Book Summaries

Book Summary – The E-Myth Revisited by Michael E. Gerber.

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The E-Myth Revisited illustrates a belief that says small businesses in the United States simply do not work; the people who own them do. The people who own small businesses in America work far more than they should for the return they’re getting. In the book, The E-Myth Revisited Rev Ed: Why Most Small Businesses Don’t Work and What to Do About It, American author and founder of E-Myth Worldwide, Michael E. Gerber, describe a process for creating systems within a small business and strategies for surviving the roller coaster of the entrepreneurial life.

The E-Myth Revisited Favourite Takeaways

Small Business failure Statistics

Every year, over a million people in America start a business of some sort. Statistics tell us that by the end of the first year, at least 40 percent of them will be out of business. Within five years, more than 80 percent of them—800,000—will have failed. And the rest of the bad news is, if you own a small business that has managed to survive for five years or more, don’t breathe a sigh of relief. Because more than 80 percent of the small businesses that survive the first five years fail in the second five.

The e-myth revisited book is based on four main ideas:

E-Myth

E-Myth \ ‘e-,’mith\ n 1: the entrepreneurial myth: the myth that most people who start small businesses are entrepreneurs 2: the fatal assumption that an individual who understands the technical work of a business can successfully run a business that does that technical work

It is rooted in a romantic belief that small businesses are started by entrepreneurs, when, in fact, most are not.

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 belief in the Entrepreneurial Myth is the most important factor in the devastating rate of small business failure today. Understanding the E-Myth, and applying that understanding to the creation and development of a small business, can be the secret to any business’s success.

IDEA #2: The Turn-Key Revolution.

Not only is it changing the way we do business in this country and throughout the world but it is changing who goes into business, how they do it, and the likelihood of their survival.

IDEA #3: Business Development Process.

 At the heart of the Turn-Key Revolution is a dynamic process called the Business Development Process. When a small business ignores this process—as most unfortunately do—it commits itself to Management by Luck, stagnation, and, ultimately, failure. The consequences are inevitable.

IDEA #4

The Business Development Process can be systematically applied by any small business owner in a step-by-step method that incorporates the lessons of the Turn-Key Devolution into the operation of that business. This process then becomes a predictable way to produce results and vitality in any small business whose owner is willing to give it the time and attention it requires to flourish.

The Entrepreneurial Seizure

It could have been anything; it doesn’t matter what. But one day, for apparently no reason, you were suddenly stricken with an Entrepreneurial Seizure. And from that day on your life was never to be the same.

Inside your mind it sounded something like this: “What am I doing this for? Why am I working for this guy? Hell, I know as much about this business as he does. If it weren’t for me, he wouldn’t have a business. Any dummy can run a business. I’m working for one.”

The Fatal Assumption

if you understand the technical work of a business, you understand a business that does that technical work. In fact, it’s the root cause of most small business failures! The technical work of a business and a business that does that technical work are two totally different things!

To the technician suffering from an Entrepreneurial Seizure, a business is not a business but a place to go to work.

The real tragedy is that when the technician falls prey to the Fatal Assumption, the business that was supposed to free him from the limitations of working for somebody else actually enslaves him.

 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. Because although the Entrepreneurial Seizure started the business, it’s the technician who goes to work. And suddenly, an entrepreneurial dream turns into a technician’s nightmare.

The Entrepreneur, The Manager and The Technician

The Entrepreneur

The entrepreneurial personality turns the most trivial condition into an exceptional opportunity.

 The Entrepreneur is the visionary in us. The dreamer. The energy behind every human activity. The imagination that sparks the fire of the future. The catalyst for change. 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.”

The Entrepreneur is our creative personality—always at its best dealing with the unknown, prodding the future, creating probabilities out of possibilities, engineering chaos into harmony.

The Manager

The managerial personality is pragmatic. Without The Manager there would be no planning, no order, no predictability. Without The Manager, there could be no business, no society. Without The Entrepreneur, there would be no innovation.

If The Entrepreneur lives in the future, The Manager lives in the past. Where The Entrepreneur craves control, The Manager craves order.

The Technician

The Technician is the doer. “If you want it done right, do it yourself” is The Technician’s credo. The Technician loves to tinker. Things are to be taken apart and put back together again. Things aren’t supposed to be dreamed about, they’re supposed to be done.

If The Entrepreneur lives in the future and The Manager lives in the past, The Technician lives in the present. He loves the feel of things and the fact that things can get done.

while The Entrepreneur dreams, The Manager frets, and The Technician ruminates.

The Entrepreneur wakes up with a vision. The Manager screams “Oh, no!” And while the two of them are battling it out, The Technician seizes the opportunity to go into business for himself.

The Small Business Lifecycle

The three phases of a business’s growth: Infancy, Adolescence, and Maturity.

Infancy: The Technician Phase

During Infancy, you’re a Master Juggler, keeping all the balls in the air. It’s easy to spot a business in Infancy—the owner and the business are one and the same thing. If you removed the owner from an Infancy business, there would be no business left. It would disappear! In Infancy, you are the business.

Infancy ends when the owner realizes that the business cannot continue to run the way it has been; that, in order for it to survive, it will have to change. When that happens—when the reality sinks in—most business failures occur. When that happens, most of The Technicians lock their doors behind them and walk away. The rest go on to Adolescence.

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! “And, besides, that’s not the purpose of going into business. “The purpose of going into business is to get free of a job so you can create jobs for other people. “The purpose of going into business is to expand beyond your existing horizons.

Adolescence: Getting some help

Adolescence begins at the point in the life of your business when you decide to get some help.

There’s no telling how soon this will happen. But it always happens, precipitated by a crisis in the Infancy stage. Every business that lasts must grow into the Adolescent phase. Every small business owner who survives seeks help.

A Mature Company

A Mature company is started differently than all the rest. A Mature company is founded on a broader perspective, an entrepreneurial perspective, a more intelligent point of view. About building a business that works not because of you but without you.

The person who launches his business as a Mature company must also go through Infancy and Adolescence. He simply goes through them in an entirely different way. It’s his perspective that makes the difference. His Entrepreneurial Perspective.

The Business Development Process:  Innovation, Quantification, and Orchestration.

Innovation

 Innovation is the mechanism through which your business identifies itself in the mind of your customer and establishes its individuality. It is the result of a scientifically generated and quantifiably verified profile of your customer’s perceived needs and unconscious expectations.

Orchestration

The need for Orchestration is based on the absolutely quantifiable certainty that people will do only one thing predictably—be unpredictable. But for your business to be predictable, your people must be. Then what? Then the system must provide the vehicle to facilitate predictability. To do what? To give your customer what he wants every single time.

All the Best in your quest to get Better. Don’t Settle: Live with Passion.

Lifelong Learner | Entrepreneur | Digital Strategist at Reputiva LLC | Marathoner | Bibliophile [email protected]

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