Doubts about E-Myth Revisited

The E-myth Revisited was the first book I bought when I started my gym and it’s one of the first i usually recommend that people read. But as i get further into the business, I wonder if some of the central arguments need to be questioned – specifically the idea that you absolutely MUST pull yourself out of the business so it can run without you. I’m not sure i believe that any more, at least for every type of business.

I noticed that same argument in Rich Dad, Poor Dad book 2 when he talked about how the self-employed quadrant was totally inferior to the business and investment quadrants. He also argued that you should totally pull yourself out of your business, but he acknowledged that most Amercian millionaires were self-employed – exactly what he was arguing against.

For me, I love what i do and would never want to turn the whole thing over to employees even if I could. Nor am i like the miserable baker in E-myth that was working 20 hour days. I wonder if there aren’t quite a few businesses where you don’t have to completely pull yourself out of the business (work On your business, not In it) and can still be successful.

Is Gerber partially wrong?

I think it depends on your goals. I suppose they mean that by leaving yourself in there, you are limiting your growth potential. However if you enjoy things the way they are, then I don’t see any problem with staying put. :thumbsup:

I never read it but I bet it has only about 10% relevance to people working in Asia. Why? Would you let a local team or manager run your whole business without you around to check the details? It’s not going to happen because your business and money will be ripped off quick-smart.
Cultural and environmental relevance is extremely important. Size and capital is also important. Industrty specific factors are extremely important.
Pharma or medical devices for example, you think you can step away from monitoring such a business for even a week?

E-myth is supposedly about what it takes for small business to succeed. It does bring up a lot of important stuff to be sure. I just have doubts about some of it.

Another part that bothers me some is the insistance on having a plan that takes you out of the business ASAP. I’ve seen on other forums and in talking with people the idea that new business owners need to be writing that kind of franchise/escpae plan as soon as they can.

What always gets me is that people in the early years of their business haven’t figured out the ins and outs of their business yet. Any plan of that sort that they wrote would be wildly premature. Stay in the business and learn the ropes first.

[quote=“Formosa Fitness”]E-myth is supposedly about what it takes for small business to succeed. It does bring up a lot of important stuff to be sure. I just have doubts about some of it.

Another part that bothers me some is the insistance on having a plan that takes you out of the business ASAP. I’ve seen on other forums and in talking with people the idea that new business owners need to be writing that kind of franchise/escpae plan as soon as they can.

What always gets me is that people in the early years of their business haven’t figured out the ins and outs of their business yet. Any plan of that sort that they wrote would be wildly premature. Stay in the business and learn the ropes first.[/quote]

I read E-myth some years ago. To my mind, Gerber’s model as presented in this book is an effective model for one thing: creating money-making mechanisms out of what originally was one’s passion – great for the franchisor financially if they pull it off, but bad for society. It is a selfish model that promotes abdicating responsibility rather than delegating it.

Forumosa Fitness, I’ve never met you, but having read your posts, I’ve admired that you’re living, and making a living, out of your passion. As a consumer, I try to support businesses exactly like yours, and try to avoid businesses like the franchises Gerber is promoting, precisely because I want to support people who are still doing what they love, and doing it sustainably (i.e. if you’re working 20 hour days, find some better help, and train them, and they will be loyal for a while, and then maybe one day they will go and start their own business – not as a cookie cutter of you, but in theirown vision – and that will be an additional part of your contribution to society, and a much more real contribution than if they were just your franchisee).

[Edit: Having said this, I don’t mean to knock all franchises. The kind of franchise where the franchise owner continues to share a stake and share accountability, while letting his various partners also bring their own strengths and visions into play can be a very positive business model. But this kind of franchise is rare indeed.]

Rotalsnart,
Thanks for the kind words.

I agree that not all frachises are bad. For example, Go Performance gym is a small fitness franchise in the States that has a lot of integrity and has maintained quality by still being fairly small. Franchises like them that can give a consistently good experience and maintain the original vision are okay by me and knock on wood, that will be the direction we go one day.

I guess it depends a lot on the product or service offered. Gerber seemed to have restaurants and similar businesses in mind when he wrote that IMO and I don’t see where it necessarily applies to carpenters, for example.

Hi everyone,

I read E-myth the first time 1998 or 1999 when I was trying to starting a business in the US. My partner made me read it as a pre-requisite to going into business with me. A great requirement I think.

Last year I read the 4-hour workweek and liked it as well while my friend “Loretta” criticized it based on some of the same ideas as Formosa Fitness brought up in this post: that he really likes working and would not enjoy laying around etc.

I think both books really should say that you should work to ENABLE you to take yourself out of your own business. Maybe your life changes and you need to stay at home with a sick relative for a year or one day you DO get tired of the business/job and need a really long break. At that point it would be good to have been laying the foundation for a business that can work without you.

I am fully enjoying owning a business that can operate without me in its daily operations. Of course I am still in the middle of it to try to develop and grow the business, but if I want to take off for a few weeks here and there the customers are still being serviced and I still have money coming in.

I would assume that the baker in the E-myth story could develop her business to have the possibility to function without her and then she can choose whatever role she wants in the business?

What do you think?

Take care,
Elias

Elias,
I always appreciate hearing your thoughts on this stuff.

Having a plan that enables you to pull yourself out of your business is perhaps a good idea, but I still wonder if it’s necessary for every business. To bring the Rich Dad, Poor Dad stuff into it, I guess there’s a difference between the self-employed quadrant and the business quadrant. I see myself as being self-employed, not running a business so much at least at the level I’m at right now. I think Robert Kiyosaki makes this distinction a little clearer than Gerber in E-Myth.

Kiyosaki argues along the lines of Gerber that you must pull yourself out of your business but he concedes that most American millionaires don’t do that. Most of them are self-employed and never pull themselves out of the business. Kiyosaki argues that staying self-employed is the harder of the two so he’s against it just like Gerber. But my questions are these:

  1. What if you’re in a business where that isn’t perhaps a good idea? What if the market you’re in fits a self-employed style rather than a full-blown business with employees? Carpenters, electricians, etc. may, for example, not be in a position to expand into a business nor need to.

  2. What if you aren’t capable of learning to operate at that level or find that you do the self-employed level better? Kiyosaki and Gerber seem to think that everyone can do it if they’d just try but they don’t seem to take individual learning capacities and interests into consideration.

  3. If most American millionaires have been self-employed then that seems like a surer path to success, yes?

For me personally, I’d like to work myself out of some of the day-to-day details so I can focus on other areas I enjoy more. Come to think of it, maybe I need to start looking at Enspyre. :slight_smile:

The difference between a Business and Self-Employment is whether or not you could leave tomorrow with little effect on the immediate running of your company.

If you want to be successful it is absolutely important that you plan a business that does not need your active input to maintain itself. I wish someone would have told me that when our company was in its infancy because now it is taking a huge amount of effort, time and money to turn it into a proper Business.

That does not mean you’re not allowed to work hands-on, it means that you are not so ingrained in the company that it can not survive without you.

Without this kind of detachment any company will be severely limited by the constraints of its owner. The company will be almost impossible to sell on if you decided to do so, you will miss out on large clients or opportunities and you may even bring down the whole operation through stagnation.

spot on llary…

If you are a self-employed electrician you will never be able to make more than the ongoing rate per hour x the number of waking hours you have in a day. That is a pretty shitty way to live and it’s not a business, it’s a job without the security. Someone with more business sense might take on an apprentice to help him finish jobs quicker and take on more work, then gradually farm the work out to his apprentice and eventually get the apprentice to a level where he can teach others.

Turning self-employment into a proper business is one of the hardest things I have ever done but anyone is capable if they put their minds to it. It takes a huge amount of motivation and effort which can be very daunting after you already put so much sweat into your original idea. The hardest part was admitting to myself that not working making the transformation was down to laziness.

I appreciate your thoughts on this. It makes sense but i still wonder sometimes if that fits all situations.

I think llary makes a good point, that you need to distinguish between being self-employed and owning a business. The former is similar to a job, where you are the sole employee. The advantage is that you choose how many hours you want to put in and you get paid for each one, but not more than that.

With a business, there is a concept of leveraging others or assets involved. Usually the pay is very little in the early years, but if you do a good job of building it up, then one day you can step back and continue earning money for all the time you put in, in those early years. Many people are not willing to (or not able to) go this second route, since that involves giving up the stability of a regular pay cheque in exchange for an opportunity that may or may not pan out.

FWIW, I have chosen the second route and am still in the early years stage. :pray: