E-Myth (entrepeneur)

Professional Surveyor March 2008 Volume 28 Number 3
Book Review: The E-Myth Revisited
Jeff Salmon

At year's end I was perusing a list of "underrated business books" on the Bnet website (www.Bnet.com, devoted to dispensing business advice), when I came upon a short review of this book. (Note first that the "E" stands for "entrepreneur," not "E-Commerce" or "Electronic.")
The reason it caught my eye was the author's definition of the e-myth:
"the entrepreneurial myth that most people who start small businesses are entrepreneurs,
the fatal assumption that an individual who understands the technical work of a business can successfully run a business that does that technical work. "

Let's start with the second part of this definition, and it bears repeating: "the fatal assumption that an individual who understands the technical work of a business can successfully run a business that does that technical work." Working with small survey shops and sub-contractors I cannot help being struck by the accuracy of this observation. And if land surveyors don't qualify as "technical workers" I am at a loss for who would.

If this observation seems a bit harsh, and you as the owner/ operator of a small, technically oriented business are thrilled with the success and profitability of your shop, then by all means, skip this review.

However, if you are like many who work in small survey shops, you may have already discovered that being proficient in the technical aspects of surveying does not necessarily carry over into the other aspects of running a business.

The stakes are high: Within five years, nearly 80 percent of all newly formed small businesses will fail. The author blames the e-myth for this failure rate. As described above, the e-myth suggests that most people who start a small business are entrepreneurs. Nothing could be further from the truth; most folks who start small businesses are "technicians" whether they are land surveyors, carpenters, or beauticians.

Make no mistake: these people are great at what they do. Unfortunately, as part two of the definition points out, being a great technician rarely translates into being a great business person. I once heard it put another way: "Working 20 years for someone else does not prepare you to work for yourself."

Part One: Three Personalities
The book is divided into three major parts: part one expounds further on the concept of the e-myth and, more importantly, provides the reader with the three personalities that are necessary for a successful business: the Entrepreneur, the Manager, and the Technician.

The Entrepreneur is the visionary, dreaming up new ideas for the business. Without the Entrepreneur, the business would suffer from lack of innovation and fail to differentiate itself from the competition. The downside of the Entrepreneur is that, thriving on change, he creates havoc around him and sees most people as problems that get in the way of his vision.

The Manager's pragmatic personality, on the other hand, is all about organization. The Manager craves order and clings to the status quo. If, without the Entrepreneur there is no innovation, then without the Manager there would be no structure and therefore no business.

The Technician is, of course, the one who "gets things done." The Technician is not a dreamer, he's a doer. He finds the Entrepreneur to be a constant source of irritation, always dreaming up impractical ideas when his hands are full of practical projects that need to be done. As an individualist, he is likewise annoyed by the Manager's attempt to create structure, which he often sees as an attempt to "control" him.

The trick, the author says, is not to go out and hire an Entrepreneur and a Manager to augment the Technician in you; rather you should develop the Entrepreneur and Manager within yourself. Mr. Gerber does this by pushing the business person past his "comfort zone" into the realm of the "entrepreneur perspective."

Part Two: The "Turn-Key Business"
Here the author introduces the concept of the turn-key business by using the business format franchise as a model. Whereas, during a five-year period 80 percent of small businesses fail, the rate of failure for franchises is only 25 percent. What accounts for the success of the franchise is not necessarily the product, but rather the well-developed turn-key business system that is provided to the franchisee. To be sure, the author does not advocate turning your business into a franchise, but he does a great job of explaining how this prototype has a high success rate and provides higher-than-normal rates of return on investment.

Not surprisingly, the author of The E-Myth Revisited promotes the tools of business process management that I have discussed previously in my Business Angle column. By analyzing, improving, and most of all documenting your business processes you can begin to achieve what the author sets as a goal for all small businesses: "Working on not in your business." If you only do the later, that is work in your business, all you have created is a job, not a business. By working on your business you create an entity that is separate from yourself and doesn't require your constant attention. You can actually spend time away from your business and decrease your burnout factor.

Moreover, when you begin to think of the business as a product in itself, then you have created value that will serve you in the future. After all, one day you will want to retire. If you have worked on the business, you can sell the business. If all you've done is worked in the business, then you find no takers when you try to sell just a job.

Part Three: Business Development Concepts
In this section of the book the author introduces the "Business Development Program" that has seven steps, your:

Primary Aim
Strategic Objective
Organizational Strategy
Management Strategy
People Strategy
Marketing Strategy
Systems Strategy

Although space doesn't permit a full examination of each of these steps, I will discuss the first, and probably most important, step: "Your Primary Aim." The author makes it clear that the first step in organizing (or re-organizing) your business begins, not with your business, but with you personally. You should create a vision of how you want to live your life, who you want to be, and what you want your life to look like. "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 author points out that the difference between these two is "living intentionally and living by accident."
If one gets nothing more than this lesson from the book, then the book is money well spent. However, I found The E-Myth Revisited to be an eye-opening experience, not just another self-help business book. There is plenty of great advice here for the owner of a small survey shop or any technically oriented small business.

Resources
A company website, www.e-myth.com, offers more information on the concept behind the e-myth. This is a commercial site; however you can avail yourself of free newsletters and information too. Try running "Michael Gerber" through Amazon.com's search function to find this and other related books.

For more information about process management, check out the July and August 2007 issues of this magazine for a two-part article, "Process Management: The path to profitability." If you haven't saved your past issues, search the magazine's archives online at www.profsurv.com/archives.

About the Author
Jeff Salmon helps his clients with land-use and a variety of general business issues, including marketing, in Elizabeth, Colorado.