The E Myth Revisited – A Book Review

In Book Reviews, Management, Uncategorized by James2 Comments

Forty percent of small businesses fail in the first year. Of the businesses that survive the first year eighty percent of them fail in five years. Of the ones that survive five years eighty percent of them will fail. These are the statistics and statistics don’t lie, they just report reality. The reality is if you’re going to start a small business you will be in a very, very small minority if you’re successful. So what can you do? I think the best thing to do is listen to people who have succeeded, and do what they do. In The E Myth Revisited: Why Most Small Businesses Don’t Work and What to do About it  author Michael E. Gerber revisits his 1986 best-selling book adding new insights and demonstrating that the principles outlined in the book still hold true today. The “E” in the title stands for “entrepreneur,” and the myth is that starting a business will give you freedom and independence from your current job. The fatal assumption most people make as Gerber says lies in the belief that an individual who understands the technical work of a business can successfully run a business in that industry because he understands the product better than anyone else. This mentality happens a lot in farming. One of the big problems with farmers is they too often ignore the business aspect of their profession. I get it, the reason most farmers do what they do is for a love of the land and the animals they work with. Nobody gets into farming for the money. This mentality is more often than not fatal. There are of course exceptions, and it’s to them we should look to when trying to avoid becoming another negative statistic. Joel Salatin of Polyface Farms is one of the best in the business when it comes to understanding entrepreneurship, and it’s why he’s where he is. Being a farmer is first about being an entrepreneur. If you can’t make a profit and pay the bills the dream is over.

What’s in the Book? 

  • Part 1: The E-Myth and the American Small Business 
    • Chapter 1 – The Entrepreneur Myth 
    • Chapter 2 – The Entrepreneur, the Manager, and the Technician 
    • Chapter 3 – Infancy: The Technician’s Phase
    • Chapter 4 – Adolescence: Getting Some Help 
    • Chapter 5 – Beyond the Comfort Zone 
    • Chapter 6 – Maturity and the Entrepreneurial Perspective 
  • Part II: The Turn-Key Revolution: A New View of Business 
    • Chapter 7 – The Turn-Key Revolution 
    • Chapter 8 – The Franchise Prototype 
    • Chapter 9 – Working On Your Business, Not In It 
  • Part III: Building a Small Business That Works!
    • Chapter 10 – The Business Development Process 
    • Chapter 11 – Your Business Development Program 
    • Chapter 12 – Your Primary Aim 
    • Chapter 13 – Your Strategic Objective 
    • Chapter 14 – Your Organizational Strategy 
    • Chapter 15– Your Management Strategy 
    • Chapter 16 – Your People Strategy 
    • Chapter 17 – Your Marketing Strategy 
    • Chapter 18 – Your Systems Strategy 
    • Chapter 19 – A Letter to Sarah 
    • Epilogue 
    • Afterword 

Highlights 

  • The Three roles: Entrepreneur, Manager, Technician 
    • Gerber says a person is really three people in one: The entrepreneur, the manager, and the technician. He argues that most people who start their own business are technicians who simply want to work for themselves so they can enjoy their work, make more money, and be their own boss; this is the fatal assumption. In the book he clearly defines what each role is, why it’s important, and how each should function within the business and business owner. One crucial point he makes is that your business is not your life. You must view it outside of yourself to look at it objectively, and for farmers this is quite hard because farming is a lifestyle, and it very much defines you in meaningful ways, but the business part – the part that sustains the dream – is separate, and must be viewed as so.
  • Maturity and the Entrepreneurial Perspective
    • Start with the end in mind. I’ve heard this advice numerous times, in various contexts, and Gerber gives it again in his book. The entrepreneur needs to have a clear vision of what he wants the business to look like when it’s done. With this comes the idea of “working on your business, not in it.” Most people get wrapped up in the product they are selling and forget that all successful businesses actually sell the business before the product. Another way I’ve heard it put is you are selling the experience of doing business with your company. Gerber says there are some key questions you should be asking yourself when you’re working on your business: 1. How can I get my business to work, but without me? 2. How can I get my people to work, but without my constant interference? 3. How can I systematize my business in such a way that it can be replicated 5,000 times so the 5,000th unit will run as smoothly as the first? 4. How can I own my business and still be free of it?
  • The Turn Key Revolution 
    • The second big revelation Gerber makes in the book is something he calls “The Turn Key Revolution.” It’s the idea of designing your business in such a way that it could be franchised. This is related to question number three above. The idea is creating a business that is system dependent rather than people dependent. This of course does not mean it won’t require people, but it means it’s designed so thoroughly and efficiently that anyone could jump in and do the work necessary to fill a vacant role. It’s a business that is essentially built for being sold. This is what franchise owners are buying – they are buying a proven system. People get turned off by franchises, especially people who want to do the type of farming and small family business I want to do, but there is a lot to be learned from it. Just because you create a business that could be sold, it doesn’t mean you have to sell it. Polyface Farms in Virginia is the perfect example of this. When you look at Polyface Farms it meets the criteria of a franchise prototype. Joel Salatin, if he wanted to, could sell his farm, and if he found the right owner who bought into his vision and followed the system he has created, nobody would ever know Joel left the farm – not that he ever would, but again, the goal is to create a business that you could walk away from at anytime of your choosing. This is the Turn Key Revolution. The title comes from the idea of giving the next owner the key to the door with everything in place for him. It’s the franchise model that has worked quite well for most of the successful companies we know today. The beauty is the principles behind it can be adapted to small businesses, and Gerber argues they have to be adapted or failure will ensue.

Final Thoughts of a Wannabe Farmer 

I don’t have a lot of business books under my belt to compare this one to, but with that said I would highly recommend this book to anyone who is a business owner or thinking of one day becoming one. It’s hard to know what all the right answers are, in fact it’s impossible. The best we can do is listen to successful people, compare the principles they teach to reality, see if you can actually see it working, and decide if it’s valid. Looking at what Gerber has written and then looking at successful businesses, including his own, I believe he adds great value in answering the question his book sets out to answer: “Why do so many small businesses fail?” I realize that to make my dream of farming full-time a reality, I’m going to have to look at myself first as an entrepreneur, and a farmer second; the first sustains and makes the second possible, and I’m okay with that.

Buy the book via Amazon by clicking HERE (It’s an affiliate link so I get a little kickback if you buy. Thanks!)

 

 

Comments

  1. gabrieldye

    It seems so obvious to study business (even a few books) before diving into your own. But it wasn’t to me. I was thinking with only a third of my brain, apparently – my technician. And so I ended up one of the bad statistics. Good to see you expanding beyond the technical aspects of your future venture. Again, I might need to borrow this book from you too!

  2. Author
    James

    I’m sure you learned a lot being one of those statistics though. Thanks for the comment and I’m glad it peaked your interest. I think it’s definitely worth the time to read, and it’s a quick read.

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