Sunday, April 15, 2012

The E-Myth Revisited: A Book Every Entrepreneur Should Read

I’ve written previously that I enjoy a good book list, so you can imagine how excited I was to see Entrepreneur Magazine's list of Six Books on Leadership Worth Actually Reading.

The first book I read from the list (which was compiled by Gwen Moran) was Michael Gerber's The E-Myth Revisited: Why Most Small Businesses Don't Work and What to Do About It. Gwen describes the book as follows:
If you've already read it, read it again. This seminal book on entrepreneurship teaches business owners how to get out of the day-to-day rut and resume the role of visionary. Its straightforward, no-nonsense style helps you spot ways to make your business more effective and efficient, freeing you to look for the Next Big Thing--and still have a life of your own. Gerber reminds you how to be in charge, which is a lesson even leaders need now and then.
Who is Michael Gerber and what is The E-Myth Revisited about?
Michael Gerber is a business coach and the founder of GERBER Business Development Corporation. His book is about why the majority of small businesses fail and what key business concepts an entrepreneur can implement to prevent such a failure. He writes in a conversational style as if he is having a conversation with a client, which for much of the book he is. His tips follow the story of Sarah, an owner of a pie shop called “All About Pie.” Sarah has worked herself into a tailspin making pies and maintaining her shop while a trusted employee ran her business. When this employee quits, she is at a loss as to how to keep her business going. Gerber coaches her, along with the reader, on what she needs to do to turn her company into a successful small business.

Here are my favorite concepts:
Most people who go into business for themselves do so after they are stricken with an “Entrepreneurial Seizure.” This usually occurs after they realize any dummy can run a business. I am working for one. From that moment on you have to start your own business. Which leads to the -

The Fatal Assumption:
If you understand the technical work of a business, you understand a business that does the technical work.

Instead, to be a successful business owner you need three separate skills:

Entrepreneurial - they are the dreamers who focus on the future and provide the vision.

Managerial - they supply order and maintain systems by focusing on the past and clinging to the status quo.

Technician - they supply the output and like doing things. They live in the present.

While all three want to be the boss, none want to have a boss. Yet all three skill sets are ultimately required. The key is to correctly balance the three skill sets and avoid the common pitfall of spending too much time operating as the technician.

The Franchise Business Model:
If a small business is to thrive, it must move beyond the owner. A business that is dependant on the owner and his or her abilities is not really a business, but a burdensome job for the owner. Instead you should think of your business as a franchise - an entity that can operate and thrive on its own. To do so apply these rules:

Provide consistent value to your customers – you can't have great service one day and lousy the next.

Operate without specialized skill sets. Meaning the company must be able to operate within a system where ordinary people can produce extraordinary results.

Document everything about the business in an operations manual.

Everything about the business should be uniform: a consistent color, dress and facilities code.

In essence, when operating under the Franchise Business Model you are working “on” your business rather than “in” your business.

A business needs to be able to grow:
To do so a company has to innovate, quantify and orchestrate.

Final thoughts:
Anyone who is an entrepreneur, is considering becoming an entrepreneur, works in a leadership role or has an interest in small business should find value in reading this book. Even if you are a sole-proprietor operating as a one person shop i.e. tax preparer or gemologist, though not really written for you, you most likely will also find this book helpful. Personally, I found many of the concepts relevant for a small business I am very familiar with. At this particular company, there is too much working “in” rather than “on” the business. A certain owner would be better off setting up procedures and systems others could follow rather than doing so much of the work himself; missing important details in the process. He thinks he is saving his company money by not hiring or training others to help him, but ultimately spends quite a bit of money fixing costly mistakes and making up for oversights.

One other point:
Prior to seeing this book included on a list of leadership books, I had thought it was about E-Commerce. It does make you wonder how a business guru specializing in coaching small-businesses could have selected such a misleading book title.

Have you read this book? What were your thoughts?

Please Note, I am an Amazon Affiliate


  1. Have not read it, but think I will do so and then gift to my boss! Thanks for the tip.

  2. I have not read the book, but I was thinking the same thing re E-commerce! It is a misleading title, though it seems like it should be a must-read for anyone thinking of venturing out on their own.

  3. Webb,
    Your comment made me snicker, but I do have to wonder how many people read this book and thought, “My boss needs to read this.”
    Maybe they should require every business owner to read the book before applying for a Federal I.D. Glad to see I wasn’t the only one who thought the title was misleading.

  4. I havent read the book, but its in my pile.

  5. Marissa,
    Stop back and let me know what you think after you read it.