Decoding The E-Myth Concept For Business

Originally published in 1986, "The E-Myth" set out to challenge the very fundamentals of how we all thought doing business worked - but is it still relevant? 

The thing is, when Michael Gerber wants to “talk shop” - you generally want to listen. Dubbed the world’s “Number One Small Business Guru”, Gerber’s forty year career in business skills training has cemented his status as the go-to for navigating life - and business - as an entrepreneur. His first book became a global sensation, and has been revisited many times over the years via new releases and updated concepts - but what exactly is “The E-Myth” all about, and how can Australian small business owners use it as their secret weapon?

What Is The E-Myth Concept?

The "E-Myth," or Entrepreneurial Myth, is the flawed assumption that people who are experts at a certain technical skill will therefore be successful running a business that does that technical work. In the original book, Gerber introduces readers to the five core concepts of his hypothesis. 

The Principle Of Life - In theory, your business should be a way to get more out of your life. It should be more than just a job that you have created for yourself, and instead - it is there to serve you.

The Law Of Objectivization - View your business as separate from you. Think of it as a product of you, and you will be able to reinvent it. It is about taking a step outside of your business, and looking at it objectively.

Working On It, Not In It - The business as a whole is the product, not just the things or the services that the business produces. You should be focused on building your business, not merely cranking out products or services.

Systemization - View your business as an integrated system. The system does the work, and people run the system. Your business should be a well oiled machine, and should be able to operate at full capacity without you. 

Business Development Cycle - The task of the owner is the continuous development of the business via the ongoing process of innovation, quantification, and orchestration, along with covering different owner personality types, the three phases and the franchise prototype. 

Gerber proceeds to explain that inside every business owner lives three distinct personalities: The Entrepreneur, The Manager and The Technician - and that most business owners struggle to find the balance between the three. The Entrepreneur is regarded as the innovator, the visionary, the dreamer, and the opportunity seeker, and their ideas can be too big or too fast for the others to keep up with. Pragmatic and predictable, The Manager is the one who “cleans up” after The Entrepreneur, and is generally more cautious, conservative and resistant to change. Finally, The Technician likes to see ideas reduced to methodology, and is the workhorse of the team that enjoys being in the “coal face”. 

Gerber argues that many businesses are driven by the “technician” personality, which is based on the understanding that knowing how to do the technical work of a business is enough to run a business that does technical work - and that this is where many fall flat. 

He also goes on to observe that businesses have three phases of growth: infancy, adolescence and maturity. Operating from the bottom up rather than the top down, the infancy phase is closely linked to the technician mindset, meaning that the owner is too “hands on”, and working in the business as opposed to on it. The business then morphs into the adolescence phase, where the owner may suffer from entrepreneurial burnout, and realise that they need to change the way things are currently done. In turn, a fully formed mature business owner understands how they got to where they are now, and what needs to be done next in order to get where it is they want to be. 

Despite criticisms that the E-Myth concept is now outdated thanks to the arrival of the internet, the fine print has been “tweaked” over the years by Gerber himself. While business may change, it would seem that people generally don’t, which is why E-Myth has remained as a go-to for both new, existing and flourishing business owners from around the world. 

Further Advice On E-Myth And Other Good Business Practices

A fresh perspective can be a game changer if you’re looking for ways to transform your business, make it more profitable, and ultimately make yourself happier as the owner.

If understanding your finances or the in’s and outs of doing business isn’t your strong point, then it may be reassuring to know that you’re not alone. In fact, many brands (big and small) enlist the services of an accountant and business coach in order to free up their time, while knowing that their financial obligations are already taken care of by the professionals. 

At Muro, we are more than just accountants - we offer our clients strategic business advice and ongoing support to help them reach their business and financial goals. Get in touch with us at Muro today to ensure that you’re on the right path for success as we head into 2021.