- Title: The E-myth revisited
- Author: Michael E. Gerber
- Year of publication: 1995
- Length: 268 pages
- Link: Amazon
The first version of the book was published in 1986, and re-published in a newer edition in 1995. In the 1995 edition, the author addresses businesses as physical businesses, as there was almost nothing else back then. Amazon had just been created (1994). Google didn't even exist. The internet revolution was just starting.
It's an old book, but it has valuable ideas. Even if, like almost all non-fiction books out there, it is way too long. There is a lot of unnecessary storytelling and artificial suspense.
The book is divided in 3 parts:
- Part 1: the E-myth and American small business (chapters 1 to 6).
- Part 2: the turn-key revolution: a new view of business (chapters 7 to 9).
- Part 3: building a small business that works (chapters 10 to 19).
Paradoxically, the first 2 parts have enigmatic titles but well-thought ideas while the third part has a clear title but quite obscure content. I feel like the third part was added artificially, just to make the book longer. I might be wrong about this, but the concepts explored in part 3 feel much less clear than those in parts 1 and 2. Otherwise, the titles of the chapters do not show any logical progression, so we don't know what to expect.
Key ideas (parts 1 and 2 of the book)
1. The roles of a business owner
A business owner can play 1 or several roles in his business:
- the role of the technician, by doing the actual (technical) work required for the customers.
- the role of the manager, by supervising the technicians, and handling the day-to-day operations.
- the role of the entrepreneur, by making strategic decisions for the business and by passing his vision to the manager.
2. The e-myth: why small businesses fail
The e-myth the author refers to in the title of the book is the entrepreneur myth. Most business owners think that great technicians make great business owners, but this a myth. On the contrary, great technicians do not make great business owners, unless they decide to leave their technician role for the entrepreneur role. This is usually painful for most business owners.
Small businesses fail because their owners choose to exclusively do what they like, which is often the technician role, and not what the business needs, which is the entrepreneur role. Businesses that survive and develop are businesses in which their owners play fully the entrepreneur role.
3. Delegate and create systems
Business owners, in order to play the entrepreneur role must do 2 things:
- First, they need to delegate the roles of technicians and managers.
- Second, they need to create systems to make sure that technicians and managers follow the same processes every time. This guarantees that customers get the same outcome no matter who take care of them.
Systems are powerful. This is exactly what makes franchise businesses very successful. Think about the major fast food chains. They have established very strict processes that every employee must follow. People can come and go, but the systems stay. This is what the author refers to as the franchise prototype: people run the system, and the system run the business. But people are replaceable, because the business does not rely at anytime on special skills or extraordinary talent of its employees.
5. The 6 rules to design a franchise-like system (chapter 9)
There are 6 rules to design a franchise-like system:
- The system provides consistent value to customers, employees, suppliers, and lenders, beyond what they expect.
- The system is operated by people with the lowest possible level of skill.
- The system stands out as a place of impeccable order.
- All work in the system is documented in operation manuals.
- The system provides uniformly predictable service to the customer.
- The system utilizes uniform color, dress, and facilities code.