The E-Myth Point of View

Working on your business, not in it

The Entrepreneurial Myth

The E-Myth, or “Entrepreneurial Myth”
states that most businesses fail to
achieve their potential because most
business owners are not entrepreneurs;
they are technicians suffering from an
“entrepreneurial seizure.”

Entrepreneur Manager Technician

In order to create a truly successful business, you’ve

got to go to work on it, not just in it. That is the
revolutionary idea and message that was first
introduced in the best-selling business book: The
E-Myth Revisited: Why Most Small Businesses Don’t
Work and What To Do About It, by Michael Gerber,
author and founder of E-Myth Worldwide

Money
The Seven Centers of Management Attention
Marketing Management
model will help you see your business as a high
performance machine. And seeing your business
Leadership as one system – the product – will dramatically
change your perspective and your life as a small
Lead Client
Generation Fulfillment business owner.
Lead
Conversion
 The E-Myth Point of View
Page 1

The E-Myth Point of View

“This is not a call to do battle. It is a call to learning. How to feel, think, and act differently and
more productively, more humanly than our existing skills and understanding allow.”
— Michael Gerber

Introduction
If you’re like most small business owners, you’re too busy running your business to truly enjoy
the fruits of your labor. And if you can’t safely leave your business for a couple of days or a
week, then you haven’t got a business, you’ve got a job!
In order to create a truly successful business, you’ve got to go to work
ON it, not just IN it. That is the revolutionary idea and message that
was first introduced in the best-selling business book: The E-Myth
Revisited: Why Most Small Businesses Don’t Work and What To Do
About It, by Michael Gerber, author and founder of E-Myth Worldwide.
The “E-Myth” or “Entrepreneurial Myth,” states that most businesses
fail to fulfill their potential because most small business owners are
not entrepreneurs but rather technicians suffering from an
“entrepreneurial seizure.”

The Entrepreneurial Myth

Most small business owners will tell you that one day they realized they didn’t want to work
for someone else, or they wanted to make more money or have more personal time, and thus
decided to start their own business thinking it would provide those things. Many believed that
since they understood the technical work of the business (like being an electrician, auto
mechanic, dentist, or accountant), they would know how to build a business in their particular
field of expertise.
That is the fatal assumption — that because you know how to do the work of the business, you
know how to run the business! It explains why 40% of the small businesses started each year
fail, and 80% of the remaining never make it to their 5th anniversary. Most business owners
are too busy working in their business and not on it and eventually run the business and
themselves into the ground.

The Three Business Personalities

Why do so many business owners fall into this trap? The answer lies within each of us. There
are three primary ways of relating to work that are fairly universal. Think of them as three
separate personalities, the Entrepreneur, the Manager and the Technician. Each personality
has a purpose and vital role to play.

Copyright © 2005 by E-Myth Worldwide. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including
photocopy, recording, or any information storage and retrieval system, without permission in writing from E-Myth Worldwide.
 The E-Myth Point of View
Page 2

The Technician performs work that is

direct and hands-on, such as building
products, delivering service, doing the
administrative or support work. The
work is strictly tactical. The
Technician’s relationship to time is
focused on effort and how much can
be accomplished or produced within
the time allotted. The Technician
associates money with income, or
“how can I produce more so I can
earn more?” In other words, the
Technician is focused on trading time
Entrepreneur Manager Technician for money.
Notice that to the Technician, “work” is about what they can do personally. It is the Technician
who is tempted to open his own business because he believes he can do it better and any way
he pleases, free from the constraints of a “boss.”
The Manager’s work is both tactical and strategic, but is focused on getting results through
others. The Manager is concerned with developing systems that consistently produce
outstanding results. He invests in the training of his employees to operate and innovate those
systems and asks, “How can we be more productive?” The focus is on the collective work of
the team, unlike the Technician whose focus is on his own production. Efficient production and
delivery of service are his key areas of interest, so for the Manager time equals money. To the
Manager, money is about cost control and increasing profits.
The work of the Entrepreneur is visionary, strategic, and shapes the business. Entrepreneurs
are dreamers who focus on the future (time), and are impatient to achieve their vision.
Money to the Entrepreneur is about building equity and getting a good return on his
investment. The Entrepreneur is most concerned about the performance of it — the business.
Ultimately, the work of the Entrepreneur consists of these accountabilities: to develop the
vision for the future of the business, and to communicate that vision with conviction and
passion to all who need to hear it, including customers, employees, lenders, vendors,
investors, and the community.
Each of the three personalities within you thinks differently about the business. Can you see
that how you think about business, is how you end up doing business? You may be an expert at
the work you do, but if you think of yourself as a Technician — if you function in your
business as a Technician — your thinking is shortsighted, and your prospects limited.
Most small business owners find themselves spending very little time doing the work of the
Manager or the Entrepreneur — work that can be leveraged. Rather, their days are spent doing
endless tasks like opening the office, answering the phone, ordering supplies, finding new
customers, and doing the books. Sound familiar?

Copyright © 2005 by E-Myth Worldwide. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including
photocopy, recording, or any information storage and retrieval system, without permission in writing from E-Myth Worldwide.
 The E-Myth Point of View
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The Franchise Prototype: Thinking Like an Entrepreneur

So what is a Technician to do? Stop thinking about the technical work and start thinking about
the company you are creating. Shift your relationship to the business to one that is healthier
and more profitable by understanding that (1) the business is not your life (although it may feel
that way much of the time); (2) the business is there to serve your life; and (3) to have a life,
the business cannot be dependent on you. You have to get out of the way. You have to move to a
different business model. One that makes sense. “Doin’ it, doin’ it, doin’ it” will never get you
where you want to go.
The most effective conceptual framework for building a successful business is to view your
current operation as the prototype for a large number of franchises or turnkey operations just
like it. Even if you never plan to open another location, this perspective will help you create a
business that delivers a consistent, quality experience to your customer, time and time again.
You need to develop a successful “way” to do business — your company’s way. You must
develop systems that enable your employees to run the operations of the business. In other
words, your company must be systems-dependent, not people-dependent.
This requires that you see yourself as the leader of the business, not just the highest paid
employee! When you begin to take on the mantle of leader, everything begins to change
because you begin to change, not only leading others to a common goal, but also leading the
creation of a world-class company. Let’s explore what it means to lead.

The Five Essential Skills

As the leader of your company, you must take a good, hard look at yourself, assess your
strengths and weaknesses, and be willing to develop the skills that will ensure your success. As
a leader, you must be committed to learning, as well as changing personal patterns or
unproductive habits that may be getting in your way of achieving
The 5 Essential Skills results. Developing the following five skills are essential to becoming
a powerful leader of your business
Concentration The first is concentration. The skill of concentration is the ability to
focus your attention now, where you are. Without the skill of
concentration, you can’t even begin to do things in a determined,
Discrimination
fundamentally focused manner. Concentration is focus.
The second essential skill is discrimination. Once you’ve begun to
Organization develop the ability to concentrate, you need to decide what you’re
going to focus on. Discrimination is how you choose between this
Innovation
and that, between the most strategic and the most tactical.
The skill of discrimination needs to be practiced so that you begin to
intentionally choose to do the most important things for the most
Communication
important reasons. When you hone this skill, you can tap into more
focused energy.

Copyright © 2005 by E-Myth Worldwide. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including
photocopy, recording, or any information storage and retrieval system, without permission in writing from E-Myth Worldwide.
 The E-Myth Point of View
Page 4

The third skill is organization. Now that you can concentrate and discriminate, you need to
create order and predictability so you can successfully grow the company without chaos.
Simply put, organization is the skill of turning chaos into order.
The fourth skill is innovation. Now that you’ve begun to concentrate, discriminate and
organize your world, you can begin to innovate. Innovation is the skill through which you turn
wrong action into right action. Innovation involves creativity and a commitment to continuous
improvement. Collectively innovation, quantification, and orchestration are known as the
Business Development Cycle.
And, finally, the fifth essential skill is communication. Without the ability to communicate
with clarity, precision, passion and purpose, the building of a world-class company will be
much more difficult than it needs to be. People want to be inspired. They want to be a part of
something important, something significant and meaningful. As the leader of your company,
it is your job to develop inspiring communication skills. As you progress through the
Mastery Impact! program, your E-Myth Business Coach will guide you on the development
of these skills.

Seven Centers of Management Attention

In order to work on your business, it is helpful to have an
entrepreneurial model that provides a framework for your
business development. The Seven Centers of Management
Attention is the E-Myth model. Money
If you look carefully at any business, you will notice
that there are key functions that focus directly on
Marketing Management
interacting and serving customers. They are Lead
Generation, Lead Conversion, and Client
Fulfillment. There are also key functions that
focus primarily on the care and development of the Leadership
business itself. They are Leadership, Marketing,
Money, and Management. Together these functions Lead Client
make up the Seven Centers of Management Generation Fulfillment
Attention model. Thinking of your business in the
context of these key functions enables you to view it Lead
systemically. In other words, your business is one system Conversion
with seven major subsystems. It is a powerful business
model that effectively demonstrates the integrative nature of all
the primary systems in a business.
This model is used to help you organize your thoughts around how to develop your business as
you work through Mastery Impact! It provides an intelligent, logical, and effective starting
point for planning and executing new strategies. The Seven Centers of Management Attention
model will help you see your business as a high performance machine. And seeing your

Copyright © 2005 by E-Myth Worldwide. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including
photocopy, recording, or any information storage and retrieval system, without permission in writing from E-Myth Worldwide.
 The E-Myth Point of View
Page 5

business as one system — the product — will dramatically change your perspective and your
life as a small business owner.

You’re on the Right Path

In a nutshell, the E-Myth Point of View is the perspective that your business should work for
you, rather than you working for it. To achieve this perspective, you have to work ON your
business, not just IN it. That requires leadership, and leadership requires that you practice
concentration, discrimination, organization, innovation, and communication.
The strategic view of building a franchise, using your business as the prototype and organized
by the Seven Centers of Management Attention will help you gain the objectivity you need to
work on your business. Built on systems, your business will create a consistent, predictable
experience for your customers as well as a dynamic environment for your employees.
Finally, remember that as an entrepreneur you are committed to building a business that is not
only profitable, but also marketable. Your biggest payout won’t come from your salary or
dividends, but from the day you sell all or part of the business. Investors will pay a healthy
premium for a business that produces consistent, predictable, and increasing profits because
those profits will provide a predictable return on their investment. Most people think of this as
“sweat equity.” But it’s really “intelligence equity” — the value you add to the business by
finding faster, easier, and less costly ways to do the work.
When taken to heart and practiced every day, the principles of The E-Myth Point of View will
guide your work as an entrepreneur and help you achieve a new level of success and happiness
in your business and your life. They will sustain you as you work through Mastery Impact!
and beyond.
Here’s to more life and creating a business that works!

Copyright © 2005 by E-Myth Worldwide. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including
photocopy, recording, or any information storage and retrieval system, without permission in writing from E-Myth Worldwide.