Wednesday, June 9, 2010

Book review of The E-Myth Revisited

While Rich Dad Poor Dad was more of a general "rah rah" get you into business mindset book, E-Myth is a focused nuts and bolts of running a business book.

The author, Michael E. Gerber, uses a relatable story of a small business owner experiencing trouble with her business. She could be anyone, it could be any business. This approach makes the book easy to read. It adds a human element that is often missing in a book in this category. Reading about dry business information makes my eyes hurt. However, I can read about people all day long.

The general message of the book shows the errors that entrepreneurs make when starting a new business. It then shows how you can go about avoiding common pitfalls, or if you're already in the quagmire, how to correct those mistakes.

Here is a starting fact from the book: 50% of all new small businesses fail in the first year. 80% fail in the first five years. And of those 20% that survive, 80% of them fail within ten years. Now guys I'll admit it, I'm a gambler. That being said, I'd never make a big bet laying those kind of odds. That's just bad money management. Yet here we are, trying to start a business and those are the odds we find ourselves butting up against.

Conversely, 75% of franchises opened succeed. How do you like that? A trend of epic failure, and a trend of 3 out of 4 making it. So as a non-franchised business, what are we to do? The E-Myth solution to this? Turn your business into a franchise.

To more correctly state it, treat your business like a franchise. Franchises have systems set in place that dictate how operations are handled. If you can build a system around your daily tasks, you can put into place a step-by-step guide to how you perform your business. Once it has been broken down as such, anyone with the proper training will be able to do it. You just built yourself out of your business. Enjoy being able to take a vacation while your business keeps generating you income.

There will be accountability. There will be defined jobs and roles. There will also be available the ability to stick people into those positions when your business begins to take off. E-Myth stresses the importance of visualizing the end game scenario of your business. That way when you do start to expand, good lord willing, you are ready for it. This is where an organizational chart will greatly come into play. I'll talk about that in a later post.

That's all the detail of the book that I can get into. I could keep going on and on, but I feel like it would not be fair to the author who put in all the hard work to spill all the wonderful information he collected in this book. There have been several books that I've read that have directly changed my life. The Great Divorce, How to Win Friends and Influence People, and If You Meet the Buddha on the Road, Kill Him! are all books that come to mind. After I read them, I never quite looked at the world in the same way again. This is one of those books. It was eye opening. After reading this I started building systems for every day activities in my life. It really does make things easier, and an easier business makes for a happier me. That I am sure of.

If you would like to see the E-Myth website, go here. I have not browsed through it, but I'm sure it is full of much useful information. Good luck!

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