Michael E. Gerber developed the E-Myth strategy for small business. There are a number of useful ideas and tools that he espouses in his E-Myth books but one of the ones that stuck the most with me is the simple phrase: Work on your business not in your business.

This simple phrase is packed with a lot of meaning, which we will talk about in this article. In this simple phrase, Gerber cleverly identifies the role that a business owner should take in his or her business.

When you work in your business, you are letting your business control you. In a way, it’s almost as if you’re an employee, simply doing what you’re told to do. Your schedule and your customers and your industry and your system of practices and procedures dictate what it is that you do each day.

When you work on your business, you are the master. You control your business. You set your schedule, you control your customers (in a good way), you work alongside (not as a result of) what your industry dictates, you create good practices and procedures. You are in command.

When you work in your business, you’re like a whitewater raft, pushed about according to the whims of other forces. When you work on your business, you’re like an engineering firm that redesigns and redevelops the river itself to flow where you want it to flow.

When you work in your business, it feels different. You’re busy and you don’t feel like you’re in control. It feels like chaos. When you work on your business, you know it. You do feel in control and it feels like controlled chaos. How do you really know whether you’re working in your business or on it? Gerber gave the perfect measuring tool: If you can step away from your business for a period of time (say, a day or a week) and your business continues to run, you’ve been working on your business. However, if your business struggles or folds, you’ve been working in your business.

So, what can you do about it?

One way to work on your business instead of in your business is to create systems. We’ve talked about that here recently.

Another way to work on your business instead of in your business is to hire (either employees or virtual staff) to do some of your work for you. Once you have systems in place, this will be extremely easy to do.

And a third way to work on your business instead of in your business is to focus on vision-casting and positioning. Create the big picture and position your company as a leader in the field. Let other people do the delivery work itself. Or, if your knowledge is invaluable to the delivery of your product or service (i.e., if you are a coach or consultant), employ others to do everything else but deliver your product or service. And, if your knowledge is invaluable to the success of the company, consider creating other products and services that you don’t have to be present to deliver (like information products or pre-recorded webinars).

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Small business owners have a lot to do and the relentless forward march of time can be stressful. It’s hard to get everything done that you’d like to get done. (Heck, it’s hard to get everything done that you need to get done). You schedule, you prioritize, you delegate, but it still is an overwhelming flood of work.

What you need is focus. Stop multitasking. There is a lot of pressure to multitask: To try to cover several projects at once. And, although this might work for some things, it doesn’t work as often as we’d like to think it works. Simply put, we’re not as good as we think we are.

When we multitask, we end up doing an inferior job on all of our projects, and potentially taking longer to do them. When we focus on one thing at a time, we can actually do a better job in a shorter time. To give a simple example: If you have 4 projects and you try to multitask them, you might end up taking 2 to 2 and a half hours to complete the work and each project will feel choppy and inferior. However, if you focus on each one individually, you can do a single project in only 20 to 25 minutes (for a total time of 1 hour and 20 minutes to 1 hour and 40 minutes) and end up with 4 well-done, cohesive projects at the end.

Part of the problem is that we can’t switch as easily from one thing to another. It takes a great amount of mental energy to switch. If you’re a consultant and you’re working on a business plan for a client and at the same time you’re coaching a client on how to get the most out of their staff, you’re demanding too much of yourself at once.

Instead, you can get more done in less time and complete it to a greater level of excellence when you focus on one thing at a time.

Here are some tips to help you do that:

* Batch similar projects together. Even if they are to different clients, if they are similar, you’ll do them faster and more effectively when you do them at the same time.

* Stop watching your email. Sometimes, having an auto-notification of email can feel convenient because it allows you to respond to people right away. But it is a big factor in us switching from one thing to another.

* If you need a period of concentration to finish a project, switch the phone to voicemail.

* If you’re prone to get off onto rabbit trails about stuff, or if you’re the kind of person who will instantly hit the web if a thought suddenly jumps into your mind (even if it isn’t related to the topic at hand), keep a piece of paper on hand to list any thoughts or ideas you have. Rather than pursuing them, write them down. Then later, when you have a moment, you can get back to them but they won’t pull your attention away from your work.

* Make sure you have eaten, drank plenty of water, are in relatively good health, and get plenty of rest. Busy entrepreneurs can be hard on their own bodies and not eating right or not getting adequate rest can make it harder for you to focus.

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Small businesses have an inherent and often unrealized skill: agility. They can bend and move quickly, according to market demands. However, entrepreneurs don’t realize it because they’re often wrapped up in their product or service or brand development. But when you work with larger companies, that’s when you begin to realize just how agile smaller businesses are.

Small business solves problems.
Take the situation of Scale Computing, as reported in the New York Times Small Business section. Scale Computing was busy searching for a solution to a problem and they inadvertently stumbled across the solution to another problem!

You can read the article for yourself, but I’ll summarize it here: Scale Computer worked to create software that could predict stock market trends allowing them to make money from investing. They created a model and tested it and it seemed to work, and they struggled to turn this into a marketable solution.

However, what they kept hearing was: Their solution to market trends was interesting… but MORE interesting was their solution to storage space. Without realizing it, they had developed a low cost but powerful model to store data. Once they realize it, they changed their tune and began to see success right away.

Agility as a factor to make small businesses competitive.
Agility is a huge benefit to small business owners. The ability to switch gears without missing a beat can make any business far more competitive. If the market demands something different, the smart business owner hears the message and responds.

Compare it with a large and bureaucratic organization that can’t see beyond its own bloated administration. A couple of decades ago, the bloated American automotive industry was caught off guard by lower-priced and more fuel efficient imports. The caught up, but it took a while. Or another example: Big, bloated airlines can’t get past their policies and habits while Southwest Airlines continues to win the praise of travelers. Megalithic phone companies and banks can’t quite "get it" when their customers demand lower fees, fair prices, and transparent policies and they are caught off guard when young, agile upstarts shake things up.

The problem arises for a few reasons (if you’re a big company, listen up)… Like a big ship, it takes a long time to turn around when you’ve built up some momentum. So ideas – both good and bad – turn into trains that cannot be easily stopped. Also, executive level hobby horses are pushed through by senior level management who emulate their bosses and those ideas are pushed through my middle management who emulate their bosses and those ideas are pushed through by lower level management who emulate their bosses and those ideas are pushed through by paid-by-the-hour line employees who just do as they’re told. Also, big, bureaucratic organizations become gathering places for employees who just want a job to get them through to retirement. Also (yes, there are more reasons), big, bureaucratic organizations create innumerable hoops for people to jump through if they try to create change.

As a small business owner, you’re probably already more agile than your larger competitors. So use it to your advantage!
 

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Quick, name the most profitable segment of customers in your business.

Most business owners who answer this question will usually answer based on a demographic segmentation. For example, they might say "married women, aged 20 to 40" or "executives of Fortune 500 firms" or "B2C businesses with over $1 million in sales". Knowing these segments is helpful.

But if your answer was like one of those answers, you’re missing out on a slightly narrower and even more profitable segment! Repeat customers. Your existing customer list is your most profitable segment of customers. When you sell to them, it costs you less – per dollar earned – to generate that revenue. The most obvious reason is that they already know and trust you, so there is little or no marketing cost (although there might be some customer-relationship-nurturing costs); and they already trust you to deliver on your promises, so the sales cycle is shorter.

In her SmallBizTrends blog post, "Selling to Existing Customers", she outlines 3 reasons why existing customers should be high on your list of people to make sales to. You can read the full article here: http://smallbiztrends.com/2009/09/paying-attention-sales-strategy.html.

To summarize her reasons, she says that selling to existing customers "enhances the bond between you and your client", "presents opportunities for increased business", and "is a cost effective marketing strategy".

Her article is great but does not go into specifics about how to do communicate with existing clients, so we’ll give you some ideas here:

* When you connect with your client in person or over the phone, also connect with them on Facebook, Twitter, LinkedIn, and any other social media that you use. This will give you an easy way to gain insight into their lives and they will hear from you from time to time in a non-threatening (non-sales!) environment.

* Be intentional in your communication to existing customers. Far too many businesses spend their time, money, and effort on convincing people that they are a credible organization. New prospects don’t know that and they need to hear the message… but previous customers already know that and the message is redundant to them. To your existing customers, your message should be "you know we provide value; let us provide even more value for you!"

* Today’s technology gives us many advantages to segment our marketing between new and existing customers. Even something as simple as a database or as complex as a CRM system enables you to split your communication efforts so the right customer hears the right message.

* Reward repeat buyers with programs that enhance loyalty and sales. This might include something like the popular "Buy 9 Get One Free" program or a membership into an insiders club which provides across-the-board discounts, invitations to insiders-only events, and more.

Your prospects will take a lot of your energy to turn them into customers. And once they’re customers, don’t give up on them! Invest time into nurturing your relationship with existing customers. You’ll increase the amount of per-client PROFIT you make, and you’ll solidify your customer base for the long-term.

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Do you want to make more money in your business? Do you want to drive down expenses? Do you want to work a little less so you have more time for family? The answer to achieving these things just might surprise you: The answer is that you need to do the same old thing.

The problem is, business owners need to be all things to all people and they can be pulled from one issue to the next throughout the day. Because of this, best practices don’t become "practices"! And good habits don’t become "habits".

Here are a couple of examples:

A freelance graphic designer might normally give great service and speedy turnaround times but takes on too much work and can’t deliver it on time.

A consultant who tries out Twitter one month and doesn’t get any benefit out of it so they try out Facebook another month and LinkedIn another month.

A real estate agent who tries different methods of lead generation and creative ways of showing homes and closing deals.

The problem, in each example, is a lack of consistency. Businesses will do far better, they will run more productively and profitably, and they will drive down expenses and increase customer satisfaction when they perform consistently. Consistency in business means finding the best options and then doing them over and over and over and over (instead of trying to do too much or jumping from one thing to another).

The freelance graphic designer will know how much work can be handled and will minimize the amount of time that they take on more. The consultant will choose just a couple of social media and will work those diligently. The real estate agent will find two or three lead generation methods and will run with them.

Sometimes, the temptation is to try out different things in case you find something better. While it’s okay to test new options to see what the result might be, the danger is that you give up way too much by neglecting proven methods. This is a mirage; a "grass looks greener" situation. Many businesses will be far more successful if they find just a few good practices and stick with them… occasionally (emphasis on occasionally) dialing in additional options to test them.

So, here’s how to make this happen for you:

1. Identify your best practices. You probably know them (even if you don’t realize it). They’re the actions you take that are the most profitable.

2. Turn them from concepts into actual systematic processes by writing them down and figuring out how you can do them efficiently.

3. Do them over and over and over and over and over.

4. Repeat #3.

5. Repeat #3.

6. Repeat #3

Now, I’m not suggesting that you just through innovation out the window. But I am suggesting that your business will be more successful when you harness your innovative ideas and instead focus your efforts on performing good habits again and again.

As a business owner you can only do so much on your own. You bring a set of skills to the table and, admittedly, there are skills that you probably don’t have. The result is that you might have a business with a big, gaping hole right in the middle of your skillset that you need to fill in.

Hiring is an option. You can hire employees or outsource. But that might not work for every circumstance. However, partnering might be your preferred choice; it’s the sharing of the workload and the credit and the reward. Partners come to a project with an ability to contribute and a desire for mutual success.

Partnering can be a great way to build your business to a degree that you weren’t able to accomplish before. That’s because partnering follows the principle that 1+1=3; when two people put their heads together, they can accomplish great things, much more than if they just each worked on their own and combined the results.

Here are some tips that can help you become a better business partner:

• When you approach someone to talk about the possibility of partnering, make sure that you are recommending an idea that has a mutual win-win scenario. Many successful business owners have a couple of great stories to tell where someone offered them an "amazing partnering opportunity" that was entirely one-sided… in the favor of the other person.

• Early on in the process, determine what skills and strengths (and even weaknesses) each person brings to the table.

• Outline the work and the reward and make sure that each gets his or her appropriate share. Fifty/fifty is not always the best option (although it is often the default option). You might consider giving more reward to a person who takes on more risk or does more work.

• Agree in writing to the parameters set out. It can sometimes feel like a hassle to do so but it is helpful when disagreements arise to go back and see what you agreed to.

• Create contingency plans. What happens if the project is super-successful? What happens if the project fails miserably? What happens if one of the partners needs to move on from the project? It doesn’t hurt to anticipate as many scenarios as possible to help you address any potential situation that could arise.

• Start with one partner and start small. If you have too many partners in your first project, you’ll end up managing instead of enjoy and contributing.

• Be prepared to lose some control. This is one of the biggest challenges that business owners face, especially those who have been operating as sole proprietors for years. Partnerships are relationships of give and take and sometimes you won’t always complete something in the same way that you foresaw.

Partnering can be an enjoyable and profitable way to grow your business. If you’re not sure where to start, consider partnering with someone you already know – such as a vendor, a client, a business peer, or a friend. This is a good way to get your feet wet.

And start small! Don’t commit your very first partnering project to aim for a massive multi-million dollar extravaganza. Instead, create something small and build from there.

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Remember back to your dating days? Perhaps you were seeing someone and decided to break it off and, in the midst of that tense discussion you pull out the infamous "it’s not you, it’s me".

In the classic TV show Seinfeld, George Costanza faces that age-old excuse:

The phrase "it’s not you, it’s me" really is an excuse. It’s an easy way to get out of a difficult conversation without having to give the real reason.

There are two places in business where this happens all too often:

When you’re reviewing an employee and when you’re firing them.

In both of these scenarios, employees deserve the "straight goods" and your business requires that you don’t give them "it’s not you, it’s me". In this blog we’ll talk about how to review employees. In the next blog we’ll talk about what to do when you have to drop the proverbial employment axe.

Reviewing employees: I’ve been on both sides of the table. I’ve reviewed others and I’ve been reviewed. Reviewing others is difficult – perhaps more difficult than being reviewed – because you have to tell someone the honest truth and then see them again every single day after.

In those situations, the truth can be hard to tell, and hard for the employee to take. So here are some ways to frame your conversation so that you don’t do irreparable damage to your professional relationship (and potentially to the job the employee is doing).

1. Make sure your review is specific. This will help you keep the conversation focused on particular tasks or actions rather than on generalities like "I’m not happy with your approach to work". Divide your review into the actions that an employee takes on a day-to-day basis and review them for that activity. If you use a performance scale, don’t make the scale 1/100 because that is way too broad. Use a 1/5 performance scale and make sure that you have outlined what each point is.

2. Make sure your review is well documented for both the good points and the bad points. It’s much easier to say "your performance has been unsatisfactory" when you can point to the various measurements and evidence that would suggest that. (Bonus tip: Make sure that they know what you’re measuring them on FIRST!)

3. Don’t try to get the bad stuff out of the way first so you end on a good note and don’t try to leave the bad stuff until the end or your employees will dread every review. Just deal with something as it comes up in your review, good or bad.

4. Since you expect great performance, help your employee know how to get "5/5" on every measurement. This takes a lot of pressure off of your delivering bad news because, when an employee gets a 4/5 you can follow up with "and here’s how you can achieve a 5/5 for next time"; and when the employee gets a 1/5 on something you just follow up with the same comment: "and here’s how you can get a 5/5 the next time". Give your employees constructive and actionable steps for every point of their review.

Reviews aren’t easy, especially if you will see your employees regularly. But if you keep the conversation pointed at measurable results and actionable future tasks, your review will go much more smoothly… because it IS them, not you!!

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In today’s business climate, you need to keep cash flow coming in. That’s not always possible when potential buyers seem to have scattered like scared townsfolk in an Old West shoot-out. In an economic downturn, people spend less so businesses need to work harder to earn revenue.

One way you can earn more revenue is through strategic partnerships with others. This takes some legwork and a hefty dose of creativity to make it happen, but proposing partnership is easy (since many businesses want to generate more clients and revenue) and collaborating is fun.

Here is how you can partner for greater business potential:

First, think about who your target market is. Explore their needs and wants and buying habits. Make sure that you’re not just working on data from who you WANT to sell to but who you are ACTUALLY selling to; you might find that those are two dramatically different markets.

Now, think about other needs and wants and buying habits of the same target market. Let’s say that your business targets soccer moms and sells clothes and accessories for their children ages 6 through 10. Think about what other needs and wants and buying habits they have. They’re probably also looking at minivans, lessons (like soccer, piano, etc.), and they’re buying things (like food) to enhance the health and wellbeing of their children. They might also be looking for popular entertainment for their kids – video games, appropriate internet activities, etc. And don’t forget, they’d probably like some downtime or pampering themselves with the amount of effort they invest in their children.

So, now that you have a long list of OTHER needs and wants and buying habits, think about who offers these. For our soccer mom example: Is there a local soccer team? Is there a go-to piano teacher? Is there a minivan dealership? Is there a grocery store nearby? Is there a spa? Do some research and find companies that meet the needs on your list. This is now your strategic partnership target list.

With this list, brainstorm how you can partner. Maybe you can create some co-branded marketing. Maybe you can promote each other’s services. Maybe you can include a coupon for each others’ businesses with every purchase. Maybe you can create a product or service and split the revenue and expenses. The opportunities are endless.

Let’s take the soccer mom example and look at some ideas. If you target moms to sell them children’s clothing and accessories, you might:

* Work with a minivan dealership to offer a "summertime package" – when they purchase a minivan they can also purchase a package of your summertime fun accessories, or maybe some travel accessories for kids. Or, perhaps you can offer to create mannequin displays in their dealership and clothe the mannequins with your clothes. It livens up their dealership and gives you a targeted place to show your wares.

* Collaborate with the local spa, piano teacher, and child nutritionist to create an occasional newsletter with tips for moms and coupons to your businesses.

* Work with local grocery stores to sell some of your accessories. For example, perhaps you can offer a "my first picnic" with your backpack stuffed with fun picnic food and a plastic tablecloth.

The secret to strategic partnering is to find the right partner and get creative at developing a solution that will be loved by the customers each of you share.

Business owners work towards growing their companies. This might include any number of factors:

• Growing marketshare
• Growing revenue
• Growing the customer base
• Growing profitability
• Growing the product line
• Growing reputation
• … and other factors.

But at some point, business owners are likely to hit a wall when they discover that they cannot continue to grow in the way that they were growing. For example: Maybe they’ve acquired as many customers as they can realistically serve on their own. Or maybe they have hit some kind of invisible limit in their revenue and they just don’t know how to make more money without working longer hours. Or maybe they have extended their product line as broadly as possible and don’t want to extend it any more for fear of having too much on their plate. No matter what metric you’re using to chart growth, you seem to be hitting a wall and you can’t break through.

If this happens to you, what should you do?

The short answer is: This is a clear sign you need to think about hiring someone else. If you’re running a business on your own, there can be a big question mark around when to add someone else to your team and this is the time when you need to think about doing that.

But there’s a long answer, too. It might be time to re-think how you want to grow and it might be time to decide what your vision is for your business. If you want to grow in some ways, hiring specific staff will bring you there. If you want to grow in other ways, then it’s time to think about other types of product lines. Here is a fictional case study with different endings to illustrate:

Mary runs a small e-commerce site selling hand-painted decorations. Her website has been pulling in good traffic and she has found some great sources to get customers. Now, she spends some of her day doing administrative work, some of her day marketing, and most of her day is spent creating these hand-painted decorations. Mary has hit the proverbial wall, mentioned above, and is now thinking about what’s next for her business.

OPTION 1. Mary decides that she likes the painting part of her business and wants to continue doing that, but she wants to get rid of the rest. So, she hires a virtual assistant to take care of the administrative work, some of the marketing, and some of the customer management. This frees her up to hand-paint more decorations.

OPTION 2. Mary decides that the painting part is enjoyable but she ultimately wants a bigger business. So, she hires a virtual assistant to take care of the administrative work, and she hires someone who she can train to take care of the hand-painting. Then, in the short term, she does some hand-painting of the decorations but she starts to focus on the marketing side of her work. She gives most of the hand-painting to the painter (and does a bit herself to handle the overflow with an eventual eye toward hiring a second painter).

OPTION 3. Mary likes the money! She enjoys what she does, of course, but would enjoy retiring early even more! So, she focuses on building profitability. She revisits her suppliers to see if she can negotiate lower prices for bulk orders. She examines her systems and processes to make herself more efficient. She improves service to enhance customer loyalty. She raises her prices to increase revenue. She looks to broaden her offering to include some higher-profit items like an ebook on how to decorate with all hangings or a paid subscription to a webinar series on how to start a hand-painted decoration business.

There are other options, of course, but these three nicely illustrate what is next for Mary.

For Mary, and for you, it starts with asking yourself what you truly want with your business. Maybe you want to grow but you don’t want to have someone else doing to revenue-generating work that you love to do. That’s okay. As soon as you know that, you can figure out what the next step is to take.

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Recently, a satirical review of a t-shirt on Amazon attracted more and more satirical reviews… which turned into real sales for the company that makes the shirts! Read more about it here.

Or, just look at any book, business, or recording artist who makes an appearance on Oprah.

Or, consider how album sales are linked to controversial lyrics.

Or, how news reports of Twitter being the latest marketing craze feed the frenzy of people who suddenly NEED to be on Twitter.

When there’s buzz, suddenly the "volume" goes up. The number of people talking about the company increases. Attention is generated. And the business on the receiving end of the buzz notices a difference.

Getting people talking about the business has been around for a long time but one company seems to have turned it into an art form. The company is Half.com, which started like most businesses and was bought by Ebay for millions, got attention from getting people to talk about them. Although they had a number of initiatives that were worthy of watercooler conversations, their biggest, brashest word-of-mouth campaign was when they convinced a town to rename itself Half.com. They’ve been much quieter in recent years, but that initial buzz was enough to get the attention of a company like Ebay and entice them to pay.

It’s a snowball effect. Once you can generate enough positive, attention-getting headlines, people talk to their friends about you and then their friends tell other friends, and on it goes. Sometimes buzz is created by forces outside of your control (such as the satirical feedback posted on Amazon which drove business for the t-shirt company) but sometimes you can create your own buzz (by taking a page from Half.com). So, how can you create some buzz for your company?

• Start by looking at what you do and if there is a way that you can get some attention by doing it in a unique way. 1-800-GOT-JUNK does a great job of generating consistent local buzz by donating their time and talents to clean up public places. That’s a perfect example of the "sync" between the offer and some buzz-generating effort.
• Take it up a notch. While still striving for that fit between offer and buzz, find something that is unusual, bold, and unheard of. Renaming a town is a good example. This takes guts and perseverance to do successfully, and many good ideas are killed in the boardroom when the executives weigh the consequences and aren’t able to quantify the benefit. Buzz produces quantifiable benefits but must first pass through an unquantifiable stage. The inability to control the buzz is often an idea-killing reason, too.
• Buzz is a mindset. It’s not something that is easily done by flipping a switch. If you’re a conservative company that isn’t known for generating headlines, it will be much harder to do than if you are a company that doesn’t mind being a little brash and rough-around-the-edges. In other words, your buzz should sync with your brand. So consider adjusting your brand first.
• If you have a CEO or some other figurehead with a colorful personality, you can leverage this into some buzz. Compare Oracle’s in-your-face CEO with SAP’s very conservative (some might say "old school") approach to professionalism. And I don’t need to tell you that it works for rockstars, too.
• When planning to generate some buzz, don’t just come up with a great idea. Buzz won’t happen on its own. Figure out how you’re going to deliver it to the world, how you are going to nurture the conversations, and what you’ll do with the increased attention. Make sure that you’re ready to quickly ramp up marketing opportunities that leverage the buzz AND the ability to deliver increased products or services because of the buzz.
• Most importantly, don’t be afraid to fail. You might have to try a few different things before you’re successful with one.
   

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