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

by Michael E. Gerber

the people who are exceptionally good in business aren’t so because of what they know but because of their insatiable need to know more.

the great ones I have known seem to possess an intuitive understanding that the only way to reach something higher is to focus their attention on the multitude of seemingly insignificant, unimportant, and boring things that make up every business.

“The true question is not how small a business should be but how big. How big can your business naturally become, with the operative word being naturally? “Because, whatever that size is, any limitation you place on its growth is unnatural, shaped not by the market or by your lack of capital (even though that may play a part) but by your own personal limitations.

“Simply put, your job is to prepare yourself and your business for growth. “To educate yourself sufficiently so that, as your business grows, the business’s foundation and structure can carry the additional weight.

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.

it is the Entrepreneurial Perspective that says it’s not the commodity or the work itself that is important. What’s important is the business: how it looks, how it acts, how it does what it is intended to do.

Thus, the Entrepreneurial Model does not start with a picture of the business to be created but of the customer for whom the business is to be created. It understands that without a clear picture of that customer, no business can succeed.

It’s your job—more accurately, the job of your business—to develop those tools and to teach your people how to use them. It’s your people’s job to use the tools you’ve developed and to recommend improvements based on their experience with them.

That is, the typical small business owner prefers Management by Abdication to Management by Delegation. Unfortunately, the inevitable result of this kind of thinking is that the business also grows to depend on the whims and moods of its people.

What you do in your model is not nearly as important as doing what you do the same way, each and every time.

Go to work on your business as if it were the pre-production prototype of a mass-produceable product.

Tolerance for failure is a very specific part of the excellent company culture—and that lesson comes directly from the top.

the difference between creativity and Innovation is the difference between thinking about getting things done in the world and getting things done.

“Creativity thinks up new things. Innovation does new things.”

the difference between great people and everyone else is that great people create their lives actively, while everyone else is created by their lives, passively waiting to see where life takes them next.

He took whatever jobs came along, and, because of his natural and varied talents, he did whatever he did well, but even then none of the jobs turned into anything with a future, at least not a future that attracted him.

Your Strategic Objective is a very clear statement of what your business has to ultimately do for you to achieve your Primary Aim.

Your Strategic Objective is not a business plan. It is a product of your Life Plan, as well as your Business Strategy and Plan.

“It was like the hotel was an expression of who he was, a symbol of what he believed in. “So if I hadn’t taken the hotel seriously, it would have looked like I wasn’t taking him seriously, as a man whose values I respected. “I guess that’s why he took me seriously.

it’s becoming clear to me why I have so much respect for this place. It’s because I have so much respect for the Boss. To me, the place is him. If I didn’t respect him, I don’t think I would be as good at what I do here as I am.

‘The work we do is a reflection of who we are. If we’re sloppy at it, it’s because we’re sloppy inside. If we’re late at it, it’s because we’re late inside. If we’re bored by it, it’s because we’re bored inside, with ourselves, not with the work. The most menial work can be a piece of art when done by an artist. So the job here is not outside of ourselves, but inside of ourselves. How we do our work becomes a mirror of how we are inside.’”

we give everyone who comes to work at the hotel an opportunity to make a choice. Not after they’ve done the work, but before. “And we do that by making sure they understand the idea behind the work they’re being asked to do.

the business is a place where everything we know how to do is tested by what we don’t know how to do, and that the conflict between the two is what creates growth, what creates meaning.

We’ve fast become a world of things. And most people are being buried in the profusion. What most people need, then, is a place of community that has purpose, order, and meaning. A place in which being human is a prerequisite, but acting human is essential. A place where the generally disorganized thinking that pervades our culture becomes organized and clearly focused on a specific worthwhile result.

In short, we had a conflict between what we wanted and what we had. The two necessary components of conflict. The essential conditions for innovation. The conditions that give birth to a system.