The E-myth Revisited - a Must-read for Business Owners | Book Review
In this video I review the book and cover my key takeaways.
This book pointed out the exact mistakes I have been making in the past 5 years as an entrepreneur and because of that I truly believe it’s a must-read for every business owner!
Hi friends, welcome to my channel. If you’re new here, my name is Bobby, I’m an entrepreneur and business advisor based in the Netherlands. I am starting to do business book reviews on my channel so I chose the E-myth revisited by Michael E. Gerber as the first one.
Who Should Read It?
It’s very clear – Everyone owning or dreaming of owning a small business. It’s a must-read!
There’s a very high chance it will change your way of looking at business and the earlier you read it the better. Especially if you still haven’t made the leap towards becoming an entrepreneur. Read it multiple times if necessary but make sure you understand very clearly the key points of the book.
My key takeaways
The following are the points that made the biggest impression on me.
- Being good at your job doesn’t mean you will be automatically good at owning a business performing that job. This is what the E-myth actually is – the idea of a business is to create value and solve a particular problem. In reality, most small businesses are started because the founder experienced an “entrepreneurial seizure” as the author calls it which leads them to decide to start a business. The thing is that most of the time they don’t have the right motivation and understanding of what a business is so they end up creating a job for themselves rather than a business. More specifically, for example, being a great cook doesn’t make you a good restaurant owner.
So the author points out that every business owner needs to be aware and pay attention to their 3 business personalities – the technician who works hands-on on the product or service, the manager who puts everything in order, and the entrepreneur who creates the vision and improves the business. The lack of balance between these 3 personalities leads to so many failures in business.
- There are 3 stages of a business (the number is constantly repeated in this book) – infancy when it’s mostly just the founder or founders, adolescence when the business starts growing and there are more people joining, and maturity when the business can sustainably operate and grow without being dependent on the founder.
The twist is: No company grows into a Mature state but it rather starts from the beginning with the intention and premise of being mature.
This is done by careful preparation of strategies, detailed documentation of processes, and contingency plans for risk mitigation. According to the author, almost all small businesses start with the “let’s just do work” rather than “let’s build a mature business”.
Another key point in the book is the difference between delegation and abdication. The founder’s accountability cannot be delegated to others – that’s abdication. Only well-defined processes and a well-oiled system for producing results can be delegated. The accountability remains, however, with the founder.
- A business is a product by itself that needs to be developed from day one with the idea that anyone should be able to run it successfully, independent from the founders. To achieve this a business should be dependent on systems of processes rather than people. And this is how one starts a business with the premise of maturity. The author points out the benefits of thinking about your business as a franchise, where everything you do you document as if you are intending to sell it to someone else who can just follow your guidelines and be successful with the same business. Not that every business has to be a franchise but following this idea allows founders to build businesses in a way that they are independent of themselves while building systems that anyone with a bit of background knowledge should be able to operate successfully.
All these points are from the first half of the book. The rest is mostly dedicated to a 7 step process of developing a business model but I didn’t find them as compelling as the key points I just covered. Mainly because they felt very narrowly targeted and outdated.
A few things I didn’t like
Outdated, because it’s quite noticeable that the book is relatively old being originally published in 1986. And even though the author revisited it in 1995 (hence the title), the book is obviously written for more traditional types of business. It doesn’t mention any modern business models, the internet, or digital business whatsoever.
However, Michael E Gerber also published a few related books since then which I haven’t read so I wouldn’t be surprised if he shares a more modern outlook towards business in his new works. I still think that most business owners, no matter the activity or industry can learn a lot from the E-myth revisited but some will benefit more than others. For example brick and mortar stores, restaurants, etc.
The thing that struck me the most as morally old was towards the end of the book when Michael E. Gerber talks about the People’s strategy of a business and more specifically how employees are more interested in job security and a clear career path rather than the vision of the founder. However, I don’t think this fully applies to millennials and Zoomers and in general to modern businesses. I personally subscribe to Simon Sinek’s view on having a just cause that intrinsically motivates people to follow and be part of it.
The book has a double narrative – on one hand, the author talks to the reader and explains the fundamental ideas. On the other, he tells the story of Sarah, a fictional small business owner serving as an example case. Because of this, there’s a lot of repetition with every idea covered 2 to 3 times in the book. It honestly feels like it could have easily been half the size and still have the same message.
There’s also a lot of very cheese moments like the fictional character prizing the author for his business knowledge or when she tears up while he points out her mistakes or compliments her.
How the book changed me
Despite the not-so-great writing style, I wish I had read this book before I started as an entrepreneur. Looking back to when I started my first business, I was definitely a technician founder trying to create a job for myself. A job that I knew I can do well and I questioned why I should be doing it for someone else and getting a fraction of the recognition and profit. And the worst part is that I knew it cannot scale and that it is not sustainable. I knew the business should not be dependent on me but I never managed to get to the point of maturity.
In my second business, I had a co-founder but it still didn’t work well. We never had clear processes or a plan of what we are doing and why. We were just jumping from client to client and from project to project without a clear vision. We didn’t even have a good distribution of responsibilities between the two of us and we were always just winging it. We weren’t working alone either and more often than not we were abdicating responsibilities to our colleagues rather than creating systems for the operations of the business.
Because of this experience, I kind of naturally got to the same ideas discussed in the E-myth revisited but the book really explains things well! And it still came as a very good point of my business career because I am already applying what I learned to my current business.
My 3 favorite quotes
- If your business depends on you, you don’t own a business – you have a job. And it’s the worst job in the world because you’re working for a lunatic!
- The purpose of going into business is to get free of a job so you can create jobs for other people.
- The true product of a business is the business itself.
What about you, friends? Have you read the book or do you plan to do so?
If you liked this post stay tuned as I am working on 3 more that will cover in more detail my main takeaways of this great business book.
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Thank you and see you soon.
You can find the book on Amazon: https://amzn.to/3uJe3wt This is an affiliate link so I’ll get a small commission if you buy the book, at no extra cost for you.
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