The E-Myth Revisited: Why Most Small Businesses Don't Work and What to Do About It

Customer Reviews

Will shape the future of your business and your life.

I have read The E-Myth many times over and have found the Franchise Prototype system absolutely amazing. I am now 26 years old and in the last 4 years have built 2 very successful companies. Being in business for yourself is not about making money. It is about fulfilling a part of yourself. Understanding the principals in this book will change the way your run your business and give you balance to your life. That is what it is all about you know. Balance. Understanding why God placed you on this Earth and making sure you spend time to stop and smell the roses. If you take what Michael says in this book to heart and apply it's principals to your life your business will never be the same. Trust me from the experience in what this book has done to my past business and the power that is pushing my Statewide Business Brokerage. I would easily pay 1 million dollars for the knowledge and understanding I have learned from this book. Thank you Michael for leaving a legacy with me that will reshape my family tree.

I believe "systems dependent businesses" don't exist.

I didn't read all the way through "The E-Myth Revisited: Why Most Small Businesses Don't Work and What to Do About It" by Michael Gerber. I stopped reading at about page 100. "E-myth" stands for "entrepreneurial myth." Gerber makes the accurate point that just because a person understands the technical work behind a business doesn't imply that the person understands that kind of business. People who understand the technical work don't necessarily understand how to operate the business. They are technicians, not entrepreneurs.

Gerber contends that most small business owners run into difficulty because they think and work like technicians. They try to do the work of the business, rather than learning how to run the business. Gerber writes, "If your business depends on you, you don't own a business-you have a job." "What if you don't want to be there?" The work grinds small business owners down, and they become disillusioned with their businesses.

This is probably true for many, new small business people. Many people aren't cut out to operate a business. Running a business is hard work. But, rather than acknowledge that reality, the goal, according to Gerber, is to create a business which doesn't need you, to create a "systems dependent business" and not a "people dependent business."

Gerber uses McDonald's as his prototypical model of operation. Gerber says McDonald's is an example of a turn-key business. You just put the key in the lock and the business works. A prototype franchise that can be easily replicated is Gerber's holy grail of business.

Gerber writes: "Given the failure rate of most small businesses, he [Ray Kroc, the founder of McDonald's] must have realized a crucial fact: for McDonald's to be a predictable success, the business would have to work, because the franchisee, if left to his own devices, most assuredly wouldn't!...Once he understood this, Ray Kroc's problem became his opportunity... Forced to create a business that worked in order to sell it, he also created a business that would work once it was sold, no matter who bought it... a foolproof, predictable business.... A systems-dependent business, not a people-dependent business."

I disagree with this analysis. Difficulty of management is a fundamental problem with any delocalized business, one with many locations spread throughout a large area. A dedicated manager is needed on each site. One manager can't oversee all the business locations. The franchise concept is one way to place devoted managers at each location. Each franchisee is not only carefully selected (in a good franchise) and carefully trained, but each franchisee has paid money to own the franchise. So, each manager becomes an owner. And, owners care more about the success of their business than anyone else. They are willing to work harder than anyone else to see the business succeed. Their own money is at stake.

Ask owners of successful franchises if they sit around *not* working. If an employee doesn't show up, who fills in? In fact, many franchise owners will tell you that buying a franchise is very much like buying a job! The fundamental premise that a McDonald's franchise can function with just anyone *not* working at the helm, while the operation just sort of self-manages, is incorrect.

It's true the best franchises don't tend to fail, but they aren't sold to just anybody either! I'm not criticizing the franchise concept. My goal is just to show that few businesses are purely "systems dependent."

Gerber suggests you try to create a template business operation that works of its own accord so that it can be replicated in a cookie cutter approach. Easier said than done!

Where do you get the basis for this template, or as Gerber calls it, "Franchise prototype" ? Gerber says the "franchise prototype" is part of your entrepreneurial vision. You dream about what your business will look like in the future. In practice, most successful franchises are based upon many years of operating history and industry experience. And, many knowledgeable business owners, who fully understand the franchise concept, have failed dismally when trying to franchise operations.

Of course, McDonald's and other established franchises have spent billions of dollars to create brand awareness for the franchise, which brings in a steady flow of customers. Your new "business format franchise" (way of doing business) won't have brand awareness. You will need to build it. Building brand awareness is marketing, and no marketing plan is ever assured to work. There won't be a cookie cutter marketing plan to toss in with the cookie-cutter operation.

"The E-Myth Revisited" is also a bit dated. Gerber writes, "A soggy French fry is not a McDonald's French fry." That has not been my recent experience. So much for flawless systems!

I did catch a glimpse of the last pages where Gerber offers a free "Turn-Key AnalysisTM" of your business. He writes, "Conducted over the phone in no more than an hour, our Turn-Key AnalysisTM will determine exactly what needs to be done in your business to give you everything you want from it: what essential building blocks are missing and need to be added; what processes and systems are absent or, if present, are inadequate to achieve the results you want to produce."

That's a pretty impressive offer! In under an hour, over the phone, he'll tell you exactly what's wrong with your business! I think I'll pass on that. But, do consider contacting SCORE (Service Corps of Retired Executives), your local small business development center, or business graduate school. Each of these might be able to provide small business counseling. Be sure to specify that you want a complete turn-key operation with no work and no management. Showing up for business optional.

Yet, some business owners claim that this book has helped them. I think they might be confusing good old organization and routine for a "systems dependent business."

Peter Hupalo, author of "Thinking Like An Entrepreneur."

An eye opener for sure...

It's one of those books that gives you a wake up call, although some of the sections in the book does tend to wander off into the story of other peoples lives as examples, but overall the book does wake you up, I did gain alot of perspective from the book, funnly enough I did email the e-myth website to find out if they provided any e-learning services, but no reply till today for the past 2 weeks, makes you wonder??

A must buy book for anyone getting into the business especialy for some of us that have dealt with situations where you seem to be unable to cope with all the sudden increase of business and how to deal with them, do keep in mind that this book is very down to earth, and do keep in mind that you would require some sort of business background if you ever going to be starting a business, a recommendation as a subject of choice would be accountanting so maybe an accounting abc manual would be a good reference manual in the future in addition to this book. This book is not going to save you but will for sure open your mind.