Book Review: “The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It”, Michael E. Gerber

By Michael E. Gerber

Reviewed by David L. Perkins, Jr.

Michael Gerber’s The E-Myth is the book most frequently recommended to me. That’s probably why I never read it. I have a fad phobia. “In vogue” is a call to all lemmings, as far as I’m concerned.

The E-Myth was first published in 1985. The E-Myth Revisited was published in 1995. It’s perennially on lists of best business books. It’s on the required reading lists of classes taught at institutions of higher learning the world over, such as Stanford. Not sure why I finally decided to pick up a copy, but let’s just say I’m not hopelessly stubborn.

It’s a good thing. Gerber says successful entrepreneurs tend to be open to learning new things. Always searching for knowledge. On a quest to get better every day. Ready to drop less productive methods for better ones.

Gerber addresses what we all know — few businesses owners break through and find the quality of life, freedom and financial success they desire. But of considerable value is his reason why.

Most businesses are started by people with technical expertise, he says. The entrepreneurial (“E”) myth is that technical expertise can provide a strong foundation to build a successful business on. In reality, success comes only by learning and effectively implementing certain proven techniques for growing and managing a business.

I’ve said for years that businesses should exist to serve their owners. Similarly, owners should not be slaves to their businesses. Gerber agrees, but he ALSO tells us HOW we can organize our business so we may be better served. So we can have a business and also a life.

Gerber says the trick is to build the business so:

• Every job is standardized, i.e., all job functions detailed in job descriptions and job manuals
• Every person knows exactly what to say and do in every instance (because it’s detailed in a written job manual)
• All tasks, even managerial, can be performed by the lower-skilled (and lower-cost) workers

The E-Myth says every business should be built as if it’s going to be franchised and the business owner must move from technician (and laborer) to leader.

Gerber says operations should be standardized so each employee knows exactly what to do and when to do it, and so managers spend their time bringing in business. How? The business owner’s job is to determine which marketing and sales methods work best and standardize those, too. Standardize the client acquisition side of the business so that — just as the operating side — the lowest skilled workers can execute and deliver results.

Gerber says the greatest development in business in the past century is the development of the franchise model pioneered by McDonald’s. Gerber says that 75 percent of franchises that open survive past their fifth anniversary. Non-franchise businesses — less than 20 percent.

I wish I had read The E-Myth 15 years ago.