The E-Myth Revisited - why small businesses so often fail to grow

The Three Roles of the Small Business Owner -

technician, entrepreneur, manager

In his highly acclaimed book "The E-Myth Revisited", Michael Gerber  explains the major reason most small businesses fail to develop is that they are run by a "Technician" - in other words someone who knows how to capably perform the technical work involved in a job

However, all too often in a small business what is neglected are two other equally important roles - the "Entrepreneur" and the "Manager".  Although we may have a bias towards performing just one of the roles in our small business, all of the roles must be performed if the business is going to work effectively

• The Technician is someone who is an expert in his or her craft, such as a mechanic, baker or doctor  This often leads these people to go into business for themselves - they're good at what they do, and they know it, so why not earn more money by working for themselves?  The technician is happiest doing the work they are good at and avoiding the rest
• The Entrepreneur is the dreamer, the one who is enthusiastic to do something new, who aspires to reach for the stars.  The Entrepreneur lives in the future, thinking about the possibilities and opportunities that exist.  The Entrepreneur likes action and can become quite frustrated by delay
• The Manager is highly thorough and methodical, the detail-oriented one, who prefers order and predictability and likes to dot the i's and cross the t's. He or she is the one who remembers to pay the bills, and wants a well-organized world with no surprises

Each of these three roles are necessary in the founder. In business: without the Entrepreneur, you might as well keep working for someone else as a Technician.  Without any technical ability, the Entrepreneur must rely on others to get anything done, and without the organizational abilities of the Manager, the other two would probably find themselves with the electricity in the office turned off because there were many other things to do rather than pay the bills.

• "Systems for Success"

If the business is to grow and prosper, it must move beyond relying upon the founder.  A business that is wholly dependant upon the founder and their abilities is not really a business, but instead it can be a very burdensome job for founder.  Every time you are out sick or take a vacation or are otherwise absent, you will worry about whether the business will stop in your absence. 

A real business is one where the founder has created a system so that the business can run itself without their constant presence.  The book describes this as the "Franchise Principle".  The inspiration for this comes from franchise businesses such as McDonalds, Subway, Burger King and so on, where there are manuals describing in minute detail how to run the business, combined with top-notch staff training, so that customers have much the same experience the world over. 

The book does not suggest that you necessarily try and create a business that will be franchised, but instead you treat it as if that were your objective. Therefore: you need a well-documented system to run the business.  Instead of running the business (fixing bicycles, writing computer programs, selling cakes), you need to work on the business. You need to spend time creating a business that can be an autonomous entity of itself, capable of operating and thriving on its own.

• Business Success Principles

Here are four key principles that Gerber proposed can help to guide your business to enduring success:

• Provide consistent  value to your customers - it can't be great one day and lousy the next.
• It should not require brilliant people to work. However, you may of course need people with technical skills, but your aim should be not to have to rely on having people of rare talent in order to work.  it should be the quality of your systems that helps take ordinary people and enables them to consistently perform high quality work.
• All aspects of running the business should be documented in operations manuals.
• All aspects of your business operation should be uniform -from the dress code to the facilities, everything should follow a consistent set of standards - in which staff are properly trained.

The Entrepreneur Mind-set

In the following short video clip, Michael Gerber speaks about the mind-set and leadership skills required by the entrepreneur

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