Monthly Business Book Review by Charles Read, President/CEO GetPayroll

This is the first in a monthly series by Charles Read. Charles will be reviewing business books, some newly published, some classics, and some obscure. His goal is to help you in running your business by giving you some insights and recommendations for readings that will make running your business a little easier. And who doesn't want that?! Enjoy!

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The E Myth Revisited - Book Review by Charles Read, CEO & President of GetPayroll

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

Author: Michael E. Gerber

Publication: 1995 

Why this book:

This book saved my business when I read it the first time. I buy it by the dozen and give it to clients that are having a difficult time in their business. I give a copy to every new employee in my company and insist that they read it.

Premise:

In the author’s own words, “Why most small businesses don’t work and what to do about it”.  The answer as he lays it out is The Turn-key Revolution business model.

Review:

First Michael explains why people start a business. They were good at something. They are a carpenter, accountant, mechanic, plumber, dog groomer and so on. Probably damn good at it, but doing it for somebody else and not feeling appreciated. So one day they're hit with an Entrepreneurial Seizure and start their own business.

The problem is your good at what you do and that is not running a business.

Michael uses an example, apocryphal I assume, of Sarah and her business “All About Pies”. Michael follows her through the book and the lessons he teaches her.

He explains three types of positions:

  1. The Entrepreneur (the futurist)
  2. The Manager (the pragmatic)
  3. The Technician (the doer)

He tells how new business starts and the phases it goes through. It grows until it has to shrink or goes broke, tragically survives as an adolescent or fully matures into a successful business. He does this using Sarah, her business, and its problems as the test case.

In Chapter Seven, he describes The Turn-Key Revolution of franchising and how it changed small business. He uses McDonald's as an example harking back to the days when it called itself “The most successful small business in the world." It is a staggering success because it gives entrepreneurs a proven formula to succeed: The Franchise Prototype, the formula of a turn-key business. Everything is laid out and tested and retested all the time and the system adjusted accordingly.

The Concept

The idea here is to create your own franchise prototype and to work on your business and not in your business. Create a model and document it. 

  • The model provides value to your clients. 
  • The model will be operated by people with the lowest possible level of skill necessary to achieve their function in the model. 
  • The model will bring order. 
  • All work will be documented in the model. 
  • The model will provide a uniformly predictable service to the client. 
  • The model will utilize a uniform color, dress, and facilities code.

Create Your Model

The remainder of the book teaches you how to create your model. It teaches you the process, the aims and the strategies you need in your model:

  • Business Development
  • Primary Aim
  • Strategic Objective
  • Organizational Strategy
  • Management Strategy
  • People Strategy
  • Marketing Strategy
  • System Strategy

He ends with the First Step. Take stock of where your company is today and what you want it to look like. The difference is the Gap and what needs to be done to make your dream a reality.

On a Personal Note

I reread this book every few years and then look at my business to identify the gaps that exist and rededicate myself to eliminating them. Still working on it but the gap is better than 20 years ago when I was considering firing all my employees and going back to being a CPA. A friend, Richard Fish, sent me a copy and urged me to read it. I've been gung ho ever since.

Charles Read, President/CEO of GetPayroll
 

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