The E-Myth Principles – Run Your Business as a Business

The E-Myth Principles – Run Your Business as a Business

The E-Myth Revisited by Michael Gerber is a must read for all business owners and is definitely at the top of our reading list at WBNL Coaching.

Key points and takeaways from this seminal work for small business owners:

  • Concept of Working “ON” your business while working “IN” your business
  • Think Franchise – Duplicatable Systems
    • Expansion / satellite teams in other markets
  • Building a business takes three skill sets:
    • The entrepreneur – vision
    • The manager – order & systems
    • The technician – the output
  • Three phases for businesses are generally:
    • Infancy
    • Expansion
    • Maturity

In The E-Myth, or Entrepreneurial Myth, author Michael Gerber’s core premise is that most new businesses are not started by entrepreneurs who set out to build a strong business but by technicians who enjoy the hands-on work themselves. Because of that natural bias, most business owners focus on working “IN” their business when really they should be working “ON” their business.E-Myth Book

As a solopreneur, the key is to find that delicate balance of working “ON” your business while you are working “IN” the day-to-day operational tasks.

Instead of looking at your business as a one-off operation, consider your business to be a prototype for a large number of franchises (expansion teams) that could be added at a later date. By adopting that mindset, you, as the business owner, will not only participate in the business as a technician but will also act as a manager (putting systems in place and controls) and as an entrepreneur (having a vision of how the business can create sustainable added-value for all key stakeholders).

A business that is built and managed by someone who combines the approach of the technician, the manager and the entrepreneur will have a far greater chance of future success than one guided by someone thinking like a technician alone.  One of the many benefits of hiring a talented administrative assistant or office / team manager is getting that needed support to actually work “ON” your business.  It is critical to implement those effective and duplicatable real estate and business systems for your company.

The key principles of the E-Myth approach to business are:

1. Most new businesses are started by technicians – people who are skilled at what they enjoy doing, and who figure they’d rather work for themselves than for someone else. Almost all new business owners assume that because they understand the technical work of the business, they understand how a technical business works. In reality, these are two completely different issues, and blurring the distinction between the two is a fatal error.

2. Building a business takes three skill sets:
(1) The entrepreneur (2) The manager (3) The technician

The entrepreneur – vision

  • The visionary, the dreamer among the three
  • Likes to play”what-if” and “if-when” games.
  • Is the creative department of the business and is always on the lookout for new, innovative things.

The manager – order and systems

  • The Manager is in charge of putting order to the business.
  • Does the planning. Is more on the practical side.
  • Always has problems on their mind.
  • Always fussing over some things in the business. Generally does not like change and opts to stick to time-tested formula when solving business problems.

The technician – the output

  • The technician is in charge of the physical aspect of the business.
  • The doer, the builder, the laborer. (salesperson, team associate)
  • Gets things done and makes things happen.
  • For emerging businesses, the technician is usually the most visible character.
  • This is one major flaw to watch out. Letting the technician take over the business will simply bring the business to its demise. Due to his overzealous nature, the technician will only exhaust the life out of the business.

3. Businesses generally go through three phases of growth:

  • Infancy — when the technician is at the forefront.
  • Expansion — when better management skills are required.
  • Maturity — where an entrepreneurial perspective is needed.

4. Use a Turn-Key or Franchise Perspective

The best model for building a successful business is to view your operation as the prototype, which a large number of “franchise” or turn-key operations will later duplicate. The challenge then becomes to maximize the amount of time you spend working on your business rather than in your business.

Standards for Franchise Prototypes

  • Build a model that will provide prospective clients, suppliers, and employees continuous value and even exceed expectations.
  • Build a model that is user-friendly, meaning a model can be functional even to people whose skill level is low.
  • Build a model that is free of defects.
  • Build a model that is equipped with Operations Manuals.
  • Offer your clients a model that is guaranteed to provide consistently predictable results.
  • Build a model that will make use of similar branding, procedures and facilities code.

5. Business Development Process

The Business Development Process is, of necessity, a dynamic and flexible process simply because the world never stands still. Everything in the world of business is changing daily — and a business must be flexible and responsive enough to move with those changes if it to retain and generate new added value.

Three key activities:


An innovative business constantly finds new answers to the questions:

  • What stops customers from getting more added value from interacting with the business?
  • What is the best way to ensure customer needs are met?


Good businesses record and quantify everything, and then continuously seek ways to improve those numbers week in and week out. Once you’ve quantified everything, you can build a database that will unerringly track your business’s health and progress. Armed with specifics, your business planning will take on new relevancy and urgency.


Orchestration is similar to optimization — it’s the process of removing discretion at the operating level of the business in favor of whatever produces the best results. Thus, orchestration starts with innovation, is validated by quantification and ultimately embeds best-practices into the business’s standard operating procedures.

Once something has been deliberately orchestrated, results become predictable and consistent. You then have a franchise — a unique way your business delivers value to clients and customers whenever they interact with you.

In short, innovation, quantification and orchestration form the foundation for the business development process because they are the processes by which businesses can anticipate and respond to changing market conditions.

Adapted from Business Book Summaries.


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Posted on

July 11, 2016