The E-Myth Revisited: Why Most Small Businesses Don't Work and What to Do About Itby Michael E. Gerber
The E-Myth Revisited debunks the big misconceptions that cause businesses to fail and presents a unique approach to building and running a business that fits your dream lifestyle. You’ll learn how to set aside the technical work and let the entrepreneur in you direct the business, set an effective system in place, and, most importantly, boost your company’s success! This is ideal for small business owners who want an effective system for running their business based on the franchise model so that the company can run without them.
Identify Your Primary Aim
“I doubt that by now, you’d be surprised to find out that I don’t believe your business to be the first order of business on our agenda.”
One of the major mistakes people make in business is not considering how it fits into their life.
Before you can think about what you want your business to look like or define your actual business goals, you must first think about your life in general. What do you want your lifestyle to look like? What wider life goals do you want to achieve?
Once you understand this, you can then start picturing a business that fits into this vision of your ideal life.
Actions to take
Find Your Strategic Objective
“Your Strategic Objective is a very clear statement of what your business has to ultimately do for you to achieve your primary aim. It is the vision of the finished product that is and will be your business.”
The next step after understanding your primary aims in life is to envisage a business that meets them. This is your strategic objective—-a set of standards and overall aims you must meet to realize your primary life aims. This is different from your business plan.
Finding your strategic objective starts first with identifying what you want your business to look like in the future, not just when you first start it.
Actions to take
Pinpoint Your Organizational Strategy
“Most companies organize around personalities rather than around functions. That is, around people rather than accountabilities or responsibilities. The result is almost always chaos.”
Most businesses start with one or two people filling all roles. As they grow, they add more employees to carry out work where needed. This cycle of adding more people whenever a workload gets too heavy continues, but too often, they don’t have a clear system or hierarchy in place.
This lack of hierarchy usually results from the business reacting to growth as and when it happens rather than being prepared for it from the start. If not fixed immediately, this will likely make your organization chaotic.
To avoid this, you should have an organizational strategy that needs to be filled in your business instead. Sure, you may take on all of these roles to begin with at first, but you’re likely to fill these jobs with various employees as your business expands. The difference is that there is already a clear system in place to dictate how the business operates as it grows.
Actions to take
Develop Your Management and People Strategy
“The system will become your solution to the problems that beset you because of the unpredictability of your people.”
Effective business management doesn’t depend on experienced managers with excellent people skills. Instead, it depends on a clear management system that can be replicated by anybody who takes the role.
Having a clear management system starts with your idea of what the business delivers to the customer. Then, you need to create an operations manual outlining how that experience is delivered.
For example, suppose you own a hotel that aims to deliver a luxury experience with clean, orderly rooms and attention to detail that makes guests feel special. In this case, you may make your employees follow a clear checklist that ensures every room is up to the same standards.
Once you have this operations manual in place, the final step is to communicate to your employees the idea and vision of your business. This way, they will understand the purpose of the operating system they are following. All the managers need to do now is ensure people stick to it.
Actions to take
Find the Demographic and Psychographics of Your Customers
A good marketing campaign is built on two important pieces of knowledge; your customers’ demographics and psychographics.
The demographic describes who buys your product: What are their age, gender, and social class? The psychographic, on the other hand, describes why they buy your product. Does it fill a practical need or create a specific feeling, for example? Once you know these two things, you can build a winning marketing campaign.