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

by Michael E. Gerber

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And so 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. (And that make up every life, for that matter!)

That Fatal Assumption is: if you understand the technical work of a business, you understand a business that does that technical work.

The technician suffering from an Entrepreneurial Seizure takes the work he loves to do and turns it into a job. The work that was born out of love becomes a chore, among a welter of other less familiar and less pleasant chores. Rather than maintaining its specialness, representing the unique skill the technician possesses and upon which he started the business, the work becomes trivialized, something to get through in order to make room for everything else that must be done.

“The purpose of going into business is to get free of a job so you can create jobs for other people.

All such “going-for-broke” companies were started with an Entrepreneurial Seizure by a Technician who focused on the wrong end of the business, the commodity the business made, rather than the business itself.

“So, in this context, a business that ‘gets small again’ is a business reduced to the level of its owner’s personal resistance to change,

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.

“It’s up to you to dictate your business’s rate of growth as best you can by understanding the key processes that need to be performed, the key objectives that need to be achieved, the key position you are aiming your business to hold in the marketplace.

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. “And

The Entrepreneurial Perspective adopts a wider, more expansive scale.

Each step in the development of such a business is measurable, if not quantitatively, at least, qualitatively. There’s a standard for the business, a form, a way of being that can be translated into things to do today that best exemplify it.

What exactly is the Entrepreneurial Model?

It’s a model of a business that fulfills the perceived needs of a specific segment of customers in an innovative way.

The Entrepreneurial Model looks at a business as if it were a product, sitting on a shelf and competing for the customer’s attention against a whole sh...

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.

without a clear picture of that customer, no business can succeed.

To The Entrepreneur, the business is the product.

What we must do, instead, is to provide our inner entrepreneur with a model of a business that works, a model that is so exciting that it stimulates our entrepreneurial personality—our innovative side—to break free of The Technician’s bonds once and for all.

In short, for this business model of ours to work, it must be balanced and inclusive so that The Entrepreneur, The Manager, and The Technician all find their natural place within it, so that they all find the right work to do.

The true product of a business is the business itself.

A systems-dependent business, not a people-dependent business.

The system runs the business. The people run the system.

In the Franchise Prototype, the system becomes the solution to the problems that have beset all businesses and all human organizations since time immemorial.

Once you recognize that the purpose of your life is not to serve your business, but that the primary purpose of your business is to serve your life, you can then go to work on your business, rather than in it, with a full understanding of why it is absolutely necessary for you to do so.

Because unless your customer gets everything he wants every single time, he’ll go someplace else to get it!

1. Your Primary Aim 2. Your Strategic Objective 3. Your Organizational Strategy 4. Your Management Strategy 5. Your People Strategy 6. Your Marketing Strategy 7. Your Systems Strategy

I believe it’s true that 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.

“The difference between a warrior and an ordinary man is that a warrior sees everything as a challenge, while an ordinary man sees everything as either a blessing or a curse.”

“What truths are your curtain hiding from you? What misunderstanding keeps you where you are, in the past, in the dark, shrouded in your limited beliefs, shrinking from the world, from the light on the other side of the curtain?

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

Tactical Work is the work all technicians do. Strategic Work is the work their managers do.

“In other words, unless I act in exactly the same way as I expect my employees to act, the system I create will indulge my preferences, rather than what the business really needs to make it possible for everyone other than me to be as productive and happy as possible. “And

“Because it’s critical if you are to begin your business all over again that you’re able to separate yourself from the roles you need to play. To become independent of them, rather than these roles becoming dependent on you.

“The driver must take charge of the horse and carriage, Gurdjieff once said. “And, as the owner of your business, as the driver of your business, that’s your primary job: to take charge of the horse and carriage.

The System will transform your people problems into an opportunity by orchestrating the process by which management decisions are made while eliminating the need for such decisions wherever and whenever possible.

It is a System designed into your Prototype to produce a marketing result. And the more automatic that System is, the more effective your Franchise Prototype will be. Management Development—the process through which you create your Management System, and teach your up-and-coming managers to use it—isn’t a management tool as many people believe. It’s a marketing tool.

“And that was the second thing that surprised me when I came to work here,” the Manager continued. “How seriously the Boss took the operation of this hotel.

“It was like the hotel was an expression of who he was, a symbol of what he believed in.

“But it was how he was about his business that struck me.

“You know, I’ve never said this to anyone before. It’s really strange, but while I’m telling you all of this, 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.

‘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.

“And we do that by making sure they understand the idea behind the work they’re being asked to do. “I guess that’s what excited me most about taking this job,” said the Manager. “It’s the very first place I’ve ever gone to work where there was an idea behind the work that was more important than the work itself.

“That’s what the Boss and I talked about in our first meeting. His philosophy about work and about business. I came to understand that the hotel was the least important thing in our relationship. What was important was how seriously I took to playing the game he had created here.

That is what the very best businesses represent to the people who create them: a game to be played in which the rules symbolize the idea you, the owner, have about the world.

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.

Giving your customer a sense that your business is a special place, created by special people, doing what they do in the best possible way.

“You, as the Shareholder, as the owner, as the COO, as the VP/Marketing, as the VP/Finance, whatever positions you take, must take full accountability for what’s going on in your business. “And to do so, you must lead the company in the direction you intend it to go. “And that means you must set the standard.

Your Marketing Strategy starts, ends, lives, and dies with your customer.

Most of what it does, however, is unconscious; that is, automatic, habitual.