The E-Myth Revisited - Michael E. Gerber

🚀 The Book in 3 Sentences

1. Set up a simple, clear organisational structure so everyone knows their role, what they’re responsible for, and what they’re accountable for. 4 Important position - CEO, Marketing, Operation and Financial
2. We’re not really selling a commodity but we’re selling the feeling people get when they buy and use the product. 
3. Focus on building the business itself instead of getting stuck working in my business.

🎨 Impressions

I went into the book thinking it would teach me how to set up an ecommerce business. With a title like E-Myth Revisited, I assumed it was going to be all about online tactics and tools. Instead, the book guide my thinking towards teaching me how to build a business that works for me rather than trapping myself inside it.

What really stayed with me was the lesson on organisational structure. The way the author breaks down roles and responsibilities made me realise that role clarity is essential for business survival. Another insight that truly resonated with me was about what we are actually selling. We are not just selling a product. We are selling the feeling people experience when they buy it. A satisfied feeling lasts longer than any feature list, and that emotional spark is often what brings customers back for something even better next time.

📀 How I Discovered It 

Through Ali Abdaal youtube videos.

🦉 Who Should Read It? 

I think this book is not just useful for business owners. A lot of the ideas can actually be applied inside a corporate setting too, especially the part about building a clear organisational system and defining job contracts so people know exactly what they are expected to deliver. That kind of clarity removes confusion and saves a lot of unnecessary drama.

Overall, I feel it is most helpful for someone who has already started a business but is struggling without a proper system to support growth. It gives structure to the chaos. I would not rush to recommend it to someone who is still just thinking about starting a business, because many of the lessons only truly make sense after you have felt the pain of running one yourself.

☘️ How the Book Changed Me 

• I want to build my life intentionally, with meaning that goes beyond just work and deadlines.
• I will become better not because i know more but i have the insatiable need to know more.
• I choose to work on my business instead of getting buried inside it.
• Begin and create life intentionally to have meaning beyond work.
• Leave fully not just by existing and living intentionally not just living by accident.
• People do not buy commodities. They buy the feeling they get from the product, and that feeling is what keeps them coming back.
• I will create a clear organisational chart so I can delegate properly and let people own their roles with confidence.

✍️ My Top Quotes

• If you are greedy, your employees will be greedy, giving you less and less of themselves and always asking for more.
• Great businesses are not built by extraordinary people but by ordinary people doing extraordinary things
• All you need to do is begin living your life as if it were important. All you need to do is take your life seriously. To create it intentionally. To actively make your life into the life you wish it to be. Simple? Yes. Easy? No. But absolutely essential if your business is to have any meaning beyond work.
• 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 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 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 we’re 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 of ourselves, but inside of ourselves. How we do our work becomes a mirror of how we are inside.

📒 Summary + Notes

Part I: The E-Myth and American Small Business

• Entrepeneur: The business is the product
• Technician: the product is what he delivers to the customer
• Franchise: True product of a business is not what it sells but who it sells it.
  • Create a business that worked in order to sell it.
  • Create a business that would work to whoever it was sold to.
  • Create a system dependent business.
  • Built business out of perfect predictable components.
• People are good in business not because what they know but they have the insatiable need to know more.
• Successful entrepreneur possesses focus on seemingly insignificant, unimportant and boring things that make up their business.

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

• Turnkey Operation : Having the right to use the systems, learns how to run it, and then “turns the key”.
• The franchise game;
  • Provide consistent value to my customers, employees, suppliers and lenders beyond what they expect.
  • Will be operated by personnel with the lowest possible level of skill
  • The franchise model in arranged in flawless order. (A business that looks orderly reflect to my customer that we know what we are doing.)
  • All work will be documented in operations manual.
  • The model will provide uniform predictable service to the customers.
  • The model will utilise a uniform color, dress and facilities code.
• Create a business that is system dependent rather than people/expert dependant
• Work on my business rather than work in it. Ask question such as;
  • How can i get my business to work without me.
  • How can i get my people to work without my interference.
  • How can i systemise my business so that it can be replicated the same way thousands of times.
  • How can i own my business and be free from it.
  • How can i spend my time doing the work i love to do instead of working on i have to do.

Part III: Building a Small Business That Works!

• Business development process involve;
  • Innovation, quantification and orchestration.

• Innovation is the mechanism in which my business identifies itself in the mind of my customer and establishes its individuality.
  • Innovation leads to nowhere without quantification.
  • Example;
    • Employee: “hi welcome to our store. Have you shopped here before?”
    • If “yes” then reply: “great, we’ve created a special new program for people who have shopped here before. Let me take a minute to tell you about it.”
    • If “no” then reply: “great, we’ve created a special new program for people who haven’t shopped here before. Let me take a minute to tell you about it.”

• Quantification is the numbers that are related to the impact of an innovation makes.
  • Have a baseline before innovation was put into effect by determining how many customers enters into my business.
  • Determine how many people bought the product and the value of product before implementing the innovation.
  • Count the people who enter my premise after innovation was implemented.
  • Count the number of people who purchased something.
  • Determine average unit value of sale.
  • Determine the improvement made as a result of my innovation.

• Orchestrate is the elimination of choice or eliminate people own authority to choose

• Business development program composed of;
  • Primary aim
  • Strategic objective
  • Organisational strategy
  • Management strategy
  • People strategy
  • Marketing strategy
  • System strategy

• Before Starting A Business, Ask;
  • What do i wish my life looks like?
    • I wish i don't have to worry about money and i can spent my money whenever i want for the betterment of my life and my family’s live.
    • I wish i can have money to travel aboard 3 month at a time and to learn their language.
    • I wish i can have free time to do the things that i want, when i want it, with whomever i want.
  • How do i wish my life to be on a day to day basis.
  • How would I like to be with other people in my life—my family, my friends, my business associates, my customers, my employees, my community?
    • I want to let them know I care for them and I will do my best to make them feel I care/kind to them.
  • How would I like people to think about me?
    • I am trustworthy.
    • I develop people.
    • I chose deep work over gossips.
    • I am more than capable.
    • I deliver as per my target.
    • I am confident.
    • I am unselfish.
    • I develop meaningful relationship and meaning work.
    • I am a credible leader with exceptional people management skills.
  • What would I like to be doing two years from now? Ten years from now? Twenty years from now? When my life comes to a close?
  • What specifically would I like to learn during my life—spiritually, physically, financially, technically, intellectually?

• Primary Aim;
  • Having the vision to bring my business to life and my life to my business.

• Strategic Objective;
  • What my business has to do for me to achieve my primary aim.
  • My strategic objective not my business plan but it is a product from my life plan, business strategy and business plan.
  • Strategic objective is a tool to measure progress towards an end. It is designed for implementation, not rationalisation.
  • Its list of standards. A template for my business, to make certain that time invest in my business produces exactly what i want from it.
    • First standard: Money standard
      • Gross revenue.
      • How big my company be when its done.
      • The ultimate reason why i build my business is actually selling it.
    • An Opportunity Worth Pursuing
      • A business that can fulfill my financial standard based on my primary aim and strategic objective.
      • How to know it is an opportunity?
        • Does the business i have in mind solve problems experienced by a large enough group of consumers to make it worthwhile.
      • Identify business in a commodity form (banking, internet etc). Product is what my customer feels as he walk out of my business.
        • In Revlon case, the commodity is cosmetic, the product is hope.
        • Channel, he commodity is perfume, the product is fantasy.
        • Pies, commodity food, the product is caring.
        • Nobody interested in the commodity, they buy feelings.
      • Demographic and psychographic will predetermine how my business satisfies their feelings.
        • Demographic: tells who is my customer is.
        • Psychographic: tells why my customers buy it.
      • The only way to tell it is an opportunity is by determining selling opportunities (demographic) and how successfully i can satisfy my customers emotional and perceived needs (psychographic)
    • Specific question that needed to be answered.
      • When is my prototype going to be completed.
      • Where am i going to be in business? Locally? Internationally?
      • How am i going to be in business? Retail? Wholesale?
      • What standards am i implementing? Hiring? Firing? Training?

• Organisational Strategy
  • Organisational chart has a more profound impact than any other single business development.
  • Organise people by function instead of personality. Organising by personality create chaos and disaster.
  • President / COO Chief Operating Officer / CEO Chief Executing Officer
    • Accountable for overall achievement of the strategic objective and reporting to the shareholders
  • Vice President / Marketing
    • Accountable for finding customers.
    • Accountable to finds new ways to provide customers with the satisfaction they derive from widget, at lower cost and with greater ease.
    • Reports to COO.
    • Direct superior to 2 positions; sales manager and advertising/research manager.
  • Vice President / Operations
    • Accountable for keeping customers by delivering to them what is promised by marketing
    • Accountable to discover new way to assemble product, at lower cost, and with greater efficiency and provide customer with better service
  • Vice President / Finance
    • accountable for supporting marketing and operations yo achieve profitability standards.
    • Accountable to secure capital at the best rates whenever needed.
    • Reporting to COO
    • Direct superior to (2 positions) accounts receivable manager and accounts payable manager.
  • At first i need to fill all position.
  • Then the next step is to outline and write position contract for each position.
    • It is a contract rather than just a description between company and employee.
    • Contain the rules of the company game’s.
    • Provide the employee with a sense of commitment and accountability.
  • Needs to produce sales operation manual and hire not a master technician but an apprentice, a total novice, someone eager to learn how to do it right.
    • No experience necessary, just an open mind and a willingness to learn.
    • Create an environment in which doing it is crucial than not doing it, where doing it well is a way of life for them.
    • Took my employee seriously.
    • Hire people not to do the work, but to do something much more important than that.
    • Give people choice to work for you, not a choice after they have done the work by making sure they understand the idea behind the work they do.
    • Rules at the hotel mentioned by the interviewed manager.
      • The customer is not always right but but ensure that we make them feel that way.
      • Everyone who works here is expected to work at his best he possibly can and be accounted for it. If he cannot do that, he should leave.
      • Business is a place where we are tested by what we dont know now to do it. And the conflict between knowing and not knowing is what create growth and meaning.
    • It is not about the hotel entirely. its about how serious the employee took to play the game/do the work created by the manager.
      • The process/game in the business can’t be simply captured in written page but instead it must be experienced.

• Management Strategy
  • Rule of the game
    • The process/rules comes first, then what people do comes second.
    • Never create a game that myself unwilling to play too. My people will figure it out and never let you forget it.
    • Make sure there are specific ways to win the game without ending it. The game cannot end because it will take the life out of my business but its important to have victories to prevent people growing weary.
    • Change the game from time to time by changing the tactics but not the strategy.
      • Stratergy is the foundation of me, my people commitment to each other.
      • Its the moral of my game’s logic.
      • Change is necessary to prevent the game becoming ordinary.
    • Game can never be self sustain. Remind the game constantly to my workers. Create a special meeting about the game at least once a day.
      • Make issues about an exception and ensure people are aware of it.
    • The game has to make sense. Illogical game will never fly. The best game are built on universally verifiable truth.
    • The game need to be fun from time to time, note that is not all the time.
      • A game is often not fun.
      • Playing a game well means dealing with the no fun part.
      • Make it fun once every 6 month. A something to look forward to and something to forget later.
    • If you cant think of a good game, steal one.
  • People are not sastified in their life be it from their families, religion, government and themselves. People are missing purpose and values.
    • That’s why business is important, it creates a game worth playing.
    • It becomes a place such as integrity, intention, commitment, vision and excellence to produce a worthwhile result.
      • The result is returning my customer a sense that my establishment is a special place, created by special people and doing the best to their capacity.
  • Hiring process is the most essential medium to communicate the business ideas. Process of hiring includes;
    • A scripted presentation communicating what the business is about, its history, experience the idea successfully and the required attribute of the position applied.
    • Meeting individually with the applicant to discuss his reaction and feelings about the idea you communicating and discuss his experience and background.
    • Ask the applicant why does he feels superbly appropriate for his applied position.
    • Notify the successful applicant by phone with scripted presentation.
    • Notify the unsuccessful applicant and thanking him for his interest. If possible send out a standard letter, signed by the interviewer.
  • Things to do for applicant in his first day of work.
    • Review the establishment idea.
    • Summarise the system and processes to bring the idea into reality.
    • Bring the new hiring to a tour of a facilities, highlighting people at work and system and highlight the interdependencies of the people and the system.
    • Answering clearly and fully all employees question.
    • Issued out uniform and operating manual.
    • Review the operations manual including the strategic objective, organisational strategy, and position contract of the employee’s position.
    • Completes the employment papers
  • What it means to have accountability for what is going on in my business.
    • Set standards for managers that expect to produce result.
    • I need people who want to play the game, not people that who believe they have a better one.
    • Managers do not simply manage people, managers manage the system of the business to achieves its objective.
    • System produce the result, the people manage the system.
  • Marketing strategy start, ends, lives and dies with my customers.
    • Customer’s subconscious mind is the one who made the decision and action. 75% buying decision are made at the headline and appearance alone. The first 3 minute is what make we win or lose the sale.

• Succesfull Marketing Stratergy
  • 2 pillars.
    • Demographic
      • Science of marketplace reality. It inform us who buys the product.
    • Psychographics
      • Science of perceived marketplace reality: it tells why certain demographic types buy your product.
  • How to determine demographic and psychographics of my customers?
    • Ask them to complete a questionnaire in return for a free gift.
  • Determine customer’s trading zone by identifying where your customer’s live, identify them from a map, draw a line around it and that becomes my first pass trading zone.
  • The true small business owner need to do - strategic work instead of tactical work.
    • Strategic work is determining the demographic and psychographic of my customers.
    • Tactical is the work itself.
  • Business must incorporate
    • Lead generation: Marketing
    • Lead conversion: Sales
    • Client fulfillment: Operations

• Type Of System In My Business
  • Hard, soft and information system
    • Hard system: computers
    • Soft system: animate or living or ideas: people. Things need to be sold. 80% of sales are produced by 20% of people. (Because the 20% people have system while the rest doesn't). A selling system is a soft system.
    • Information system: inventory control, cash flow forecasting, sales activity summary report and any other related information.
  • What is a selling system?
    • It is an orchestrated interaction between me and my customer. The steps are as follows;

1. identify the benchmark/consumer decision points in the selling process.
2. Literal script that I use over and over again to get to each customer successfully.
3. Create various material to use with each script.
4. Memorise the script.
5. Deliver the script by my salespeople in identical way.
6. Leaving my people to communicate effectively, by articulating, watching, listening, hearing, acknowledging, understanding and engaging every prospect as fully as he can be.

• Power Point Selling System consist of 2 parts which is structure and substance.
  • Structure: a predetermined element of he process which includes what i say, the materials that i use to say it and what i wear.
  • Substance: what the salesperson bring to the process which includes how i say it, how i use the material when i say it and how am i delivering it.
• Power Point Selling Process is a series of scripts defining the entire interaction between the salesperson and customer.

• The appointment presentation: moves the prospect from where he is to the needs analysis presentation.
  • Speaks about the product rather than the commodity.
    • Example: “Hi, Mr. Jackson. I’m Johnny Jones with Walter Mitty Company. Have you seen the remarkable new things that are being done to control money these days?”
    • “What new things?”
    • “Well, that’s exactly why I called. May I have a moment of your time?”

• The needs analysis presentation:
  • Repeat what i said in the appointment presentation to re-establish emotional commitment.
    • “Remember, Mr. Jackson, when we first talked I mentioned that some remarkable new things were going on in the world to control money?”
  • Then tell the prospect how i like to fullfill my earlier promise to him.
    • “Well, what I’d like to do is to tell you about those things. At the same time, I’d like to show you some incredibly effective ways my firm, Walter Mitty Company, has developed to help you to control money here in your business Okay?”
  • Establish my credibility by communicating my company expertise.
    • “We are Money-Controlling Specialists”
  • Communicate personal willingness to do what it takes to utilise my company abilities on his behalf.
    • “Let me tell you why we created our company, Mr. Jackson. We’ve found that people like yourself are continually frustrated by not being able to get the most out of their money. Frustrated by paying higher interest rates than they have to. By working with financial experts who don’t seem to know what they’re doing. By banking with a bank that doesn’t seem to have their best interest at heart” And so on. “Do these things ever frustrate you. Mr Jackson? Of course they do And that’s why Walter Mitty Company has created a Money-Controlling System that makes it possible for you to get the most preferential treatment in the financial arena while paying the least for it. Now I know that sounds too good to be true. But let me explain how we propose to go about doing that for you….”
  • Then describe my company system and why it works so well. Not what it does but its impact on the prospect.
    • “The Walter Mitty Company’s Money-Controlling System is designed to do three things, Mr. Jackson.“First, it enables us to know what specifically bothers you about controlling your money. Because we know that controlling money must be personally tailored to each and every one of our clients. In order to do that we’ve created what we call at Walter Mitty Company a Money Management Questionnaire. By asking you these particular questions, we’re well on our way to helping you get what you want. Before I leave today, I’ll review the Questionnaire with you. “Once the Questionnaire is completed, we return it to our Financial Systems Group. This is a group of financial specialists who review your Questionnaire to make certain that it has been completed accurately. “If it has, they enter the information into our Money-Controlling System that has been designed to analyze this information and compare it with the broad spectrum of data we’ve assembled over the years. Once having analyzed the information, the System will then create personally tailored solutions just for you, Mr. Jackson. Ways to secure the kind of preferential treatment we talked about earlier, but at the lowest possible cost. Ways of controlling your money and using it to your advantage, not someone else’s. “These solutions will then be prepared in the form of a Financial Report that I’ll deliver to you personally and review with you at that time. “Should any of our solutions make sense to you, we’ll be more than happy to help you implement them. If not, then at least we’ll have started the process of becoming better acquainted so that we may be of assistance to you some other time. “In any case, the Financial Report is yours—at absolutely no cost whatsoever. It’s our way of saying we’re serious about what we do, and would be happy to work with you, whether now or in the future. “So let’s review the Questionnaire together, and when we’re done I’ll provide you with a summary of some of the remarkable new things that are happening in the world to control money. And then I’ll take your information back so we can prepare your Financial Report. Okay?”
  • Complete the questionnaires.
  • Then provide the prospect with the information promised earlier.
  • Make an appointment with the prospect and remind him that i have the solution for him at no cost!
    • Tell the customers make him understand. It doesnt matter whether he decides to implement it or not.

• The Solution Presentation.
  • If i have done a good job in the need analysis presentation, the sale is already made. Selling is actually an opening, while solution presentation is the closing.
  • Provide preferential treatment to the prospect if the prospect is opening up to a deeper experience of frustration in his problem.
  • Offer he prospect.
    • Be inside of the circle who are in the know.
    • Be treated like important people.
    • Use the solution like the pro.
    • Gain control of his life.
      • “Of the options we’ve suggested here, Mr. Jackson, which do you feel would best serve you right now?”
      • And then waits for the answer! Because the next person who speaks is going to make a purchase. If that’s Johnny Jones, he’s going to buy a “no sale.” And that’s all, except for writing up the sale! Of course, there’s everything else to do.
  • Once i have perfected the system by going to the same script every time, review the solution the same way every time, i will not have a selling person but a selling system.