The must read book for aspiring entrepreneurs

Over half the people I speak to professionally list “self-employment” as one of their life goals. This can take many forms including:

• Tradespeople wanting to go out on their own
• Professionals wanting to start their own consulting business
• Those wanting to start a business to pursue their passions (e.g. to open a restaurant)
• And those who believe that owning their own business is the only way to get rich.

If you too dream of going out on your own or starting a business then I strongly recommend that you read “The E-myth Revisited” by Michal E. Gerber before you quit your job.

Or if you know someone who has the self-employment goal then please do them a huge friendly favour and forward this article to them now.

Preferably you need to read The E-myth before you succumb to what Gerber calls ‘the Entrepreneurial Seizure’. That’s the point where something inside your head resoundingly declares “I could do this for myself’, and from that point on your world is not the same.

The E-myth

The ‘E-myth’ is the myth of the entrepreneur. Gerber describes it best:

At the heart of the e-myth is ‘the fatal assumption’ that if you understand the technical work of a business, you understand a business that does that technical work. And the reason it is fatal is that it just isn’t true.

But the technician who starts a business fails to see this.

The real tragedy is that when the technician falls prey to the Fatal Assumption, the business that was supposed to free him form the limitations of working for somebody else actually enslaves him.

Self-employment enslaves many rather than frees them.

Now it’s not my intention to turn you off going into business. I do agree that many of the wealthiest people achieved their wealth by concentrating their risk and investing in their own business.

I want you to embark on that part of your journey with your eyes as wide open as possible to the realities of being in business. That is what Gerber does in “The E-myth”.

Inside The E-myth Revisited

The E-myth Revisited is written with a blend of traditional non-fiction text and parable. Gerber illustrates his points through the story of his client Sarah and her business “All About Pies.” This is a master stroke in getting the message across as Sarah experiences and expresses many of the emotions and questions that you do as you read the text.

If you’ve come across The E-myth after starting your business then you will likely relate to Sarah’s predicament. No matter how raw it feels stick with it as I promise you that the books also brings hope.

Part One of the book is essential reading for the aspiring self-employed person as you get an overview of the phases of business and some of the essential roles. One important distinction to grasp is the difference between:

• The Entrepreneur
• The Manager
• The Technician

And to realise that everyone who goes into business is actually the three roles in one. But the trap is that you start by operating too much in the technician role and neglect the important functions of the other two roles. Yet without completing the function of all three roles the technician becomes stressed and enslaved as mentioned earlier.

After reading part one pause for reflection and take a good hard look at your situation and motives.

Are you truly willing to do what it will take to be successful?

Your Primary Aim

You may have heard of self-employed people that their business is their life. The truth is that a successful business is not your life, though it can play a significantly important role in your life.

You need to decide what role that will be by considering what Gerber refers to as your primary aim. To me this chapter of the book is gold. In one sense you really should start here. But without having read the earlier sections you may be too dismissive and flippant in your answers.

To discover your primary aim Gerber suggests you ask yourself these questions:

• What do I value most?
• What kind of life do I want?
• What do I want my life to look like, to feel like?
• Who do I wish to be?

Those who have worked closely with me may not be surprised that I consider this chapter to be gold as it mirrors my approach to financial planning. The whole purpose of a business and of creating wealth is to facilitate the life that you want. So first you must start by defining what is most important to you.

If having reflected on your primary aim you decide your business aspirations are for the right reasons then read further into the book to learn what a successful business needs to look like.

Your Turn-key Operation – The Franchise Prototype

One of the big ideas in “The E-myth” is that every business can aim to be turn-key and operate in a methodical, repeatable way like the successful franchises such as McDonalds. Whilst many entrepreneurs may not ever plan to franchise they can still operate their business as if it were the prototype for a franchise.

The pay-off for creating a turn-key operation includes:

• Creating a real exit strategy. A well-run business that will continue to operate smoothly and profitably after sale is very attractive to buyers.
• More time for you in the other roles in your life. Plus your time in the business will be more enjoyable.

Enjoying being in business and then easily selling it for a bucket load of cash seems to be the aim of most aspiring entrepreneurs. So resist the temptation to dismiss this section just because you can’t imagine yourself as a McDonalds.

The essential business eye opener

Self-employment and a business can be extremely rewarding both personally and financially. Sadly for most it is not. Businesses can burn through your hard earned assets and strain your relationships to breaking point. You can end up in a place you never wanted to be and don’t know how to get out of. (Ask Sarah.)

Even if owning your own business is just a speck on the horizon I strongly recommend you promptly buy and read “The E-myth Revisited” by Michal E. Gerber.