Are You Working for a Lunatic?

Since January, I’ve been encouraging you to think about your business, starting with a vision and goals that will help you as you plan for this grazing season. (If you’ve missed any in that series, you can find everything here.) With that in mind, I thought this past article by Kit Pharo was appropriate as it helps us think about our different roles as business owners, and consider what we might want to adjust as we go forward.

Learning to work smarter – NOT harder can be a challenge for us. Farmers and ranchers, for the most part, are not afraid of hard work. Unfortunately, most are not so good at working smarter. They would rather do minimum labor type work than entrepreneurial and management type work. And that leads to a job, instead of a business:

“If your business depends on you, you don’t have a business. You have a job – and you are working for a lunatic.”   ~ Michael E. Gerber

Building Systems to Succeed

Properly done, entrepreneurial and management type work will generate an income that is at least ten times greater than minimum labor type work. So it’s helpful to see what it takes to succeed.

The quote above came from a book called The E-Myth Revisited by Michael Gerber. The subtitle for this book is “Why Most Small Businesses Don’t Work and What to Do About It.” The second chapter begins by saying, “Everybody who goes into business is actually three-people-in-one: The Entrepreneur, The Manager, and The Technician.”

All three personalities are important. The problem is that most small business people (including farmers and ranchers) spend most of their time being The Technician. The Technician is the doer. He loves to tinker. He believes that if you want something done right, you will have to do it yourself. As long as The Technician is working, he is happy. The Technician maintains that thinking is unproductive unless it is thinking about the work that needs to be done.

In his book, Gerber says, “The entrepreneurial personality turns the most trivial condition into an exceptional opportunity.   The Entrepreneur is the visionary in us. The dreamer…”   He continues by saying, “The managerial personality is pragmatic. Without The Manager there would be no planning, no order, and no predictability.”

For the most part… The Technician personality does what I often refer to as minimum-labor work. That includes fence building and repair, cow work, horseback riding, mechanic work, farming, etc. As you probably suspect, I spend many hours on the computer in my office. What kind of work am I doing? To be totally honest with you, most of the work I do in my office is technical work. It is no different than building fence.

The E-Myth book discusses the difference between Working In The Business (WITB) and Working On The Business (WOTB). Most farmers and ranchers have no problem working IN the business. They get out of bed every morning looking forward to working IN the business. One of the reasons they love what they do is because they have the privilege of working IN their business.

Working ON the business requires that we step back from our day-to-day working IN the business. The object of working ON the business is to create a business that can stand on its own – a business that does NOT depend on us. Remember… if your business depends on you, you don’t have a business.   You have a job and you are working for a lunatic.

Creating a business that can stand on its own is best done by building the business around a set of systems – NOT specific people. If the systems are properly created, they can be managed by just about anyone.   This is a tough concept for farmers and ranchers to understand. However, I believe it is very doable.

The E-Myth book discusses how 52-year-old Ray Kroc created what is now known as “The Most Successful Small Business in the World.” What business is that? McDonald’s. In less than forty years, McDonald’s became a $40-billion dollar-a-year business – with over 35,000 restaurants worldwide that employ more than 1.7 million people. The number of restaurants grows on a daily basis.

It doesn’t matter if you go to a McDonald’s in Texas, Montana or Australia – the French fries and hamburgers will all taste the same. How can that be possible? The business was built on systems that can be duplicated all over the world – AND these systems can be managed by minimum-wage teenagers.

My goal is to create a business that does not depend on me and my involvement. I don’t want to stop working – but I want a business, instead of a job. A business is something that works for me, while a job is something that I work for. There is a BIG difference! Once we have created a true business, management and/or ownership is easy to transfer from one person to another.