The E-Myth Revisited

By Michael E. Gerber
Founder and Chairman of E-Myth Worldwide


Why do so many people go into business for themselves and then fail?


Four Profound Ideas to bring You Small Business Success
Idea #1
There is a myth (The E-Myth) that small businesses are started by entrepreneurs risking their
capital to make a profit. The real reason for starting a business isnt usually related to
entrepreneurship.

Idea #2
There is a Turn-Key Revolution going on in the small business world. This revolution changes
the face of who is going into business, how they go into business and their chance of success.

Idea #3
The Turn-Key Revolution is all about the Business Development Process (BDP). When The
BDP is systemically applied there are amazing results. If used, BDP helps small businesses create
their own destiny and thrive.

Idea #4
The BDP can be applied by any small business owner. The process becomes a predictable way to
produce results owner needs to be willing to give it energy and resources.




Your business is a distinct reflection of who you are.
If your business is to thrive, it must change. And you must change first.
This information will help you understand the relationship each business owner must have with
his/her business.




The entrepreneur only exists for a moment. Not long before . . .
Vision of the business has gone.
Exhaustion has replaced exhilaration.
The climb to the top turns into terror.





The Entrepreneurial Seizure
Who starts their own business?
An amazing technician that was working for someone else.
Something happens stricken by the Entrepreneurial Seizure and decide to strike out on your
own.
I know what I am doing.
I can do my managers job better.
Any dummy can run a business.


Fatal Assumption
The technical work of a business and a business that does technical work are two different
things.
Believe that if you understand the technical work, you can run a business that does that kind of
work.
Job you know well becomes one job you know how to do plus many others you dont know
how to do at all.


Technician takes the work loves to do and turns it into a job.
The love of the work becomes a chore something must do to get through in order to take care
of so many other things that are not the work he/she loves to do.
Go from exhilaration to terror to exhaustion to despair.



The story of . . . .

the Entrepreneur,
the Manager and
the Technician.


We are all 3 people in one and each one wants to be boss!!
The Entrepreneur The Manager The Technician
Visionary
The Dreamer
Creative Personality

Lives in the Future
Need for control
Thrives on change
Sees opportunity


Creates things for the manager
to put in order

Creates a lot of havoc
unsettling for those around


Pragmatic
Plan, likes order, predictability


Lives in the Past
Craves order
Clings to status quo
Sees problems


Creates neat rows of things


Cleans up the mess
The Doer
Do it yourself
Dont dream do

Lives in the present
Control of the workflow
Everyone gets in the way dont
want new and dont want to be
part of a system

Creates things as an individual


Doesnt want to be anywhere
near the mess


The mangers views technician as problem to be managed
Technician views manager as a meddler
Manager and Technician view entrepreneur as one who got them in trouble in the first place!


Entrepreneur wakes up with a vision
Manager says Uh oh
Technician goes into business for self, while they are battling.


If we could balance the three perfectly:
Entrepreneur would move forward with new ideas
Manager would work on operations and systems
Technician would do the work


Most of us are:
10% Entrepreneur
20% Manager
70% Technician



What happens if there isnt balance?
In E-driven business, if no M to give it order and no T to work, wont succeed.

In M-driven business without E and T to play their roles you will create something that turns out
didnt need to be created in the first place.

In T-driven business without E to lead and M to supervise, T works until she drops.


One of the three is strongest in you.
For most, it is the technician.
I went into business because I am really good at . . . . .


What if you dont have any E in you?
If you want to be an E, leave behind the T and start to see what the business could be apart from
yourself.
Time to create a new life
Challenge my imagination.
Create a new business that doesnt require me to be there all the time.
Wonder Imagine Dream See Possibilities



How could I totally change my experience of this business?






Infancy Adolecsence Maturity

To answer that, we can start by looking at the
Small Business Life Cycle.


Three Phases of a Business Growth













Infancy
Sunny Period
Consumed by your business and loving it!
Master Juggler doing it all!
Owner and the Business are one.
You do a good job pay your dues, so the customers start coming.
The customers start referring their friends to you. Everyone wants YOU!

Cloudy Period
The harder you work the behinder you get!
Customers notice things are the way they used to be. Errors start happening service is slow -
shipments are late.
You finally realize there is no way possible to make all of this work.
Something has to change.
This is when most businesses fail. Most technicians give up.

A Technician that owns a business has an upside down focus.
Does the work of the business instead of working the business.
A great Technician ignores the high-level strategic thinking and planning that a small
business requires to survive and thrive.

If the customers are buying YOUR ability rather that the ability of YOUR BUSINESS, it wont
survive without you!

Purpose of going into business is to get free of a job so you can create jobs for other people.
. . . invent something that satisfies a need in the marketplace . . .
So you can live an expanded, stimulating new life.

If you really want to be a Technician get rid of your business and get a job!

When you decide to be a business owner, you have agreed to a new game. One where you
need to put the Technician role aside and focus on the Entrepreneur and Manager roles.

When you are able to let go of Technician and allow other roles to be successful,
the rewards are amazing!

Adolescence

Help is on the Way
This stage begins at the point where you decide help is necessary!
Normally look for a Technician that can do the work that you cant or dont like to do.
Woo hoo! Such a sense of relief to have someone else helping out!
Management by Abdication - not Management by Delegation: just let the new guy handle it!

Customer complaints start coming in . . . packages are not delivered correctly . . . product is not
packaged correctly.

You realize that all of those people dont know how to do things as well as you do so you start
taking back tasks . . . and more tasks . . . and more tasks.

So you are once again juggling everything and also paying people that are supposed to be doing this
work for you! Because they can never perform the work good enough for The Boss.

And you dont know how to approach this situation any differently because to do that, you would
need the help of the Entrepreneur and Manager in you! You need to stop the Technician and focus on
skills to develop your business.

Outcomes Possible
Back to Infancy stage: do everything yourself until you burn out.
Go for broke: grow faster and faster until self-destruct.
Hang on for dear life: Adolescent Survival
Have to keep the business going YOU have to be there or business isnt there.
Put everything you have into your business.
YOU end up giving out cant keep going at that pace.


Listen Up!
The owner needs to prepare the business for growth: buildings, equipment, employees, etc.
and
The owner needs to prepare him/herself for growth: hiring, planning, visionary thinking, accounting.

Plan and Adjust
Where do I want to be?
When do I want to be there?
How much cash will it take?
How many people do I need to hire?
What will they do?
What equipment do I need?
What technology do I need?
What raw materials will I need?

Maturity
A mature company is:
your unique invention.
started differently than other companies.
a business that works without you not because of you.
knows how it got to be where it is and what it must do to get where it wants.

The Entrepreneurial Perspective helps a company go through
the infancy and adolescent phases in a much different way.

The best businesses are built around a model that works not built around the technical work.
The business is important: how it looks, how it acts, how it does what it does.

Entrepreneur Technician
How must the business work? What work needs to be done.
Business is a system that produces results Business is a place where workers work to
produce income for him/herself.
Start with a picture of the future of the business.
Then works to change the present to become the
future envisioned.
Start with the present and looks to an uncertain
future so wants to keep things status quo.
See the business as a whole first and then the
parts.
Sees the business in parts first and then the whole
the parts create.
Integrated vision Fragmented vision
Current state is modeled after the vision. Future state is modeled after current.


The product isnt the focus the experience of the product is.
How will my customer experience my business?
How will it look?
How will it stand out?

The business is the product.
Customers = opportunity.





Find an exciting business model that will awaken the Entrepreneur!

Be careful to find a model that has a place for
the Entrepreneur, Manager and Technician.








The Turn-Key Revolution
A way of doing business that brings a business from chaos to order.
Franchises are very successful and they are everywhere.
The true product of a business is the business itself.

Business Format Franchise
Product is not what makes the business grow and flourish it is how you sell the product.
Need to create a business dependent on systems and processes not particular people.
Create a prototype test it change it test it again.

Franchise Prototype
Creativity - imagination innovation testing assumptions.
Conceive and perfect the system.
The details and specific processes need to be tried, tested and confirmed.
Constantly ask yourself: Does it work? You can answer yes if the system can run the business
and people can run the system.
Employees then need to be trained to those processes and procedures.

The prototype is how you balance all three personalities!
To the Entrepreneur brings his/her vision to life
To the Manager brings order, process and system
To the Technician brings him/her a place to work

Franchise Rules
Your business prototype will bring consistent value to your customers, employees, suppliers,
etc. It will exceed their expectations.

The model will be operated by those with the lowest possible level of skills.

The model will be the ultimate vision of order.

Every process and procedure will be documented for reference.

When the model is followed, customers will receive the same experience every time.

The model has standard colors, dress and facilities.



The Franchise prototype is how you get away from
having your business control you!!

Your business is not your life.

Your business should be allowing you to do what you want with your life.
Not owning and dictating your life.
Your mantra needs to be Today I will work on my business, not in it.


The Business Development Process

Use a Business Development Process to develop your franchise prototype. This process consists of
three activities:

Innovation
Quantification
Orchestration



Innovation
Doing things differently.
Focus on the process of how you do business not on the product itself.
Hi, may I help you? versus Hi, have you been here before?
Color blue suits outsell brown suits

What is in the way of a customer getting exactly what they need?
Focus on the customers views, needs, wants.
Establishes your business identity differentiates you from others in the same business.
The Best Way keep asking this over and over.



Quantification
This is putting process in place so you know if innovations are working.
If you are going to implement something new, how will you measure the impact before and after?
Need to collect and analyze data.
Start by quantifying everything about your business.
Will tell you where you are - then can measure if you are getting where you want to be.



Orchestration
Eliminate choices to create consistency and enhance planning.
If something works, do it every single time.
Make it part of your process and systems so everyone will do it every single time.
Allows you to give customers what they want every time so they will come back again and again.
Watch for ways to improve only do things as long as they are getting results.





The Business Development Program

Seven Steps to Develop Your Franchise Prototype
1. Your Primary Aim
2. Your Strategic Objective
3. Your Organizational Strategy
4. Your Management Strategy
5. Your People Strategy
6. Your Marketing Strategy
7. Your Systems Strategy

Your Primary Aim
If you dont have an aim:
How can you work toward it?
How can you measure progress?
How do you know where to go next?
How do you know how far you have come?


Answer these questions:
What do I value?
What do I want from life?
What type of lifestyle do I want?
Who do I want to be?
What do I want life to look like?
What will my days look like?
How do I want my relationships to be?
How would other people describe you?
What are your goals for the next 2 years? 10 years? 20 years?
What do you want to learn?
What will your finances look like?
The answers will help you see your vision and work toward it.




Pretend you are in your 80s and sitting in your favorite spot
reflecting on your life. What would those reflections be like?