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Why Most Small Businesses Don’t Work and What To Do About It

Cover of the book "E-Myth Revisited"

Emyth Revisited, with a million book sales worldwide, was written by Michael E. Gerber. It’s one of the most important books about entrepreneurial business that I’ve ever read, and I’ve read more than my share.

The basic premises of the book are:

  1. The entrepreneurial myth: the myth that most people who start a business are entrepreneurs, and

  2. The fatal assumption that an individual who understands the technical work of a business (like furnace installation) can successfully run a business that does that kind of technical work.

Gerber says that “(Most) small businesses in the United States do not work; the people who own them do; and they’re doing the wrong work.

Gerber argues that there is a big difference between building a “business system” – one that can be run by others without your forever presence – and a business that can’t function, can’t make money, unless you are personally there working your hiney off 16 hours a day.

In other words, the majority of small business owners haven’t really built businesses, they’ve built jobs for themselves. And they’re likely working harder for themselves than they ever did for an employer.

The book is built around four profound ideas which, if ignored, will likely lead to business failure:

“Idea #1: There is a myth in this country – I call it the E-Myth” which says that small businesses are started by entrepreneurs risking capital to make a profit. This is simply not so. The real reasons people start businesses have little to do with entrepreneurship. In fact this belief in the Entrepreneurial Myth is the most important factor in the devastating rate of small business failure today. Understanding the E-Myth, and applying that understanding to the creation and development of a small business, can be the secret to any business’s success.”

“Idea #2: There’s a revolution going on today in American small business. I call it the Turn-Key Revolution.” Not only is it changing the way we do business in this country and throughout the world but it is changing who goes into business, how they do it, and the likelihood of their survival.”

Idea #3: At the heart of the Turn-Key Revolution is a dynamic process we at E-Myth Worldwide call the Business Development Process. When it is systematized and applied purposely by a small business owner, the process has the power to transform any small business into an incredibly effective organization. Our experience has shown us that when a small business incorporates this process into its every activity and uses it to control its destiny, that company stays young and thrives. When a small business ignores this process – as most unfortunately do – it commits itself to Management by Luck, stagnation, and, ultimately, failure.”

Idea #4: The Business Development Process can be systematically applied by any small business owner in a step-by-step method that incorporates the lessons of the Turn-Key Revolution into the operation of that business. This process becomes a predictable way to produce results and vitality in any small business whose owner is willing to give it the time and attention it requires to flourish.

The balance of the book goes into detail on what the development process is and how to apply it to your business.

I think E-Myth Revisited is essential reading for every small business person.

Related Resources:

If you are interested in a better quality of life given the new realities of making a living, here are some great resources to get you started:

  1. If you need help working through family decisions, weighing the pros and cons of remote working, creating an online business of your own, or if you just want to clarify your passions that point to your ideal job, you would do well to get a little help from a life coach. One of the best places to link- up with a coach that’s right for you is the free life coach matching service provided by Wainwright Global.

  2. If you’re drawn to remote working but don’t know how to get startedthe Laptop Lifestyle Academy is perfect program for learning the ropes.

  3. If your preference is  starting an online business of your own now or soon, there’s no better place to start than the free course at My Online Startup. It provides a great basis of knowledge and tools that will be relevant no matter what type of online venture you choose to pursue.

Yes, times are certainly challenging right now. But such developments can also be the catalyst that triggers overdue changes for the better in your life. There are plenty of great resources – like the above – to help you make them.

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“Why Services are More Challenging to Sell Than Products”

“Why the Pricing of Services is Far More “Flexible” Than the Pricing of Products

“Why You Usually See Three-Tiered Service Pricing”

“The Tyranny of Lowest Price”

“MBA Degree in a Blog Post

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“The Short-Sightedness of ‘Just Making Sales'”

Why It’s So Smart for Entrepreneurs to “Fail Fast”!

“Strategies for Practicing Customer-Centeredness”

“Differentiation and Positioning – The Keys to the Value Proposition of Your Business

“The Concept of “Exchange” and How It Impacts the Value Proposition of Your Business”

“What the Internet’s Elimination of the “Information Deficit” Means to Every Business”

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“What is ‘Quality’ Anyway?”

“On Being Customer-Centered – the Lifeblood of Your Business”

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