"Work on your business, not in it." That's the primary nugget of wisdom that small business consultant Michael Gerber is trying to impart in his books. In "E-Myth Revisited: Why Small Small Businesses Don't Work and What to Do About It", Gerber accurately describes the sad predicament that most small business owners find themselves in, but despite his sobering analysis, he labors in subsequent pages to give his readers a whole new way of looking at their businesses, as well as providing a invaluable blueprint for action.

He begins by underscoring the basic fact that, in the U.S., businesses are created at an amazingly high rate but fail in equally startling numbers. Every year, a million new businesses are created, but by year's end 40% of them go out of business. Of those businesses that survive, 80% fail to stay in business for 5 years. And of the select few that do make it past 5 years, 80% of them fail to make it to their 10th anniversary. What is going on here?

According to Gerber, these dismal statistics are representative of the E-Myth where the "E" stands for "Entrepreneur." Gerber argues that small businesses are NOT formed by true entrepreneurs who have a business vision, a clear plan of action and who marshall their efforts to attract capital from governments or private organizations. Quite the contrary, Gerber writes that most small businesses are started out by individuals struck by what he calls an "entrepreneurial seizure" or a moment of temporary insanity, if you will.

Usually, these people are talented and highly skilled and are determined to work hard and succeed, but despite their best efforts their business spiral out of their control and eventually fail. Gerber believes these individuals do not act like true entrepreneurs but rather like "technicians". In the book, a big part of which is a Socratic-style discourse with Sarah, the owner of a business called "All About Pies", Gerber describes these technicians as being great at the particulars of getting a technical job done (i.e. baking pies, repairing cars, fixing computers, etc.) but they are not very good at running all the aspects of a business in an efficient and orchestrated fashion. And unlike an entrepreneur, many of these businesses are self-funded and started for different reasons and driven by different motivations than true entrepreneurs.

Due to their technician's perspective these would-be entrepreneurs succeed only in creating a job for themselves without ever building a viable company that can function and endure in their absence. Eventually, the job they have created for themselves becomes overwhelming and consumes them. All the benefits they thought they would receive from the business (freedom, wealth, self-expression, etc.) do not materialize and eventually the business is closed and an unfufilled dream dies with it.

But cheer up! Gerber believes it doesn't have to be like this. The first thing Gerber tells us is that we have to discard the myth and face the true reality. Once would-be entrepreneurs know exactly what they are up against, they can labor to due things correctly from the outset, or to correct any problems that have already arisen.

Secondly, Gerber promotes the franchise model of running a business. In a franchise (like McDonalds) all areas of the business run according to carefully thought out "systems." In other words, everything is pre-determined and executed according to plan. The colors of the restaurant (red and yellow), the look as you go inside, the menu, how meals are prepared, the pricing, EVERYTHING has been systemized. This is the methodology that Gerber endorses as an effective way to run your business, even if yours is not a franchise business.

This systemization, Gerber argues, leads to innovation and efficiencies that allow the cash-poor small business owner to profit and grow his business in a controlled fashion. By the end of the book Mr. Gerber presents a brief blueprint for organizing all the areas of a business which is based on working ON your business instead of getting constantly bogged down in the details of the technician.

Whether you are thinking of starting a business or would like to strengthen the business you already run, The E-Myth Revisited is a MUST READ.
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