“The Eddie Murphy School of Business”

Written by Pamela Chatry

I watched a movie a few nights ago that you may have seen. It was called, “Daddy Daycare” starring Eddie Murphy as Charlie and Jeff Garlin as Phil. For most, it was a fun, light movie designed for families. For me however, it was much more than a family movie. It is a wonderful business film. If you are planning on opening a business or are in the early stages of your new business, you might want to rent it again.

The story goes something like this: Eddie Murphy is a senior executive in a high profile advertising agency. The company makes a great deal of money developing marketing campaigns around cereals filled with sugar. Eddie has a problem with this, as he wants to see children fed healthier foods. When it comes time for lay-offs, Eddie and his team are the first to go, as the healthy department isn’t making money.

Now before the lay-off, Eddie and his wife were looking for a pre-school for his three-year old son to attend. The only one in the whole town was a private school that focused on preparing three year-old children for Harvard or Yale. I’m sure you can imagine the curriculum and the formalized education. It was more like a boot camp than a pre-school.

Well, as he is laid off, Eddie can’t afford the school nor does he need it as he stays home and the wife goes back to work. Pretty soon, though he needs a job and sees that there is a need for another pre-school in the town. He figures that he and his laid-off co-worker, Phil, can open one. They believe that it shouldn’t take a lot of work to take care of the kids. So they print up some posters, hand them out at all the places where women and children hang out, and set up a registration day.

Needless to say, they have no idea what they are doing with the kids, have run-ins with the local pre-school licensing authorities, and their competition comes after them. Now this being a Hollywood movie, Charlie and Phil figure it all out very quickly and of course, turn the business around and everyone lives happily ever after.

After watching the film, I realized that there were a lot of lessons we can all learn from the “Eddie Murphy School of Business”:

• They knew nothing about the pre-school business but went ahead and opened anyway.
• They opened their doors for business far too quickly. They did no advance planning.
• The location for the business was in Eddie’s home. They gave no thought to the wear and tear on his home. There was no consideration to what his personal life would look like after opening the business.
• They gave no thought to the idea that men could be viewed as child predators and they would have a hard time getting registrations. They needed an endorsement from another mom in order to gain trust amongst the parents.
• They didn’t research what the law expected of them.
• They knew very little about entertaining or educating children.
• They didn’t have enough money to operate or keep the business open. When the business needed to move into a bigger space, they couldn’t afford it.
• They did know what the only competition in town offered and knew they didn’t want to be like that. However, they didn’t research what other pre-schools in the region or state looked like in order to follow an already successful model. They made up the rules as they went.
• They finally decided to have a focus group with their clients (the children) to find out what kids like to do but this was only after they experienced several near and total disastrous days.

So the Eddie Murphy School of Business is a lot like real life in its’ approach to business start-up. Most people start and run their business just like Eddie – with no research, no planning, little or no industry knowledge, and no money to keep them going.

In 1997, Statistics Canada published the results of a study titled, “Failing Concerns: Business Bankruptcy in Canada”. This study examined the reasons for small business failure. While external causes such as economic downturn and increasing global competition were noted, it is the internal causes that are the focus for failure in Canadian business. So what was ultimately responsible for business failure?

• Poor financial planning and management 71%
• Weaknesses in general management skills 71%
• Lack of marketing knowledge/skills 50%

So what can we learn from all this? It is best summed up in a study in the early 1990’s titled “The Rise of Female Capitalism”, written by Jerry White. The study found that 90% of successful businesswomen have a realistic business plan that is prepared in conjunction with a professional advisor. They follow this plan, monitor progress, and adjust it whenever necessary. They don’t just fly by the seat of their pants.

Take the time early in your business to do what I call, “Business Planning by The Rule of R”- Research, Reflect, Revise, Reject”. Research the world of business and your industry. Reflect on what your personal life will be like as an entrepreneur and what you want from the business. Revise all your plans regularly. Nothing is written in stone. Reject unreality. Be real about everything you are about to do and learn.

When it comes to running a business, remember the “Eddie Murphy School of Business” and don’t make the same mistakes. As the owner of a business, it is your responsibility to take care of your business and make a profit. Without profit you can’t take care of you, your family, your employees, and your suppliers. You don’t have a business.