A Summary Of The E-Myth Revisited, By Michael E. Gerber

Within the first 5 years, 80% of businesses fail. Why is it that when we live in the information age, with almost all of the information needed to succeed available for free, 80% of businesses are still failing?

The E-myth is that most people who start businesses are entrepreneurs risking capital to make a profit. When in reality most people who start businesses are technicians, people who were good at an aspect of their job and decided to start their own show. The Fatal Assumption is that if you understand the technical work of a business, you understand a business that does that technical work. This is not true.

There?s a lot that goes on with a business that a technician will not understand.

The issue is that most people set up their businesses as people dependent when they need to be systems dependent. Which means setting up systems and procedures that require people with the minimum amount of skills to keep it operating at a high level.

In this summary we will cover how the turn key revolution I s changing business forever, the 3 roles you have to play to succeed in business, the three stages of a business,

The Turn-Key Revolution

Turn Key business is the act of setting up your business so that you have systems and process set up for a consistent, effective, and orderly way of doing business. Day in and day out, so that the business is systems dependent and not people dependent. The real product you?re selling is your business. Not the product your business sells to consumers.

When setting up a turn-key operation, make sure you are documenting all of the steps and processes that go into marketing, creating new products, sales, book keeping, everything. The goal of the turn key operation is to build your business into a franchise.

The importance of creating a franchiseable business is that you won?t be forced to stay in it forever. At some point you are going to die and if you?re people dependent instead of system dependent your business will collapse.

When creating a franchise, you need to have beginning to end systems set up for what to do at every stage of the business and solutions to all problems that will crop up. The model must provide consistent value to your customers, employees, and lenders. It must be operated by people with the lowest necessary level of skill. It sounds heartless, but you have to make people expendable. Including yourself. Everything that you do in your business must be able to be documented in the operations manual.

The Three Roles You?ll Need To Play

Everyone who goes in to business has to play the role of three people: the Entrepreneur, the Manager, and the Technician. The entrepreneur is the visionary who thinks ahead and makes plans for the future, the manager establishes order in the workplace, trying to create consistency. And the technician, the worker and the doer, is the person who does the technical work. Most people are technicians turned business owners, which means they were really good at their job and decided they would be better off owning their own shop. An example is someone who is an excellent mechanic and then decides to open their own shop. If you?re only a technician you will become enslaved to your own business as you?re the only one capable of creating the work required. Where if you decide to hire other mechanics you need to be able to manage them, keep them motivated, and have a plan and direction to take risks and expand your business.

Everyone is more suited to one aspect or the other, and each has it?s own advantages and disadvantages. But in order to be a good business owner, you need all three in the same amount. You need to be able to do the technical work in the beginning to cut costs, be able to manage and train other employees, and be able to take risks and have a plan for the future.

In order to run a successful business, sometimes you?ll have to give up your main skill to someone else and allow yourself the time it?ll take to plan for the future and control the goings on by managing others and not so much doing all of the work on your own.

The Three Stages of a Business

There are three stages of a business:

Infancy: The infancy stage is where the business operates on what the owner wants rather than what the business needs to grow and succeed. This stage ends when the owner can?t keep up with demand and supply or quality drops. The end of this stage is where businesses either fail or succeed. Infancy ends when the boss realizes things cannot continue the way they have been. If you?re still only a technician, this is where many people decide to walk away.

Adolescence: The adolescence stage is where you?ve decided to let your business grow and it begins to reach outside of your comfort zone. For the Technician it?s more work then you?re comfortable doing on your own, for the manager it?s more subordinates than you?re comfortable managing and for the entrepreneur how many managers he can keep motivated to heading towards the vision. When you?re in this stage be careful not to fall into the management by abdication trap, where you have people working under you and you start to remove yourself from the business. Often, the people you hired don?t do the work to the level you want them to and you end up reverting back to infancy stage,

If you can expand your comfort zone to increase your ability to handle the expansion, you will enter into the maturity stage.

Maturity: The maturity phase means your business has a clear vision and purpose. The owner must handle the entrepreneurial aspect of running a business by hiring managers to follow the vision of the company and to manage the technicians who are doing the work.

You are not supposed to work in your business, but work on it here. Figuring out exactly who your customers you serve are and how you can add more value to their lives. When you have a mature business you can really focus on creating an impact.


In order to run a successful business, you can?t remain just a technician. You can?t hire people to build your business for you and hope they get it right. You need to focus on making the business everything you want it to become. You need to take the time to make it systems dependent so you aren?t relying on any one person, including yourself.

Be equal parts technician, manager and entrepreneur

Realize that you will be in the mature stage of a business when you have a clear vision of the future in place and an operations manual built around every aspect of your business. This business development process can be applied to any business in any industry and can absolutely take the load off of you being the main salesperson, marketer, book keeper, designer, product developer, and so on. You may need to be these things to start, but focus on finding the right people for the jobs that can be delegated and fire yourself from those positions.


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