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

by Michael E. Gerber

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 greatest businesspeople I’ve met are determined to get it right no matter what the cost.

the simple truth about the greatest businesspeople I have known is that they have a genuine fascination for the truly astonishing impact little things done exactly right can have on the world.

So, this book is not about endings, but about beginnings, about the never-ending game,

your business is nothing more than a distinct reflection of who you are. If your thinking is sloppy, your business will be sloppy. If you are disorganized, your business will be disorganized. If you are greedy, your employees will be greedy, giving you less and less of themselves and always asking for more.

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. I told Sarah that every technician suffering from an Entrepreneurial Seizure experiences exactly the same thing.

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.

Given his need for change, The Entrepreneur creates a great deal of havoc around him, which is predictably unsettling for those he enlists in his projects. As a result, he often finds himself rapidly outdistancing the others.

The way he usually chooses is to bully, harass, excoriate, flatter, cajole, scream, and finally, when all else fails, promise whatever he must to keep the project moving. To The Entrepreneur, most people are problems that get in the way of the dream.

The managerial personality is pragmatic. Without The Manager there would be no planning, no order, no predictability.

The Manager creates neat, orderly rows of things. The Entrepreneur creates the things The Manager puts in rows. The Manager is the one who runs after The Entrepreneur to clean up the mess. Without The Entrepreneur there would be no mess to clean up.

The Technician is the doer.

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 Technician didn’t do it, it wouldn’t get done. Everyone gets in The Technician’s way.

The fact of the matter is that we all have an Entrepreneur, Manager, and Technician inside us.

“An Entrepreneur does the work of envisioning the business as something apart from you, the owner.

“Don’t you see? If your business depends on you, you don’t own a business—you have a job.

As the balls continue to fall at an overwhelming rate, you begin to realize that no one cares about your business the way you do.

But Harry has needs of his own. Harry’s also a technician. He needs more direction than The Technician can give him. He needs to know why he’s doing what he’s doing. He needs to know the result he’s accountable for and the standards against which his work is being evaluated. He also needs to know where the business is going and where his accountabilities fit into its overall strategy. To produce effectively, Harry needs something The Technician-turned-business-owner isn’t capable of giving him—a manager!

“So, there’s my Comfort Zone,” she said. “What do I do about that?” “Start all over again—but differently this time,” I answered. “It’s the only way out of the trap.”

Such a business is designed to satisfy The Technician who created it, not the customer. To The Entrepreneur, the business is the product. To The Technician, the product is what he delivers to the customer.

the Business Format Franchise is built on the belief that the true product of a business is not what it sells but how it sells it. The true product of a business is the business itself.

It’s been there, waiting for you to discover it, all this time! It’s been there in the form of a Proprietary Operating System at the heart of every extraordinary business around you, franchised or not. Because, after all, that’s all that any Business Format Franchise really is.

sample of the corny language and unnecessary invented words you have to put up with while reading this book 🤦

How do you build a business that works without you? How do you get free of your business to live a fuller life? Do you get it? Do you see why this is so important? Because until you do it, your business will control your life!

Pretend that the business you own—or want to own—is the prototype, or will be the prototype, for 5,000 more just like it. That your business is going to serve as the model for 5,000 more just like it. Not almost like it, but just like it. Perfect replicates. Clones.

The question you need to keep asking yourself is: How can I give my customer the results he wants systematically rather than personally?

It is literally impossible to produce a consistent result in a business that depends on extraordinary people. No business can do it for long. And no extraordinary business tries to!

“Individuals need life structure. A life lacking in comprehensive structure is an aimless wreck. The absence of structure breeds breakdown. Structure provides the relatively fixed points of reference we need.”1 It is these “relatively fixed points of reference” that an orderly business provides its customer and its employees in an otherwise disorderly world.

Documentation provides your people with the structure they need and with a written account of how to “get the job done” in the most efficient and effective way.

from Toffler: “…for many people, a job is crucial psychologically, over and above the paycheck. By making clear demands on their time and energy, it provides an element of structure around which the rest of their lives can be organized.”2 The operative word here is clear. Documentation provides the clarity structure needs if it is to be meaningful to your people.

to successfully develop a serious business you need specific information. Most importantly, to successfully develop a serious business you need a process, a practice, by which to obtain that information and, once obtained, a method with which to put that information to use in your business productively.

In Search of Excellence

Where the business is the product, how the business interacts with the consumer is more important than what it sells.

For the master, there is only one way and that is to teach another.

What would you like to be able to say about your life after it’s too late to do anything about it?

great quote by Don Juan in Carlos Castaneda’s A Separate Peace: “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.”

The product is what your customer feels as he walks out of your business. What he feels about your business, not what he feels about the commodity.

What’s your product? What feeling will your customer walk away with? Peace of mind? Order? Power? Love? What is he really buying when he buys from you? The truth is, nobody’s interested in the commodity. People buy feelings.

Murray begins to test the clothing he wears as a Salesperson to see what colors and styles produce the greatest positive impact on the customers. He starts testing different words. He begins to think about how Widget Makers, Inc., interacts with its customers, and how each component of this interaction could be modified to increase its effectiveness. And as he quantifies the impact of his innovations on sales, he takes the most productive of them and writes them down in the Widget Makers Sales Operations Manual.

Before long, the Sales Operations Manual contains the exact scripts for handling incoming calls, outgoing calls, meeting the customer at the door. The exact responses to customer inquiries, complaints, concerns. The system by which an order is entered, returns are transacted, new product requests are acted upon, inventory is secured. Only when the Sales Operations Manual is complete does Murray run an ad for a salesperson.

At that moment, at that exact instant, Murray moves up to the position of Sales Manager and begins the process of Business Development all over again. Because at that moment, Murray has taken the most important step in freeing himself from the Tactical Work of his business. Murray has replaced himself with a system that works in the hands of a person who wants to work it. And now Murray’s job becomes managing the system rather than doing the work.

“What you’re saying is that I need to create an Organization Chart for All About Pies as it will look when it’s done, seven years from now, rather than the way it is now?” “Yes,” I responded. “And that once I’ve created that Organization Chart, I need to put my name in all the positions I currently fill?” “Right again,” I answered.

“What we do here is simple. Anyone can do it.” He opened the binder to the table of contents. “This is our Operations Manual. As you can see, it’s nothing but a series of checklists. This one is a checklist for setting up a room.” He opened the book to a yellow page.

Your People Strategy is the way you communicate this idea. It starts with your Primary Aim and your Strategic Objective, and continues through your Organizational Strategy (your Organization Chart and the Position Contracts for all of the positions in it) and the Operations Manuals that define the work your people do.

The words will become hollow if the game is a contrived one. The game can’t be created as a device to enroll your people. It can’t become cynical if it’s to provide your people with what they need in order to come alive while playing it. The game has to be real. You have to mean it.

That’s what a business can do; it can create a Game Worth Playing.

So even though your customer’s Conscious Mind is actively absorbing all manner and forms of impressions, it is totally unaware of most of them.

And that’s how buying decisions are made. Irrationally!

After all, that’s the purpose of a system—to free you to do the things you want to do.

“every written or verbal communication with anyone who comes into contact with your business is a Soft System. What so few of us understand is the power of those words when they are totally integrated.