THE E-MYTH : REVISITED- MICHAEL E. GERBERWhy Most Small Businesses Don’t Work andWhat to Do About It

Presented ByBhavin Patel

Mastermind Credo

For Customers

We Will Always Work For The Need Of Micro, Small And Medium Enterprises And For The Individual Entrepreneurs. We Will Always Learn & Upgrade And Develop Our Capacities To Serve Them, To

Empower Them, To Develop Their Confidence And Make Them Successful And Happy In Life.

3

TOPICS Basic E-Myth concept

Personalities of a small business owner

Stages of Small Business – Infancy, Adolescence, Maturity

A Turn-Key or Franchise Perspective

4

ABOUT THE AUTHOR Michael E. Gerber is the Founder, Chairman and CEO of

EMyth Worldwide.

He helped transform 70,000+ businesses in 145 countries over the past 25 years. 

His book “The E-Myth Revisited”, has sold over 5 million copies in 29 languages, and E-Myth methodology is taught in 118 universities worldwide.

Inc. Magazine has called Michael the "World's No.1 Small Business Guru."

Michael E. Gerber

5

THE E-MYTH Small businesses are started by entrepreneurs risking capital to make a

profit.

Entrepreneurs are people that notice opportunities and take the initiative to mobilize resources to make new goods and services.

Entrepreneurship is building a business from scratch, and turning an idea into a profitable business.

The real reasons most people start businesses have little to do with entrepreneurship.

6

THE REALITY Person who start’s a business is generally a “Technician”

He is working for somebody else and is probably good at it.

Why am I working for this guy? If it weren't for me, he wouldn't have a business.

Once you were stricken with an Entrepreneurial Seizure, there was no relief.

You had to start your own business.

7

THE REALITY……. (CONTD.) The Fatal Assumption

If you understand the technical work of a business, you understand a business that does that technical work. The barber opens up a barber shop

This assumption is the root cause of most small business failures!

For the person suffering from an Entrepreneurial Seizure, a business is not a business but a place to go to work.

8

THE PERSONALITIES Everybody who goes into business is actually three-people-in-one: The

Entrepreneur, The Manager, and The Technician.

The Entrepreneur (10%)

The Entrepreneur lives in future, he is the visionary.

He grabs new opportunities & seeks new markets.

Given his need for change, he unsettles those who works for him.

The Manager (20%) The Manager lives in the

past.

In new opportunities he invariably sees the problems.

He hates change and compulsively clings to the status quo.

The Technician (70%)

The Technician lives in the present.

The Technician isn't interested in ideas; he's interested in“ how to do it."

As long as The Technician is working, he is happy, but only one thing at a time.

9

INFANCY: THE TECHNICIAN'S PHASE The Technician, are free at last, a place to go to work, to be free from The Boss.

Owner and the business are one and the same thing.

Hours devoted to the business during Infancy are not spent grudgingly but optimistically.

The Master Juggler, begin to drop some of the balls.

Infancy ends when the owner realizes that the business cannot continue to run the way it has been.

10

ADOLESCENCE: GETTING SOME HELP Gets experienced technical help for the work that isn’t getting done.

Management by Abdication rather than Delegation.

The work is ultimately never done to the owner’s satisfaction.

Taking back ownership of all the jobs from the employees and once again does them himself.

The adolescent business has just reached the limits of its owner’s Comfort Zone.

11

BEYOND THE COMFORT ZONE Once the business grows beyond the owner’s Comfort Zone, one of

three things will happen:

Getting Small Again : revert the business back to Infancy, when things were simpler, where they did everything.

Going for Broke : The business continues to grow at an increasing rate until it self destructs from its own momentum.

Adolescent Survival : The owner is strong willed and stubborn, and works constantly, doing whatever it takes to survive.

12

MATURITY AND THE ENTREPRENEURIAL PERSPECTIVE Mature businesses began as mature businesses – they began with the end in mind.

Thomas Watson, founder, IBM

The Entrepreneurial Model looks at a business as if it were a product It has less to do with what’s done in a business and more to do with how it’s done.

In short, for this business model of ours to work, it must be balanced and inclusive so that The Entrepreneur. The Manager and The Technician

The EntrepreneurStarts with a clearly defined vision of the future, then changes the present to match the vision.

The TechnicianStarts with the present and looks forward to an uncertain future with the hope of keeping it like the present.

13

USING A TURN-KEY OR FRANCHISE PERSPECTIVE The best model for building a successful business is that it can be

replicated.

The maximum amount of time should be spent working on your business rather than in your business.

Less than 5% franchises fail on annual basis, or 25-percent in five years. On the other end 80 % of independent business fail.

Treating your business as the model for a future franchise system increases your chances of success - whether you ultimately end up franchising your business or not.

14

USING A TURN-KEY OR FRANCHISE PERSPECTIVE ……. (CONTD.) To build a successful franchise, you need to obey these rules:

This requires you to build a franchise model that is systems-dependent rather than personality- or expert-dependent.

All systems must be documented in a formal, written Operations Manual.

Your model must be capable of being operated successfully by people that have very low skill levels.

Your model must deliver value that consistently exceeds the expectations of customers, employees, suppliers and lenders.

‘‘Every great business in the world is a franchise.’’ -- Michael Gerber

15