The E Myth by Michael Gerber: A review

I listened to Michael Gerber speak at a Network Marketing lecture in 2001. I was very impressed and bought his book, The E Myth. I spoke with him and he personally signed the book to me. He said he wrote it for people that own a small business or want to own a small business. Having owned several small businesses over the past 25 years, it caught my attention when he said that his book was written to answer the question as to why 80 percent of small businesses fail in the first 5 years. In addition 80 of those that do not fail in the first five years, fail in the second five years.

The E Myth by Michael Gerber is a book about producing results and not a how to do it book. Gerber explains how your business is a reflection of who you are and not the technical work of a business. He says it just isn’t true that “if you understand the technical work of a business you understand a business that does that technical work.” The opposite is true. It is actually the root cause of most small business failures.

In chapter 2 of The E Myth, Michael Gerber explains how everybody that goes into business is actually three people in one. These are the entrepreneur, the manager and the technician. The entrepreneurial personality turns a trivial condition into something exceptional. The entrepreneur is the visionary in us. The manager is the part of us that goes to the store and buys containers to systematically in which to store all the various sized nuts, and screws. The technician is the doer.

Gerber explains how most businesses fail in the Technician Phase and never make it to the Adolescence stage. The Technician becomes overloaded and requires help from someone with experience in your kind of business. The Adolescence phase is getting someone who knows how to do the technical work that isn’t getting done. Two chapters are devoted to this concept.

Then in Chapters 5 and 6 of The E Myth by Michael Gerber, he gets into the fact that companies like Disney didn’t end up as mature companies, they started out that way. Even though they had to go thru the same phases it was the perspective that made the difference. Chapter 6 deals with the correct Entrepreneurial perspective.

Chapters 7-9 deal with a new view on business called the turn-key revolution. He calls it the franchise prototype where the true product of a business is the business itself. McDonald’s and Disney World are a good examples of this. Network Marketing, or MLM are names that people use to describe this turn-key concept as well. There are many articles written on these types of businesses. Click Here if you would like to see some tips on how to decide about Network Marketing opportunities.

In the last of the book, The E Myth Part III, Gerber lays out how to build a small business that works. He explains how to use Innovation, Quantification, Orchestration. There are actually 7 steps to follow to develop your business. This part has an entire chapter on the 7 steps, many of which are Strategies to follow.

I highly recommend this book for anyone wanting to start his or her own business. If I would have had it over 25 years ago when I started my first business, I would not have made as many of mistakes. That is for sure.