The E-Myth Revisited: Why Most Small Businesses Don't Work and What to Do About It

by Michael E. Gerber

“And there is a Hierarchy of Systems in your business. “This Hierarchy is composed of four distinct components: “The first is, How We Do It Here. “The second is, How We Recruit, Hire, and Train People to Do It Here. “The Third is, How We Manage It Here. “The Fourth is, How We Change It Here.

When it comes to marketing, what you want is unimportant. It’s what your customer wants that matters. And what your customer wants is probably significantly different from what you think he wants.

Demographics and psychographics are the two essential pillars supporting a successful marketing program. If you know who your customer is—demographics—you can then determine why he buys—psychographics. And having done so, you can then begin to construct a Prototype to satisfy his unconscious needs, but scientifically rather than arbitrarily.

That most small business owners, suffering as they do from what I’ve come to call ‘willful disinformation,’ simply decide what they want to do without any information at all, without any interest in what’s true, and then simply do it.

“That’s what marketing is, Sarah. That’s what your business must be. Alive, growing, committed to keeping a promise no competitor would dare to make.

There are three kinds of systems in your business: Hard Systems, Soft Systems, and Information Systems. Hard Systems are inanimate, unliving things. My computer is a Hard System, as are the colors in this office’s reception area. Soft Systems are either animate—living—or ideas. You are a Soft System; so is the script for Hamlet. Information Systems are those that provide us with information about the interaction between the other two. Inventory control, cash flow forecasting, and sales activity summary reports are all Information Systems. The Innovation, Quantification, Orchestration, and integration of these three kinds of systems in your business is what your Business Development Program is all about.

What is a selling system? It’s a fully orchestrated interaction between you and your customer that follows six primary steps: 1. Identification of the specific Benchmarks—or consumer decision points—in your selling process. 2. The literal scripting of the words that will get you to each one successfully (yes, written down like the script for a play!). 3. The creation of the various materials to be used with each script. 4. The memorization of each Benchmark’s script. 5. The delivery of each script by your salespeople in identical fashion. 6. Leaving your people to communicate more effectively, by articulating, watching, listening, hearing, acknowledging, understanding, and engaging each and every prospect as fully as he needs to be.

Structure and Substance merge in the selling process to produce a far more extraordinary result than any single salesperson could if left to his own devices.

It’s nothing more than a flight from the world of chaos “out there” into a world of our own. It’s a yearning for structure, for form, for control. And for something else as well. Something more personal. Something less distinct, yet much more intimately connected with who we are as human beings. It’s a yearning for relationship with ourselves and the world in a way impossible to experience in a job.

A small business is just such a world. And a Business Development Program can be a means to study it most effectively. And the Franchise Prototype can provide our study with the discipline it needs to succeed. Innovation, Quantification, and Orchestration become the practice that brings us and our opponent—whoever that may be—to the discovery of our limits, our weaknesses, our strengths. To the discovery of what really works in the world rather than what our imaginations might wish would work. For in a martial arts contest, there is no room for imagination. We could get killed out there! Innovation, Quantification, and Orchestration provide the belief system of our business, the philosophical bedrock of our interaction with the world. They become our source for learning, for creating, for expanding beyond our self-imposed limits. And through Innovation, Quantification, and Orchestration our business can become something more than merely a place to go to work. It can become a place that satisfies more of ourselves than just The Technician. There is a place in Business Development for the whole of ourselves. For the innovator, for the maintainer, for the doer. For The Entrepreneur, The Manager, and The Technician in each one of us. Your small business and mine can give us more life.

You must analyze your business as it is today, decide what it must look like when you’ve finally got it just like you want it, and then determine the gap between where you are and where you need to be in order to make your dream a reality. That gap will tell you exactly what needs to be done to create the business of your dreams. And what you’ll discover when you look at your business through your E-Myth eyes is that the gap is always created by the absence of systems, the absence of a proprietary way of doing business that successfully differentiates your business from everyone else’s.