on 21 November 2002
Essential Reading for anyone running a small business. The author owns a leading business consultancy that specialises in reengineering small businesses to make them work properly.
I've always avoided the idea of running my own business simply because of the pain I've seen almost everyone I know go through when they started one. Every time things get tough, they have only one solution: work harder and put in more hours. Many of those that survive do so only because the owners simply refuse to give up. As a result they, and their families suffer. So many people seem to get swallowed by their business, as if Jaws had come out of the sea and pulled them from their inflatible. Those of us standing at the edge of the water tut tut and think "no way I'm going in there". This book has changed my thinking about all that.
As Mr Gerber says, the problem is very few people have been properly trained in how to run a business. Most small business people start out as technicians who got hit by an entrepreneurial seizure. As a result of their technical background, they have a tragic tendancy to retreat back into the one thing they feel certain they know how to do well: the technical work. This is known as the comfort zone. To be a real business owner, you must move beyond your comfort zone and learn how to think strategically about your business rather than working in it.
The author poses the question: if you were to expand your business to 4 different locations, could you continue to run the 4 the way you do the one you have now? What if you expanded to 1000 locations? If you are doing the usual thing and running around performing every critical function in your business yourself then the answer is obvious: you can't. You should view the one business you have as a prototype for all the others you are going to create and run it accordingly.
The core message is that rather than doing all the work yourself, you should set up business systems. By which he means a documented procedure or checklist for every function that occurs in your business. Once you have a functioning system in place, you can then hire a relatively inexperienced person and meticulously train them to follow the system you have set up. The better the system, the better the employee performs and the better your business performs. Your manager's job is to manage the systems not the people (people are inherently unmanageable), refining and improving the systems. This leaves you free to do the real work of an owner: thinking about how to improve and grow your business.
Another good title for this book would have been "Zen and the Art of Business" since it draws so much on the authors personal philosophy of how a business should be run. He talks about business in an exciting, refreshing way I've never heard before. For example, comparing the prototype business to a martial arts dojo where you practice and practice and practice until you get it right.
You should have your business revolve around your personal life and personal goals rather than the usual scenario of being a slave to your business. The whole point of starting a business is to improve your quality of life, not suck it out of you. To that end he takes you through the steps you should go through when setting up a business to avoid those pitfalls:
- Define your primary aim based on your personal life goals
- Define the strategic objectives that your business has to ultimately do in order to achieve the primary aim
- Have an organisation chart from the very start, even if there's only 1 person in the business. This is so you can start working out what functions to replace with systems
- Realise that what you really need is a Management System, not a Manager
- Make sure your people understand the idea behind the work they do and that the idea is more important than the work itself. In order to generate motivation, encourage them to treat the systems as a game to be played.
- etc, etc.
If you are in any doubt, take a look at his web site. I think there is plenty there to convince you to buy this book. Its certainly been worth my time and I'm seriously considering starting my own business purely as a result of reading this book.
This book deserves 7 stars for pointing out the fallacies of how most entrepreneurs operate. The book deserves 1 star for proposing a standard that most people cannot hope to meet and then pushing to sell you consulting services. Pay attention to the former, and go light on the latter.
Gerber is correct that most entrepreneurs are limited by a comfort zone of wanting to remain in control as either strong technicians or managers, which limits the potential of the business. As soon as they exceed what they can handle, the business either fails in a break-out attempt or shrinks back to a simpler state. The new businesses that succeed the most are the ones that have a business model that is easy to replicate with ordinary people.
Where Gerber goes wrong is in suggesting that many people can develop such business models. I regularly study the top 100 CEOs in the country for stock-price growth, and few of them think they can develop a new business model. Why should someone starting up a new company be likely to do better than that? They won't. In fact, I have a friend who attempted to start a new business following Gerber's principles and almost failed before he adjusted to normal operating approaches. He spent so much time developing his business model that he never got around to operating it well.
Gerber's three favorite examples are McDonald's, Disney, and Fed Ex. Notice that two of the three got most of their ideas from someone else for the business model (Ray Kroc from the McDonald brothers in San Bernardino, California and Fred Smith from an Indian air freight operation).
I think there is another fallacy here: You can get ordinary people to do simple things (deliver packages, cook and deliver cheap hamburgers, and smile at people on automated rides). But in many businesses the demands of the market are extraordinary such as in many technological product businesses and services. Microsoft has a business model, but it is not one that Gerber would recognize.
Finally, he condemns people who want to operate their business as a job by being technically expert. Where would we be if people never did that? What if Peter Drucker spent all of his time developing business systems to make pizzas and tacos rather than writing business books about management? What if great musicians developed business models for teaching children to play the violin and piano rather than performing? In other words, there is room and a need for extraordinarily able one-person companies run by technicians.
Skip the pitch for the consulting services at the end. You'll like the book better if you do.
But don't let my quibbles keep you as an entrepreneur from failing to appreciate the excellent case Gerber makes for having a business model as soon as possible, and working systematically to improve it. If you can do that, you may well develop a true irresistible growth enterprise. If you can learn to create continually better business models, you will naturally prosper. That could provide the ultimate competitive advantage . . . something that few have.
Michael Gerber, a saxophone playing, poetry and pulp-fiction writing, dope smoking, mystic drifter and successful encyclopaedia salesman (according to the apparently autobiographical section), wrote the original "E-Myth" in 1986, and revisited the ideas in this book in 1995, having by that stage established E-Myth Worldwide (see ) as a major force in what has come to be known as life and business coaching. He has a rather better claim, I suspect, to having originated "business coaching" than Brad Sugars (see "The Business Coach") although he does not use that term and is quite free in acknowledging his antecedents via a quotation at the start of each chapter.
Gerber's aim was (and presumably still is) to "bring the dream back to American small business" and the book is written in a very American, perhaps even specifically Californian, style, which may grate slightly on British readers, especially where his "spiritual" side shines through. The central theme of the book is an extended conversation between the author and "Sarah", proprietor of a struggling one-woman business in the form of a pie shop (apple rather than steak and kidney, although that doesn't really matter).
There can be no doubt that Gerber's own success suggests that his methods have worked for many small businesses. He suggests that there is an "Entrepreneurial-Myth" that all small businesses are created by Entrepreneurs, while the reality is that that are created by frustrated Technicians after a moment of "entrepreneurial seizure". Technicians enjoy doing the work but are neither interested in nor equipped to develop businesses and find that they don't so much own a company as a job - and that the demands are punishing. The solution, he suggests, is to think like an entrepreneur and to work ON the business rather than IN it, setting up systems that would allow the business model to be franchised (as a business system franchise like McDonalds), even if that is not the owner's intention. The aim is to create a "turn-key" business that someone else could operate in exactly the same way as the owner with staff with "the lowest possible level of skill" consistent with their roles.
The level of documentation that Gerber suggests is necessary is formidable. I have to admit that I have never worked in a commercial organisation which had anything like his suggested level of documented procedures. (I have perhaps worked in a non-commercial one that did - that was the Army!) It is certainly a challenging set of ideas.
Most of the book is devoted to general principles, but in one or two sections he proposes quite specific techniques. When discussing sales, for example, he detailed the Gerber "Power Point Selling System" (a phrase borrowed by other West-Coast Americans, perhaps?) he describes a quite prescriptive sales technique, and suggests that it will work invariably. While it is certainly in the category of "sensible stuff", I recoiled slightly from the one-size fits all mentality as portrayed here. I suspect that Gerber in the flesh would customise this sort of thing. Another example, apparently trivial but a theme to which Gerber returns on several occasions, is that blue is a superior colour, for logos, suits, book covers, marker pens, etc. He also advocates physical contact with customers - elbow, arm, shoulder - as a sure-fire way of boosting sales. Really?
Perhaps my biggest reservation about the his methodology is that he suggests that despite everything being scripted and prescribed to achieve "the elimination of discretion, or choice, at the operating level of your business", he still thinks that this need not be dehumanising and can be consistent with empowerment and job satisfaction. Perhaps it can, but this was not, in my opinion, very well explained here. I suspect that his ideas are quite close to the "system thinking "of John Seddon (see, e.g. "Freedom from Command and Control").
I have no doubt that a small business that set up all of the systems that Gerber advocates would be extremely well run. It is hard to imagine that many business owners would go to all that trouble if they did not actually want to franchise their operations - ceasing to be, in the process, small businesses. Thus, while I found this a fascinating and, in its way, inspirational book, I was left wondering whether many small business owners would not seek to find a middle way between the drive for growth that Michael Gerber recommends and merely "owning a job", and I suspect that many small business owners have in fact found it (or one of them, as there are probably many such ways).
Nevertheless, if you are running a small business or if you are interested in how SMEs can be run well, this updated version of what is a seminal work is essential - and rewarding - reading.
on 22 November 1999
This book has changed my business and my life. The E-myth (or Entrepreneurial Myth) says that most small businesses are not founded by entrepreneurs, rather by people looking for a job. Micheal Gerber goes onto explain why too many small businesses fail. Why? Because you like I was, are probably too busy working in your business and not working on your business. This book is the gateway to a practice of what it means and needs to fulfill your life and the others you touch through your business. It deals with the "nuts and bolts" of what a business needs to look and act like, as well as the philosophy that powers and feeds the success of something which will become much more than just another business. Since reading "The E-Myth" I have read Michael`s other books which I strongly recommend ,"The E-Myth Manager" and "The Power Point". I have also attended 2 Gerber seminars - the man is amazing and one of the most profound public speakers I have been fortunate enough to witness. It is no co-incidence that since reading this book I have run marathons and walked on fire! Through Michaels insights I now have more life.
on 13 March 2005
Anyone who runs a small business, or knows someone who does, will recognise Gerber's initial description of what it's like. He summarises his observations, commenting "Exhaustion was common, exhilaration rare."
Typically, all the reasons a new entrepreneur had for going into business evaporate in a whirlwind of longer hours, more stress, cashflow struggles, even longer hours, even more stress, etc etc. Gerber offers a solution to this.
His concept is sound: develop "turn-key" systems to allow others to replicate your business model, instead of you doing everything yourself. His methods are one way of doing it, but not the only way.
Drawing on McDonalds as an example, Gerber's blueprint seems an ideal model for any business that works on a transactional basis, doing the same thing over and over again. The anecdote that unfolds following each chapter is about someone who bakes pies and sells them in a shop. However, if you're not in retail, don't be put off by this. As a business coach I have recommended this book to a number of B2B technology and consulting clients (who have to tailor their offer to individual customers) and its principles work for them too.
Gerber's central theme is "The Fatal Assumption" made by most people who decide to start their own business: "If you understand the technical work of a business, you understand a business that does technical work." Being an expert at 'doing the work' of the business does not mean you can automatically run it well.
Gerber goes on to make a compelling case for ensuring three key roles are covered in your business: the technician (doer), the entrepreneur (visionary) and the manager (organiser). You probably already know where your strength lies. Now you need to develop the other two roles in yourself, or find someone else to cover them.
This concept, followed by some very sound advice on performance management and business strategy leads to an easily digestible book that should be required reading for anyone running, or thinking of running, their own business.
on 5 September 2009
This book offers a valid insight into the dilemma faced by many small business owners: how to balance the role of entrepreneur, manager and technician. The author gives good advice, reminding business owners not just to concentrate on technical work; indeed, as the author points out, you should work on your business, not in it. However, the book never really kicks on past this rather laboured point and consequently the book could probably be significantly condensed.
Worthwhile if only to remind business owners where their priorities should lie, but not the most thought-provoking book you'll ever read.
on 20 July 2006
I have to admit that this was the first book of this kind that I have purchased but I can't recommend it enough. Having also purchased the 'E-Myth Mastery' I can say that 'Revisited' is all you need. It's stright to the point, no nonsense information for the would be entrepreneur. I think this book is the best place to start before considering 'Mastery'.
on 2 May 2006
What a fantastic book!
I first read it about 18 months ago and am re-reading it for about the 10th time now.
It has transformed the way I look at and conduct business and I recommend it to all my networking friends, business associates and coaching clients.
It uses the story of a particular individual to illustrate the most common mistakes business owners make and provides some amazing insights.
Buy this book today, you won't be dissappointed!
on 3 January 2001
This book is a 'must read' for anyone who has their own business. Gerber makes his main points very simply and clearly, but they are of profound importance to the health of your business. Once understood, you will be able to look at your business with fresh eyes, and begin to put systems into place that will enable you to become free of your business, while making it ever more profitable. If you're thinking of starting up in business for yourself don't do anything till you've read this cover to cover!
on 25 October 2006
This is a book that I am using to run our business, I have had it recommended by two successful entrepreneurs who started their businesses and worked themselves into the ground to the point of heart attacks, bought the books and now have some life back. You want to work on your business not in it.
Take what you want from the book, it does help. A simple example I have just introduced in the ops manual is postage. I used to do this buy gut feel, sometimes first class, sometimes standard parcel and sometimes UPS. I now have a simple procedure so my temp does not need to decide, my customers get the same service if I do it or if the temp does it. It costs the same and I can budget for it. I now can use a temp that knows nothing about shipping..... This book makes you think about your business in a different way.
Buy this book if you are thinking about starting your own business.