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[Review] The E-Myth Revisited


Few books resonate with me as much as “The E-Myth Revisited” does. And for good reason too.

Written by Michael Gerber – “The World’s #1 Small Business Guru” – its key takeaways are beautifully presented in the form of a compelling narrative involving the author and a small business owner named Sarah. Through the eyes of Sarah, the owner of “All About Pies”, I was whisked away on an enchanting entrepreneurial journey while learning the techniques needed to build a better business.

In Gerber’s eyes, three distinct personalities exist in each small business. To succeed, one should balance the needs and job scopes of all three, namely:

1. Entrepreneur: the visionary and dreamer who casts his/her eye to the future and provides the catalyst for change;

2. Manager: the pragmatic personality who looks at creating order and processes. While the entrepreneur thrives in the future, the manager lives in the past; and

3. Technician: the doer who is often the strongest of the three personalities (70% of small business owners). This is the guy or girl who loves to tinker/bake/sew/write, and is the person focused on the task at hand in the present.

The central tenet of “The E-Myth Revisited” proposes that the most successful small businesses are built like franchise prototypes. With McDonald’s as its benchmark (like it or not, it still is the world’s most successful restaurant chain), the book urges us to “work on our business, not in it” and to build robust systems to improve our chances of success.

Infused with a spirit of continuous learning, these systems are assembled during the business development process and should encompass:

1. Innovation: constant improvements and upgrades such as how one greets a customer or mixes and matches colors in one’s shop;

2. Quantification: the measurement of various benchmarks from number of customers, time of visits, products purchased, to revenue; and

3. Orchestration: how everything fits together in a systematic fashion where nothing is left to chance. Quoting from Theodore Levitt, “Discretion is the enemy of order, standardization, and quality.”

Employing the disciplines of Innovation, Quantification and Orchestration, one should then build one’s business by skillfully mixing and baking the following ingredients:

1. Primary Aim: A personal purpose statement. In other words, “what would you like to say about your life after it’s too late to do anything about it”;

2. Strategic Objective: A clear statement of what your business has to ultimately achieve. Usually described in terms of money (revenue), business model, customer, and other standards;

3. Organizational Strategy: Organization charts, position contracts, and other HR details;

4. Management Strategy: System designed to produce a marketing result, covering all aspects of the business. Usually results in the development of an Operations Manual;

5. People Strategy: The proverbial rules of the game, its logic and how its played in the day to day responsibilities of employees. This is captured in the Policies and Employee handbook;

6. Marketing Strategy: Focused on the demographics (who he/she is) and psychographics (why he/she buys) of one’s target market;

7. Systems Strategy: A way to integrate all the different components of the business into a coherent and consistent whole. Encompasses hard systems (furniture, fixtures, signs), soft systems (eg prospecting and selling to customers), and information systems (what needs to be recorded either manual or automated).

Towards the end of the book, Gerber turned philosophical, waxing lyrical about bringing the dream back to American small business. We’re also instructed to treat our business like a dojo, a martial arts school where “we make contact with ourselves – our fears, anxieties, reactions, and habits.”

While¬†“The E-Myth Revisited” may have been written quite some time ago (it was last published in 1995), its teachings still ring true in this day and age. Although social technologies have transformed the business and consumer landscape, the basic principles of sound businesses still apply.

Highly recommended reading for start-up business owners and entrepreneurs.


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