by Michael E. Gerber
Problem
Many small businesses fail due to the misconception that good technical skills equate to good business skills. This “Entrepreneurial Myth” (E-Myth) often leads to business owners becoming overwhelmed by operational tasks, thereby stunting the growth of their business.
Promise
“The E-Myth Revisited” helps debunk this common misconception, offering strategic insights and systems-oriented thinking that can transform a small business from a chaotic, owner-dependent operation into a smooth, scalable, and profitable venture.
Perspective
“My business should work for me, not the other way around. By implementing systems and structure, I can create a sustainable and successful business.”
Précis
In “The E-Myth Revisited”, Michael E. Gerber outlines the common pitfalls that cause small businesses to struggle and fail. The book asserts that many owners operate under a misconception – they believe being an expert in a technical skill (the Technician) means they have what it takes to run a business in that industry. This is the ‘Entrepreneurial Myth’ or ‘E-Myth.’
Gerber introduces the concept of working on your business, not just in your business, emphasizing the importance of strategic and systems thinking. He illustrates the idea of seeing your small business as a prototype for a scalable and replicable model, similar to a franchise.
The book explores the critical roles within a business – the Entrepreneur, the Manager, and the Technician – and explains how balancing these roles is essential for business success. Gerber guides readers through the stages of business growth and offers practical strategies to systematize operations, leading to increased efficiency, control, and profitability.
Playbook
- Think of your business as a franchise prototype: Begin to create systems that make your business operations seamless and replicable. For example, you might create a detailed operations manual that outlines every business process.
- Work on your business, not just in it: Spend time strategizing, planning, and looking at the bigger picture. Instead of being consumed by daily tasks, dedicate time each week to long-term growth strategies.
- Balance the Entrepreneur, Manager, and Technician within you: Understand these three roles and ensure you’re not neglecting any of them. For instance, if you’re mostly playing the Technician, you might need to invest more time thinking strategically (Entrepreneur) or organizing and planning (Manager).
- Systematize your business: Create systems that allow your business to run smoothly, even without your constant involvement. This might involve automating certain processes, delegating tasks, or setting up detailed procedures.
- Innovate, Quantify, and Orchestrate: Continually seek ways to improve (Innovate), measure the impact of changes (Quantify), and organize for efficiency (Orchestrate). For example, you might innovate a new customer service process, measure customer satisfaction before and after the change, and then refine the process based on your findings.
- Create a strong company culture: Foster a work environment that encourages growth, learning, and collaboration. Make your mission and vision clear to every team member, so everyone is aligned and moving towards the same goal.
- Plan for growth: Consider where you want your business to be in the future and make plans to achieve that vision. This might involve setting specific business goals, identifying potential challenges, and creating strategies to overcome them.
Prompt
Think about a business you know well. What systems could be put in place to improve its efficiency and scalability? How could the principles of the E-Myth be applied to this business?