If you’re a small business owner or thinking of starting your own business, “The E-Myth Revisited” by Michael E. Gerber is an essential read for entrepreneurs and startup owners. In the book, Gerber, a renowned business consultant, explains why most small businesses fail and provides actionable insights on how to build a successful enterprise.
The book emphasizes the importance of systems and processes, focusing on working on your business, not just in it.
Key Concepts
The Entrepreneurial Myth (E-Myth)
The core idea of the book is the Entrepreneurial Myth, which suggests that most small businesses are not started by entrepreneurs but by technicians suffering from an entrepreneurial seizure. Gerber explains, “If you understand the technical work of a business, you understand a business that does that technical work. And the reason it’s fatal is that it just isn’t true.” This myth leads to businesses being operated based on technical skills rather than entrepreneurial vision.
The Turn-Key Revolution
Gerber introduces the Turn-Key Revolution, which is the foundation of the franchise model. He states, “The Business Development Process has the power to transform any small business into an incredibly effective organization.” The key is to systematize operations so the business can function without the owner’s constant involvement.
Working On Your Business, Not In It
A critical lesson from the book is the need to work on your business, not just in it. Gerber emphasizes, “Your business is nothing more than a distinct reflection of who you are.” This concept encourages business owners to develop systems and processes that allow the business to operate independently of their direct input.
The Three Personalities: Entrepreneur, Manager, and Technician
Gerber explains that every business owner has three personalities: the Entrepreneur, the Manager, and the Technician. He writes, “The problem is that everybody who goes into business is actually three-people-in-one: The Entrepreneur, The Manager, and The Technician.” Balancing these roles is crucial for business success, as each personality brings different strengths and perspectives.
The Business Development Process
The book outlines a systematic approach to developing a business. Gerber states, “The Business Development Process can be systematically applied by any small business owner in a step-by-step method.” This process includes defining your primary aim, setting strategic objectives, and creating organizational, management, people, marketing, and systems strategies. It’s about creating a framework that ensures consistency and efficiency.
What it doesn’t cover
While “The E-Myth Revisited” offers crucial advice on creating successful business systems, it doesn’t get into the nitty-gritty of advanced marketing tactics, financial management, or legal details.
If you’re looking for more in-depth guidance in these areas, consider picking up Building a StoryBrand by Donald Miller for clear marketing strategies, Profit First by Mike Michalowicz for practical financial advice, and The Small Business Start-Up Kit by Peri Pakroo to navigate the legal side of things.
Quotes
“The problem with most failing businesses I’ve encountered is not that their owners don’t know enough about finance, marketing, management, and operations—they don’t, but those things are easy enough to learn—but that they spend their time and energy defending what they think they know.”
“The Entrepreneur lives in the future, never in the past, rarely in the present. He’s happiest when left free to construct images of ‘what-if’ and ‘if-when’.”
“If your business depends on you, you don’t own a business—you have a job. And it’s the worst job in the world because you’re working for a lunatic!”
Author’s Bio
Michael E. Gerber is a highly respected business consultant and author. He has been advising small businesses for over 40 years and is the founder of E-Myth Worldwide. Gerber’s expertise lies in helping small business owners develop and implement effective business systems.
Complement this book with these books
- “The Lean Startup” by Eric Ries This book complements Gerber’s emphasis on systems and processes by focusing on the iterative process of building a startup. Ries introduces the concept of validated learning and the Build-Measure-Learn feedback loop, which helps entrepreneurs develop products that meet customer needs efficiently.
- “Good to Great” by Jim Collins Collins’ book explores why some companies make the leap to greatness while others do not. It complements Gerber’s ideas by providing insights into the characteristics of successful companies, such as disciplined people, disciplined thought, and disciplined action.
- “Scaling Up” by Verne Harnish This book provides a detailed framework for growing a business. Harnish’s focus on the Four Decisions—People, Strategy, Execution, and Cash—aligns well with Gerber’s emphasis on creating systems and processes that support sustainable growth.
Citation: Gerber, M. E. (2009). The E-Myth revisited: Why most small businesses don’t work and what to do about it. HarperCollins e-books.
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