“There is a myth in this country – I call it the E-Myth – which says that small businesses are started by entrepreneurs risking capital to make a profit. This is simply not so. The real reasons people start businesses have little to do with entrepreneurship. In fact, this is belief in the Entrepreneurial Myth is the most important factor in the devastating rate of small business failure today.”
We all know that running a business can be a big challenge. We assume that it has to do with the fact that getting customers can be difficult or that there’s endless amounts of marketing to be done or books to keep or other administrative tasks. But it’s not often that we think about the problem as being related to the lifecycle of the business and the owner’s ability to manage it. But this is exactly what Michael E. Gerber challenges us to think about in The E-Myth Revisited.
Gerber’s big idea revolves around the premise that small business owners are working very hard, but are doing the wrong work. He walks the reader through the three different facets of the small business owner – the entrepreneur, the manager and the technician. The technician is the role that most owners find themselves in and because they are immersed in the work, they are unable to successfully take their business through the different lifecycle stages. Aside from bringing awareness to the issue, Gerber provides business owners with practical advice to overcome this common pitfall while planning for long term success.
The Big Idea
Understanding the Technical Work Does Not Mean You Can Run a Business that Does that Technical Work
"That fatal assumption is: if you understand the technical work of a business, you understand a business that does technical work."
Gerber emphasizes that there is more to a business than just the technical work that the business does. This is because in order for the business to be successful, it has to be good at more than just the technical work. He points out that most small business owners have a very strong grasp of their craft and make the assumption that they would be qualified to run a business that does that kind of work. But that’s simply not true.
In this state, the business owner becomes trapped as the technician – the doer of the work. Yet, every business owner really needs to be three people in one: The entrepreneur, the manager and the technician. The entrepreneur is the visionary. The manager is the pragmatic personality who appreciates planning and order; to some degree status quo. There has to be some degree to balance between all three personalities and the business owner must move beyond the comfort zone of just being the technician.
Insight #1
Play the Franchise Game
"Your business is not your life… This is where you can put the model of the Franchise Prototype to work for you. Where working on your business rather than in your business will become the central theme of your daily activity."
When I first read Gerber’s idea that business owners should take on a franchise mentality, I was a bit shocked. “Create a franchise? Is he crazy?!?” But as I read more, I came to appreciate that Gerber was purporting that business owners could benefit from franchise development concepts as they move towards a fully functioning business.
The idea of developing a franchise prototype is that the work can be replicated and scaled again and again. Who wouldn’t want that?
Gerber also suggests 6 rules that guide the franchise game.
- The model will provide consistent value to your customers, employees, suppliers and lenders, beyond what they expect.
- The model will be operated by people with the lowest level of skill possible.
- The model will stand out as a place of impeccable order.
- All work in the model will be documented in the Operations Manuals.
- The model will provide a uniformly predictable service to the customer.
- The model will utilize a uniform color, dress and facilities.
Insight #2
Create a Primary Aim
"I don’t believe your business to be the first order of business on our agenda. You are."
We spend countless hours each week doing work-related things. It’s easy for it to become all consuming. One of the telltale signs that work is consuming your life is that you have no other updates for friends or family when they ask you how you’re doing besides how work is going. Gerber reminds us to keep a healthy perspective and relationship to our work. Specifically that your business is not your life, but that it can still play an important role in your life.
Rather than just envisioning your business, Gerber suggests setting a primary aim that is reflective of the kind of life that you want to lead and who you wish to be. It’s about establishing a greater purpose beyond the business. Having encountered the dark side of this situation myself, I can wholeheartedly endorse the importance of keeping your work in perspective.
Gerber’s The E-Myth Revisited offers up a wealth of great information and strategies for small business owners. In my own experience with this material, I found it very easy to identify myself in the small business lifecycle and have already started to implement Gerber’s advice for growing the business beyond where it currently is in order to live the kind of life I dream of.
