The E-Myth

The E-Myth: why most small businesses don’t work, and what to do about

Business owner hard working
Business owner stressed

If you don’t know how to grow your business, read the E-Myth!

Michael Gerber wrote the E-Myth in 1986 and is my number-1 Business Bible. I have it sitting on my desk, and a surprising number of people I talk to have read it.

The E-Myth, or Entrepreneurial Myth, describes that people believe businesses are started by “Entrepreneurs”. However, the truth is, most businesses are started by “Technicians” who think that, because they know how to do the technical work of a business, they’ll be able to build a successful business that does that work.

In the book, a lady who learned how to make delicious pies from her mother, started a bakery shop. In my world, it is a plumber starting a plumbing business, or a framer / carpenter starting a Construction company.

As you know by now, running a business is something completely different from executing your trade. Running a (growing) business includes Finances, Personnel, Marketing, Sales, Legal stuff, IT, Administration, Processes, and the list goes on, it’s exhausting!

The E-myth

The E-Myth is a great guide into the sequence of delegation when growing and maturing your business:

  1. Technical work (Responsibility)
  2. Managerial work (Accountability)
  3. Leadership

I use Gerber’s concept when working with owners on their Organizational Structure (Org Chart), and it is at the core of reducing the owner’s work load.

Success Story

Through various exercises, incl Open Brainstorms, Root Cause Analyses and Process Mapping, we have identified countless opportunities for Operational Improvements in this low-margin business.

However, the Owner is so occupied with working in the business, much of it being mundane tasks, that he does not have the time to work on the business.

We have clarified the Owner’s business goals (incl significant expansion plans), and created the associated current and future org charts.

Our focus is now on delegating Accountabilities to newly appointed & existing Managers, which will enable the Owner to start working on Continuous Improvement projects (leading to improved margins) and looking for Acquisitions.

BMW Building Materials Wholesaler

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