The E-Myth Revisited: Why Most Small Businesses Don't Work and What to Do About It 1995

Summary:

• The E-Myth Revisited: Why Most Small Businesses Don't Work and What to Do About It by Michael E. Gerber is a book about the importance of understanding the fundamentals of running a successful small business. The book is based on the idea that most small business owners are technicians, not entrepreneurs, and that they lack the necessary skills to run a successful business. Gerber argues that the key to success is to create a business that works like a franchise, with systems and processes in place to ensure consistent results. He outlines the three essential roles that must be filled in order to create a successful business: the entrepreneur, the manager, and the technician. He also provides practical advice on how to create a business that is both profitable and enjoyable.

  The book begins by discussing the "E-Myth," which is the idea that most small business owners are technicians, not entrepreneurs. Gerber argues that these technicians lack the necessary skills to run a successful business, and that they often fail because they don't understand the fundamentals of running a business. He then outlines the three essential roles that must be filled in order to create a successful business: the entrepreneur, the manager, and the technician. The entrepreneur is responsible for setting the vision and direction of the business, the manager is responsible for implementing the vision, and the technician is responsible for executing the tasks necessary to achieve the vision.

  Gerber then provides practical advice on how to create a business that is both profitable and enjoyable. He outlines the importance of creating systems and processes that will ensure consistent results, and provides guidance on how to create a business that works like a franchise. He also discusses the importance of delegation and how to create a team of employees who are motivated and productive.

  The book concludes by discussing the importance of taking time to enjoy the fruits of one's labor. Gerber argues that it is important to take time to appreciate the success of the business, and to enjoy the rewards of hard work. He also provides advice on how to create a business that will last for generations.

  The E-Myth Revisited is an essential read for any small business owner. It provides practical advice on how to create a successful business, and outlines the importance of understanding the fundamentals of running a business. The book is filled with useful advice and is a must-read for anyone looking to start or grow a small business.

Main ideas:

• #1.     The E-Myth: The entrepreneurial myth is that most small businesses are started by entrepreneurs who possess the necessary skills and knowledge to make their businesses successful. The reality is that most small businesses are started by people who lack the necessary skills and knowledge to make their businesses successful.
  
  

  The E-Myth, or entrepreneurial myth, is the idea that most small businesses are started by entrepreneurs who possess the necessary skills and knowledge to make their businesses successful. However, the reality is that most small businesses are started by people who lack the necessary skills and knowledge to make their businesses successful. This is the premise of the book The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It by Michael E. Gerber.

  Gerber argues that most small business owners are not entrepreneurs, but rather technicians who are good at a particular skill or trade. They may be excellent at what they do, but they lack the business acumen to make their businesses successful. He suggests that small business owners need to develop an entrepreneurial mindset in order to succeed. This means understanding the importance of systems, processes, and delegation, and having the ability to think strategically about their business.

  The E-Myth Revisited provides practical advice and guidance for small business owners who want to make their businesses successful. It offers a step-by-step approach to developing an entrepreneurial mindset and creating a business that can thrive in the long-term. By understanding the entrepreneurial myth and taking the necessary steps to become an entrepreneur, small business owners can create a successful business that will last for years to come.

• #2.     The Technician Trap: Many small business owners fall into the trap of becoming technicians, focusing on the day-to-day operations of their business instead of focusing on the big picture. This leads to burnout and a lack of growth.
  
  

  The Technician Trap is a common problem for small business owners. It occurs when a business owner focuses too much on the day-to-day operations of their business, such as customer service, product development, and marketing, instead of focusing on the big picture. This can lead to burnout and a lack of growth. As Michael E. Gerber explains in his book The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It, “The Technician Trap is the single greatest threat to the success of any small business.”

  The key to avoiding the Technician Trap is to focus on the big picture. This means setting goals, developing strategies, and creating systems that will help the business grow. It also means delegating tasks to employees and outsourcing certain tasks to outside professionals. By taking a more strategic approach to running the business, the owner can free up time to focus on the bigger picture and ensure that the business is growing and thriving.

  The Technician Trap is a common problem for small business owners, but it can be avoided with the right approach. By focusing on the big picture and delegating tasks, business owners can ensure that their business is growing and thriving. With the right strategies in place, small business owners can avoid the Technician Trap and achieve success.

• #3.     The Turn-Key Revolution: To be successful, small business owners must learn to become entrepreneurs and create a business that can run without them. This requires creating systems and processes that can be replicated and scaled.
  
  

  The Turn-Key Revolution is a concept that encourages small business owners to become entrepreneurs and create a business that can run without them. This means that the business must have systems and processes in place that can be replicated and scaled. This allows the business to grow and become more successful without the owner having to be involved in every aspect of the business. It also allows the owner to focus on the bigger picture and create a business that can be successful in the long-term. By creating a business that can run without them, small business owners can free up their time and energy to focus on other aspects of their business, such as marketing, customer service, and product development. This allows them to create a business that is more successful and profitable in the long-term.

  The Turn-Key Revolution is an important concept for small business owners to understand and embrace. It allows them to create a business that can run without them and become more successful in the long-term. By creating systems and processes that can be replicated and scaled, small business owners can free up their time and energy to focus on other aspects of their business. This allows them to create a business that is more successful and profitable in the long-term.

• #4.     The Entrepreneurial Perspective: To be successful, small business owners must learn to think like entrepreneurs and develop a vision for their business. This requires understanding the customer, the market, and the competition.
  
  

  The entrepreneurial perspective is essential for small business owners to be successful. It involves understanding the customer, the market, and the competition. This means taking the time to research and analyze the customer’s needs, the market’s trends, and the competition’s strategies. It also involves developing a vision for the business and setting goals to achieve that vision. This requires a deep understanding of the business and the industry, as well as the ability to think strategically and creatively. It also requires the ability to take risks and make decisions quickly. Finally, it requires the ability to motivate and inspire employees to work towards the vision. By taking the time to develop an entrepreneurial perspective, small business owners can create a successful business that will stand the test of time.

• #5.     The Three Primary Responsibilities: To be successful, small business owners must learn to manage three primary responsibilities: managing the business, managing the people, and managing the work.
  
  

  Managing the business involves understanding the financials, setting goals, and making decisions that will help the business grow. This includes understanding the market, developing a business plan, and creating a budget. It also involves understanding the legal and regulatory environment, and making sure the business is compliant with all applicable laws and regulations.

  Managing the people involves recruiting, hiring, and training employees. It also involves developing a culture that encourages collaboration and innovation, and creating an environment where employees feel valued and respected. It also involves developing a system of rewards and recognition that motivates employees to do their best.

  Managing the work involves setting priorities, delegating tasks, and ensuring that tasks are completed on time and within budget. It also involves developing systems and processes that help the business run more efficiently, and ensuring that the business is meeting customer needs. It also involves staying up to date on industry trends and best practices.

• #6.     The Three Primary Tasks: To be successful, small business owners must learn to focus on three primary tasks: planning, organizing, and controlling.
  
  

  Planning is the first of the three primary tasks that small business owners must focus on in order to be successful. Planning involves setting goals and objectives, developing strategies to achieve those goals, and creating a timeline for implementation. It also involves researching the market, understanding customer needs, and developing a competitive advantage. Planning is essential for any business to succeed, as it provides a roadmap for the future and helps to ensure that resources are used efficiently.

  Organizing is the second of the three primary tasks that small business owners must focus on. This involves creating systems and processes to ensure that tasks are completed efficiently and effectively. It also involves setting up a structure for the business, such as departments, teams, and roles. Organizing is essential for any business to succeed, as it helps to ensure that tasks are completed in a timely manner and that resources are used effectively.

  Controlling is the third of the three primary tasks that small business owners must focus on. This involves monitoring and evaluating the performance of the business, as well as making adjustments as needed. It also involves setting up systems to measure progress and ensure that goals are being met. Controlling is essential for any business to succeed, as it helps to ensure that the business is on track and that resources are being used effectively.

• #7.     The Three Primary Systems: To be successful, small business owners must learn to create three primary systems: a marketing system, a production system, and a management system.
  
  

  A marketing system is essential for any small business to succeed. It involves creating a plan to reach potential customers and build relationships with them. This includes developing a brand, creating a website, and using social media and other digital marketing tools. It also involves creating a pricing strategy and developing promotional campaigns.

  A production system is necessary to ensure that products and services are delivered on time and to the highest quality standards. This includes developing processes and procedures for creating and delivering products and services, as well as managing inventory and supplies.

  Finally, a management system is needed to ensure that the business is running smoothly. This includes setting goals and objectives, developing strategies to achieve them, and managing the finances of the business. It also involves hiring and training staff, managing customer relationships, and developing systems to measure performance.

• #8.     The Three Primary Questions: To be successful, small business owners must learn to ask three primary questions: What do I want to do? How will I do it? Who will do it?
  
  

  The Three Primary Questions are essential for small business owners to ask themselves in order to be successful. The first question is What do I want to do? This question helps the business owner to identify their goals and objectives. The second question is How will I do it? This question helps the business owner to determine the best way to achieve their goals. The third question is Who will do it? This question helps the business owner to identify the right people to help them achieve their goals. By asking these three primary questions, small business owners can gain clarity and focus on their business objectives and create a plan to achieve them.

  The E-Myth Revisited: Why Most Small Businesses Dont Work and What to Do About It by Michael E. Gerber is a great resource for small business owners. It provides valuable insight into the challenges that small business owners face and offers practical advice on how to overcome them. The book also provides a framework for small business owners to ask the three primary questions and develop a plan to achieve their goals. By following the advice in this book, small business owners can gain the clarity and focus they need to succeed.

• #9.     The Three Primary Objectives: To be successful, small business owners must learn to focus on three primary objectives: increasing sales, increasing profits, and increasing customer satisfaction.
  
  

  To be successful, small business owners must learn to focus on three primary objectives: increasing sales, increasing profits, and increasing customer satisfaction. Increasing sales is the most obvious goal for any business, as it is the primary source of revenue. However, it is important to remember that sales alone do not guarantee success. Profits must also be increased in order to ensure the long-term sustainability of the business. This can be done by reducing costs, increasing efficiency, and improving pricing strategies. Finally, customer satisfaction is essential for any business to succeed. Customers must be provided with quality products and services, as well as excellent customer service. By focusing on these three objectives, small business owners can ensure that their business is successful and profitable in the long run.

• #10.     The Three Primary Principles: To be successful, small business owners must learn to adhere to three primary principles: focus, discipline, and consistency.
  
  

  Focus is essential for small business owners. Without a clear focus, it is easy to become overwhelmed and distracted by the many tasks that need to be done. A business owner must be able to identify their goals and objectives and then prioritize their tasks to ensure that they are working towards those goals. This requires a clear understanding of the business’s mission and a commitment to staying on track.

  Discipline is also key for small business owners. Without discipline, it is easy to become sidetracked and lose sight of the goals. A business owner must be able to stay focused and motivated, even when things get tough. This requires setting realistic goals and sticking to them, even when it is difficult.

  Finally, consistency is essential for small business owners. Without consistency, it is easy to become inconsistent and unfocused. A business owner must be able to maintain a consistent level of effort and dedication to their business. This requires setting a schedule and sticking to it, even when it is difficult.

  By adhering to these three primary principles, small business owners can ensure that they are successful in their endeavors. Focus, discipline, and consistency are essential for any business to succeed, and by following these principles, small business owners can ensure that their business is successful.

• #11.     The Three Primary Goals: To be successful, small business owners must learn to set three primary goals: short-term, mid-term, and long-term.
  
  

  Short-term goals are those that can be achieved within a few months or a year. These goals should be specific and measurable, and should focus on the immediate needs of the business. Examples of short-term goals include increasing sales by a certain percentage, launching a new product or service, or hiring additional staff.

  Mid-term goals are those that can be achieved within two to five years. These goals should be more ambitious than short-term goals, and should focus on the long-term growth of the business. Examples of mid-term goals include expanding into new markets, launching a new website, or increasing profits by a certain percentage.

  Long-term goals are those that can be achieved within five to ten years. These goals should be the most ambitious of all, and should focus on the ultimate vision of the business. Examples of long-term goals include becoming a market leader, launching a new product line, or expanding into international markets.

  By setting these three primary goals, small business owners can create a roadmap for success. They can use the short-term goals to focus on immediate needs, the mid-term goals to focus on long-term growth, and the long-term goals to focus on the ultimate vision of the business. By setting these goals and working towards them, small business owners can ensure that their business is on the path to success.

• #12.     The Three Primary Strategies: To be successful, small business owners must learn to develop three primary strategies: a marketing strategy, a production strategy, and a management strategy.
  
  

  A marketing strategy is essential for any small business to succeed. It involves understanding the target market, developing a unique selling proposition, and creating a plan to reach potential customers. This includes researching the competition, creating a budget, and developing a plan to track and measure results.

  A production strategy is also important for small business success. This involves understanding the production process, developing a plan to ensure quality control, and creating a system to track and measure production efficiency. It also involves understanding the costs associated with production and developing a plan to keep costs low.

  Finally, a management strategy is essential for small business success. This involves understanding the roles and responsibilities of each team member, developing a system to track and measure performance, and creating a plan to ensure that the team is working together effectively. It also involves understanding the legal and financial aspects of running a business and developing a plan to ensure compliance with all applicable laws and regulations.

• #13.     The Three Primary Values: To be successful, small business owners must learn to embrace three primary values: integrity, quality, and service.
  
  

  Integrity is the foundation of any successful small business. It is essential that business owners remain honest and ethical in all their dealings, both internally and externally. This means being transparent with customers, employees, and vendors, and always delivering on promises. It also means being honest about mistakes and taking responsibility for them.

  Quality is the cornerstone of any successful small business. Business owners must strive to provide the highest quality products and services to their customers. This means using the best materials, employing the most skilled workers, and ensuring that all products and services meet the highest standards of excellence.

  Service is the lifeblood of any successful small business. Business owners must strive to provide the best customer service possible. This means being available to answer questions, addressing customer concerns promptly, and providing helpful advice and support. It also means going the extra mile to ensure that customers are satisfied with their purchases.

• #14.     The Three Primary Challenges: To be successful, small business owners must learn to overcome three primary challenges: time management, financial management, and personnel management.
  
  

  Time management is a critical challenge for small business owners. They must learn to prioritize tasks, delegate responsibilities, and manage their time efficiently in order to maximize productivity and minimize wasted effort. This requires a clear understanding of the goals of the business and the ability to plan and execute tasks in a timely manner.

  Financial management is another key challenge for small business owners. They must learn to manage their finances effectively in order to ensure the long-term success of their business. This includes understanding the financial implications of their decisions, budgeting, and managing cash flow. It also involves understanding the tax implications of their business and developing strategies to minimize their tax burden.

  Finally, personnel management is a major challenge for small business owners. They must learn to recruit, hire, and retain the right people for their business. This requires an understanding of the skills and experience needed for each position, as well as the ability to motivate and manage employees. It also involves developing effective policies and procedures to ensure that employees are productive and that the business is running smoothly.

• #15.     The Three Primary Resources: To be successful, small business owners must learn to leverage three primary resources: capital, technology, and people.
  
  

  Capital is the financial resources that a small business needs to operate. This includes money for start-up costs, such as rent, equipment, and inventory, as well as ongoing expenses like payroll and taxes. Without adequate capital, a small business will struggle to survive.

  Technology is the tools and systems that a small business needs to operate efficiently. This includes computers, software, and other digital tools that can help automate processes and streamline operations. By leveraging technology, small business owners can save time and money.

  People are the employees and customers that a small business needs to succeed. Employees provide the labor and expertise that are necessary to run a business, while customers provide the revenue that keeps it afloat. Without the right people, a small business will struggle to grow and thrive.

  By leveraging these three primary resources, small business owners can create a successful and sustainable business. Capital provides the financial resources needed to operate, technology helps to automate processes and streamline operations, and people provide the labor and expertise necessary to run a business. With the right combination of these three resources, small business owners can create a successful and profitable business.

• #16.     The Three Primary Roles: To be successful, small business owners must learn to play three primary roles: leader, manager, and entrepreneur.
  
  

  As a small business owner, it is essential to understand the three primary roles that must be played in order to be successful. The first role is that of a leader. Leaders are responsible for setting the vision and direction of the business, inspiring and motivating employees, and creating a culture of success. The second role is that of a manager. Managers are responsible for ensuring that the business is running efficiently and effectively, and that all tasks are completed on time and within budget. Finally, the third role is that of an entrepreneur. Entrepreneurs are responsible for coming up with innovative ideas and solutions to problems, and for taking risks in order to grow the business.

  These three roles are essential for any small business owner to understand and master in order to be successful. Leaders must be able to set the vision and direction of the business, managers must be able to ensure that the business is running efficiently and effectively, and entrepreneurs must be able to come up with innovative ideas and solutions to problems. By understanding and mastering these three roles, small business owners can ensure that their business is successful and profitable.

• #17.     The Three Primary Skills: To be successful, small business owners must learn to develop three primary skills: communication, problem-solving, and decision-making.
  
  

  Communication is essential for small business owners to be successful. They must be able to effectively communicate their ideas and goals to their employees, customers, and other stakeholders. They must also be able to listen to feedback and criticism in order to make informed decisions.

  Problem-solving is another important skill for small business owners. They must be able to identify problems and develop solutions that are both effective and efficient. They must also be able to anticipate potential problems and develop strategies to prevent them from occurring.

  Decision-making is the final primary skill that small business owners must develop. They must be able to make decisions quickly and confidently, while also considering the potential consequences of their decisions. They must also be able to weigh the pros and cons of different options and make the best decision for their business.

• #18.     The Three Primary Habits: To be successful, small business owners must learn to cultivate three primary habits: planning, organizing, and delegating.
  
  

  Planning is essential for small business owners to succeed. It involves setting goals, creating strategies, and developing a timeline for achieving those goals. Planning also involves researching the market, understanding customer needs, and developing a competitive advantage. By taking the time to plan, small business owners can ensure that their business is well-positioned to succeed.

  Organizing is another important habit for small business owners. This involves creating systems and processes to ensure that tasks are completed efficiently and effectively. It also involves setting up a structure for the business, such as a hierarchy of roles and responsibilities. By organizing their business, small business owners can ensure that their operations run smoothly.

  Delegating is the third primary habit for small business owners. This involves assigning tasks to employees or contractors to ensure that the business is running efficiently. It also involves setting expectations and providing feedback to ensure that tasks are completed on time and to the highest standard. By delegating tasks, small business owners can free up their time to focus on more important tasks.

• #19.     The Three Primary Mindsets: To be successful, small business owners must learn to adopt three primary mindsets: customer-centric, results-oriented, and growth-focused.
  
  

  The customer-centric mindset is essential for small business owners to understand and embrace. This mindset requires that the business owner puts the customer first in all decisions and actions. This means that the customers needs and wants should be the primary focus when making decisions about products, services, and marketing. The customer-centric mindset also requires that the business owner is willing to go the extra mile to ensure customer satisfaction. This could include offering additional services, providing discounts, or offering personalized customer service.

  The results-oriented mindset is also important for small business owners to adopt. This mindset requires that the business owner is focused on achieving measurable results. This means that the business owner should be constantly evaluating the effectiveness of their strategies and making adjustments as needed. The results-oriented mindset also requires that the business owner is willing to take risks and try new things in order to achieve the desired results.

  The growth-focused mindset is the third primary mindset that small business owners must adopt. This mindset requires that the business owner is constantly looking for ways to grow and expand their business. This could include launching new products or services, expanding into new markets, or investing in new technologies. The growth-focused mindset also requires that the business owner is willing to take calculated risks in order to achieve their goals.

• #20.     The Three Primary Attitudes: To be successful, small business owners must learn to cultivate three primary attitudes: optimism, resilience, and adaptability.
  
  

  Optimism is essential for small business owners. It is the belief that no matter what challenges arise, you can find a way to overcome them. It is the belief that you can make your business successful, no matter what the odds. Optimism is the fuel that drives entrepreneurs to keep going, even when the going gets tough.

  Resilience is also key for small business owners. It is the ability to bounce back from setbacks and keep going. It is the ability to stay focused on the goal, even when the odds seem insurmountable. Resilience is the determination to keep going, no matter what.

  Finally, adaptability is essential for small business owners. It is the ability to adjust to changing circumstances and find new ways to succeed. It is the ability to recognize when something isnt working and find a new way to make it work. Adaptability is the key to staying ahead of the competition and staying successful.