Book Summary: The E-Myth Revisited

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May 24, 2016
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June 8, 2016
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The E-Myth Revisited

Why Most Businesses Don’t Work and What To Do About It

By Michael Gerber


The E-Myth is one of the best known small business books and should be on the reading list of every small business owner.

It discusses the myth that most people (who aren’t in business) believe that small business owners are Entrepreneurs. The truth is that they are Technicians that started their business because they are good at what they do, but they have never been shown how to properly run a business and what is needed to make it successful.

The key is to develop and structure the business so that it is not reliant on the owner. If it’s reliant on the owner then it’s not a really a business but a job…


The 4 main ideas:

  1. It is a myth that small businesses are started by entrepreneurs
  2. The Turn-Key Revolution – build the business to work without you
  3. At the heart of the Turn-Key Revolution is a business development process that can transform any small business into an extremely effective organisation.
  4. The Turn-Key Revolution can be systematically applied to any small business


Your 3 Hats

Need to find balance between the Entrepreneur (visionary), the Manager (organiser) and the Technician (doer)

A business moves from infancy (technician does everything) –> adolescence (getting some help) –> either (i) getting small again (ii) going for broke (iii) barely surviving

The entrepreneurial perspective builds a mature business from day 1.  It views the business as a product that needs to be designed and can be duplicated and sold over and over again.

Design a prototype –> have the ability to duplicate it


The business should be able to:

  • Provide consistent value to customers, suppliers, employees, lenders, other stakeholders
  • Not depend on expert/experienced staff
  • Provide order in a chaotic world
  • Document all process in Operations Manuals
  • Provide uniform service
  • Utilise a uniform colour, dress and facilities code



The Business Development Process


  1. Determine your Primary Aim – your personal life goals and how you’d like to interact with others.


  1. Determine your Strategic Objective – what the business needs to do for you to achieve your Primary Aim
  • How big does the business need to be to satisfy your financial goals?
  • Is it reasonable to assume that it can get that big? If it can’t then it’s not worth pursuing.
  • Milestones
  • Other standards/principles the business should have


  1. Set the Organisational Strategy
  • Organisational chart of the mature business
  • Write and sign Position Contracts
  • Document each position and associated processes from the bottom up
  • Employ inexperienced (but capable) staff in the lowest position
  • Start this process at the next level up, etc.


  1. Put in place your Management Strategy
  • The systems that staff must follow so that expert managers are not needed
  • A marketing tool to ensure that customers needs are met and expectations surpassed


  1. Put in place your People Strategy
  • Communicate your vision and expectations before hiring someone, not after
  • Select people who fit the desired culture and who “buy into the game”
  • They should believe in the systems you have put in place and have a desire to improve themselves and the organisation
  • Copy pages 203-206


  1. Develop your Marketing Strategy
  • Focus on what the customer wants
  • Demographics – who are your customers
  • Psychographics – why he buys, his perception of the product/service
  • The importance of marketing science – particular colours, shapes, etc.


  1. Your Systems Strategy
  • 3 types of systems that are inter-dependent of each other:
    (i) hard systems – innate objects
    (ii) soft systems – living things or ideas
    (iii) information systems – provides info about the interaction of the other two
  • Each can be used on its own or together to solve problems in the business
  • Example of a soft system is the Power Point Selling Process (p 240-247)


Book summary by Anil Puri


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