The E-Myth Revisited
Michael E. Gerber
The E-Myth Revisited is Michael Gerber's explanation of why most small businesses fail: they are started by technicians, people good at a craft, who assume that knowing the work is knowing the business. Every business needs a technician, a manager and an entrepreneur, and the technician-founder does the first all day, the second badly at night and the third never. His remedy is to work on the business rather than in it: design it as if it would be franchised, write an operations manual so that the recurring work runs the same way every time, and start from a picture of the finished business.
You are good at the thing your business does, and that is why it will become a job you cannot leave. Gerber has watched it happen for forty years and knows the way out.
The book in essence
Gerber's E-Myth is the entrepreneurial myth: that businesses are started by entrepreneurs. Most are started by technicians in what he calls an entrepreneurial seizure, the moment they ask why they are doing this for someone else, and the fatal assumption follows them out the door. The book is a long conversation with Sarah, a pie-maker whose shop has become a prison, through which Gerber lays out the three personalities every owner must be, the stages of a business from infancy to maturity, and the turnkey revolution he saw in franchising: a business designed to be run by people with less skill than its founder, on systems written down. Work on the business, not in it. Build the franchise prototype whether or not you ever franchise. Write the operations manual. Orchestrate, so that the customer gets the same experience every time. The founder's freedom and the customer's trust come from the same place.
First published in 1986 and revised in 1995, it is the most-read small-business book in print and the origin of the phrase 'work on your business, not in it'.
Who it's for
- Anyone about to turn a craft into a business
- Owners of a business that runs on them and cannot survive their holiday
- Readers who want to stay small but not trapped
Who it's not for
- — Readers who dislike the parable form; the Sarah dialogue runs through the whole book
- — Anyone who wants the lean or customer-development method; Gerber assumes the offer works and fixes the operation
Key lessons
01
Knowing the craft is not knowing the business
The technician who starts a business does the work all day and never does the entrepreneur's job, because there is no time. Within a year the business is a job with worse hours.
A physiotherapist opens a clinic, is fully booked in two months, and cannot take a week off because nobody else can see his patients. He has bought himself a job.
02
Work on the business, not in it
One hour a week looking at how the work is done and what would let someone else do it, starting from a picture of the finished business rather than today's list.
Friday at four: a written first-visit assessment, six home-programme templates, a booking rule. Three months later a locum covers a week and patients notice nothing.
03
Build the franchise prototype
Design the business as if it were the first of five thousand, to be run by people with less skill than you. What would have to be written down? That is your business, not you.
A baker's nine-page manual runs the bakery for two weeks in her sister's hands. Two customers say the bread was slightly different; nobody cancels.
04
Orchestrate the recurring work
The customer wants the same experience every time, not the best possible one. Eliminate discretion where it adds no value: the same intake, quote and follow-up, written down.
A clinic's follow-up message at week six goes to every patient as a standard, and referrals go from four a month to eleven.
Try this today
Write the three roles, technician, manager, entrepreneur, and the hours you gave each this week. Then write what would break in your business if you were away for a week.
Quick check
What is the E-Myth?
What is the franchise prototype?
Selected quotes
“If your business depends on you, you don't own a business, you have a job.”
“The work of the entrepreneur is to work on the business, not in it.”