go out and spend, but also, do you have key financial indicators that you regularly review? That's pretty key, regularly reviewed to understand the health of your company and the progress towards your goals. So take time to look at the accounts, take ownership of the number that's sitting in your bank or the flow of cash through the business in order to know.

Okay we're looking pretty good so far, or we're 50% of our way towards our goal for this year. Having that level of detailed knowledge about the company is so key. Yeah. 

Mike Parsons: So rather than just making a gut call and just jumping into action, are you actually measuring things in the business and making the right decisions based on that?

That is that's huge. Isn't it? That's like how many companies do you know that just run off gut feeling quick decisions, no data. 

Mark Pearson Freeland: Certainly the ones who are just starting out. And as we know, 70, 80% of small businesses fail within the [00:43:00] first five years, don't they? And I think finance is going to be one of the key linchpins that comes out and causes a company to fail.

And I think a lot of them, a lot of entrepreneurs are going with their gut instinct rather than using financial reports as well as indicators to make those decisions and keep. Of the health and progress of the company. 

Mike Parsons: Yeah, totally. So I think what we can do is in our show notes, we can put a link into Michael Gerber's strategic systems design piece that's on the web.

 We'll have a link in the show notes. If you want to get the show notes, head over to moonshots.io where not only can you read the show notes, you can become a member too. And if all of that seems a little too much. Just jump into your into your iPhone or your beautiful little Android phone. Just give us a rating or review.

However you want to be part of the moon shots ecosystem. Jump in, be part of it. We want to [00:44:00] hear from you. We want you to follow up on these ideas because we think that'll help you be. Not any great entrepreneur, but a better version of yourself. In fact, the best version of yourself, which is what we're all about.

And mark, we have gone high and low throughout the E-Myth by Michael Gerber. But we do have time for one more. That's 

Mark Pearson Freeland: right. Wait, why don't we hear from Michael once more for those of our listeners, we're thinking, ah, no, Michael he's broken it down. He's told me to not take it personally, but also he's thinking about franchising.

It might be all too much for me. Don't worry listeners because this final clip that we've got from my colleague, Gerber is telling you Mike myself, that it's never too late. So let's hear from my colleague, but once more about how we can all start the process. 

Michael E Gerber: Unfortunately, it's too late for most good news is break.

Crop was 52 when he [00:45:00] started Ray crock was 52 when he started, which tells you already that if you're not yet 52, you still got a chance. But if you're as old as I am, which is 80 good news is you still got a chance.

My wife and I have started a brand new enterprise this year to celebrate my 80th birthday. Now, what am I out of? My freaking mind? No, got a dream. I'm going to ask you to write it down. I've got a dream. Please write that down. I've got a dream and then write a question. What is it? I've got a dream. What is it?

My dream, our dream lose dahlias dream. And my dream is just this. And I want you to write this down, to transform [00:46:00] the state of small business worldwide, to transform the state of small business worldwide. We have a vision. Please write this down. I have a vision. What is my vision?

Please write this down. I have a purpose.

What is my purpose?

Please write this down. I have a mission.

Mark Pearson Freeland: What 

Michael E Gerber: is my mission. So I just told you at the beginning of all this process, when Louis Dahlia, and I said, we're going to launch a new enterprise and I'm going to share what that is. We're launching it based upon a platform without a platform for growth. It will ultimately be. Without a dream, a vision, a purpose, and a mission.

It will automatically fail very [00:47:00] few companies in your industry or any industry were started with the dream. Why? Because very few people who start their own companies are truly entrepreneurs. Entrepreneurs are dreamers. Steve jobs was a dreamer. Ray crock was a dreamer. Bill gates is a dreamer and on.

And Nita Roddick was a dreamer. Mary Kay cosmetics was fashioned by a dreamer who had a dream, a thinker who had a vision. A storyteller who had a purpose and a leader who had a mission, write that down, a dreamer, a thinker, a storyteller, a leader. And so when I share this with you understand, I'm talking about Ray Kroc, I'm talking about Steve Jobs.

I'm talking about the Google boys. I'm talking about everyone who's founded any enterprise. It was founded upon a dream, a vision, a purpose, and a. 

Mike Parsons: Wow. Wow. He's bringing it home at the end of the show. Marky, mark. I know. Once again, he's just like he's full of so much. Bold or Daishia's vibrant thinking, isn't he?

Mark Pearson Freeland: Yeah. I think even to extend on that, it's all this thinking, but it's wisdom, isn't it. From working with a hundred thousand companies and getting the experience, not only from seeing and reflecting on brands. Ray Kroc and McDonald's, but also seeing all these other entrepreneurs and business owners going through the process of starting failing, succeeding.

There's so much wealth of tips and tricks we can learn from Michael Lee [00:49:00] Gerber here. I think we've condensed it all pretty quick, but there's so much there. 

Mike Parsons: There really is. He goes on to say he's really big on dreaming big and getting started. There's this great quote frame. The dreamer has a dream.

The thinker has a vision. The storyteller has a purpose and the leader has a mission. These four personalities, dreamer, thinker, storyteller, and leader comprise the totality of what it means to be an entrepreneur. How good is that? 

Mark Pearson Freeland: That is, it is such a great, and I can totally imagine mighty Gerber breaking it down for us like that.

 He's got that vision himself of thinking about entrepreneurs. Creating businesses, creating structures that can hire new people, creating something for the world and breaking it down into those personality archetypes. I can totally see Gerber doing that. What a wonderful little breakdown of him.

Mike Parsons: [00:50:00] Yeah. And what I like is he's very down in the weeds in like how you got to create a system so you can work on the business, but he compliments that. Have a dream and get started with that dream. And the reason why a lot of entrepreneurs don't have it is because they're not actually entrepreneurs.

They're just small businesses. Or entrepreneurs or individuals that are owned by their small business. They're not truly entrepreneurs. So he's really, it's like Carpe diem, seize the day, dream a dream, go out and make it happen. What I like about that is it's not just the laborious details of creating systems.

He's asking us to think big. And I think that is why the journey of entrepreneurship is so exciting because it's on one is so left, left brain, right? Brain it's details. It's down in there getting the job done, but it's also having a vision or a dream for how the world can be better. What a fitting end to the show.

Mark Pearson Freeland: That's right. And [00:51:00] we're only two episodes so far into our entrepreneurship series, Mike, with Michael league over today, Darren Hardy, last week. We've got another absolute powerhouse for coming for us and our listeners next week with sir James Dyson. He's a good one. He is a good one. But before we get so excited about James and we forget about Michael, I need to ask you mark.

Mike Parsons: Now that we've gone through this journey that started with Michael Lee Gerber saying, don't take this personally. I want to know, did you take it personally? And what's the one idea that really stuck. 

Mark Pearson Freeland: The thing that I'm going to take personally intentionally, here's the idea of stepping back from working in the business.

And instead taking time to preserve and work on the business, thinking about it in that, like you say, left brain, brain thinking about it in that slightly different way is what I think separates the successful [00:52:00] entrepreneurs of enterprises against those who fail within the first few years of. On the business rather than in it, rather than making the business work only with you, but work for you.

That, for me, feels like the big aha from Mike Lee Gerber. What stood out for you? I think I think I could put more work into the systems. When you think about creating an operating manual and breaking it down, that's work that I could do. There's. It's such a simple thing, but I think I've neglected a little bit.

Mike Parsons: What did you think about this creating systems? I 

Mark Pearson Freeland: think it's. It's unarguable that it's a tried and tested way of making a successful enterprise. A McDonald's I know we've heard from Darren Hardy talk about McDonald's and today from Michael Gerber, we heard about McDonald's as well, but I think it's a really powerful case study to repeatedly refer back to because they have done it [00:53:00] so well.

And I think creating the system in order to delegate work. To go to the extreme with McDonald's creating a system in order to franchise your business. I think if you can build that in from day one, it probably does make it a lot easier down the line. But even if you've started your business and you're not on day one anymore, maybe you're a few years down the line.

I think you can still put in those systems in place in order to make your life that little. Lighter or easier or more efficient or more productive, if you can reflect on your time and think about who you need to hire and how in order to educate them or delegate work to them. Like the operations manuals.

I think that's a really big practice to start the new year with isn't it put it in place now, maybe take time to reflect on the processes, the systems for us, Mike, it could be. Good. The production of the moonshot show [00:54:00] for other entrepreneurs, it could be creating a systems in their marketing or the finance, but I think taking the time to really reflect on those and build it in is going to be what improves the year for many of our listeners, I think.

Mike Parsons: Mark, thank you to you and thank you to you. Our listeners, it has been great to have you all with us on this journey into Michael egos. The E-Myth and it started rather viciously. He said, don't take it personally and challenged us with the question. Are you really working on the business or in the business?

Are you working for growth? And he really pointed out that you don't build a business that relies on you. What you have to go out and do is create a system, prepare for. Just like Ray Kroc did when he started the McDonald's franchise at the age of 52. So if Ray can do it, anyone can do it. And it all comes back to this central idea of working [00:55:00] on the business, not just in the business and those systems.

They have to build a business that doesn't rely on you that can scale that can grow and potentially be just as successful as McDonald's. So go out there, have a dream and start this process. If you do this, you will be on a rollercoaster journey. The thrill of your life. You will become an entrepreneur.

You will become the very best version of yourself. And that's what we're all about here on the moonshots podcast. That's a wrap.