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The E-Myth Revisited By Michael E. Gerber | Animated Video Summary | Between The Lines
Within the first 5 years, 80% of businesses fail. Why is it that when we live in the information age, with almost all of the information needed to succeed available for free, 80% of businesses are still failing?
The E-myth is that most people who start businesses are entrepreneurs risking capital to make a profit. When in reality most people who start businesses are technicians, people who were good at an aspect of their job and decided to start their own show. The Fatal Assumption is that if you understand the technical work of a business, you understand a business that does that technical work. This is not true.
There’s a lot that goes on with a business that a technician will not understand.
The issue is that most people set up their businesses as people dependent when they need to be systems dependent. Which means setting up systems and procedures that require people with the minimum amount of skills to keep it operating at a high level.
In this E-Myth Revisited Review, we will cover how the turn key revolution is changing business forever, the 3 roles you have to play to succeed in business, and the three stages of a business.
This book covers why you should not rely on people, including yourself for building a business. And you should instead make your business Systems Dependent. So set up your business so you are relying on pre-set systems to turn to whenever anything goes wrong. You need to have a game plan for any issue that can occur.
There are three stages to a business:
Infancy: The infancy stage is where the business operates on what the owner wants rather than what the business needs to grow and succeed. This stage ends when the owner can’t keep up with demand and supply or quality drops. The end of this stage is where businesses either fail or succeed. Infancy ends when the boss realizes things cannot continue the way they have been. If you’re still only a technician, this is where many people decide to walk away.
Adolescence: The adolescence stage is where you’ve decided to let your business grow and it begins to reach outside of your comfort zone. For the Technician it’s more work then you’re comfortable doing on your own, for the manager it’s more subordinates than you’re comfortable managing and for the entrepreneur how many managers he can keep motivated to heading towards the vision. When you’re in this stage be careful not to fall into the management by abdication trap, where you have people working under you and you start to remove yourself from the business. Often, the people you hired don’t do the work to the level you want them to and you end up reverting back to infancy stage,
If you can expand your comfort zone to increase your ability to handle the expansion, you will enter into the maturity stage.
Maturity: The maturity phase means your business has a clear vision and purpose. The owner must handle the entrepreneurial aspect of running a business by hiring managers to follow the vision of the company and to manage the technicians who are doing the work.
You are not supposed to work in your business, but work on it. Figure out exactly who your customers you serve are and how you can add more value to their lives.
In order to run a successful business, you can’t remain just a technician. You can’t hire people to build your business for you and hope they get it right. You need to focus on making the business everything you want it to become. You need to take the time to make it systems dependent so you don't rely on any one person, including yourself.
Be equal parts technician, manager and entrepreneur
Realize that you will be in the mature stage of a business when you have a clear vision of the future in place and an operations manual built around every aspect of your business. This business development process can be applied to any business in any industry and can absolutely take the load off of you being the main salesperson, marketer, book keeper, designer, product developer, and so on. You may need to be these things to start, but focus on finding the right people for the jobs that can be delegated and fire yourself from those positions.
Did you find our E-Myth Revisited summary helpful? Let us know in the comments!