The E-Myth Revisited

That Fatal Assumption is: if you understand the technical work of a business, you understand a business that does that technical work.

The work that was born out of love becomes a chore, among a welter of other less familiar and less pleasant chores. Rather than maintaining its specialness, representing the unique skill the technician possesses and upon which he started the business, the work becomes trivialized, something to get through in order to make room for everything else that must be done.

The entrepreneurial personality turns the most trivial condition into an exceptional opportunity. The Entrepreneur is the visionary in us. The dreamer. The energy behind every human activity. The imagination that sparks the fire of the future. The catalyst for change.

The managerial personality is pragmatic. Without The Manager there would be no planning, no order, no predictability.

Without The Manager, there could be no business, no society. Without The Entrepreneur, there would be no innovation. It is the tension between The Entrepreneur’s vision and The Manager’s pragmatism that creates the synthesis from which all great works are born.

The Technician loves to tinker. Things are to be taken apart and put back together again. Things aren’t supposed to be dreamed about, they’re supposed to be done.

Instead, the typical small business owner is only 10 percent Entrepreneur, 20 percent Manager, and 70 percent Technician.

“The purpose of going into business is to get free of a job so you can create jobs for other people.

“And to play this new game, called building a small business that actually works, your Entrepreneur needs to be coaxed out, nourished, and given the room she needs to expand, and your Manager needs to be supported as well so she can develop her skill at creating order and translating the entrepreneurial vision into actions that can be efficiently manifested in the real world.

What kind of help do you, the overloaded Technician, go out to get? The answer is as easy as it is inevitable: technical help. Someone with experience. Someone with experience in your kind of business. Someone who knows how to do the technical work that isn’t getting done—usually the work you don’t like to do.

A true passion—for the personal transformation such a process will call for: accessing new skills, new understanding, new knowledge, new emotional depth, new wisdom.

If you don’t articulate it—I mean, write it down, clearly, so others can understand it—you don’t own it! And do you know that in all the years I’ve been doing this work with small business owners, out of the thousands upon thousands we’ve met, there have only been a few who had any plan at all! Nothing written, nothing committed to paper, nothing concrete at all.

It’s a model of a business that fulfills the perceived needs of a specific segment of customers in an innovative way.

Thus, the Entrepreneurial Model does not start with a picture of the business to be created but of the customer for whom the business is to be created. It understands that without a clear picture of that customer, no business can succeed.

Because the Business Format Franchise is built on the belief that the true product of a business is not what it sells but how it sells it. The true product of a business is the business itself.

Forced to create a business that worked in order to sell it, he also created a business that would work once it was sold, no matter who bought it. Armed with that realization, he set about the task of creating a foolproof, predictable business. A systems-dependent business, not a people-dependent business.

The Prototype acts as a buffer between hypothesis and action. Putting ideas to the test in the real world rather than the world of competing ideas. The only criterion of value becomes the answer to the ultimate question: “Does it work?”

The system runs the business. The people run the system.

Thus, the name: Turn-Key Operation. The franchisee is licensed the right to use the system, learns how to run it, and then “turns the key.” The business does the rest.

The system isn’t something you bring to the business. It’s something you derive from the process of building the business.

It is a proprietary way of doing business that successfully and preferentially differentiates every extraordinary business from every one of its competitors. In this light, every great business in the world is a franchise.

Your business and your life are two totally separate things. At its best, your business is something apart from you, rather than a part of you, with its own rules and its own purposes. An organism, you might say, that will live or die according to how well it performs its sole function: to find and keep customers. 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.

What is value? How do we understand it? I would suggest that value is what people perceive it to be, and nothing more.

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.

Documentation provides your people with the structure they need and with a written account of how to “get the job done” in the most efficient and effective way. It communicates to the new employees, as well as to the old, that there is a logic to the world in which they have chosen to work, that there is a technology by which results are produced. Documentation is an affirmation of order.

There was absolutely no consistency to the experience. The expectations created at the first meeting were violated at each subsequent visit.

What you do in your model is not nearly as important as doing what you do the same way, each and every time.

Go to work on your business rather than in it.

Go to work on your business rather than in it, and ask yourself the following questions: • How can I get my business to work, but without me? • How can I get my people to work, but without my constant interference? • How can I systematize my business in such a way that it could be replicated 5,000 times, so the 5,000th unit would run as smoothly as the first? • How can I own my business, and still be free of it? • How can I spend my time doing the work I love to do rather than the work I have to do?

Most importantly, to successfully develop a serious business you need a process, a practice, by which to obtain that information and, once obtained, a method with which to put that information to use in your business productively.

Where the business is the product, how the business interacts with the consumer is more important than what it sells.

Begin by quantifying everything related to how you do business. I mean everything.

Because without the numbers you can’t possibly know where you are, let alone where you’re going. With the numbers, your business will take on a totally new meaning. It will come alive with possibilities.

“Discretion is the enemy of order, standardization, and quality.”

Think of your business as though it were the prototype for 5,000 more just like it.

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.

Quote by Don Juan in Carlos Castaneda’s A Separate Peace: “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.

The first standard of your Strategic Objective is money. Gross revenues. How big is your vision? How big will your company be when it’s finally done?

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.

Understanding the difference between the two is what creating a great business is all about.

People buy feelings. And as the world becomes more and more complex, and the commodities more varied, the feelings we want become more urgent, less rational, more unconscious. How your business anticipates those feelings and satisfies them is your product. And the demographics and psychographics associated with your customer will predetermine how you do that.

The System will transform your people problems into an opportunity by orchestrating the process by which management decisions are made while eliminating the need for such decisions wherever and whenever possible.

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.

So the famous dictum that says, “Find a need and fill it,” is inaccurate. It should say, “Find a perceived need and fill it.” Because if your customer doesn’t perceive he needs something, he doesn’t, even if he actually does.

Hard Systems are inanimate, unliving things. My computer is a Hard System, as are the colors in this office’s reception area. Soft Systems are either animate—living—or ideas. You are a Soft System; so is the script for Hamlet. Information Systems are those that provide us with information about the interaction between the other two.

The Information System will track the activity of your Selling System from Benchmark to Benchmark.

If your Systems Strategy is the glue that holds your Franchise Prototype together, then information is the glue that holds your Systems Strategy together. It tells you when and why you need to change.

Hard Systems, Soft Systems, Information Systems. Things, actions, ideas, information. The stuff of which our lives are made, and the stuff of your business as well.

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. Carlos Castaneda A Separate Reality