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Book review: The E-Myth Revisited: Why Most Small Businesses Don't Work and What to Do About It

The E-Myth Revisited: Why Most Small Businesses Don't Work and What to Do About It The E-Myth Revisited: Why Most Small Businesses Don't Work and What to Do About It by Michael E. Gerber


My rating: 4 of 5 stars
When I told a business owner at a local event that I had started my own technology services business, he recommended that I read this and learn how to "work on my business, not in it." I had heard the phrase and other mentions of Michael Gerber and The E-Myth in Entrepreneur Magazine and elsewhere, but after this personal recommendation I had to read it. This book is an eye-opening read for any small business owner.

The E-Myth (Entrepreneurial Myth) is that businesses are started by entrepreneurs seeking profit. In actuality, businesses are started by technicians (employees) who have an Entrepreneurial Seizure at work, and convince themselves that they could be their own boss and work for themselves. They make a Fatal Assumption that by understanding the technical work of a business, they also understand the business that does that technical work.

Gerber asserts that most businesses don't grow like they should. He believes that "the purpose of going into business is to expand beyond your existing horizons. So you can invent something that satisfies a need in the marketplace that has never been satisfied before. So you can live an expanded, stimulating new life."

This book is one of the most influential and well-known among entrepreneurs, and for good reason. It provides a guide and the motivation for creating not a job, but a scalable, sustainable, profitable business.

Notes

Gerber explains that we're all composed of 3 personalities. For your business to succeed, you must play each role:
Three personalities
1. The Entrepreneur: a future-focused visionary who pursues opportunities
2. The Manager: a past-focused worrier who plans and orders
3. The Technician: a present-focused worker who concentrates on the task at hand

Phases of business growth
1. Infancy
- owner and business are one and the same
- as Technician, you discover that there's too much to handle

2. Adolescense
- you hire technical, experienced help
- you but find that employees don't care as much or work as hard as you, so you start acting like the Technician again and doing it all yourself

3. Maturity
- think of the business as separate from yourself
- work on the business, not in the business
- follow the Entrepreneurial Perspective: shape the business to match your vision of the future

Think in terms of the Franchise Prototype: design your business as if it were a prototype for others. By thinking of your business itself is the product you sell, you'll work toward perfecting every facet of it.

Know your Primary Aim; your dream life.
Your Strategic Objective is the set of standards that helps your business meet your Primary Aim: standards of money, the type of business, target customer, etc.
Create an organizational chart of all the main positions your company will one day have, even if you fill them all now.

Sales
People buy feelings (control, security, simplicity, peace of mind, etc.), not commodities.
Customers don't make rational buying decisions. They make them unconsciously.
Demographics: who your customer is
Psychographics: why your customer buys
Don't find a need and fill it; find a perceived need and fill it.
Selling isn't closing, it's opening.

Power Point Selling
1. Appointment Presentation: get the customer's emotional commitment by describing your product (feelings it gives customer) not the commodity (actual good or service)
2. Needs Analysis Presentation: show the customer their frustration and how you can relieve it
3. Solutions Presentation: provide the rational armament to back up the customer's emotional commitment. Give the details of your product, and ask for the sale.

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