The E-Myth Revisited – Gerber

The E-Myth Revisited: Why Most Small Business Don’t Work & What to Do About It
by Michael E. Gerber

This book is great for making you think properly about starting a business. Think about all the people you know who have started a business. Most continue to this day to work more hours and have more stress, because they keep working in their business and they’ve begun to hate it. Michael Gerber teaches how to “work on your business, instead of in it.”

Most people try starting businesses in things they are good at. Perhaps they do their job every day and think, “I could run this business on my own, do a better job at it than my manager and have all the profit for myself.” So they start a business doing the work they always did, but they now also have the responsibilities of managing, marketing, hiring and procuring supplies. They go nuts, and they start to hate what they used to love.

Sometimes they try hiring someone to do some of their work. That person is good at it, so the owner keeps piling more stuff on that person and not handling the responsibility of it. That person ends up getting tired of their job and the fruitless, unorganized way you run the company they work for. They quit, and the business grows small again. Then the owner really goes nuts.

Gerber gives the formula of the franchise prototype. By thinking about each position your business needs in it to operate, whether it is sales clerk, waitress, cook, or accountant, and by setting up and writing down a system by which that person does their job, you free yourself from doing the work. You can hire anyone to do it and teach them how. You don’t need to hire professionals that will run things their way. Hire amateurs and train them.

The best strategy is to start from the bottom, writing up a system for the easiest jobs and getting someone to do those, then move on to the more complex ones. Once your system is working smoothly, you can replicate your entire business by hiring a whole new team of people to run it. Thus you are like a franchise.

This is most applicable to any business with a physical storefront. Web-based businesses might not profit from trying to replicate themselves, but the way of thinking is correct. Work on making your business run without you. Then you can really grow and you are not stuck doing all the work. Sound crazy?! It worked for Steve Jobs. He even got kicked out of his own company for a while.

Too busy to read the entire book? Read my notes for a summary of the most useful points.

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