If you’ve read Michael Gerber’s book “The E-Myth Revisited”, you know that many business owners get caught in the trap of working IN their business, and not ON their business.
What does that mean?
Simply put, working IN your business means playing the role of “technician”, the one who does all the nitty-gritty work on a day-to-day basis. Working ON your business means being a true entrepreneur – guiding the overall strategy of your business, but letting others do the day-to-day nitty-gritty work.
Gerber says that playing the role of the technician is fine in the early days of your business, but at some point you have to elevate yourself to the role of entrepreneur – otherwise, you run the risk of burning out. In fact, Gerber believes that the #1 cause of small business failure is that many business owners get burnt out by being technicians, when they should be systematizing their businesses and hiring others to do the operational work.
When I read “The E-Myth Revisited” recently it really struck a chord with me, because I’ve been a technician in my online business for too long. Reading the book caused me to step back and think about the individual components of an online business. Going forward, I’ll be systematizing every aspect of my business – developing written processes for every component, and hiring additional people to carry out the day-to-day tasks that aren’t already performed by my virtual staff.
So how does this affect you? Well, whether you’re an online veteran or a complete newbie, I encourage you to think about the components I’ve outlined in the video above and the diagram posted below. If you’re currently playing the role of technician, think about which components of your business you can outsource, to grow your business faster (if there’s one thing I would have done differently in growing my own business, it would be to hire outsource help sooner!)
Here’s what I think are the most important components of an online business:
- Audience Needs. Every business should start by identifying the needs of an audience. Without knowledge of your target audience needs, you won’t be able to develop targeted offers, speak the language of your audience, or empathize with their situation.
- Offers. Offers plays the crucial role of satisfying your audience’s needs. Offers should be as targeted as possible – in other words, they should be as close a match as possible to what your audience is looking for.
- External Traffic. Traffic is obviously the lifeblood of any online business. You could have the most compelling offer in the world, but without traffic to your website, you don’t have a business. External traffic is any traffic that comes from paid sources (e.g. Google Adwords, Yahoo Search Marketing), or free sources (i.e. through search engine optimization, social media, etc).
- Internal Traffic. Internal traffic is traffic that you generate yourself – by sending out regular messages to your email lists and driving people back to your website(s). This keeps you in touch with your customers, and builds your relationship with them.
- Website Development. This one’s self-explanatory. Building a relationship with your target audience and making sales often requires that you have a good website (unless you’re an affiliate marketer – but even then, many of the most successful affiliates use their own websites to drive affiliate sales).
- Tracking. Tracking involves monitoring what people are doing on your website(s). Are they making purchases and/or signing up for your newsletter? As the saying goes, “what gets measured gets managed”. If you’re not tracking the activity on your websites, you’re missing opportunities for improvement.
- Conversion Optimization. A “conversion” can be any key action taken by your target audience (i.e. signing up for your email list; purchasing one of your products). Once you start getting conversions, you want MORE of them. One of the cheapest ways to get more conversions without spending more money on traffic is to improve the conversion rate of the traffic you already have.
- Customer Service. If you operate solely as an affiliate marketer, you probably don’t do much customer service. But if you sell your own products, good customer service is essential. As you’ve probably heard, it’s much cheaper to make sales from existing customers than get new customers, so you want to be providing excellent service to hold onto your existing customers.
So that’s my take on what makes up an online business. Feel free to download the schematic in which I’ve outlined all of the components (download the schematic here).
And if you have any questions, or suggestions for improving this model, please leave them below!