Book Review: The E-Myth Revisited

by | Feb 21, 2020

The tagline on the cover is “Why Most Small Businesses Don’t Work and What to Do About It”. As a small business that helps small businesses grow this seemed extremely relevant and I was not disappointed.

The book starts with discussing the “Entrepreneur Myth”: that all businesses owners are entrepreneurs. The reality is that most small business owners fall under one of two other categories the author Michael Gerber calls Technicians or Managers.

Technicians are professionals who start a business doing the thing they’re good at. Think Accountants, Chefs, and Google Ads Specialists. It seems like a fantastic idea: ditch the boss, make your own schedule and make more money doing the exact same work you do now. You may even have some clients who love you and not the company you work for that would move to your new business with you.

Where Technicians get in trouble is that it’s NOT the exact same work. All you did was add a whole new set of work that Entrepreneurs and Managers are supposed to do, like balance the books, clean the shop, develop processes and standards, train new employees, oh and SELL. Eventually the weight of all this work crushes you and you fold up.

The Manager is basically operations. At its best it’s the part of us that needs to develop standards and processes and have consistent branding. All of this is crucial to success. At its worst it’s your need to make everything neat and orderly for the sake of being neat and orderly and doesn’t want to hear any ideas that are going to upset this delicate balance you created. Which means you don’t innovate, you don’t adapt to your customer’s needs, you don’t grow. Which means you fall behind and eventually fold up.

As I mention a couple times in my year one reflection blog I came into this 100% as a Technician. I would tell myself how great it would be to escape the constant hustle of new clients and beating revenue projections, and really put my heart and soul into a small list of clients for the rest of my life, holding hands skipping down the yellow brick road to retirement.

Then reality set in, I grew way faster than I anticipated and also LOVED it, and had to become a Manager and Entrepreneur really quickly. Which if done right is better for my clients. Every minute I spend creating reporting is a minute I am not spending analyzing that report and developing strategies from it to make their business better. Which is what they actually pay me for.

Beware of this mental trap because it’s easy to fall into. You think your customers are hiring you to physically create the Facebook Ads, or design the website, or do the tax return or make the ring. Sometimes your customers fall into that trap too and they may not be the best customer for you long term.

But that’s not what you’re both here for. You’re here for what those activities DO for them, to save them time, to grow their business, to feel something they crave like security or empowerment. As one of the best lines in the book puts it:

“The commodity is the thing your customer actually walks out with in his hand. The product is what your customer feels as he walks out of your business.”

The Technician knows how to create that feeling.
The Manager takes what the Technician knows and turns it into a repeatable outcome.
The Entrepreneur explores ways to spread that feeling to more people, or find new ways to create that feeling.

From there the book is almost entirely about Operations. Gerber gives us a nice framework for how to do this in our own businesses, with McDonalds as the model of a “turnkey business” where you can plug anyone into your system and create results. The Technician can quench that thirst for “creating” they lose by no longer working “in” their business by working “on” their business as the Entrepreneur.

One of my favorite tips here was when you start your business, create the org chart for what you think your fully formed business will look like. What positions do we need? What are their responsibilities? Is this a full time or part time role?

Then plug names into every position for who is handling this now. It’s an exciting exercise that also gets you thinking about how these people work together, what their skillsets need to be, how much you’re really responsible for in the business at the beginning, and a clearer picture of what it’s going to take to get business looking like this down the road.

I did bristle some at the idea that a great business can plug anyone into it and keep it humming. That’s great for hotels, restaurants, and convenience stores. I don’t think that works as well in marketing, though many large agencies try and do okay at it. The digital world moves too fast, and documenting every option for how to handle an unknown Google algorithm change sounds like an enterprise you could spend years on and never get all the way there.

For me, roles like this fall under that Steve Jobs quote on how we don’t hire people to tell them what to do, we hire them to tell us what to do. It’s smart to identify roles this will apply to, and others it won’t based on how you want your business to look when it’s “complete”.

Quality people create quality outcomes. This shouldn’t be all that surprising coming from the guy whose tagline is “It’s About People”.

But it doesn’t mean you cannot develop processes that make it easier for a skilled SEO to do their job, or checklists and habits that help a manager check on that SEO’s work and that the results are the best they can be, and that they fit into the larger value proposition of the business.

It also doesn’t mean you hire solely based on experience. The person has to share that feeling you want to convey about your business to your customers.

For Marion that’s Care. There is a personalized level of service and communication that shows I care more about my clients’ well being than anyone else will because I understand how hard it is to trust someone else with your business.

To work with me you have be able to think of clients as human beings with personalities and interests outside of their jobs. If you don’t and you view them as “client 15” that should be happy solely based on the metrics, you won’t understand why we do things the way we do here.

But the right people allow you to release your Technician self and focus on new ways to make your clients’ lives better. Embrace it, treat these people well, and let them put you out of a job by running the day to day better than you could.

But first you have to know what that feeling is. What do you want your customers to feel about your business? Then you can find the people.

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