Home
Introducing Our Firm
Seven Habits
Articles
Book Reviews
Business FAQ
Need Help?
Other Websites

Find us on Facebook
Follow me on Twitter
Connect on LinkedIn
Connect on Google+

*A Book Review*

The E-Myth

Do You Have a Business or a Job?

By Michael E. Gerber

by Michael C. Gray

January 26, 1998


Michael Gerber is a business consulting "guru" whose observations about small businesses have had a profound impact on how his students see their businesses and the role of the business owner.

Gerber observed that most people go into business for the wrong reason. They are skilled technicians - they do a good job of what the business provides to the customer. They believe they can earn more by doing it in their own business than for someone else, so they leave and open their own shop. This is what Gerber calls an "entrepreneurial seizure."

These technicians believe they will find more freedom in their business, but they discover it is the hardest job in the world, because there is no escape. They are the ones who are doing the work! They are the "business!" But if they are the business, they haven't really created a business at all, they have created a job for themselves!

According to Gerber, the role of the business owner is really quite different. The role of the business owner is to create a business that works independently of himself or herself. If that is the case, there is an "end point" where the business functions independently of the business owner. At that point, the business owner may choose to sell it or not, but he or she will have created a ready-to-sell "money making machine" for which he or she may choose the effort to devote to it. The business can also be duplicated from place to place.

The model for this effort is the "turnkey franchise," such as McDonalds. The franchise creator, Ray Kroc, made a uniform business with a certain look, providing a consistent experience to the customer. This was accomplished by establishing and documenting tested, detailed systems. The franchisor controls the design of the restaurant, sells uniformly made food and equipment, and provides the "scripts" for the service people and detailed procedures for preparing the food.

Likewise, the business owner should start with an idea of "what this business should look like." An organizational chart should be created (which could start with the business owner in each box) to document a business organization, with responsibilities as chief executive, marketing, accounting, finance, and production. Gradually, the business owner tests, measures and documents the procedures for each position and replaces himself or herself until he or she isn't really needed at all.

The shorthand phrase for the business systems could be "Here's how we do it here."

Finally, the business becomes like a game, a dojo, or learning place where each person finds satisfaction in performing his or her part to the best of his or her ability.

Small business owners should be grateful to Michael Gerber for his profound observations and the challenge he has presented to us. Each morning, we should ask ourselves, "Am I going to a business, or am I going to a job?" If we are going to a job, what are we going to do about it? We have a model for change.

The only criticism I have with Gerber's approach is that it can be inflexible when dealing with the change that we all must deal with today. Employees must think in order to provide outstanding service. More important than "Here's how we do it here," we need to know "What's important here." What are the values that drive our business? People always need to be more important than the systems that are supposed to serve them. Systems shouldn't override common sense.

Gerber's ideal of creating a business that really works is worthwhile. Visit his web site at www.e-myth.com.

May we help you create a business that really works for you?

Buy it on Amazon: The E-Myth : Why Most Small Businesses Don't Work and What to Do About It.

For our new reviews of business and self-improvement books, subscribe to our newsletter, Michael Gray, CPA's Tax & Business Insight!

Michael Gerber's book, The E-Myth, is a great book explaining how to create a business that works independently of the entrepreneur who started it.


Home | Introduction | Tax Info | Seven Habits | Business Improvement | Book Reviews | Need Help? | Links


Michael Gray, CPA
2190 Stokes St., Suite 102
San Jose, California 95128
(408) 918-3162
Fax (408) 998-2766
email: info@profitadvisors.com
Sign up for our free monthly newsletter,
Tax & Business Insight,
for the latest tax news!

subscribe html
unsubscribe text only

We respect your email privacy!