The E-Myth – Reviewed

Do You Have a Business or a Job?

A Book Review – compiled by Peter/CXO Wiz4biz

Michael Gerber is a Business Consulting “guru” whose observations about small businesses have had a profound impact on how people see their businesses and the role of the business owner. Gerber observed that most people go into business for the wrong reason. They are skilled Technicians – they do a good job of what the business provides to the customer. They believe they can earn more by doing it in their own business than for someone else, so they leave and open their own shop. This is what Gerber calls an “entrepreneurial seizure.”

These Independent Technicians believe they will find more freedom in their own business, but they discover it is the hardest job in the world, because there is no escape. They are the ones who are doing most or all the work! They are the “business!” But if they “are” the business, they haven’t really created a business at all, they have created a job for themselves! According to Gerber, the role of the business owner is really quite different.

Purpose of the Business Owner is to create a business that works independently of himself or herself. If that is the case, there is an “end point” where the business functions independently of the business owner with no or minimal intervention. At that point, the business owner may choose to sell it or not, but he or she will have created a ready-to-sell “money making machine” for which he or she may choose the effort to devote to it. The business can also be duplicated from place to place.
A Turnkey Franchise is the model for this effort – such as McDonalds. The franchise creator, Ray Kroc, made an automatic business system with a certain look, providing a consistent experience to the customer. This was accomplished by establishing and documenting tested, detailed systems. The franchisor sells uniformly-made food, and the headquarters provides the “scripts” for what the employees do – including detailed procedures & the equipment for preparing the food.

Getting Organized. A business owner should start with an idea of “what this business should look like.” An organizational chart should be created to document each function (ie, CEO, Development, Operations/ Production, Marketing & Sales, etc) Initally, the Owner may fill most positions, but gradually, the business owner does, measures & documents the procedures for each position and replaces himself or herself until he or she isn’t really needed at all. The business becomes like a learning place where each person finds satisfaction in performing his or her part to the best of his or her ability.

Praise. Small business owners should be grateful to Michael Gerber for his profound observations and the challenge he has presented to us. Each morning, we should ask ourselves, “Am I going to a business, or am I going to a job?” If we are going to a job, what are we going to do about it? We have a model for change.

Criticism. Gerber’s approach can be inflexible when dealing with the change that we all must deal with today. Employees must have the authority to make their own decisions – in order to provide outstanding service. More important than “Here’s how we do it here,” we need to know “What’s important here.” What are the values that drive our business? People always need to be more important than the systems that are supposed to serve them. Systems shouldn’t override common sense.

Can we help you create a business that really works for you vs you working for it? Peter/CXO 5 Star Startup Services.

Comments: Did this article help you? Are there any other considerations you think are important?