Benchmark Business Group

E-Myth, Where it Started

September 26, 2017

This month we've focused on business books that we believe every business owner should read including Built to Sell and QBQ. We want to end the month with one of our favorites by Michael Gerber. The E-Myth Revisited has a special place in our company story, our hearts, and in shaping the way we do business every day at Benchmark Business Group. BBG started out as an E-myth coaching center and was designed by Susan and Bob Clements in collaboration with Michael Gerber. We'll be the first to admit that we're biased when it comes to the E-Myth Revisited.
 
Michael E. Gerber states in the E-Myth Revisited, "the problem is not that the owners of small business in this country don't work; the problem is they're doing the wrong work." His best-selling book outlines the type of work that business owners should be doing and it all starts with the E-Myth.
 
What is the E-Myth?
 
E-Myth is the myth that most people get into business because they are entrepreneurs, but in fact, most business owners are technicians. They are the electricians, bakers, software developers, graphic designers, etc., that had what Michael Gerber describes as an "Entrepreneurial Seizure." They made the fatal assumption that because they were experts in their fields they knew what it took to run a business in their field. And so they get started working in their own business, often in the same roles they had before: electrician, baker, and so forth.
 
Gerber's point of view is that it's what a business owner doesn't know about business itself, not their field of expertise, that will hurt them. A business owner becomes so busy working "in" the business that they don't have time to work "on" the business. His phrase, "Work on your business, not in it" is iconic to any small business owner.
 
When a business owner is consumed working in their business, they end up with a job and the business is left without the guidance and leadership of an entrepreneur. This creates a myriad of business problems and the business inevitably struggles to grow and thrive because no one is focusing on growth or strategy. Business owners get frustrated as their business stalls, fires become common, and the owner eventually becomes overwhelmed.
 
The Three E-Myth Personalities
 
Gerber explains that this is because in every business there has to be three key personalities: The Entrepreneur, The Manager, and The Technician. While the business needs the work of all three personalities, the owner is seldom a balance of the three. Typically, whatever personality is naturally the strongest will take over, while the other two seldom show up for work.
 
The three personalities are:
  • The Entrepreneur: This personality is the dreamer. They live in the future and are the catalyst for change. They are always thinking about what comes next, the vision, and how to grow the business.
  • The Manager: This often-forgotten personality is the planner. They live in the past and embrace status quo. They tend to favor building order, predictability, and consistency. They figure out how to turn the vision into a reality.
  • The Technician: This personality is the doer. They live in the present and focus on what has to be done right now to produce the product or serve the client.
When a business owner allows one personality to take over, the business will struggle, if not outright fail. Technicians will get too busy and overwhelmed causing quality to drop and leads to stop. Managers will create the best plans imaginable, but won't get them implemented and they certainly are not focused on growth. Entrepreneurs will have great ideas for growth, but will always be moving on to the next big idea and nothing will get done. It's a constant battle that most business owners try to solve by hiring their way out of the issue. Gerber points out this often leads to "Management by Abdication rather than Delegation."
 
You Can't Hire Your Way Out of the Problem
 
Business owners try to achieve balance of the three personalities by hiring others to do the work. And there's often a honeymoon period for the business owner where this works great. It frees them up, it gives them more time, and they're able to start enjoying the freedom of being a business owner. Gerber warns that this is a trap, because at some point employees leave, or they stop doing the work the way you did, or they get overworked, or...
 
The problem is the business is "people dependent." The business owner is relying on key employees. Instead, the solution is to create a business that works not because of you, or key employees, but thrives without you. Gerber calls this the Turn-Key Revolution.
 
The turn-key revolution is creating a business that is dependent on systems and not people. It's a continuous cycle of working on the business rather than in the business. In the E-Myth Revisited, Michael Gerber lays out an entire foundation for the work that all business owners need to know, understand and implement to create a business that works for them and not just because of them. A business that provides them with time, money, and freedom to create the life they've always dreamed of having. We call it, "Value Realized."

Over the years at Benchmark Business Group we've watched businesses transform and business owners get their life back as they shift their focus on how they think about working in their business. The idea is simple, practical, and proven. The implementation is much more complicated, but know that it can be done and it's worth the investment of your time and energy. The result is owning a business that is more enjoyable and profitable to own and has more value when you're ready to sell it. Our challenge to you this week is to read the E-Myth Revisited and analyze which personality is most prevalent in your business, and what you can do to redesign your business to embody a healthy balance of Technician, Manager, and Entrepreneur.

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