The E Myth Revisited by Michael Gerber

The E Myth Revisited by Michael Gerber

The Book in A Few Sentences 

People start businesses to do work they love and control their time and who they work with. But most small businesses fail because the owner works in the business rather than on the business. Small business success requires three things: a) work on your business, not in your business b) your business is your product c) your product is your systems.

The E Myth Revisited summary

This is my book summary of The E-Myth Revisited by Michael Gerber. My notes and summary include the key ideas and concepts and most important passages from the book.


  • Contrary to popular belief, my experience has shown me that people who are exceptionally good in business aren’t so because of what they know but because of their insatiable need to know more.
  • The greatest businesspeople I’ve met are determined to get it right no matter what the cost.

Part 1: The E-Myth and American Small Business

1: The Entrepreneurial Myth

  • The technical work of a business and a business that does that technical work are two totally different things!
  • The real tragedy is that when the technician falls prey to the Fatal Assumption, the business that was supposed to free him from the limitations of working for somebody else actually enslaves him.
  • The technician suffering from an Entrepreneurial Seizure takes the work he loves to do and turns it into a job.
  • First, exhilaration; second, terror; third, exhaustion; and, finally, despair.

2: The Entrepreneur, The Manager, and the Technician

  • …everybody who goes into business is actually three-people-in-one: The Entrepreneur, The Manager, and The Technician.
  • The entrepreneur is the visionary in us. The dreamer.
  • To The Entrepreneur, most people are problems that get in the way of the dream.
  • The managerial personality is pragmatic. Without The Manager there would be no planning, no order, no predictability.
  • Where The Entrepreneur craves control, The Manager craves order.
  • Where The Entrepreneur invariably sees the opportunity in events, The Manager invariably sees the problems.
  • The Technician is the doer.
  • If The Entrepreneur lives in the future and The Manager lives in the past, The Technician lives in the present. He loves the feel of things and the fact that things can get done.

3: Infancy: The Technician’s Phase

  • Instead most businesses are operated according to what the owner wants as opposed to what the business needs.
  • It’s easy to spot a business in Infancy—the owner and the business are one and the same thing.

4: Adolescence: Getting Some Help

  • Adolescence begins at the point in the life of your business when you decide to get some help.

5: Beyond the Comfort Zone

  • Every Adolescent business reaches a point where it pushes beyond its owner’s Comfort Zone—the boundary within which he feels secure in his ability to control his environment, and outside of which he begins to lose that control.
  • …a business that ‘gets small again’ is a business reduced to the level of its owner’s personal resistance to change.
  • In short, businesses that ‘get small again’ die.
  • Simply put, your job is to prepare yourself and your business for growth.

6: Maturity and the Entrepreneurial Perspective

  • Maturity, the third phase of a company’s growth, is exemplified by the best businesses in the world. Businesses such as McDonald’s, Federal Express, and Disney.
  • To The Entrepreneur, the business is the product.

Part II: The Turn Key Revolution: A New View of Business

8: The Franchise Prototype

  • The system runs the business. The people run the system.
  • In the Franchise Prototype, the system becomes the solution to the problems that have beset all businesses and all human organizations since time immemorial.

9: Working On Your Business, Not In It

  • Once you recognize that the purpose of your life is not to serve your business, but that the primary purpose of your business is to serve your life, you can then go to work on your business, rather than in it, with a full understanding of why it is absolutely necessary for you to do so.
  • How can I give my customers the results he wants systematically rather than personally? Put another way: How can I create a business whose results are systems-dependent rather than people-dependent?
  • …great businesses are not built by extraordinary people but by ordinary people doing extraordinary things.
  • …in a world of chaos, most people crave order.
  • How can I spend my time doing the work I love to do rather than the work I have to do?
  • The problem isn’t your business; it never has been. The problem is you! It has always been you and will always be you. Until you change, that is.

Part III: Building a Small Business That Works!

  • Building the Prototype of your business is a continuous process, a Business Development Process.
  • Begin by quantifying everything related to how you do business. I mean everything.
  • The need for Orchestration is based on the absolutely quantifiable certainty that people do only one thing predictably—be unpredictable.
  • And to the craftsperson is one who has reached that stage of her development where she is content with the work, and only the work, knowing that it is only through being there with one’s work that the jewel will reveal itself, and that it is the work, and only the work, raised to the level of near perfection that connects the craftsperson with herself, with her own heart. 
  • And so she practices, day in and day out, content to do so, without the thrill of the apprentice to keep her going, but knowing deep inside that there is no place to go but here.l
  • And that, I believe, is the heart of the process: not efficiency, not effectiveness, not more money, not to ‘downsize’ or ‘get lean,’ but to simply and finally create more life for everyone who comes into contact with the business, but most of all, for you, the person who owns it.
  • …the Business Development Process can be thought of as a metaphor for personal transformation, for coming to grips with real life.

12: Your Primary Aim

  • I believe it’s true that the difference between great people and everyone else is that great people create their lives actively, while everyone else is created by their lives, passively waiting to see where life takes them next.
  • The difference between the two is the difference between living fully and just existing.

13: Your Strategic Objective

  • …your business is a means rather than an end, a vehicle to enrich your life rather than one that drains the life you have.
  • …how much money do you need in order to be independent of work, to be free?
  • The product is…What he feels about your business, not what he feels about the commodity.
  • What’s your product? What feeling will your customer walk away with? Peace of mind? Order? Power? Love? What is he really buying when he buys from you?
  • The truth is, nobody is interested in the commodity. People buy feelings.

14: Your Organizational Strategy

  • It’s the process through which you think through your business as best you’re able and then structure the way it is to work. Your Organization Chart is that structure.

15: Your Management Strategy

  • It is a System designed into your Prototype to produce a marketing result.
  • And an effective Prototype is a business that finds and keeps customers—profitably—better than any other.

16: Your People Strategy

  • “The work we do is a reflection of who we are. If we’re sloppy at it, it’s because we’re sloppy inside. If we’re late at it, it’s because we’re late inside. If w’ere bored by it, it’s because we’re bored inside, with ourselves, not with the work.”
  • “The most menial work can be a piece of art when done by an artist. So the job here is not outside ourselves, but inside of ourselves. How we do our work becomes a mirror of how we are inside.”
  • They [employees] want to work for people who have created a clearly defined structure for acting in the world. A structure through which they can test themselves and be tested. Such a structure is called a game. 
  • And there is nothing more exciting than a well-conceived game.
  • What most people need, then, is a place of community that has purpose, order, and meaning.
  • A place in which being human is a prerequisite, but acting human is essential. 
  • A place where the generally disorganized thinking that pervades our culture becomes organized and clearly focused on a specific worthwhile result.
  • The ‘It’ of your business…is Caring.

17: Your Marketing Strategy

  • If you know who your customer is—demographics—you can then determine why he buys—psychographics.
  • Again, demographics is the science of marketplace reality. It tells you who buys.
  • Psychographics is the science of perceived marketplace reality. It tells you why certain demographic types buy for one reason while other demographic types buy for another.
  • Reality only exists in someone’s perceptions, attitudes, beliefs, conclusions…and nowhere else.
  • Those perceptions are at the heart of your customer’s decision-making process.
  • You have to become a student of the art of business and the science of business.
  • And that’s why the business process of Lead Generation, Lead Conversion, and Client Fulfillment is so critical to the growth of your business. 
  • And that’s what marketing is. The whole process. Not just a part of it but the entire thing.
  • …make a promise their [your] customer wants to hear, and to deliver on that promise better than anyone else on the block!

18: Your Systems Strategy

  • There are three kinds of systems in your business: Hard Systems, Soft Systems, and Information Systems.
  • Hard Systems are inanimate, unliving things. My computer is a Hard System, as are the colors in this office’s reception area
  • Soft Systems are either animate—living—or ideas. You are a Soft System; so is the script for Hamlet. 
  • Information Systems are those that provide us with information about the interaction between the other two.
  • After all, that’s the purpose of a system—to free you to do the things you want to do.
  • A completely predictable technology for producing formerly unpredictable results.
  • …every written or verbal communication with anyone who comes into contact with your business is a Soft System.

Afterword: Taking the First Step

  • …determine the gap between where you are and where you need to be in order to make your dream a reality.
  • That gap will tell you exactly what needs to be done to create the business of your dreams.
  • …the gap is always created by the absence of systems…