Masters in Minutes - The E-Myth Revisited: Why Most Small Businesses Dont Work and What to Do About It / Summary & Key Takeaways in 20 minutes

The E-Myth Revisited: Why Most SmallBusinesses Don't Work and What to Do About It | Summary & KeyTakeaways

By Masters in Minutes

Published by Masters in Minutes

Copyright 2015 Masters in Minutes

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Table ofContents

Author of The E Myth Revisited, Michael E.Gerber is the Founder, Chairman, and CEO of E-Myth Worldwide, thecompany he founded in 1977 to provide small-business owners andentrepreneurs with help they need to build a business that works.Since then, E-Myth Worldwide has provided more than 25,000 smalland emerging business-owner clients with the means to radicallytransform their businesses and their lives.

The most successful business people knowthat a systems dependent business, not a people dependent business,is the only way to go. When fully developed, a systems dependentbusiness does not require the owners personal time nor energywhile giving them the assets needed to create the life theywant.

In order to create a business that does notneed you working on it or in it you must create a systems dependentbusiness.

This is what the E-Myth Revisited is allabout. It defines all the major steps and the development processto create a business that ultimately does not require your time norenergy and fulfills your needs in life.

It is literally impossible to produce aconsistent result in a business that depends on extraordinarypeople.

To create a business that serves your life(and not the other way around), create a systemsdependent not peopledependent business.

A people dependent business is at the mercyof peoples emotions, skills, whims and personalities. It requiresskilled and experienced people to operate. Highly skilled peopleare too expensive, hard to replace and time consuming tomanage.

A systems dependent business does notrequire highly skilled people and produces consistent reliableresults. A systems dependent business is a business that, oncefully developed does not need you to work in or on it. So you canin turn focus on all the other things you want to do in life.

So how do you create a systems dependentbusiness?

Imagine the business you are building is aprototype for 5,000 other businesses exactly like it. A business that you must be able tomake perfect replicates or clones of. This first business is aFranchise Prototype.

Ray Kroc and McDonalds

Ray Kroc built McDonalds first as aFranchise Prototype. His clientele werent people that wantedhamburgers, but people that wanted a successful, fool proofbusiness. The successful business model, his Franchise Prototype,was his product not the hamburgers.

If you do decide to fully franchise and sellexact copies of your business, your business becomes the productitself and not what the business is selling.

Even if you dont plan to sell your businessor franchise it, you must approach business development with themindset that it can be perfectly replicated if you want a businessthat doesnt rely on you to do and manage everything.

1. The model will provide consistent value to yourcustomers, employees, suppliers, and lenders, beyond what theyexpect.

2. The model will be operated by people with the lowestpossible level of skill.

3. The model will stand out as a place of impeccableorder.

4. All work in the model will be documented inOperations Manuals.

5. The model will provide a uniformly predictableservice to the customer.

6. The model will utilize a uniform color, dress, andfacilities code.

There are three core personalities in all ofus that fight for control when it comes to the world of businessbuilding. All of them want to be the boss and none of them want tohave a boss. As someone that is out to create a new business orredesign their current business, you must be aware of the roles ofthese three personalities, how they interact and when theappropriate times are for each one to take over business work.

The Entrepreneur

The Entrepreneur is the dreamer and thecreative personality in all of us. The Entrepreneur has the visionand idea to go start something new. The Entrepreneur is the ideaman. But without guidance, the Entrepreneur creates havoc due toits lack of focus and changing vision. The other two personalitiesare never able to keep up with these changes if The Entrepreneurhas no guidance.

But with the proper guidance and vision TheEntrepreneur is the one that drives the whole enterprise forwardinto a fully functioning mature business.

The Manager

The Manager is the one that tries toorganize everything. They want complete order and a specific plan.Once a plan is in place, they dont want things to change.

The Technician

The Technician is the doer. They are theones that interact with customers on a day to day basis or are thewidget makers. The Technician likes to be in the middle of theactual work. The other two just get in the way of The Techniciansdoing. The Technician cant see past the day to day work and islimited by his own skills.

The Imbalance

There is a natural imbalance among thesepersonalities in most people. For most, after the Entrepreneur inus has pushed us into taking the leap to start our own business,The Technician takes over the operations of the business.

The technician tries to do everythingwithout bothering to develop a reliable system that other peoplecan run and manage. The Technician wants to be in the thick of it:controlling everything and likes it that way.

If the business is successful in bringingnew customers and grows. The Technician just works more hours tohandle the increased work load.

The Technician may finally get to the pointthat they hire someone to take over some of the work but because hehasnt created a system for the new person to follow, problemsensue and quality in one fashion or another drops; widgets break,customers complain, the store doesnt stay clean etc.

Now The Technician has to manage newemployees, fix all the problems that continue to crop up and keepup with all the other work needed to be done. The Technician cantfigure out a solution to this increasing work load and newproblems. All the Technician has at his disposal for problemsolving is his widget making skills. Running and growing a businessmust be impossible! Frustrated and exhausted The Technician givesup and closes up shop.

The E-Myth

The E-Myth is short for the EntrepreneurialMyth. The myth that the personality that set out to start their ownbusiness (The Entrepreneur) is the same personality that managesthe day to day work of the business itself. As you can see in theexample above, it is The Technician that is often times the onetaking control after the business gets started and stays thatway.