THE E-MYTH REVISITED by Michael E. Gerber

• Contrary to popular belief, my experience has shown me that the 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.
• If your thinking is sloppy, your business will be sloppy. If you are disorganized, your business will be disorganized.
• That Fatal Assumption is: if you understand the technical work of a business, you understand a business that does that technical work. And the reason it’s fatal is that it just isn’t true. In fact, it’s the root cause of most small business failures!
• The technical work of a business and a business that does that technical work are two totally different things!
• The problem is that everybody who goes into business is actually three-people-in-one: The Entrepreneur, The Manager, and The Technician. And the problem is compounded by the fact that while each of these personalities wants to be the boss, none of them wants to have a boss.
• The entrepreneurial personality turns the most trivial condition into an exceptional opportunity.
• To The Entrepreneur, most people are problems that get in the way of the dream.
• The managerial personality is pragmatic.
• The Technician is the doer.
• The fact of the matter is that we all have an Entrepreneur, Manager, and Technician inside us. And if they were equally balanced, we’d be describing an incredibly competent individual.
• It is self-evident that business, like people, are supposed to grow; and with growth, comes change. Unfortunately, most businesses are not run according to this principle. 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.
• There’s only something wrong with being a Technician who also owns a business! Because as a Technician-turned-business-owner, your focus is upside down.
• If your business depends on you, you don’t own a business—you have a job.
• Adolescence begins at the point in the life of your business when you decide to get some help. There’s no telling how soon this will happen. But it always happens, precipitated by a crisis in the Infancy stage.
• As a business grows, it invariably exceeds its owner’s ability to control it—to touch, feel, and see the work that needs to be done, and to inspect its progress personally as every technician needs to do.
• One of the most consistent and predictable reactions of The Technician-turned-business-owner to Adolescent chaos is the decision to “get small” again. If you can’t control the chaos, get rid of it.
• Luck and speed and brilliant technology have never been enough, because somebody is always luckier, faster, and technologically brighter.
• “The true question is not how small a business should be but how big. How big can your business naturally become, with the operative word being naturally?
• A Mature business knows how it got to be where it is, and what it must do to get where it wants to go.
• the very best businesses are fashioned after a model of a business that works.
• What’s important is the business: how it looks, how it acts, how it does what it is intended to do.
• That most people who go into business don’t have a model of a business that works, but of work itself, a Technician’s Perspective, which differs from the Entrepreneurial Perspective
• The Entrepreneurial Perspective sees the business as a system for producing outside results—for the customer—resulting in profits. The Technician’s Perspective sees the business as a place in which people work to produce inside results—for The Technician—producing income.
• To The Entrepreneur, the present-day world is modeled after his vision. To The Technician, the future is modeled after the present-day world.
• The Entrepreneurial Model looks at a business as if it were a product, sitting on a shelf and competing for the customer’s attention against a whole shelf of competing products (or businesses). Said another way, the Entrepreneurial Model has less to do with what’s done in a business and more to do with how it’s done. The commodity isn’t what’s important—the way it’s delivered is.
• without a clear picture of that customer, no business can succeed.
• To The Entrepreneur, the business is the product. To The Technician, the product is what he delivers to the customer.
• Most business founders believe that the success of a business resides in the success of the product it sells.
• The true product of a business is the business itself.
• What Ray Kroc did was to apply the thinking behind the Industrial Revolution to the process of Business Development, and to a degree never before experienced in a business enterprise.
• The system isn’t something you bring to the business. It’s something you derive from the process of building the business.
• your business is not your life.
• 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.
• Further, now that you know what the game is—the franchise game—understand that there are rules to follow if you are to win:
• 1. The model will provide consistent value to your customers, employees, suppliers, and lenders, beyond what they expect.
• 2. The model will be operated by people with the lowest possible level of skill.
• 3. The model will stand out as a place of impeccable order.
• 4. All work in the model will be documented in Operations Manuals.
• 5. The model will provide a uniformly predictable service to the customer.
• 6. The model will utilize a uniform color, dress, and facilities code.
• I would suggest that value is what people perceive it to be, and nothing more.
• So what could your Prototype do that would not only provide consistent value to your customers, employees, suppliers, and lenders but would provide it beyond their wildest expectations? That is the question every Entrepreneur must ask.
• It is in the understanding of value, as it impacts every person with whom your business comes into contact, that every extraordinary business lives.
• if your model depends on highly skilled people, it’s going to be impossible to replicate.
• By lowest possible level of skill I mean the lowest possible level necessary to fulfill the functions for which each is intended.
• The question you need to keep asking yourself is: How can I give my customer 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? Systems-dependent rather than expert-dependent.
• That is not to say that people are unimportant. On the contrary, people bring systems to life.
• But for ordinary people to do extraordinary things, a system—“a way of doing things”—is absolutely essential in order to compensate for the disparity between the skills your people have and the skills your business needs if it is to produce consistent results.
• While the business must look orderly, it is not sufficient; the business must also act orderly. It must do things in a predictable, uniform way.
• Go to work on your business rather than in it. Go to work on your business as if it were the pre-production prototype of a mass-produceable product.
• How can I get my business to work, but without me? • How can I get my people to work, but without my constant interference?
• the difference between creativity and Innovation is the difference between thinking about getting things done in the world and getting things done.
• “Creativity thinks up new things. Innovation does new things.”
• The next time you want somebody to do something for you, touch him softly on the arm as you ask him to do it.
• Innovation is the heart of every exceptional business. Innovation continually poses the question: What is standing in the way of my customer getting what he wants from my business?
• For the Innovation to be meaningful it must always take the customer’s point of view.
• To be at all effective, all Innovations need to be quantified. Without Quantification, how would you know whether the Innovation worked?
• Begin by quantifying everything related to how you do business. I mean everything.
• Orchestration is the elimination of discretion, or choice, at the operating level of your business.
• In short, the definition of a franchise is simply your unique way of doing business.
• In short, Innovation, Quantification, and Orchestration are the backbone of every extraordinary business. They are the essence of your Business Development Process.
• Your Business Development Program is the vehicle through which you can create your Franchise Prototype. The Program is composed of seven distinct steps: 1. Your Primary Aim 2. Your Strategic Objective 3. Your Organizational Strategy 4. Your Management Strategy 5. Your People Strategy 6. Your Marketing Strategy 7. Your Systems Strategy
• With no clear picture of how you wish your life to be, how on earth can you begin to live it?
• As with Mature companies, I believe great people to be those who know how they got where they are, and what they need to do to get where they’re going. Great people have a vision of their lives that they practice emulating each and every day. They go to work on their lives, not just in their lives.
• “The difference between a warrior and an ordinary man is that a warrior sees everything as a challenge, while an ordinary man sees everything as either a blessing or a curse.”
• Your Strategic Objective is a very clear statement of what your business has to ultimately do for you to achieve your Primary Aim.
• In fact, there is ultimately only one reason to create a business of your own, and that is to sell it! To do it, to finish it, and then to get paid for it!
• The commodity is the thing your customer actually walks out with in his hand. The product is what your customer feels as he walks out of your business. What he feels about your business, not what he feels about the commodity. Understanding the difference between the two is what creating a great business is all about.
• The truth is, nobody’s interested in the commodity. People buy feelings.
• Tactical Work is the work all technicians do. Strategic Work is the work their managers do.
• As in any game, the “people game” has rules that must be honored if you are to become any good at it.
• Your Marketing Strategy starts, ends, lives, and dies with your customer.
• When it comes to marketing, what you want is unimportant. It’s what your customer wants that matters. And what your customer wants is probably significantly different from what you think he wants.
• Demographics and psychographics are the two essential pillars supporting a successful marketing program. If you know who your customer is—demographics—you can then determine why he buys—psychographics. And having done so, you can then begin to construct a Prototype to satisfy his unconscious needs, but scientifically rather than arbitrarily.
• A system is a set of things, actions, ideas, and information that interact with each other, and in so doing, alter other systems.
• There are three kinds of systems in your business: Hard Systems, Soft Systems, and Information Systems.
• Hard Systems are inanimate, unliving things.
• Soft Systems are either animate—living—or ideas.
• Information Systems are those that provide us with information about the interaction between the other two.
• Freedom does not come automatically; it is achieved. And it is not gained in a single bound; it must be achieved each day.
• You should know now that a man of knowledge lives by acting, not by thinking about acting, not by thinking about what he will think when he has finished acting. A man of knowledge chooses a path with heart and follows it.