the e-myth revisitedBook Title: The E Myth Revisited: Why Most Small Business Don’t Work and What to Do About It

Author: Michael E. Gerber

Genre: Business Development

Sub-Topics: Business Systems, Franchise Model, Marketing, Entrepreneurship

First Edition: March 1995

Published By: HarperCollins

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For over a year my friend and mentor has been recommending the E-Myth Revisited as a must read for me.  Having a fairly new small business, he urged me to read it because of the lessons from the text as well as to help me avoid some pitfalls via the new found knowledge and understanding.

Recently I read it and I cannot believe that I waited so long.  The E-Myth seems to compile many of the courses I took in college and much of the good I learned in corporate America and package it into an easy to read handbook that I could use as a guide to implement into my own small business.  If you are feeling like there is a cog missing in the wheel of your business I highly recommend this as a must read.

To start the book debunks the idea that if someone is self-employed they are an entrepreneur.  Rather that they may have just had an “entrepreneurial seizure” and ran off to start a business without really working on changing their thinking to become a business owner.  They are the Technician and spend most if not all of their time working in their business and not on their business.  The point the book is making is that a true entrepreneur creates or develops a systems dependent model that does not require the owner to physically do the work.  Actually this is the core message and the book develops this for many chapters before getting more into the “how to” later on.

The first key point, is that when someone goes into business they are actually 3 people in one.

  • The Entrepreneur
  • The Manager
  • The Technician

All are required for the business to run but the key is that the owner must understand the three ways of thinking and then develop standard processes and systems around operating these core areas.  Easier said than done right?

E-Myth goes on to talk about difference phases of business.  The key I took from this is that during the initial growth phase when the business owner needs more help, they typically hire an expert to handle a certain aspect of the business such as accounting or administrative work.  Since standard work has not been created the owner simply dumps more and more tasks on the new employee to offload the stress on the owner.  This is ok for a while however it amplifies the current problem.  If that person quits or stops preforming it is very difficult to bring someone in to fill the gap.  The person hired becomes the process and thus recreating the wheel and developing a new process is necessary when hiring someone new.

This is called “management by abdication”, and was a big problem we ran into when we hired our first employee in our business.  My business partner and I simply dumped a bunch of our duties onto her without a framework, process or even the bigger picture as to why.  The result was that whenever there was an exception or problem we had to get involved which in some cases created more work than what we had before as well as some unhappy customers.  Big mistake, if you are going to hire someone, make sure they have standard work that anyone else at their skill level could jump in and take over with minimal training.

The book goes onto to talk about business that do continue to growth, must mature, and the owners must work on the business from a development perspective.  They must create a prototype or franchise model rather or not it will be franchised or sold.  The reason is this type of model, creates a dependable, stable and predictable system that delivers consistent service / products to customers, can handle growth and has a people and management strategy that empowers employees to run the business.  Of course this allows the owners to gain back time without sacrificing dollars.  Not that the owner will never have to work again, actually contrary, the owner may work harder to develop and grow a bigger and more fail proof model.  The key though is that the day to day operations are not dependent on the owner.  There is a system for that.

Not to steal too much of the book’s thunder, as it is a must read, but the book goes on to lay out a step by step process for how to develop a franchise model, how to engage in business development.  Not every little detail is there but it is enough to get the hungry entrepreneur going in the right direction.

To start though, E-Myth asks the reader; what is your primary aim?  That is what is your core goal in life, and how will your business help you accomplish it?  The point the book makes is that most people do not start a business to run a business.  They start one to help them accomplish bigger goals and dreams, such as better provide for their family or have more choices.  E-Myth asks the reader to closely examine this before even starting on the business development journey.

E-Myth then identifies that the owner must identify the business’s Strategic Objective, or where it is going and what is it going to be.

The book then lays out these core strategies

  • Organizational Strategy
  • Management Strategy
  • People Strategy
  • Marketing Strategy
  • Systems Strategy

Without taking too much from the book, I will just say that each step is fundamental in developing a systems dependent business.  And while some the principles are difficult to implement, the payoffs can be seem almost immediately.

To wrap up, the E-Myth Revisited is an information packed yet enjoyable read.  Oh I forgot to mention that throughout the book you get to follow along as a pie shop owner goes through the process, which is very fulfilling in its own right.  As the tagline on the cover says The E-Myth Revisited “What Every Successful Entrepreneur Knows.”


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The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It

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