Book Review: The E-Myth Revisited
The E-Myth Revisited: Why Most Small Businesses Don't Work and What to Do About It
by Michael E. Gerber
Three-Sentence Summary
Small business growth relies on balancing three different mindsets The Entrepreneur, The Manager, and The Technician. The Franchise Prototype provides a proprietary way of doing business that differentiates excellent business. The Business Development Process provides the steps to build such a Prototype.
Who Is This Book For?
Anyone who wants to start a new business, aiming for small or franchising. If you want an overview of how to approach such a business and a systematic way to structure your business plan step by step, this book is for you. If you have read many books about building a tech startup, this one might give you a different angle to inspect your role as a founder. Due to the scope limitation, the individual methods are described well but with little argumentation. This one might not provide many new learnings if you are a seasoned reader.
Major/Important Concepts
#1. A business owner is three-people-in-one: The Entrepreneur, The Manager, and The Technician.
And you have to balance the roles well and not let anyone of them take control of the business.
The Entrepreneur is the person who has the vision of a successful business and who sketches and holds the higher purpose of the business. The Entrepreneur lays out a strategic plan according to his dream.
The Manager is the one chasing behind every task and translating the strategic plan from The Entrepreneur to tactical actions. He seeks order, aims for clarity, and thrives from the operation.
The technician is the one responsible for producing the product and is focused solely on the work at hand in the present.
The majority of small business fails due to the technician in charge. Simply because making the product and building a business to make the product are two different things.
#2. The small business can be easily expanded and retained by cloning itself right.
To successfully clone a small business, you need a well-tested business format template that follows a series of steps. The end goal is to create a business that produces value consistently and can be operated by people with the lowest possible skill level.
The owner should be clear about the higher aim behind the business, not only about the product itself.
Lay out strategic and actionable plans from the higher aim to lead people to follow. Don’t instead try to fit the business objective to the people you have.
Communicate and remind the strategies and objectives to your people throughout hiring, onboarding, training, and daily operations. Typically, a written operation manual is needed.
Innovating ways to improve value to your most important customers. Using
statistics to quantify and compare the impact of changes.
Keep an eye on the complete picture of your business image. Ensure visible products, logos, working environment, and way-of-workings fit the business.
Related Readings/Resources
Noise: A Flaw in Human Judgment by Daniel Kahneman. If you want to know more about how and why decisions are relied on, simple statistics are much more effective than solely on humans.
Lean Startup by Eric Ries. Equivalent tech business guide.
The 7 Habits of Highly Effective People by Stephen Covey, and The Five Most Important Questions You Will Ever Ask About Your Organization by Peter Drucker. If you want to know more about how to create your own and the company’s mission statement (aka. a higher aim).