Book Summary: The E-Myth Revisited
Have you ever wondered why most small businesses, no matter how hard they try, keep failing? Micheal Gerber reveals the answers in this book. Consequently, the future of small businesses revolves around just three philosophies: the e-myth, the turnkey revolution, and the business development process.
The electronic myth
The e-myth, or business myth, evolved from a very fatal assumption: that the success of every business is achieved simply by summarizing the following: an entrepreneur’s desire to own a business plus the certain amount of capital that brings more knowledge of the amount of target profit.
Little did the entrepreneurs know that this assumption spelled DISASTER instead of SUCCESS. Entrepreneurs must learn to focus more on the business: the people involved in it and the phases it typically goes through. Knowing these can prevent small businesses from experiencing entrepreneurial attack, a stage in which an entrepreneur experiences feelings of elation, exhaustion, and despair.
Small businesses basically consist of three main characters, namely: the technician (the doer and builder), the manager (the planner), and the entrepreneur (the dreamer, visionary). Also, small businesses have different phases of life. These are: childhood (the technician phase); adolescence (help-getting phase); beyond the comfort zone; and, maturity and entrepreneurial perspective.
The turnkey revolution
As the term itself implies, Turn-key Revolution talks about the different transformations in the way companies are managed and should be managed. A very prominent example is McDonald’s introducing the business format franchise idea to the business world.
The business format franchise has radically changed the future of small businesses. Here, the franchisor entitles the franchisee to own the rights to their entire business system. This format is based on the belief that the real product of a company is its technical sales and not what it sells.
The business development process
The business development process is the response to the ceaseless dynamism of the business world. It provides the entrepreneur with the necessary tools to anticipate the continuous changes that take place around them. The process consists of three elementary stages: innovation, quantification and orchestration.
The business development program requires the following aspects to be defined:
Your main goal. The main objective of the owner must focus on what he really wants, needs and wants for his life. Defining this will push the owner to pursue their defined business dreams.
Your Strategic Objectives. It contains standards that help the owner achieve his objectives for his business. This should answer the question: What will this serve my main purpose?
Your organizational strategy. Business owners must learn to appreciate the value of organizational structures. Some points to consider are the organization around personalities, the organization of your company and the position contract.
Your management strategy. As an owner, you must recognize the truth that the successful implementation of a management strategy does not depend on the people who could implement it, but on the system.
Your people strategy. This refers to the approach you take towards your people and your work. To make people appreciate the work you do, you need to make them understand the idea behind each of your homework assignments.
Your marketing strategy. This is the stage where all attention suddenly shifts from the owner to the customer. You put aside your personal goals first and start focusing on the customer’s needs.
Your systems strategy. There are three types of systems in a company: hard systems, soft systems and information systems. Hard systems refer to all those in your business that are inanimate and have no life. Soft systems refer to all those that can be living or inanimate. Information systems are everything else in the business that provides you with data related to how the above two systems interact.