- Mike Kern, CPA
Book Review: The E-Myth Revisited
Updated: Dec 10, 2019
If you’re looking for a classic business book, look no further. It's hard to read a business book and not see a reference to The E-Myth. If you’re working around the clock with little to no benefit from your business, this is the book for you. The “E” in “E-Myth” stands for entrepreneurial. The “myth” is this: that an entrepreneur, who is an expert in a certain good or service, believes they can successfully run a business that provides that good or service. This, of course, is not necessarily true because running a business takes a lot more than just being an expert at cooking, accounting, or plumbing.
This book takes us through the story of an entrepreneur. She had a dream to work for herself and loved baking - so she opened a bakery. Although she made an amazing pie, she was working crazy hours and began to realize the business could not function without her. She was heavily involved in the day to day operations and had no time to focus on the high-level strategic decisions… she was just worried about servicing the next customer. She set out to work for herself but instead found herself working for the worst boss of all, the monster she created... her business. Many business owners relate. How do you get out of that? Or better yet, how do you make sure that never happens?
Michael Gerber describes 3 personality types:
Entrepreneur - the visionary who comes up with new bright ideas - but with little to no thought of how to actually implement them in the business
Manager - the integrator, the one that plans and figures out how to put ideas into practice
Technician - likes to focus on one thing at a time and prefers to go task by task and not worry about big picture items
The problem, Michael says, is that business owners often come out of the corporate world with a technician mindset. They think that because they are experts in a certain field, they should have no problem going out on their own and being their own boss. It is a very attractive dream to them, but it often becomes a nightmare. To be a successful business owner, you need to enable yourself to leverage all 3 personalities effectively.
These technician business owners often end up creating a job for themselves rather than owning a business. They set out to not have a boss but their business becomes their boss. They are so wrapped up in the day to day operations of their business that they are never able to take a step back. Michael Gerber says you need to work on your business, not in it! How do you do that? His answer… processes!
Processes & systems should be the foundation of your business. He says that as a business owner you need to treat your business like a franchise. The reason McDonald's can hire people at minimum wage is because they make it so simple to work there. The simpler you can make your processes the better. Do you remember those Geico commercials that said, “So easy a caveman can do it”? That's what you’re shooting for! If you can make running your business that simple, you are no longer essential for the success of your business and you can step back and collect the cash! There are no more 80 hour weeks if you trust that your employees can step right in and do the job the exact same way you would.
The E-Myth revisited makes a whole lot of sense. It’s a great read for any business owner that feels like they're on a treadmill. It also provides the language to better describe our entrepreneurial tendencies. Take some time to read it and let us know what you think!
Mike Kern, CPA