The E-Myth Revisited: building a business that works without you

Who should use it, and when not to

Use it when a small business stops if the owner is ill or away, when the owner works long weeks doing client work and never plans, or before the first hires.

It suits service and trade businesses with repeatable work. It helps less with work that is truly one of a kind each time, such as fine art. For writing each procedure, use the SOP writer skill.

The core ideas

The entrepreneurial myth. A plumber opens a plumbing business, a baker opens a bakery. Each is skilled at the work and assumes that's enough. Gerber calls this the fatal assumption.

Three personalities. Inside every owner are the technician (wants to do the work), the manager (wants order and planning) and the entrepreneur (wants to build something new). Most owners spend nearly all their time as technicians.

The business's life stages. Gerber describes a business's infancy, when the owner and the business are the same, its adolescence, when the owner hires help but still holds it together, and its maturity, built from the start on a broader view.

The franchise prototype. Like the founders Gerber admired, such as Ray Kroc at McDonald's, an owner should see the business as a system separate from themselves. The system produces consistent results that customers can count on.

The business development program. The book walks through the owner's primary aim (the life they want), the business's strategic objective, an organization chart of positions rather than people, and systems for management, people, marketing and operations.

A worked mini example

This is an illustration. A kitchen renovation business in Toronto has four people. The owner works 62 hours a week: 30 doing carpentry, 12 quoting, 8 ordering materials, 5 on bookkeeping and 7 answering client calls. The two carpenters wait each morning for instructions. When the owner was sick for a week, two jobs stopped.

Sorted by role, the week is 42 technician hours, 20 manager hours and no entrepreneur hours. The org chart has five positions, four of them held by the owner. The first three processes to write down: a daily job plan sent the night before, a materials order list, and a Friday client update with photos.

How to start working on your business

1. Sort your week into technician, manager and entrepreneur hours.
2. Write your primary aim: the life you want the business to support.
3. Write the strategic objective: who you serve, the promise, the revenue, and when it should run without you.
4. Draw the org chart of positions, with your name in each one you hold.
5. Pick three processes that take most of your hours or break when you're away.
6. Define the result every time, as a customer would notice it.
7. Hand each one over with training and a date you stop doing it.

The business system prototype skill runs these steps with your week and marks hours it has to estimate.

Common mistakes

• Hiring "help" with no position or result. The owner stays the system.
• Documenting everything at once. Start with the three processes that free the most time.
• Systems that need rare talent.
• Forgetting the owner's own aim.

Where it comes from

Michael E. Gerber founded his small-business coaching company, EMyth, in 1977, after seeing that the small business owners he worked with, many of them technicians, didn't know how to run a business. He published The E-Myth in 1986 and The E-Myth Revisited in 1995, followed by many E-Myth books for specific trades.

This page is an independent summary in our own words. It is not affiliated with or endorsed by Michael E. Gerber, EMyth, or the publishers. "E-Myth" is a trademark of its owner; the book's title is used only to name it. More explainers are in the business books index.

Questions

What is the E-Myth?

Michael Gerber's name for the entrepreneurial myth: the belief that most small businesses are started by entrepreneurs. He argues most are started by technicians, people skilled at the work, who assume that knowing the work means knowing how to run a business.

What does working on your business mean?

Spending time designing how the business works, its systems, roles and standards, instead of only doing the client work yourself. Gerber contrasts it with working in the business.

What is the franchise prototype?

Gerber's advice to build a business as if it were the model for a franchise: documented systems that let ordinary trained people deliver the same result every time, whether or not it is ever franchised.