The E-Myth Revisited | Michael E. Gerber | Cliff Note Books
The E-Myth Revisited, written by Michael E. Gerber, is a business book that explores the common misconceptions surrounding entrepreneurship and small business management. The “E-Myth” stands for the Entrepreneurial Myth, which is the false belief that someone who is skilled at a particular technical task can run a successful business based on that skill.
The book is divided into four main sections:
The E-Myth and American Small Business: Gerber explains the reasons why most small businesses fail, attributing it to the E-Myth. He introduces the concept of the three business personalities: the Entrepreneur, the Manager, and the Technician, and argues that most small business owners are too focused on the Technician role.
The Turn-Key Revolution: Gerber discusses the concept of the “Turn-Key” system, which is a model for creating a business that can run efficiently without the owner’s constant presence. He uses the example of franchises, like McDonald’s, to illustrate how a successful business is based on systems and processes that can be replicated and scaled.
Business Development Process: Gerber proposes a structured approach to building a successful business, breaking it down into three phases: Innovation, Quantification, and Orchestration. He emphasizes the need for systematization, documentation, and continuous improvement in every aspect of the business.
Your Business and Your Life: The final section explores the relationship between the business owner and their personal life. Gerber stresses the importance of finding a balance, setting clear goals, and working “on” the business, not just “in” it.
In summary, The E-Myth Revisited is a practical guide that aims to help entrepreneurs overcome common pitfalls by focusing on the importance of systematizing, planning, and understanding the different roles within a business. By recognizing and addressing the E-Myth, small business owners can increase their chances of success and build a thriving, sustainable enterprise.
QUOTES
“The purpose of going into business is to get free of a job so you can create jobs for other people.”
“If your business depends on you, you don’t own a business—you have a job.”
“A true business opportunity is the on that an entrepreneur invents to grow him or herself. Not to work in, but to work on.”
“The entrepreneur is the innovator, the grand strategist, the creator of a vision. The manager is the planner, the pragmatist, the organizer. The technician is the doer, the specialist, the expert in the work itself.”
“The problem isn’t your business; it never has been. The problem is you!”
“Great businesses are not built by extraordinary people but by ordinary people doing extraordinary 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.”
“The system runs the business. The people run the system.”
“The secret of successful delegation is to identify the results you want and the specific steps to achieve those results, and then to create a feedback mechanism to be certain you’re getting the results you want.”
“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.”
AUTHOR
Michael E. Gerber is an American author, entrepreneur, and business consultant best known for his work on small business development and entrepreneurship. He was born on June 20, 1936, in Elizabeth, New Jersey. Gerber began his career in marketing and advertising before transitioning to business consulting, where he discovered a passion for helping small business owners achieve success.
In 1977, Gerber founded E-Myth Worldwide, a coaching, training, and education company aimed at providing support and resources to small business owners. The company’s mission is to help entrepreneurs transform their businesses by focusing on systemization, planning, and understanding the different roles required for a successful business.
Gerber’s best-known work, “The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It,” was first published in 1986 and has since sold millions of copies worldwide. The book has been widely acclaimed for its practical advice on overcoming common entrepreneurial pitfalls and developing a successful, sustainable business.
In addition to “The E-Myth Revisited,” Gerber has authored several other books, including “E-Myth Mastery,” “Awakening the Entrepreneur Within,” “The Most Successful Small Business in the World,” and a series of industry-specific books called “The E-Myth Vertical Series.”
Throughout his career, Michael E. Gerber has been a sought-after speaker and has been featured in various media outlets, including Inc. Magazine, Forbes, and The New York Times. His work has been influential in shaping the modern entrepreneurial landscape and providing valuable insights to countless small business owners.
CRITICISMS
While “The E-Myth Revisited” has received widespread acclaim for its practical advice and insights, there have been some criticisms as well:
Overemphasis on systemization: Some readers argue that the book places too much emphasis on systemization and standardization, which may not be suitable for all types of businesses, especially those that require creativity and flexibility. Critics suggest that rigid systems can stifle innovation and hinder a company’s ability to adapt to changing market conditions.
Not applicable to all industries: Some critics point out that the book’s principles, particularly the franchise model, may not be applicable to all industries or businesses. They argue that the turn-key approach might work well for certain types of businesses (e.g., fast food restaurants) but may not be as effective in industries that require specialized knowledge, bespoke solutions, or unique value propositions.
Oversimplification of entrepreneurial roles: The book’s classification of entrepreneurs, managers, and technicians has been criticized as an oversimplification that may not reflect the diverse range of skills and responsibilities required for running a successful business. Some readers argue that a more nuanced understanding of entrepreneurial roles is needed to capture the complexities of modern business management.
Lack of concrete examples: While the book is filled with general advice and concepts, some readers feel that it lacks concrete examples and case studies to illustrate how the principles can be applied in real-world situations. They argue that more practical guidance and actionable steps would make the book more helpful to entrepreneurs.
Outdated concepts: As “The E-Myth Revisited” was first published in 1986 and later revised in 1995, some critics argue that certain concepts may be outdated, given the rapid advancements in technology and shifts in the business landscape. The book may not fully address the challenges and opportunities presented by the digital age, social media, and the gig economy.
Despite these criticisms, “The E-Myth Revisited” remains a popular and influential resource for entrepreneurs and small business owners, offering valuable insights into the mindset and strategies needed for business success.
SUMMARIES
Section I: The E-Myth and American Small Business
Chapter 1: The Entrepreneurial Myth
In this chapter, Gerber introduces the concept of the “E-Myth” (Entrepreneurial Myth), which is the mistaken belief that a person who is skilled at a technical task can successfully run a business based on that skill. He explains that this misconception is the primary reason why many small businesses fail, as the business owners struggle to balance their technical expertise with the managerial and entrepreneurial aspects required for business success.
Chapter 2: The Entrepreneur, The Manager, and The Technician
Gerber presents the three distinct personalities that exist within every business owner: the Entrepreneur, the Manager, and the Technician. The Entrepreneur is the visionary and innovator, the Manager is the planner and organizer, and the Technician is the doer and specialist. Gerber argues that most small business owners focus too much on the Technician role, which can lead to imbalance and hinder the growth of the business.
Chapter 3: Infancy: The Technician’s Phase
This chapter explores the initial stage of a small business, called Infancy, where the owner primarily operates in the Technician role. Gerber explains that during this phase, the business is heavily dependent on the owner’s technical skills, and the owner often struggles with time management and delegation. As the business grows, the owner must learn to transition from the Technician role to embrace the Entrepreneur and Manager roles to avoid stagnation.
Chapter 4: Adolescence: Getting Some Help
Adolescence is the phase where the business owner begins to seek help by hiring employees. This phase presents new challenges, such as learning to delegate and manage people effectively. Gerber highlights that many business owners struggle during this phase because they still cling to the Technician mindset and have difficulty relinquishing control over the technical aspects of the business.
Chapter 5: Beyond the Comfort Zone
In this chapter, Gerber discusses the importance of pushing beyond one’s comfort zone to grow the business. He emphasizes that business owners need to develop new skills and knowledge to overcome the limitations of their Technician mindset. This involves embracing the Entrepreneur and Manager roles and learning to balance these different aspects of business management.
Chapter 6: Maturity and the Entrepreneurial Perspective
Gerber introduces the concept of Maturity, which is the stage where a business owner successfully integrates the Entrepreneur, Manager, and Technician roles. The Entrepreneurial Perspective is the mindset required to achieve this integration, focusing on long-term vision, strategic planning, and systemization. The chapter highlights the importance of developing this perspective to build a sustainable, successful business.
In summary, Section I of “The E-Myth Revisited” explains the concept of the E-Myth and introduces the three key business personalities: the Entrepreneur, the Manager, and the Technician. It describes the challenges faced by small business owners at various stages of business growth and emphasizes the importance of balancing the three roles to achieve long-term success.
Section II: The Turn-Key Revolution: A New View of Business
Chapter 7: The Turn-Key Revolution
Gerber introduces the concept of the Turn-Key Revolution, which is a new approach to building a successful small business. This approach emphasizes the creation of a business that can run efficiently without the constant presence of the owner. The Turn-Key Revolution is based on the idea of systematizing and standardizing processes so that the business can be easily replicated and scaled, much like a franchise.
Chapter 8: The Franchise Prototype
In this chapter, Gerber uses the example of McDonald’s to illustrate the principles of the Turn-Key Revolution. He explains that the success of McDonald’s lies in its ability to create a consistent, efficient, and replicable business model that delivers a predictable customer experience. By following the Franchise Prototype, small business owners can develop systems and processes that lead to a successful, scalable business that doesn’t rely solely on the owner’s expertise.
Chapter 9: Working On Your Business, Not In It
Gerber emphasizes the importance of working “on” the business, rather than just “in” it. This means focusing on strategic planning, system development, and management, rather than getting caught up in the day-to-day tasks of the business. By working on the business, owners can create a solid foundation for growth, ensuring that their enterprise is not entirely dependent on their presence and technical skills.
In summary, Section II of “The E-Myth Revisited” presents the Turn-Key Revolution and the Franchise Prototype as a new approach to building a successful small business. This approach involves systematizing and standardizing processes, focusing on working “on” the business rather than just “in” it, and creating a business model that can be easily replicated and scaled. By embracing these principles, business owners can develop a more sustainable and efficient enterprise that is not solely reliant on their expertise.
Section III: Building a Small Business That Works!
Chapter 10: The Business Development Process
Gerber introduces the Business Development Process as a structured approach to building a successful small business. This process involves three phases: Innovation, Quantification, and Orchestration. The goal is to create a systematized, scalable business by continuously improving and refining each aspect of the operation.
Chapter 11: The Business Development Program
This chapter outlines the Business Development Program, a step-by-step plan for implementing the Business Development Process. The program involves setting clear objectives, creating detailed plans, and defining metrics for measuring success. Gerber emphasizes the importance of following this program to ensure that the business is continually evolving and improving.
Chapter 12: A Letter to Sarah
In this chapter, Gerber shares a letter he wrote to one of his clients, Sarah, detailing the importance of adopting the principles outlined in the book. Through this letter, Gerber illustrates the transformative impact that the E-Myth concepts and the Business Development Process can have on a small business.
Chapter 13: Your Primary Aim
Gerber discusses the importance of defining a clear personal goal, or Primary Aim, for the business owner. This goal serves as a guiding principle and motivation for the entrepreneur. By understanding their Primary Aim, business owners can make more informed decisions and align their actions with their long-term objectives.
Chapter 14: Your Strategic Objective
This chapter focuses on defining the Strategic Objective for the business, which is a clear statement of what the business aims to achieve. Gerber explains that a well-defined Strategic Objective serves as a roadmap for the company’s growth and success.
Chapter 15: Your Organizational Strategy
Gerber emphasizes the importance of developing an Organizational Strategy, which involves creating a clear organizational structure and defining roles and responsibilities for each team member. This strategy helps ensure that the business operates smoothly and that employees have a clear understanding of their roles and expectations.
Chapter 16: Your Management Strategy
In this chapter, Gerber discusses the need for a solid Management Strategy to effectively lead and manage the business. This includes creating systems for delegation, communication, and performance evaluation. A strong Management Strategy ensures that the business runs efficiently and that employees are empowered to contribute to the company’s success.
Chapter 17: Your People Strategy
Gerber explains the importance of a People Strategy in attracting, retaining, and developing the right talent for the business. This involves creating a company culture that fosters personal growth, teamwork, and accountability. By investing in a strong People Strategy, business owners can build a dedicated, high-performing team that supports the company’s objectives.
Chapter 18: Your Marketing Strategy
This chapter highlights the crucial role of a Marketing Strategy in attracting and retaining customers. Gerber emphasizes the need for a comprehensive marketing plan that considers the target audience, unique selling proposition, and customer experience. A well-executed Marketing Strategy helps to drive business growth and customer loyalty.
Chapter 19: Your Systems Strategy
Gerber concludes the section by discussing the importance of a Systems Strategy, which involves developing and implementing efficient processes and systems throughout the business. This includes systems for operations, finance, and technology. A strong Systems Strategy enables the business to run smoothly, minimize errors, and scale effectively.
In summary, Section III of “The E-Myth Revisited” provides a detailed guide for building a successful small business using the Business Development Process. This involves creating and implementing strategies for every aspect of the business, from organizational structure to marketing and systems. By following these guidelines, entrepreneurs can create a sustainable, efficient, and scalable business that works.
Section IV: A Letter from Sarah
Chapter 20: The End of the Beginning
In this chapter, Gerber shares a letter from Sarah, a client he has been guiding throughout the book. Sarah’s letter serves as a testament to the transformative power of the E-Myth concepts and the Business Development Process. She expresses her gratitude to Gerber for helping her turn her struggling business around and achieve newfound success.
Chapter 21: Bringing the Dream Back to American Small Business
Gerber concludes the book by reiterating the importance of the E-Myth principles and the Business Development Process for small business success. He emphasizes that by adopting these concepts and strategies, entrepreneurs can overcome common pitfalls and build sustainable, thriving businesses. Gerber’s goal is to inspire a new generation of small business owners who embrace the entrepreneurial spirit and contribute to the growth and prosperity of the American economy.
In summary, Section IV of “The E-Myth Revisited” presents a letter from Sarah that demonstrates the impact of implementing the E-Myth principles and the Business Development Process on her business. The book concludes with Gerber’s call to action for small business owners to adopt these concepts and bring the dream of successful entrepreneurship back to American small businesses.