E-Myth Revisited

I might still own my business had I read this book 2-3 years ago.

The E-Myth Revisited by Michael Gerber taught me that a successful entrepreneur works on their business, not in their business. It’s a subtle but important distinction.

‘In’ versus ‘On’

When working in the business, the business owner is answering phones, ringing up customers, and performing the technical work for the enterprise. They are an employee who happens to own the company.

When working on the business, the business owner is documenting processes, hiring, training, systematizing, and automating operations. They are an owner who has people and systems running their company.

Every business owner must read and implement this principle. If you do not, you own a job not a business!

The Franchise Model

Gerber spends a lot of the book writing about the franchise model that has worked so successfully for the likes of McDonald’s. The methods and practices used by franchises can be implemented by small businesses. By optimizing for repeatability and simplicity, businesses can provide uniformly high quality products or services. Simultaneously, employees should clearly know what their responsibilities are which makes them easier to train and manage.

In practical terms, this looks like training videos, employees handbooks, and checklists. You want to make key tasks easily trainable and repeatable.

Once you have your systems in place, bringing on new employees is quicker and far more simple. From there, you can expand in size and locations while focusing on the strategic portion of the business.

Owner, not Operator

If I could do it all again, I would seek to remove myself from the daily operations of my business from day one. I would have hired technicians, customer service specialists, marketers, and janitors.

I wouldn’t have been profitable for the first few months but the number of customers I could have served would have been significantly higher. I would have been free to focus on training the employees and ‘steering the ship.’

But most importantly, it would have been sustainable. I’d have been free to step away from the business. To take a vacation from time to time. And when the time came to sell, the new owner would pay a premium for a business, not a job.