The E-Myth Revisited receives mixed reviews. Many praise its insights on small business management, emphasizing the importance of systems, working on rather than in the business, and the distinction between technician, manager, and entrepreneur roles. Readers find value in its advice on business development and franchising concepts. However, critics argue the book is repetitive, outdated, and poorly written, with some finding the fictional case study and dialogue annoying. Despite these criticisms, many still consider it a must-read for entrepreneurs and small business owners.
The E-Myth: Most small businesses fail due to the Entrepreneurial Myth
The Entrepreneur, The Manager, and The Technician: Three personalities in every business owner
Business Development Process: Work on your business, not in it
The Turn-Key Revolution: Franchising as a model for success
Your Primary Aim: Define your personal vision and life goals
Your Strategic Objective: Create a clear vision for your business
Organizational Strategy: Develop a structure that supports growth
Management Strategy: Create systems, not rely on skilled people
People Strategy: Cultivate a game worth playing for your employees
Marketing Strategy: Understand your customer's unconscious needs
Systems Strategy: Implement Hard, Soft, and Information Systems
The E-Myth is the myth of the entrepreneur. It runs deep in this country and rings of the heroic.
The Entrepreneurial Myth is the mistaken belief that most businesses are started by entrepreneurs with business knowledge. In reality, most are started by technicians who know how to do the work but lack business skills. This leads to failure because:
Technical skills alone are insufficient for running a successful business
Many business owners work in their business rather than on it
The owner becomes overwhelmed trying to do everything themselves
The E-Myth explains why 40% of new businesses fail within the first year, and 80% fail within five years. To succeed, business owners must shift their focus from working in the business to working on the business.
The Entrepreneur lives in the future, never in the past, rarely in the present. He's happiest when left free to construct images of "what-if" and "if-when."
Every business owner has three personalities:
The Entrepreneur: The visionary and dreamer
Sees opportunities and sets direction
Craves control and creates change
The Manager: The pragmatic planner
Craves order and creates systems
Organizes and maintains structure
The Technician: The doer and worker
Focuses on the present and getting things done
Comfortable with routine and hands-on work
Most small business owners are 10% Entrepreneur, 20% Manager, and 70% Technician. This imbalance leads to problems as the business grows. Success requires balancing these personalities and developing the Entrepreneurial and Managerial aspects.
Your business is not your life.
Working on your business means:
Treating your business as a product to be developed
Creating systems that allow the business to run without you
Focusing on strategic work rather than technical work
To achieve this:
Develop a Business Development Program
Create a Franchise Prototype (even if you don't plan to franchise)
Implement systems for every aspect of your business
Document all processes in Operations Manuals
This approach allows you to:
Build a business that can be replicated
Create value beyond your personal efforts
Achieve freedom from day-to-day operations
The true product of a business is the business itself.
The Turn-Key Revolution, exemplified by Ray Kroc's McDonald's, demonstrates:
The power of creating a business system that can be replicated
The importance of consistency and standardization
The value of focusing on the business model, not just the product
Key aspects of the franchise model:
Documented systems and processes
Standardized operations
Focus on replicability and scalability
Even if you don't plan to franchise, adopting this mindset can:
Increase business value
Improve efficiency and consistency
Allow for easier expansion and growth
What do I wish my life to look like?
Your Primary Aim is your personal vision for your life, encompassing:
Your values and priorities
The impact you want to make
How you want to be remembered
To develop your Primary Aim:
Visualize your ideal life
Define your personal and professional goals
Identify your core values and principles
Your Primary Aim should:
Guide your business decisions
Align your business with your personal aspirations
Provide motivation and purpose beyond financial success
How can I get my business to work, but without me?
Your Strategic Objective is a clear statement of what your business must ultimately do to achieve your Primary Aim. It includes:
Financial goals:
Gross revenues
Profits
Return on investment
Business model:
Type of business
Target market
Unique selling proposition
Standards and benchmarks:
Quality standards
Customer service expectations
Operational metrics
Your Strategic Objective should be:
Specific and measurable
Aligned with your Primary Aim
Focused on creating a business that works without you
Your Organization Chart flows down from your Strategic Objective, which in turn flows down from your Primary Aim.
Create an Organizational Strategy by:
Developing an Organization Chart:
Define all positions needed for a fully functioning business
Include positions for future growth, not just current needs
Creating Position Contracts:
Clearly define responsibilities and accountabilities for each position
Set standards and expectations for performance
Implementing a prototype approach:
Start by filling all positions yourself
Document and systemize each role
Gradually replace yourself with employees or systems
This approach allows you to:
Understand all aspects of your business
Create scalable systems and processes
Build a business that can operate without you
The System is the Solution.
Develop a Management Strategy focused on systems:
Create a Management System:
Standardize decision-making processes
Implement consistent policies and procedures
Develop metrics and tracking systems
Focus on orchestration:
Eliminate discretion at the operational level
Create predictable, repeatable processes
Ensure consistency in customer experience
Implement continuous improvement:
Regularly review and update systems
Encourage employee feedback on processes
Stay adaptable to changing market conditions
This approach allows you to:
Reduce reliance on highly skilled individuals
Maintain consistency as you grow
Improve efficiency and reduce errors
People do not simply want to work for exciting people. They want to work for people who have created a clearly defined structure for acting in the world.
Develop a People Strategy that:
Creates a compelling company culture:
Define your company's values and mission
Establish clear rules and expectations
Foster a sense of purpose beyond profit
Implements effective training and development:
Create standardized training programs
Provide clear career paths and growth opportunities
Encourage continuous learning and improvement
Aligns individual goals with company objectives:
Set clear performance expectations
Implement regular feedback and review processes
Reward alignment with company values and goals
This approach helps:
Attract and retain quality employees
Increase engagement and productivity
Create a positive work environment that supports your business goals
Reality only exists in someone's perceptions, attitudes, beliefs, conclusions—whatever you wish to call those positions of the mind from which all expectations arise—and nowhere else.
Develop a Marketing Strategy based on:
Understanding your customer:
Define your target demographic
Research psychographic factors (attitudes, beliefs, values)
Identify unconscious needs and desires
Creating a compelling brand:
Develop a unique selling proposition
Design visuals and messaging that resonate with your target market
Consistently communicate your brand across all touchpoints
Implementing a systematic approach to marketing:
Develop repeatable processes for lead generation
Create systems for converting leads to customers
Establish metrics to track and improve marketing effectiveness
This approach allows you to:
Connect more deeply with your target market
Create marketing messages that resonate on an emotional level
Develop a consistent and effective marketing system
A system is a set of things, actions, ideas, and information that interact with each other, and in so doing, alter other systems.
Develop a Systems Strategy that incorporates:
Hard Systems:
Physical components of your business (equipment, facilities, etc.)
Standardized tools and resources
Automated processes where possible
Soft Systems:
People-oriented processes (hiring, training, customer service)
Company culture and values
Decision-making frameworks
Information Systems:
Data collection and analysis tools
Performance tracking and reporting
Financial management systems
Integrating these systems allows you to:
Create a more efficient and consistent operation
Reduce reliance on individual performance
Make data-driven decisions for continuous improvement
Implement your Systems Strategy through:
Documenting all processes in Operations Manuals
Regular training and reinforcement of systems
Continuous review and improvement of all systems