The E-Myth Revisited — Why You Should Read
“Human beings are capable of performing extraordinary acts. Capable of going to the moon. Capable of building a bomb that can destroy us all. The least we should be able to do is run a small business that works.”
- Michael E. Gerber
There are not many people who have put such a great emphasis on small business in their books as Michael Gerber has, he made his living before as a business consultant and gained a lot of knowledge on what works and doesn’t work for them.
The reason this books contains “revisited” in the title is because the original edition came out in the 80s’, it did well for it’s time but in 2001 Michael Gerber published a revised edition.
He made this book specifically for those stuck in “the tyranny of routine,” people who are so busy with their work that they don’t have time to look at the big picture of what they are doing.
The information contain within aims to give you back control of your working hours, so you are able to work on your business and not in it.
The Business of Self-Improvement
“I don’t believe your business to be the first order of business on our agenda. You are.”
Gerber tells us that business is about our goals, who we are, and the type of person we want to be as much is it is about the actual business itself.
If you are disorganized, if you are greedy, if the information you have about what is going on in the business isn’t accurate, then it will show up in your business.
If you want your business to change, you must first change yourself.
If you have the luxury of going into business knowing exactly who you are as a person, and why you are running a business then consider yourself lucky because you are living the dream.
If you are blindly going into business with no sense of purpose, only to make money then, you might find yourself living in a nightmare.
The Entrepreneur Myth
The e-myth is the idea that anyone who starts a business can be called an entrepreneur. Entrepreneurs who actually are able to create a tremendous amount of wealth are actually rare.
Most people who go into business just want to work for themselves and not for a boss. “Why should my boss earn most of the money from the work that I am doing?”
The problem of this kind of thinking is that they only know about their job in the business and not how it fits into the business or how the business works as a whole.
After the initial excitement phase of their start-up they become disenchanted and burned out because they had no idea how much work was actually required to run the business themselves.
Having a specialized skill has hurt them more than helped because it has not prepared them to run a business and they are unwilling to let that job go to someone else, which would free up their time.
“Suddenly the job he knew how to do so well becomes one job he knows how to do plus a dozen others he doesn’t know how to do at all.”
Gerber says we must learn how to become three people in one.
- The Technician — the person doing the work itself
- The Manager — the person making sure that things are getting done and pushing the technician to make sure that goals are being met
- The Entrepreneur — the visionary behind the direction of the company, the big picture thinker.
These sides of the mind are always fighting for control, and most people are imbalanced. The most common way people run their small business is 10% entrepreneur, 20% manager, and 70% technician.
Things Fall Apart
The problem with that the technician has is that they believe the answer to ever problem is to work harder.
There is an ongoing discussion throughout the story between Michael and Sarah, a pie-shop owner, and when Sarah’s pie shop begins to crumble; she believes that making more pies is the answer. It’s not.
She needs to be more of an entrepreneur and look at the big picture, Gerber tells her to ask herself “Is it a system that works irrespective of who’s running it?” Or is it just a place where a lady makes pies and tries to sell them?
Gerber say the pattern of a technician who starts a business follows a familiar pattern: excitement, followed by despair, terror, and exhaustion.
what they once loved most, is the very thing they begin to hate.
What stops small business from growing is that the owner wants to do all the work, then they hire someone and they either don’t do it exactly like them, or the new employee leaves, and this throws the business owner into despair then causes them to develop the belief that they need to keep the business small enough to where they are able to do all the work.
Gerber says that the inability to more out of a technician based comfort-zone is the most dangerous position for a small business.
The business starts shrinking, the owner starts to lose their energy, and eventually the business can’t be sustained and dies.
The Right Path
In order to change her mindset Gerber tells Sarah “ The purpose of going into business is to get free of a job so you can create jobs for other people.”
It was about freedom from a boss, it was about going even further in a particular field, farther than you could with your normal job. It’s about creating something amazing with your life and making a difference.
Sarah learns that the right question isn’t how small her business could be but how big it could become with the right systems in place.
Now, the first thing that everyone should do if they decide to go down the path of entrepreneurship is to solidify what the goal of the business is and write the goal down.
Gerber says he is amazed at how many businesses don’t actually have nay goals written down. Any plan is better than no plan.
You shouldn’t be surprised at how chaotic and how a lack of organization starts to form in the business if you don’t have clear goals or a vision for the company.
The technician only vision is to do work, while a true entrepreneur’s vision is to work on the business itself, the actual work is secondary.
Again Gerber says “Work on your business, not in it.”
Developing a System
Gerber cites McDonald’s as a perfect example of a business, it is brilliant because it has a working system that can be replicated a million times across all restaurants.
Roy Kroc loved McDonald’s food but what he loved even more was how flawless the system that the original McDonald brothers made: it’s speed, simplicity, and order all rolled into one.
Small businesses think that in order for the business to grow, they need to hire amazing workers, but the truth is they simply need to make all the business systems idiot-proof so that anyone can complete their tasks.
In this way it is the business system itself that satisfies the customer and not the individual workers.
If you can build a great business around ordinary people, you don’t have to find extraordinary ones.
In order to keep your business at maximum efficiency, you must create the best systems, and maintain a level of organization and standardization that will mitigate your staff from operating unpredictably.
With the right systems and order in place, the business almost runs itself and the customer gets what they are expecting every time.
A business is a machine and the more you standardize and refine the machine the more money it generates.
You might think well I’m only an expert in what I know how to do, I can’t create all these different systems for a business!
Gerber would answer what does a master do when they have learned all there is to know? They pass it on to others. When you start doing this, you can start multiplying the size of your business.
Running your business through systems takes what you know and makes it the standard for all employees.
In time your business becomes a calm island in the chaos of the world, fulfilling you and your employees with stability, camaraderie, and purpose.
Gerber asks Sarah to imagine that her business had been replicated and became the model for 5,000 pie shops exactly like it, would this extension of her ideas and beliefs on a such a scale make her feel like a fraud or would it make her feel like this business she lovingly built deserved to be replicated?
This book not only provides great business advice but it also gives it in a spiritual way at times which is unusual for a business book. Gerber confesses that he is a former poem-writing hippie but I think that only adds to the appeal of the book.
What also makes it good is the message that “great people have a vision for their lives that they practice emulating each day. They go to work on their lives not just in it.”
Originally published at http://forgefinancialfreedom.com on July 26, 2019.