Business Lessons from The E-Myth Revisited by Michael Gerber

e myth michael gerber

In his book The E-Myth Revisited, Michael Gerber does have a strong opinion about what an ideal business should look like. While many other people, like best-selling author Seth Godin described in his book Linchpin, believe that a good company should be filled with people who are very creative and unique, Gerber is on the extreme, opposite side of the spectrum, claiming that the most ideal business should be like the McDonald’s where everyone follows a system or a guideline in a very strict way. I think that both ends of the spectrums can be right. In fact, Gerber’s book is about small businesses, so building a very concrete system that is to be followed strict may be a better approach. At the end of the day, the two ends of the spectrum are like two very different weapons, you may find one of the weapons more naturally suited for you. The following are some lessons I have received from reading the book.

Almost Every Entrepreneur Starts a Business as a Technician

Now, let’s start by talking about what the e-myth actually is. The “e” stands for entrepreneurs. And the myth is how people think that the people who are running small businesses are entrepreneurs. The fact is that almost everyone starts a business as a technician, may be a pretty good one. Think about it. Let’s say you are a graphic designer. You may have gotten very good working in a big company. Then at one point, you may decide that you are good enough and that you should no longer need a boss. So, you quit your job and start your graphic design business. At this point, you are actually go at designing but you know nothing about growing your business or actually making money.

There are Three People in You: Entrepreneur, Manager & Technician/h2>
In the book, Gerber explained that there are three people in you when it comes to starting and running a business.

Entrepreneur: the creative you that has the vision and the strategy

Manager: the you that organizes the entrepreneur’s intended action items and assign them to the technicians to execute

Technician: the you that actually does the work

But sadly, the entrepreneur you is often underdeveloped while the technician you dominates, leading to a failed business.

Work On Your Business, Not In Your Business

The ultimate goal for you as a business owner is to work on your business, in other words, come up with the best strategies to grow your business as an entrepreneur, rather than to work in your business as the technician. There is no doubt that, when you are just starting the business, you need to be the one who work in your business too as you can’t afford to hire enough people, or hire anyone at all. But, you still have to spend time to work on your business, or in other words, systemizing your business.

Be Like McDonald’s

In the book, Gerber made it very clear that he thinks that McDonald’s is the very best small business. What he meant is that McDonald’s has a very well defined system to operate in. As a result, it can be franchised and every franchiser should get a very predictable and successful result.

One Common Crucial Mistake is to Hire Someone to be Manager or Entrepreneur at the Beginning

When you are just starting your business, you are usually just a technician and you very naturally want to focus on what you have been proud of, your technical skills and actually making the products. It is very tempting to hire someone to do the manager part or even the entrepreneur part. Then the next thing you know, you are very close to having to shut down our company. You are the only one that can play the entrepreneur role at the beginning. You can hire a manager only if you have strong enough entrepreneurial skills to tell the manager what to manage.

Wear a Navy Suit if That Works

Sometimes, when you are no longer working under a boss, you would think that you can act freely without obeying any rules set by another person. That is true only if you don’t have to make your business a profitable one, because there is actually something that you are interacting with all the time, the market. If by wearing a navy suit can increase your revenue by ten percent, just do it, no matter how much you love wearing t shirts. The market just doesn’t caring about how much you love your t shirts.

Prepare to Be Sold or Franchised

In order to make yourself spend more effort to work on your business or turn your business into a system, you should think of your business as something that you are going to sell and franchise to other people and that you only need to spend one day to tell your future buyer what your system is and how to run your system in order to continue the success. You don’t necessarily want to sell your business in the future, but build and grow your business as if you are going to do it will help you eventually no longer have to work in the business, but solely on the business.

Your Business is Your Product

If you look at the thing that your business is producing as your actual product, you may have put too much focus on the technical side of your business. Try to think that your business is your product. So, things like how to promote and how to monetize should not be overlooked. You can have a very good physical or digital product, but without the business part working along with it, you may find yourself spending a lot of effort without make any impact to anyone else.

Write Down Your Business’s System as Manuals for Yourself & Your Staff

To make the system of your business actually executable repeatedly at a high standard, you have to document everything about the system. If you cannot write down every procedure about how to run your business, there is a good chance that the system is just a sloppy one or even a non-existent one.

A Business System is a Game You Design

Think of a business system as a game. There are rules and procedures that you have to follow in order to win that game. Meanwhile, the player has to be good enough to execute according to the rules.

Joy Can Come from Mastering a Craft within an Almost Perfect System

Isn’t it too boring to play under the same system, over and over again, over a long period of time? It really depends on how well the game is designed. Think basketball. It indeed is a game that has a lot of rules. A basketball player still has a lot of room to improve their skills and, very importantly, consistency under that game or system. So, if the game is designed well, with some minor victories occurring here and there when they execute well within the framework, joy can be found by mastering the craft, whether it is baking a cake or making a cold call.

Hire People that Want to Play Your Game, Not Better Game or Different Game

When it comes to hiring people, make sure you are hiring the right person, and not just a random smart person. By hiring the right person, Gerber means that you want to hire someone that actually wants to learn and perform under the system you have designed, but not someone who spent most of his or her effort trying to change the system that works.

A Good Leader Take Teammates and the System Seriously

To be a good team leader or a good boss, you need to treat your system and your teammates very seriously. One example would be to spend enough time to walk through the entire system with a new staff on his or her first day to work.

You Cannot Have Two CEOs

There can be a lot of smart people in a business but there should be one CEO in a business in order for the system to be designed and executed well. Imagine having two great drivers to drive a single car at the same time, is it a car that you would want to get in?

The idea of thinking McDonald’s as the ultimate role model for your own business is very interesting. Whether you agree on that or not, treating your business as your product should be able to help you more practically build a profitable small business.