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Clay Staires: This is Clay Staires America’s Leadership Expert with Tulsa Business Leadership Podcast Number 39. Today we’re talking about the E-Model, which is your business life cycle. Again, as Clay Staires Tulsa Business Leadership, I get an opportunity to speak with and consult multiple entrepreneurs across the country about their businesses. What I find most often with business leaders and entrepreneurs is that they are stuck in their life cycle. They have gotten things started up, but they haven’t known how to move from the startup.
Today I want to talk about what your life cycle looks like as you are moving from the idea to startup to your business model to an actual mature business. Let’s start out with this idea. Once again, with Clay Staires America’s Leadership Expert and Tulsa Business Leadership, the E-Model begins with the idea of a business. Again, we find that most people, if you talk to folks … As a matter of fact, I think Forbes Magazine says that about 57% of the people that are out there really would love to start their own business.
I actually had an opportunity just last night in a group interview, one of the persons that came to a group interview for one of my companies was talking about their desire to start their own business. So 57% want to start their own business, but the problem is that so few people actually do.
This first phase of your business life cycle is simply the idea. Most people have an idea for a business, but they never actually start. They’re never able to get out of the idea phase because of their emotion. It’s too scary. They’re too afraid. There’s this thing called security in a salary, security in benefits, security in the job that I have.
It’s very hard to move away from the security of the wage cage, because the wage cage is familiar, the wage cage can be expected. You know what you’re going to get on a daily and on a weekly and monthly basis. America’s Leadership Expert But to move out of that wage cage takes confidence. It takes a lot of energy. But, unfortunately, most people aren’t able to move out of that because there’s this boundary of emotion.
Usually, when we start out with this idea, before we have left the job, there’s a lot of energy in the idea phase. There is a lot of energy, but there’s no value in it. Everybody has the idea. Thomas Edison talks about, “Vision without execution is just hallucination.” So, unfortunately, so many people are trapped in this place of, “I’m working in a 9 to 5 job. Oh yeah. I have all these ideas of starting my own thing,” but it never actually happens because we aren’t able to move from the idea phase to the second phase, which is the startup.
Again, the big boundary between the idea and startup phase is what I call this thing called emotion. There’s just too many fears. There’s too many anxieties. There’s too many reasons why we don’t do it that keeps us from moving.
However, America’s Leadership Expert there are some people that are able to surmount, they’re able to climb that mountain of emotion, get on the other side of it, and actually start up a company, start something on their own for the first time. “Oh, this will be awesome.” They move into this startup phase but, again, as Maya Angelou – you may have heard of Maya Angelou before – she says, “Nothing works unless you do.” I love that phrase. It’s a wonderful phrase.
However, we can get trapped in this thought of working, and we become the one that is working. Because this is what happens in the startup phase. Again, a lot of emotion going on here but, again, there’s really no value in the startup. You are the worker. You’re not making money yet. The emphasis is on your skill and what you can do. Again, this is why Maya Angelo says, “Nothing works unless you do.” So every single day, you have to get up and go to work.
Unfortunately, what we want to be careful of, Gino Wickman talks about, “Don’t mistake activity for productivity. Creativity is productivity. It just doesn’t feel like it at first.” As we move into the startup phase, we start the company, and we are the engine. It’s our skill. It’s our knowledge. Everything depends upon us to get the business going. The business has a high emphasis on a person, the person being you. Then that first person that you hire. Again, now it’s me and this other person. We’re locking arms. We’re partners in crime. We’re doing this thing together.
There’s a lot of emotion in this, because it’s your baby that you have birthed. There’s so much emphasis on family and doing this together. Again, this is a wonderful part of the company, but it’s just the beginning phase. It’s called the startup phase.
Unfortunately, even though we have had the guts to move out of the wage cage and into a startup, what keeps us from moving forward is education on how to actually run a company. We get trapped in this thing of just owning a business. In other words, America’s Leadership Expert we have created a job for ourself. So we have to get up every single day and go to work. What is it? The phrase of, “Yeah, it’s great to be an entrepreneur. You get to pick which 16 hours you work every single day. Ha ha.”
The idea here is that in the startup, it’s a very important phase, but again, very high emotion. The emphasis is on your skill. The emphasis is on you being the worker. Unfortunately, over a long period of time, entrepreneurs don’t move beyond the startup.
I actually have a business that I’m working with right now in Tulsa that has been going for 30 years, but they never got out of the startup phase. The reason why I say that is because the business is still dependent upon the founder. The business is still dependent upon that one person, and without him, the business doesn’t function well. He can’t leave the business for extended amounts of time because the business depends upon him. This lets us know that we are still in the startup phase.
The way to move out of the startup phase is to begin to add systems, and the next phase is what we call the business model phase. In the business model, this is where we’re designing systems and putting … This is where we get into high execution. There’s proven systems that begin to put into place. The work is now dependent upon processes, not just on a person. There’s mentorship, training, evaluation, and management going on. There’s expanded leadership going on in the founder.
Michael Gerber says that, “Most entrepreneurs are merely technicians with an entrepreneurial seizure. Most entrepreneurs fail because they are working in their business rather than working on the business.” As we move from the startup phase to the business model phase, the key boundary there that keeps people from getting into the next phase is education.
Again, as we move from idea to startup, America’s Leadership Expert the boundary that we have to overcome is the emotion, the fear. But then, moving from startup to business model phase, the boundary that we have to overcome is education. We have to learn how to run a business, not just do our skill on a daily basis. Education is such a key piece. And, again, most entrepreneurs don’t learn how to run a business. They just have a skill that they create a job for themselves. There’s nothing wrong with that, but over time, that solopreneur or the person that has started a job for themselves begins to realize, “Uh oh. I have to go to work every day. If I don’t go to work, I don’t make the money.”
So before long, that business that we have created becomes a ball and chain. It becomes a weight around our neck, because we can never leave. We can’t do the vacation. It doesn’t create the time freedom. Even though it may be creating financial freedom, it’s not creating the time freedom that we had wanted because we have to continue going to work.
This is usually where I find most of the entrepreneurs that I begin to work with with Tulsa Business Leadership. I find them in this place where they have started up their company, but they haven’t moved to the next phase of creating the business model.
Then, as you produce your business model and begin to put your systems together, America’s Leadership Expert these are your systems for your daily management, it’s your systems for sales, it’s your systems for your marketing, the systems for public relations, human resources, leadership, management, vision, branding. All of these systems that are put into place so your company runs on the back of processes rather than on the backs of people.
This lets you know that you have moved into more and more of a business model phase of the E-Model when you are running your company based on processes and not just on people. It’s very often where I come into a company and we’ll begin to talk about the different people that are working. “We need to move this person out. We need to get rid of this person.” Immediately what I get from the owner is, “Oh, we can’t do that. That person’s too important. They know where all the dead bodies are buried.”
In Tulsa Business Leadership, what I get to do is come in and help people, help business owners move away from their dependence upon the people and put their dependence more on the processes so that they are then able to interchange people. If people aren’t working out, we just move them on and bring somebody else in. Because the business is based on the process, and this allows you, as a business owner, to begin to take more and more time away from the company, because the business is not dependent upon people. It’s dependent upon processes.
This doesn’t mean that good people aren’t important. Obviously, good people are important. But if we’re not careful, we will find ourselves being trapped with only being able to work with people that we have with us and never being able to get rid of people. “Because they’re the only ones in the company that know what’s going on, so we can’t get rid of them.” I get that all the time with business owners. “I can’t fire them yet. They know too much.” Well, what we have to do is get out of their brain what they know, put it into a process so we can move that person on.
As our business model begins to grow, then what we do with Clay Staires America’s Leadership Expert Tulsa Business Leadership is move into the next phase, which is finally this mature business. At the mature business, we have high experience. The business becomes scalable. Accountability throughout the company. There’s trust. There’s freedom. Jim Rohn talks about, “Discipline is the bridge between goals and accomplishment.”
At this point, with a mature business, we have our systems in place, and those systems become consistent. There is consistent evaluation. There is consistent accountability. Holding people accountable to running the systems and processes that we have in place. At this point, we have a company that is now positioned to scale, to sell, or to franchise. Again, we all know that the value of a franchise is its business in a box. All of the systems come with the franchise. If you just run the systems, the franchise will be successful.
This is the value that we have in putting systems together. America’s Leadership Expert This is how, once we get to the point where we have created the systems in the business model phase of the E-Model, then we find finally that we get to a mature business where we have achieved a not only financial freedom but also time freedom.
Once again, our E-Model with Tulsa Business Leadership is, step one is the idea, step two is the startup, step three is the business model, and step four is the mature business. The boundary that we have to overcome between ideas and startup is emotion. The boundary that we have to overcome between startup and business model is education. And finally, the boundary that we have to overcome between business model and mature business is experience. This is the E-Model of your life cycle in your business.
This is Clay Staires America’s Leadership Expert with Tulsa Business Leadership with Podcast Number 39, The E-Model.
